Group 1: Stock Performance and Price Targets - Atlassian (TEAM) closed at $207.89, with a 13.1% gain over the past four weeks, and a mean price target of $272.71 indicating a 31.2% upside potential [1] - The mean estimate consists of 24 short-term price targets with a standard deviation of $37.10, ranging from a low of $215 (3.4% increase) to a high of $370 (78% increase) [2] - A tight clustering of price targets, indicated by a low standard deviation, suggests a high degree of agreement among analysts regarding the stock's price movement [9] Group 2: Analyst Insights and Earnings Estimates - Analysts have shown increasing optimism about TEAM's earnings prospects, as evidenced by strong agreement in revising EPS estimates higher, which correlates with potential stock upside [11] - The Zacks Consensus Estimate for the current year has risen by 14.7% over the past month, with nine estimates increasing and no negative revisions [12] - TEAM holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating a strong potential upside [13]

Customer Growth - As of March 31, 2025, the company had more than 300,000 customers, with 50,715 customers generating over $10,000 in annualized recurring revenue from Cloud offerings[109][110]. - The number of customers with greater than $10,000 in Cloud ARR increased from 44,336 in March 2024 to 50,715 in March 2025, reflecting strong growth in the customer base[110]. Financial Performance - Total revenues increased by $167.6 million, or 14%, to $1,356.7 million for the three months ended March 31, 2025, compared to the same period in 2024[128]. - Subscription revenues rose by $201.5 million, or 19%, to $1,272.9 million, driven by paid seat expansion and price increases[129]. - Other revenues decreased by $33.9 million, or 29%, primarily due to a $27.8 million decline in maintenance revenue from the end of support for Server offerings[130]. - Net income (loss) for the three months ended March 31, 2025, was a loss of $70.8 million, compared to a net income of $12.8 million in the same period in 2024[127]. - Operating income (loss) for the three months ended March 31, 2025, was a loss of $12.5 million, compared to an income of $17.8 million in the same period of 2024[127]. - Total revenues increased by $603.9 million, or 19%, to $3,830,960 thousand for the nine months ended March 31, 2025, compared to $3,227,013 thousand for the same period in 2024[144]. - Subscription revenues rose by $762.6 million, or 27%, to $3,618,072 thousand for the nine months ended March 31, 2025, driven by paid seat expansion and price increases[145]. Cash Flow and Liquidity - Free cash flow for the three months ended March 31, 2025, was $638.3 million, an increase of $83.4 million compared to the same period in 2024, primarily due to increased cash received from customers[111]. - Net cash provided by operating activities increased by $63.1 million to $1,085,078,000 for the nine months ended March 31, 2025, compared to $1,021,940,000 for the same period in 2024[161]. - Free cash flow for the nine months ended March 31, 2025, was $1,055,225,000, compared to $1,002,418,000 for the same period in 2024[176]. - As of March 31, 2025, the company had cash and cash equivalents totaling $2.7 billion and marketable securities of $313.6 million[159]. - The company believes existing cash and cash equivalents, along with cash generated from operations, will be sufficient to meet anticipated cash needs for at least the next 12 months[170]. Expenses and Investments - Operating expenses are primarily driven by compensation expenses, which include salaries, bonuses, and stock-based compensation[119]. - Research and development expenses increased by $108.8 million, or 19%, to $685.3 million, mainly due to a $112.8 million rise in employee compensation expenses[132]. - Marketing and sales expenses grew by $72.0 million, or 32%, to $295.8 million, attributed to increased compensation and advertising expenses[133]. - General and administrative expenses rose by $10.8 million, or 7%, to $168.3 million, primarily due to higher employee compensation expenses[134]. - Research and development expenses increased by $373.6 million, or 23%, to $1,968,634 thousand for the nine months ended March 31, 2025, mainly due to increased employee compensation[148]. - Marketing and sales expenses rose by $182.2 million, or 29%, to $820,119 thousand for the nine months ended March 31, 2025, attributed to higher employee compensation and marketing event expenses[149]. - General and administrative expenses increased by $25.4 million, or 6%, to $483,694 thousand for the nine months ended March 31, 2025, primarily due to higher employee compensation[150]. Market Conditions and Risks - Economic conditions, including inflation and geopolitical tensions, may impact the company's results of operations and financial position[104]. - There have been no material changes to market risk from the information presented in the Annual Report on Form 10-K for the year ended June 30, 2024[179]. Debt and Share Repurchase - As of March 31, 2025, the company had $500 million in 5.250% senior notes due 2029 and $500 million in 5.500% senior notes due 2034[164]. - The company authorized a new share repurchase program in September 2024, allowing for the repurchase of up to $1.5 billion of Class A Common Stock, following the completion of the previous $1 billion program[167]. - Approximately 2.1 million shares of Class A Common Stock were repurchased for approximately $391.2 million at an average price of $185.57 during the nine months ended March 31, 2025[168]. Tax and Non-GAAP Measures - The projected non-GAAP tax rate for fiscal year 2025 is 26%, down from 27% for fiscal year 2024[177]. - Non-GAAP net income for the nine months ended March 31, 2025, was $716,832,000, compared to $590,982,000 for the same period in 2024[176].

Core Viewpoint - Atlassian Corp reported strong fiscal third-quarter results but provided weak sales guidance for the fourth quarter, leading to a decline in share price [1][4]. Financial Performance - Third-quarter revenue was $1.36 billion, surpassing analyst estimates of $1.35 billion [1]. - Adjusted earnings for the third quarter were 97 cents per share, exceeding analyst expectations of 87 cents per share [1]. Future Guidance - For the fourth quarter, Atlassian expects revenue to be between $1.35 billion and $1.36 billion, lower than the estimated $1.42 billion [3]. - The company anticipates cloud revenue growth of 23% and data center growth of 16.5% year-over-year for the fourth quarter [3]. - Full-year 2025 revenue guidance is set at $5.19 billion, slightly above estimates of $5.18 billion [3]. Market Reaction - Following the earnings announcement, Atlassian shares fell by 7.2%, trading at $212.42 [4]. - Analysts adjusted their price targets for Atlassian, with several lowering their estimates [4][9].

Atlassian (TEAM) reported third-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Its non-GAAP earnings per share of 97 cents beat the Zacks Consensus Estimate by 7.8%. The figure jumped 9% from the year-ago quarter’s non-GAAP earnings of 89 cents per share.TEAM’s fiscal third-quarter revenues climbed 21.4% year over year to $1.36 billion and beat the Zacks Consensus Estimate by 0.72%. The top line was primarily driven by robust paid growth in Atlassian Government ...

Core Insights - Atlassian reported $1.36 billion in revenue for the quarter ended March 2025, marking a year-over-year increase of 14.1% and an EPS of $0.97 compared to $0.89 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $1.35 billion, resulting in a surprise of +0.72%, while the EPS also surpassed expectations by +7.78% [1] Revenue Breakdown - Subscription revenue reached $1.27 billion, slightly above the average estimate of $1.26 billion, reflecting an 18.8% year-over-year increase [4] - Cloud revenue was reported at $880.43 million, exceeding the average estimate of $866.21 million, with a year-over-year growth of 25.2% [4] - Data Center revenue was $388.52 million, close to the estimated $389.56 million, showing a 6.7% increase from the previous year [4] - Other revenue totaled $83.84 million, below the average estimate of $85.84 million, indicating a year-over-year decline of 5% [4] - Marketplace and other revenues were reported at $87.77 million, also below the estimate of $90.75 million, reflecting a year-over-year decrease of 4.8% [4] Customer Metrics - Atlassian has 300,000 customers, which is below the two-analyst average estimate of 306,393 [4] Stock Performance - Atlassian shares have returned +1.9% over the past month, contrasting with the Zacks S&P 500 composite's -0.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Atlassian (TEAM) came out with quarterly earnings of $0.97 per share, beating the Zacks Consensus Estimate of $0.90 per share. This compares to earnings of $0.89 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 7.78%. A quarter ago, it was expected that this company would post earnings of $0.73 per share when it actually produced earnings of $0.96, delivering a surprise of 31.51%.Over the last four quarters, the company has sur ...

Core Insights - Atlassian reported a revenue increase of 14% year-over-year, reaching $1.19 billion, and earnings per share rose by 9% to $0.89, exceeding expectations [2][3] - The company experienced a significant 25% growth in cloud revenue, indicating a successful transition to a cloud-based suite [3] - Despite strong quarterly results, the outlook for the upcoming quarter is cautious, with expected revenue between $1.349 billion and $1.359 billion, which is below Wall Street's consensus estimate of $1.36 billion [4] Financial Metrics - Revenue for Q3 2024 was $1.19 billion, while Q3 2025 is projected at $1.36 billion, reflecting a 14% increase [2] - Earnings per share increased from $0.89 to $0.97, a 9% rise [2] - The number of cloud customers generating over $10,000 annually grew by 14% to 50,715 [2][5] - Services revenue rose from $703.0 million to $880.4 million, marking a 25% increase [2] Market Reaction - Following the earnings report, Atlassian's shares fell by 15% in after-market trading, indicating investor concern over the cautious outlook [6] - Investors are particularly focused on the company's future growth prospects and management's insights during the upcoming conference call [7] Long-term Outlook - The transition to cloud services is expected to take years to fully materialize, suggesting potential volatility in the short term [8] - Despite current challenges, there remains optimism for long-term growth in the cloud sector [8]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 reached $1.4 billion, with cloud revenue growing 25% year over year and a free cash flow margin of 47% [6][10]. - Gross margins improved to 86%, exceeding prior guidance, driven by price increases and engineering investments [40][41]. Business Line Data and Key Metrics Changes - Cloud revenue growth was primarily driven by increased adoption of premium enterprise editions, which rose over 40% year on year [14]. - Data center growth was mainly attributed to pricing, offset by strong migrations to cloud and fewer multiyear agreements [24][25]. Market Data and Key Metrics Changes - The company achieved FedRAMP Moderate Authorization for U.S. Federal Government customers, expanding its cloud platform offerings [9]. - Over 300,000 customers, including major enterprises like Mercedes and SAP, utilize Atlassian's solutions [9]. Company Strategy and Development Direction - Atlassian is focusing on integrating AI capabilities into its core products, with Robo being central to this strategy [7][10]. - The company aims to scale to $10 billion in revenue and beyond, leveraging its strategic priorities in enterprise solutions and AI advancements [10]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 20% compound annual growth rate (CAGR) through FY 2027, despite macroeconomic uncertainties [18][19]. - The company is adapting to longer deal cycles due to the complexity of enterprise deals, which is seen as a natural evolution rather than a macroeconomic issue [28]. Other Important Information - The introduction of the Teamwork Collection is expected to simplify purchasing for customers and drive long-term revenue growth [69][70]. - The isolated cloud offering is designed to meet the needs of large and complex organizations, providing dedicated resources [76]. Q&A Session Summary Question: Impact of embedding Robo on near-term revenue growth - Management noted that embedding Robo is expected to enhance user adoption and long-term growth potential, despite potential short-term revenue trade-offs [14][15]. Question: Cloud revenue growth and deal timing - Management acknowledged that enterprise deals were back-end loaded, impacting Q3 cloud revenue growth, but expected recognition in Q4 [23]. Question: Transition to annualized data center agreements - Management indicated that the change in agreement duration would lead to better cloud revenue growth contributions in FY 2026 and FY 2027 [36]. Question: Gross margin and efficiency gains - Management highlighted that gross margins of 86% were driven by price increases and efficient cloud infrastructure management, with expectations for continued improvements [40][41]. Question: Effect of tariffs on customer businesses - Management reported no significant macro impact from tariffs, emphasizing a strong pipeline and customer demand for cloud upgrades [54][55]. Question: CRO transition and go-to-market strategy - Management confirmed that the new CRO is adapting well, and the go-to-market strategy continues to evolve to meet customer needs [86][87].

Financial Data and Key Metrics Changes - The company reported total revenue of $1.4 billion for Q3, with cloud revenue growing by 25% year over year and a free cash flow margin of 47% for the quarter [8][20][41] - Gross margins reached 86%, exceeding prior guidance, driven by price increases and engineering investments [41][43] Business Line Data and Key Metrics Changes - Cloud revenue growth was impacted by enterprise deals landing later than expected, affecting the growth rate recognized in Q3 [25][48] - Data center growth was primarily driven by pricing, offset by strong migrations to cloud and fewer multiyear agreements [26][27] Market Data and Key Metrics Changes - The company achieved FedRAMP Moderate Authorization for U.S. Federal Government customers, expanding its cloud platform offerings [10] - Over 300,000 customers, including major enterprises like Mercedes and SAP, utilize Atlassian's solutions [10] Company Strategy and Development Direction - The company is focusing on embedding AI capabilities into core products, aiming for user expansion and maximizing adoption [15][16] - The strategic goal is to scale to $10 billion in revenue and beyond, leveraging advancements in AI and enterprise solutions [11][20] Management's Comments on Operating Environment and Future Outlook - Management remains confident in achieving a 20% compound annual growth rate (CAGR) through FY '27, despite macroeconomic uncertainties [21][67] - The company is adapting its go-to-market strategy to better serve enterprise customers, reflecting a shift in customer mix and needs [86][88] Other Important Information - The introduction of the Teamwork Collection is seen as a long-term growth driver, simplifying purchasing behavior for customers [68][70] - The company is committed to maintaining structural efficiency gains and optimizing cloud costs while expanding its AI capabilities [42][81] Q&A Session Summary Question: Impact of AI adoption on revenue growth - Management noted that AI adoption is still in early stages, with many enterprises experimenting and cautious about deployment [91][92] Question: Changes in go-to-market strategy with new CRO - The company is continuously evolving its go-to-market strategy to adapt to customer needs and market dynamics, with the new CRO bringing valuable experience [86][89] Question: Effect of tariffs on customer businesses - Management indicated that the business remains healthy and customers are eager to upgrade to the cloud, with no significant macro impacts observed [54][55]

Atlassian Announces Third Quarter Fiscal Year 2025 Results Revenue of $1,357 million, up 14% year-over-year Subscription revenue of $1,273 million, up 19% year-over-year GAAP operating margin of (1)% and non-GAAP operating margin of 26% Cash flow from operations of $653 million and free cash flow of $638 million Team Anywhere/San Francisco (May 1, 2025) — Atlassian Corporation (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its third ...