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Atlassian (TEAM - Free Report) reported first-quarter fiscal 2023 non-GAAP earnings per share of 36 cents, missing the Zacks Consensus Estimate of 38 cents. The figure decreased 2.7% from the year-ago quarter’s non-GAAP earnings of 37 cents per share.
Atlassian’s fiscal first-quarter revenues increased 31% to $807.4 million and surpassed the consensus mark of $801.6 million. The company witnessed solid demand for its cloud-based products, primarily led by smaller customers. Meanwhile, the cloud migration momentum continued for larger clients.
Quarterly Details
Segment-wise, Subscription revenues jumped 50% year over year to $651 million. Sales from the Maintenance business decreased 13% year over year to $113.6 million, while Other revenues (including perpetual license revenues) declined 11% year over year to $42.8 million.
During the fiscal first quarter, cloud revenues were $475 million, indicating 49.4% year-over-year growth. Meanwhile, revenues from data center rose 54% to $171.2 million. Marketplace and services revenues were $47.3 million, reflecting a 4.2% year-over-year rise. Revenues from Server declined 18.4% to $113.8 million.
Atlassian Corporation PLC Price, Consensus and EPS Surprise
Atlassian added 6,550 net new customers, bringing the total count to 249,173 customers on an active subscription or maintenance agreement basis in the reported quarter. A large number of customers are opting for cloud offerings amid the ongoing cloud migration. Such new additions and increased pricing on certain products contributed to the company’s quarterly revenues.
The company’s non-GAAP gross profit climbed 29.3% year over year to $684.3 million. Non-GAAP gross margin contracted 100 basis points (bps) to 85% during the quarter.
Atlassian’s non-GAAP operating income decreased 10.6% year over year to $147.9 million, while its operating margin contracted 900 bps to 18%.
Balance Sheet
The company ended the first quarter of fiscal 2023 with cash and cash equivalents and short-term investments of $1.52 billion, up from $1.46 billion at the end of the fiscal fourth quarter of 2022.
During the fiscal first quarter, TEAM generated operating and free cash flows of $92.4 million and $75.9 million, respectively.
Outlook
For the second quarter of fiscal 2023, the company anticipates revenues to be between $835 million and $855 million. The guided range is lower than the Zacks Consensus Estimate of $869.6 million.
Non-GAAP gross margin is estimated to be 83-84%. Non-GAAP operating margin is projected to be approximately 13%.
Zacks Rank & Key Picks
Atlassian currently carries a Zacks Rank #5 (Strong Sell). Shares of TEAM have decreased 61.2% in the past year.
The Zacks Consensus Estimate for Zscaler's first-quarter fiscal 2023 earnings has been revised 7 cents north to 26 cents per share over the past 60 days. For fiscal 2023, earnings estimates have moved north by 15 cents to $1.18 per share in the past 60 days.
ZS' earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 28.6%. Shares of the company have declined 60% in the past year.
The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 30 days. For 2022, earnings estimates have moved 16 cents up to $1.86 per share in the past 30 days.
Celestica's earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 11.8%. Shares of the company have lost 1.1% in the past year.
The Zacks Consensus Estimate for Okta's third-quarter fiscal 2023 loss has been revised 3 cents northward to 24 cents per share over the past 90 days. For fiscal 2023, loss estimates have improved by 3 cents to 72 cents per share in the past 60 days.
OKTA’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 45.5%. Shares of the company have declined 80.4% in the past year.
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Atlassian's (TEAM) Q1 Earnings Miss, Revenues Beat Estimates
Atlassian (TEAM - Free Report) reported first-quarter fiscal 2023 non-GAAP earnings per share of 36 cents, missing the Zacks Consensus Estimate of 38 cents. The figure decreased 2.7% from the year-ago quarter’s non-GAAP earnings of 37 cents per share.
Atlassian’s fiscal first-quarter revenues increased 31% to $807.4 million and surpassed the consensus mark of $801.6 million. The company witnessed solid demand for its cloud-based products, primarily led by smaller customers. Meanwhile, the cloud migration momentum continued for larger clients.
Quarterly Details
Segment-wise, Subscription revenues jumped 50% year over year to $651 million. Sales from the Maintenance business decreased 13% year over year to $113.6 million, while Other revenues (including perpetual license revenues) declined 11% year over year to $42.8 million.
During the fiscal first quarter, cloud revenues were $475 million, indicating 49.4% year-over-year growth. Meanwhile, revenues from data center rose 54% to $171.2 million. Marketplace and services revenues were $47.3 million, reflecting a 4.2% year-over-year rise. Revenues from Server declined 18.4% to $113.8 million.
Atlassian Corporation PLC Price, Consensus and EPS Surprise
Atlassian Corporation PLC price-consensus-eps-surprise-chart | Atlassian Corporation PLC Quote
Atlassian added 6,550 net new customers, bringing the total count to 249,173 customers on an active subscription or maintenance agreement basis in the reported quarter. A large number of customers are opting for cloud offerings amid the ongoing cloud migration. Such new additions and increased pricing on certain products contributed to the company’s quarterly revenues.
The company’s non-GAAP gross profit climbed 29.3% year over year to $684.3 million. Non-GAAP gross margin contracted 100 basis points (bps) to 85% during the quarter.
Atlassian’s non-GAAP operating income decreased 10.6% year over year to $147.9 million, while its operating margin contracted 900 bps to 18%.
Balance Sheet
The company ended the first quarter of fiscal 2023 with cash and cash equivalents and short-term investments of $1.52 billion, up from $1.46 billion at the end of the fiscal fourth quarter of 2022.
During the fiscal first quarter, TEAM generated operating and free cash flows of $92.4 million and $75.9 million, respectively.
Outlook
For the second quarter of fiscal 2023, the company anticipates revenues to be between $835 million and $855 million. The guided range is lower than the Zacks Consensus Estimate of $869.6 million.
Non-GAAP gross margin is estimated to be 83-84%. Non-GAAP operating margin is projected to be approximately 13%.
Zacks Rank & Key Picks
Atlassian currently carries a Zacks Rank #5 (Strong Sell). Shares of TEAM have decreased 61.2% in the past year.
Some better-ranked stocks from the broader Computer and Technology sector are Zscaler (ZS - Free Report) , Celestica (CLS - Free Report) and Okta (OKTA - Free Report) . While Zscaler and Celestica flaunt a Zacks Rank #1 (Strong Buy), Okta carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Zscaler's first-quarter fiscal 2023 earnings has been revised 7 cents north to 26 cents per share over the past 60 days. For fiscal 2023, earnings estimates have moved north by 15 cents to $1.18 per share in the past 60 days.
ZS' earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 28.6%. Shares of the company have declined 60% in the past year.
The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 30 days. For 2022, earnings estimates have moved 16 cents up to $1.86 per share in the past 30 days.
Celestica's earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 11.8%. Shares of the company have lost 1.1% in the past year.
The Zacks Consensus Estimate for Okta's third-quarter fiscal 2023 loss has been revised 3 cents northward to 24 cents per share over the past 90 days. For fiscal 2023, loss estimates have improved by 3 cents to 72 cents per share in the past 60 days.
OKTA’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 45.5%. Shares of the company have declined 80.4% in the past year.