Core Viewpoint - Wall Street analysts have rerated Atlassian Corp after the company reported better-than-expected fiscal second-quarter 2025 results, leading to raised price targets for the stock [1][2]. Financial Performance - Atlassian reported adjusted EPS of $0.96, exceeding consensus estimates of $0.76, with total revenue of $1.286 billion, surpassing the consensus of $1.240 billion, reflecting a 21% year-over-year growth [2][3]. - Cloud revenue reached $847 million, up 30% year-over-year, exceeding guidance of 25.5% and consensus estimates of 26% [3]. - Data Center revenue totaled $362 million, increasing 32% year-over-year, surpassing the consensus of 28% [3]. - Billings were reported at $1.470 billion, representing a 21% year-over-year growth, exceeding expectations [3]. Analyst Projections - Analysts project third-quarter revenue of $1.35 billion and EPS ranging from 88 cents to 92 cents [4][10][12][15]. - JMP Securities and Raymond James analysts noted the continuation of strong Cloud growth and provided optimistic guidance for future performance [4][11]. Market Position and Strategy - Atlassian has captured 85% of the Fortune 500, indicating a significant market opportunity of $14 billion, supported by a new Chief Revenue Officer with experience at SAP [6]. - The company is focusing on enterprise customers, which presents both risks and opportunities, particularly in customer acquisition costs [6]. AI and Future Growth - The introduction of paid SKUs for AI is seen as a positive step towards monetization, with over 1 million monthly active users for Rovo and Atlassian Intelligence features [7][8]. - Analysts highlighted the potential for AI to enhance customer acquisition and long-term value, despite initial concerns about rising costs [7]. Stock Performance - Following the positive quarterly results, Atlassian's stock price increased by 13.1%, reaching $310.95 [19].

Core Viewpoint - Atlassian's stock surged to a two-year high following strong financial results for Q2 2025, driven by significant contract wins and better-than-expected revenue performance [1][2]. Financial Performance - Atlassian reported Q2 revenue of $1.286 billion, exceeding its guidance of $1.241 billion [2]. - The company has increased its full-year revenue growth guidance to 18.5% to 19%, up from the previous guidance of 16.5% to 17% [4]. Customer Growth - The number of subscription customers spending at least $10,000 annually increased by 15% year over year [3]. - Atlassian achieved a record number of deals valued at $1 million or more annually [3]. Investment Strategy - The company maintains a philosophy of heavy investment in research and development (R&D), typically spending over 40% of its revenue on R&D, and sometimes exceeding 50% [5]. - Despite not being profitable, this strategy is viewed positively by investors as it supports growth [6]. Future Outlook - Atlassian surpassed $5 billion in annualized subscription revenue in Q2 and aims to reach $10 billion within three years at its current growth rate for cloud revenue [7].

Core Insights - Atlassian reported strong second-quarter fiscal 2025 results, with non-GAAP earnings per share of 96 cents, exceeding the Zacks Consensus Estimate by 31.5% and up 31.5% from 73 cents in the same quarter last year [1][2] - Revenues for the second quarter reached $1.29 billion, a 21.4% year-over-year increase, surpassing the Zacks Consensus Estimate of $1.24 billion by 4.12% [2][3] - The company raised its revenue guidance for the full fiscal year 2025, expecting growth of 18.5-19% year-over-year, up from the previous estimate of 16.5%-17% [3][10] Financial Performance - Subscription revenues increased by 30.2% year-over-year to $1.21 billion, driven by a shift towards cloud services [4] - Cloud revenues were reported at $846.9 million, up 29.7% year-over-year, while Data Center revenues rose 32% to $362.3 million [5] - Non-GAAP gross profit climbed 23% year-over-year to $1.1 billion, with a gross margin of 85%, an increase of 100 basis points [6] Operating Metrics - Non-GAAP operating income rose 33.7% year-over-year to $335.1 million, with an operating margin of 26%, up 200 basis points [7] - The company generated operating cash flow of $352 million and free cash flow of $342.6 million during the second quarter [8] Future Guidance - For the third quarter of fiscal 2025, Atlassian anticipates revenues between $1.345 billion and $1.353 billion, with a non-GAAP gross margin estimated at 84.5% [9] - The company expects the non-GAAP operating margin for the third quarter to be 23.5% [9] Market Performance - Atlassian's shares have gained 4.7% year-to-date, underperforming the Zacks Internet – Software industry's growth of 39.1% [3]

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Early on in the Q4 earnings season, the tech sector has mostly produced a lot of disappointments, with merely good (but not great) earnings unable to sustain the sharp rallies that tech stocks have seen over the past year. Atlassian (With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contribu ...

Atlassian Corp TEAM reported better-than-expected financial results for the fiscal second quarter after the market close on Thursday.Atlassian reported second-quarter revenue of $1.29 billion, beating analyst estimates of $1.24 billion, according to Benzinga Pro. The company reported second-quarter adjusted earnings of 96 cents per share, beating analyst estimates of 76 cents per share."The Atlassian System of Work is resonating with enterprises all over the globe, as business leaders increasingly turn to t ...

Group 1 - Atlassian shares increased by 20% in premarket trading after exceeding Wall Street's fiscal second-quarter earnings and guidance expectations [1] - Adjusted earnings were reported at 96 cents per share, surpassing the analyst projection of 76 cents per share [1] - Revenues for the quarter reached $1.29 billion, compared to the estimated $1.24 billion [1] Group 2 - For the third quarter, Atlassian anticipates revenues of $1.35 billion, exceeding the LSEG estimate of $1.31 billion [1] - The company experienced robust cloud and data center growth, driven by increased customer adoption of artificial intelligence solutions [2] - Subscription revenue grew by 30% year-over-year, with expectations of 26.5% cloud growth and 21.5% data center growth for the fiscal year [2]

Atlassian (NASDAQ: TEAM ) was trading sharply higher after releasing second-quarter results that apparently stunned investors. It is possible that Wall Street was fearful that generative AI would restrict headcount growth and thus slow down top-line growth rates. TEAM hasJulian is the leader of the investing group Best Of Breed Growth Stocks where he only shares positions in stocks which have a large probability of delivering large alpha relative to the S&P 500. He also combines growth-oriented principles w ...

Atlassian surpassed expectations in its most recent earnings report, fueled by strong cloud revenue growth.Team collaboration and productivity software specialist Atlassian (TEAM -1.61%) reported fiscal year 2025 second-quarter results on Thursday, Jan. 30, that topped analysts' consensus estimates. Q2 revenue of $1.29 billion surpassed the estimated $1.24 billion mark while adjusted earnings per share came in at $0.96, outshining the anticipated $0.75. This robust performance was fueled by a remarkable 30% ...

Key TakeawaysAtlassian shares jumped 20% in extended trading Thursday after the software company issued an upbeat revenue outlook amid robust demand for its AI-powered cloud offerings.The price sits poised to stage a breakout above a pennant in Friday’s trading session, signaling a continuation of the stock's strong uptrend.Investors should watch key overhead areas on Atlassian's chart around $335, $400, and $460, while also eyeing an important support level near $288. Atlassian (TEAM) shares surged in exte ...