Photo Credit: mohamed Hassan from Pixabay

Recently, Atlassian (Nasdaq: TEAM), a leading provider of team collaboration and productivity software, reported results for a strong fourth quarter that surpassed estimates. Its outlook also exceeded estimates. 

Atlassian’s Financials

Fourth quarter revenue grew 36% to $759.8 million, beating the market’s forecast of $724 million. Net loss narrowed to $105.5 million from a net loss of $213.1 million a year ago. Adjusted EPS was $0.27, in line with analyst estimates. Cash and cash equivalents, and short-term investments at the end of Q4 2022 totaled $1.5 billion.

Atlassian had 242,623 customers at the end of the quarter, compared to the analyst estimate of 242,300. Its self-serve sales funnel landed 8,048 and 37,869 net new customers in Q4 and FY22, respectively.

It hired 634 net new employees in Q4’22, and over 2,300 employees in FY22, bringing its total headcount to 8,813. Most of its new hires are focused on R&D.

By segment, Subscription revenues grew 55% to $597.3 million. Maintenance revenues declined 11% to $117.1 million. Other revenues increased 6% to $45.5 million.

By deployment type, revenue from Cloud was up 55% to $434 million, Data Center was up 60% to $158.9 million, Server fell 16% to $117.6 million, and Marketplace and Services grew 24% to $49.3 million. 

Fiscal year 2022 revenue grew 34% to $2.8 billion, and GAAP net loss was $614.1 million. 

For the first quarter of fiscal 2023, Atlassian expects revenues of $795-$810 million, well ahead of analyst estimates of $773.5 million. Adjusted EPS for Q1’23 is expected to be $0.37- $0.38, in line with analyst estimates.

Atlassian’s Ecosystem Strategy

Atlassian depends on an entire ecosystem of hundreds of channel partners, marketplace partners or developers, and integration partners. With access to thousands of apps in its ecosystem that extend its products to cover specialized use cases, deep integrations with complementary products, and a network of channel partners offering custom services, its products become stickier and it fosters a community of millions of happy users.

In the ten years since the launch of its marketplace, the Atlassian Marketplace has surpassed $2 billion in sales. It took seven years for the Marketplace to achieve its first $1 billion in sales; but due to the pandemic effect, it just took another two years to achieve the second billion. 

Atlassian’s stock is trading at $247.66 with a market capitalization of $36.2 billion. It touched a 52-week high of $483.13 in October last year. It hit a 52-week low of $159.54 in May.

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