I recently joined The REIT Forum and if you are looking for more investment ideas like this one, get them exclusively at The REIT Forum with access to our subscriber only portfolios.I last wrote about Atlassian (NASDAQ: TEAM ) in September, where I reiterated my “buy” rating with a tone of “cautious optimism” as the company’s FY24 revenue and earnings target came in lower than whatAmrita runs a boutique family office fund in beautiful Vancouver, where she leads the investment strategy for the family fund. T ...

Customer Base and Revenue - The company has over 300,000 customers as of September 30, 2024, with active use extending beyond this base due to free and starter products[121] - Customers with greater than $10,000 in Cloud ARR represent the majority of the company's Cloud revenue[121] - The number of customers with greater than $10,000 in Cloud ARR increased from 40,103 in September 2023 to 46,844 in September 2024[122] Subscription and Cloud Revenue - Subscription revenues are driven by the number and size of active licenses, product type, and license prices, with contractual terms ranging from one to twelve months[126] - The company expects subscription revenue to increase and remain the primary driver of revenue growth[128] - Cloud revenues increased by $187.7 million, or 31%, to $792.3 million in Q3 2024, while Data Center revenues grew by $92.7 million, or 38%, to $335.6 million[146] Financial Performance - Total revenues increased by $210.0 million, or 21%, to $1,187.8 million in Q3 2024 compared to Q3 2023, driven by increased demand from existing customers[143] - Subscription revenues grew by $280.0 million, or 33%, to $1,131.9 million in Q3 2024, primarily due to paid seat expansion, migrations, and price increases[144] - Other revenues decreased by $70.0 million, or 56%, to $55.8 million in Q3 2024, mainly due to a $75.5 million decline in maintenance revenue from discontinued Server offerings[145] - Net loss widened to $123.8 million in Q3 2024 from $31.9 million in Q3 2023, with the provision for income taxes increasing by $72.7 million to $93.6 million[142] Expenses and Investments - Cost of revenues is expected to rise as the company invests in cloud-based infrastructure to support migrations and Cloud customers[130] - Gross margin is expected to modestly decrease due to a sales mix shift from Data Center offerings to Cloud offerings, driven by increased hosting and personnel costs[131] - Research and development expenses increased by $121.4 million, or 25%, to $603.1 million in Q3 2024, primarily due to higher employee compensation costs[149] - Marketing and sales expenses grew by $58.8 million, or 30%, to $252.4 million in Q3 2024, driven by increased employee compensation and advertising costs[150] Cash Flow and Financing - Free cash flow decreased by $88.9 million in Q3 2024 compared to Q3 2023, primarily due to decreased net cash from operating activities and increased capital expenditures[124] - Net cash provided by operating activities decreased by $86.5 million, primarily due to higher employee bonus payments, supplier payments, and income taxes[164] - Net cash used in investing activities decreased by $38.2 million, driven by a $71.8 million reduction in marketable securities outflows[165] - Net cash used in financing activities increased by $120.9 million, mainly due to $117.7 million in Class A Common Stock repurchases[166] Debt and Share Repurchase - The company has $500 million in 5.250% senior notes due 2029 and $500 million in 5.500% senior notes due 2034[167] - A $750 million senior unsecured revolving credit facility was established in August 2024, replacing the previous $1 billion term loan and $500 million revolving credit facility[168] - The 2024 Share Repurchase Program authorizes up to $1.5 billion in Class A Common Stock repurchases, following the completion of the 2023 Repurchase Program[169] - Approximately 1.1 million shares of Class A Common Stock were repurchased for $183.9 million at an average price of $162.57 per share during Q3 2024[170] Tax and Regulatory Impact - The global minimum corporate income tax of 15% may impact the company's effective tax rate and cash tax payments starting fiscal year 2025[161] - Provision for income taxes increased by $72.7 million, a 347% rise compared to the same period in 2023, primarily due to changes in the mix of earnings and losses in foreign jurisdictions[156] - The projected non-GAAP tax rate for fiscal year 2025 is determined to be 26%[180] GAAP and Non-GAAP Metrics - GAAP gross profit for Q3 2024 was $970.157 million, compared to $799.746 million in Q3 2023[178] - Non-GAAP gross profit for Q3 2024 was $998.487 million, compared to $822.339 million in Q3 2023[178] - GAAP operating loss for Q3 2024 was $(31.978) million, compared to $(18.869) million in Q3 2023[178] - Non-GAAP operating income for Q3 2024 was $268.050 million, compared to $224.943 million in Q3 2023[178] - GAAP net loss for Q3 2024 was $(123.769) million, compared to $(31.883) million in Q3 2023[178] - Non-GAAP net income for Q3 2024 was $199.700 million, compared to $168.980 million in Q3 2023[178] - Free cash flow for Q3 2024 was $74.341 million, compared to $163.287 million in Q3 2023[178] - Weighted-average diluted shares outstanding for Q3 2024 was 260,775, compared to 258,915 in Q3 2023[178] - GAAP net loss per share - diluted for Q3 2024 was $(0.48), compared to $(0.12) in Q3 2023[178] Regional Revenue - Americas revenues rose by $95.0 million, or 19%, to $584.5 million in Q3 2024, with EMEA and Asia Pacific revenues increasing by $91.3 million (24%) and $23.8 million (22%) respectively[147] Other Financial Metrics - Other expense, net increased by $11.1 million, or 133%, to $19.4 million in Q3 2024, mainly due to higher equity method investment losses and foundation contributions[152] - Interest income rose by $3.3 million, or 13%, to $28.6 million in Q3 2024, reflecting higher investment balances[153] - Cash and cash equivalents totaled $2.1 billion, marketable securities $161.4 million, and accounts receivables $484.1 million as of September 30, 2024[162]

After experiencing a recent slowdown, the company's growth is heating back up.Shares of enterprise software company Atlassian (TEAM 19.64%) soared on Friday after the Australian outfit reported financial results for its fiscal first quarter of 2025. As of 10:30 a.m. ET, Atlassian stock was up about 15%, but it had been up as much as 22% earlier in the day.Atlassian's growth is heating upAtlassian's software remains popular, as evidence by ongoing customer acquisition and spending growth. In its Q1, the comp ...

Key TakeawaysAtlassian beat profit and sales estimates and raised its outlook as its artificial intelligence offerings helped drive subscriptions.The software and services provider for developers and project managers reported a 33% jump in subscription revenue.Atlassian now expects full year revenue growth of as much as 17%, up slightly from earlier projections. Atlassian (TEAM) shares surged Friday after the business-software company posted better-than-expected quarterly results and raised its guidance as ...

Atlassian (TEAM) reported first-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Its non-GAAP earnings per share of 77 cents beat the Zacks Consensus Estimate of 63 cents. The figure jumped 18.5% from the year-ago quarter's non-GAAP earnings of 65 cents per share, driven by strong top-line growth and disciplined cost management. Find the latest EPS estimates and surprises on Zacks Earnings Calendar. TEAM's fiscal first-quarter revenues climbed 21.5% year over yea ...

Financial Data and Key Metrics - Cloud revenue increased by 31% YoY, exceeding expectations of 27% growth [38] - Paid seat expansion and migrations were key drivers of cloud revenue outperformance [38][39] - Atlassian Intelligence usage increased more than 10 times since the start of the year [19] Business Line Data and Key Metrics - Jira Service Management (JSM) has over 55,000 customers, with strong growth in both DevOps and employee service management [66][68] - New AI-powered products like Rovo and Atlassian Intelligence are driving customer adoption and premium edition upgrades [12][19] - Jira Product Discovery Premium, Compass Premium, and Guard Premium were introduced, adding advanced capabilities to cloud offerings [13] Market Data and Key Metrics - Enterprise trends were healthy, with solid results on annual and multi-year deals, migrations, and upsell to premium enterprise editions [24] - SMB customer segment showed signs of stabilization, with stable paid seat expansion rates and healthy top-of-funnel metrics [24] Company Strategy and Industry Competition - Atlassian is focusing on serving the enterprise, delivering AI innovation, and empowering teams through its system of work [14] - The company is leveraging its cloud platform and AI capabilities to break down silos between software, IT, and business teams [10][11] - Atlassian is well-positioned in the AI era with its R&D engine and over 20 years of data on team workflows [11][12] Management Commentary on Operating Environment and Future Outlook - The macro environment remains stable, with continued stabilization in the SMB segment and healthy enterprise trends [24][25] - AI is seen as a tool to enhance human creativity and business efficiency, with no signs of seat cannibalization [20][21] - The company is confident in its ability to drive results despite a challenging macro environment [28] Other Important Information - Atlassian introduced Atlassian Focus, a new product in its enterprise strategy and planning solution [13] - The company is integrating Loom into its platform faster than any previous acquisition [61] Q&A Session Summary Question: AI Product Releases and Proof Points [16] - Atlassian has a two-pronged AI strategy: Atlassian Intelligence threaded throughout the platform and Rovo as a separate AI product [18] - Customers have seen significant time savings and increased ROI from AI products, driving premium and enterprise edition upgrades [19][20] Question: Cloud Platform Upsell and Cross-Sell Effectiveness [23] - Cloud platform outperformance was driven by stable macro environment, good sales execution, and fundamental business health [24][25] - Consolidation onto the Atlassian cloud platform and AI capabilities are driving growth [26][27] Question: AI Strategy and Pricing [30] - Atlassian Intelligence is embedded in existing products, while Rovo is a standalone AI product built for the AI era [31][32] - Rovo revenue will be included in cloud results, with modest revenue expected in FY25 [36] Question: Cloud Revenue Outperformance and Sales Go-to-Market [37] - Cloud revenue beat was driven by better-than-expected paid seat expansion and migrations [38] - New CRO Brian Duffy is expected to help mature the sales go-to-market function [41][42] Question: AI Differentiation and User Base Addressability [44] - Atlassian is differentiated in AI with its cloud platform, Teamwork Graph, and enterprise search engine [45][46] - Rovo is built on years of investment and delivers significant value to customers [47][48] Question: Consumption Pricing Strategy [51] - Atlassian has a defensive consumption-based pricing strategy, with AI and virtual service agents driving new opportunities [52][53] - Consumption pricing is modestly included in guidance, with a conservative approach to scaling [55] Question: R&D and Product Innovation [57] - Atlassian's R&D focus on developer productivity and platform maturity has led to a flurry of product innovation [58][59] - The cloud platform enables faster and more mature product development [60][61] Question: Jira Service Management Competitive Dynamics [64] - JSM continues to grow strongly, with AI enhancing its capabilities in DevOps and employee service management [66][68] - Atlassian is outperforming competitors in AI-driven virtual service agents and automation [69][70] Question: Data Center to Cloud Migration Timing [74] - Larger data center customers are moving to the cloud, with some adopting hybrid deployments before full migration [75][76] - Migration projects are multi-year journeys, with macro factors potentially affecting timing [77][78] Question: Macro Environment and Guidance [82] - Atlassian's guidance remains conservative due to macro uncertainty and execution risks in enterprise go-to-market evolution [83][84] - The company is taking a long-term view while navigating short-term challenges [85] Question: Cloud Deal Timing and Pricing Increases [87] - Deal timing was not a factor in Q1, with healthy deal flow throughout the quarter [88] - Atlassian takes a disciplined approach to pricing and concessions, focusing on long-term value [89][90]

For the quarter ended September 2024, Atlassian (TEAM) reported revenue of $1.19 billion, up 21.5% over the same period last year. EPS came in at $0.77, compared to $0.65 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $1.15 billion, representing a surprise of +3.08%. The company delivered an EPS surprise of +22.22%, with the consensus EPS estimate being $0.63. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and ho ...

Atlassian (TEAM) came out with quarterly earnings of $0.77 per share, beating the Zacks Consensus Estimate of $0.63 per share. This compares to earnings of $0.65 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 22.22%. A quarter ago, it was expected that this company would post earnings of $0.59 per share when it actually produced earnings of $0.66, delivering a surprise of 11.86%.Over the last four quarters, the company has su ...

Revenue and Growth - Revenue of $1,188 million, up 21% year-over-year[1] - Subscription revenue of $1,132 million, up 33% year-over-year[1] - Total revenue expected to be $1,233 million to $1,241 million in Q2 FY2025[8] - Total revenue growth expected to be 16.5% to 17.0% year-over-year for FY2025[10] - Total revenues for Q3 2024 were $1,187,781 thousand, a 21.5% increase from $977,775 thousand in Q3 2023[20] - Cloud revenues for Q3 2024 were $792,306 thousand, a 31% increase from $604,647 thousand in Q3 2023[27] - Data Center revenues for Q3 2024 were $335,594 thousand, a 38.1% increase from $242,943 thousand in Q3 2023[27] Profitability and Margins - GAAP operating margin of (3)% and non-GAAP operating margin of 23%[1] - GAAP gross profit for Q3 2024 was $970.157 million, compared to $799.746 million in Q3 2023[29] - Non-GAAP gross margin remained stable at 84% for both Q3 2024 and Q3 2023[29] - GAAP operating loss increased to $(31.978) million in Q3 2024 from $(18.869) million in Q3 2023[29] - Non-GAAP operating income rose to $268.050 million in Q3 2024 from $224.943 million in Q3 2023[29] - Non-GAAP gross margin for Q4 2024 is expected to be 84%[30] - Non-GAAP operating margin for fiscal year 2025 is forecasted to be between 22.0% and 22.5%[31] Cash Flow and Financial Position - Cash flow from operations of $80 million and free cash flow of $74 million[1] - Cash and cash equivalents decreased to $2,055,597 thousand as of September 30, 2024, from $2,176,930 thousand as of June 30, 2024[23] - Free cash flow decreased to $74.341 million in Q3 2024 from $163.287 million in Q3 2023[29] Expenses - Total operating expenses for Q3 2024 were $1,002,135 thousand, a 22.4% increase from $818,615 thousand in Q3 2023[20] - Research and development expenses for Q3 2024 were $603,101 thousand, a 25.2% increase from $481,738 thousand in Q3 2023[20] - Marketing and sales expenses for Q3 2024 were $252,393 thousand, a 30.4% increase from $193,567 thousand in Q3 2023[20] - General and administrative expenses for Q3 2024 were $146,641 thousand, a 2.3% increase from $143,310 thousand in Q3 2023[20] Net Income and Loss - Net loss for Q3 2024 was $123,769 thousand, compared to a net loss of $31,883 thousand in Q3 2023[20] - GAAP net loss widened to $(123.769) million in Q3 2024 from $(31.883) million in Q3 2023[29] - Non-GAAP net income increased to $199.700 million in Q3 2024 from $168.980 million in Q3 2023[29] Cloud and Data Center Performance - 46,844 customers with >$10,000 in Cloud ARR, up 17% year-over-year[4] - Cloud revenue growth expected to be 25.5% year-over-year in Q2 FY2025[8] - Data Center revenue growth expected to be 27.5% year-over-year in Q2 FY2025[8] - Cloud ARR is defined as the annualized recurring revenue run-rate of Cloud subscription agreements, calculated by multiplying Cloud MRR by 12[18] Product Launches and Innovations - Launch of Rovo, an AI-powered product for organizational knowledge[4] Tax Rate Projections - Projected Non-GAAP tax rate for fiscal year 2025 is 26%[29]

Analysts on Wall Street project that Atlassian (TEAM) will announce quarterly earnings of $0.63 per share in its forthcoming report, representing a decline of 3.1% year over year. Revenues are projected to reach $1.15 billion, increasing 17.9% from the same quarter last year. Over the last 30 days, there has been no revision in the consensus EPS estimate for the quarter. This signifies the covering analysts' collective reconsideration of their initial forecasts over the course of this timeframe. Before a co ...