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Atlassian ((TEAM - Free Report) ), the $42 billion provider of enterprise software collaboration and workflow tools, has had a rough year as the stock peaked in January above $250.
Atlassian's team collaboration software like Jira, Confluence and Trello help teams organize, discuss, and complete shared work, especially software developers who were their first customers over two decades ago at the University of New South Wales.
Even as revenues continue their steep high-teens ascent toward $5 billion this year and $6 billion next year, profits took a big hit during the bear market of 2022 and investors are still looking for a solid recovery.
Last Quarter
Atlassian reported fourth-quarter fiscal 2024 results on August 1, wherein earnings beat the Zacks Consensus Estimate and revenues matched the same. Its non-GAAP earnings per share of 66 cents beat the Zacks Consensus Estimate of 59 cents.
The figure jumped 15.8% from the year-ago quarter’s non-GAAP earnings of 57 cents per share, mainly driven by strong top-line growth.
TEAM’s fiscal fourth-quarter revenues climbed 20.5% year over year to $1.13 billion and came in line with the Zacks Consensus Estimate. The top line was primarily driven by strong migrations, robust growth across Cloud and Data Center, as well as rising enterprise sales execution.
Segment-wise, Subscription revenues soared 33.7% year over year to $1.07 billion, driven by the ongoing shift toward cloud.
Resurgent Growth Appears Within Reach
As Atlassian makes that migration, they are also expanding quickly to provide new solutions to companies everywhere. One stat from their shareholder letter last month really stood out to me...
"Within our existing enterprise customer base alone, we have identified $14 billion of revenue potential. Today, 84% of the Fortune 500 are Atlassian customers, yet they represent only 10% of our total business."
This speaks to their commitment to serving medium-sized firms, which makes sense since their collaboration tools grew out of the bootstrapping startup communities they thrived in from Australia to the UK, Amsterdam to San Francisco.
Another great stat from the letter...
"[Our] investments have already yielded strong results as the number of customers spending over $1 million annually with Atlassian grew to 524 at the end of FY24, an increase of 48% year-over-year, with a logo retention rate of 98%+."
One element of any great software company like Apple or Adobe is how they create an ecosystem for their customers that is too irresistible to leave. Atlassian seems to maintain a similar strong fan base...
"As we engage deeper with our largest customers, the message has been consistent: they want more from Atlassian to solve their collaboration challenges."
Bottom line: TEAM shares may become a buy again soon when their earnings outlook stops getting downgraded by analysts. The Zacks Rank will let you know.
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Bear of the Day: Atlassian (TEAM)
Atlassian ((TEAM - Free Report) ), the $42 billion provider of enterprise software collaboration and workflow tools, has had a rough year as the stock peaked in January above $250.
Atlassian's team collaboration software like Jira, Confluence and Trello help teams organize, discuss, and complete shared work, especially software developers who were their first customers over two decades ago at the University of New South Wales.
Even as revenues continue their steep high-teens ascent toward $5 billion this year and $6 billion next year, profits took a big hit during the bear market of 2022 and investors are still looking for a solid recovery.
Last Quarter
Atlassian reported fourth-quarter fiscal 2024 results on August 1, wherein earnings beat the Zacks Consensus Estimate and revenues matched the same. Its non-GAAP earnings per share of 66 cents beat the Zacks Consensus Estimate of 59 cents.
The figure jumped 15.8% from the year-ago quarter’s non-GAAP earnings of 57 cents per share, mainly driven by strong top-line growth.
TEAM’s fiscal fourth-quarter revenues climbed 20.5% year over year to $1.13 billion and came in line with the Zacks Consensus Estimate. The top line was primarily driven by strong migrations, robust growth across Cloud and Data Center, as well as rising enterprise sales execution.
Segment-wise, Subscription revenues soared 33.7% year over year to $1.07 billion, driven by the ongoing shift toward cloud.
Resurgent Growth Appears Within Reach
As Atlassian makes that migration, they are also expanding quickly to provide new solutions to companies everywhere. One stat from their shareholder letter last month really stood out to me...
"Within our existing enterprise customer base alone, we have identified $14 billion of revenue potential. Today, 84% of the Fortune 500 are Atlassian customers, yet they represent only 10% of our total business."
This speaks to their commitment to serving medium-sized firms, which makes sense since their collaboration tools grew out of the bootstrapping startup communities they thrived in from Australia to the UK, Amsterdam to San Francisco.
Another great stat from the letter...
"[Our] investments have already yielded strong results as the number of customers spending over $1 million annually with Atlassian grew to 524 at the end of FY24, an increase of 48% year-over-year, with a logo retention rate of 98%+."
One element of any great software company like Apple or Adobe is how they create an ecosystem for their customers that is too irresistible to leave. Atlassian seems to maintain a similar strong fan base...
"As we engage deeper with our largest customers, the message has been consistent: they want more from Atlassian to solve their collaboration challenges."
Bottom line: TEAM shares may become a buy again soon when their earnings outlook stops getting downgraded by analysts. The Zacks Rank will let you know.