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Atlassian reported an adjusted EPS of $0.57 on revenue of $939.1 million. Analysts were looking for a profit per share of $0.36 on revenue of $920.4M. Sales rose 24% year-over-year with subscription revenue jumping 34%.
For this quarter, the company sees revenue of $960M (up or down $10M), ahead of the consensus of $953.3M. The company targets FY24 cloud growth of 25-30%, which is likely the key driver of strength in the TEAM stock after earnings.
“Our continued investment in R&D has ensured we’re able to deliver innovation that takes advantage of the next generation of AI,” said Mike Cannon-Brookes, Atlassian’s co-founder and co-CEO.
“By leveraging the latest advancements in large language models, combined with each customer’s own data and two decades of our data-driven insights into how teams work, we’re able to help each of our customers unleash their potential.”
Goldman Sachs analysts hiked the price target by $23 to $188 per share.
“We remain constructive on Atlassian’s ability to drive LT growth as new features and gen-AI can unlock a $175bn+ TAM. While initial FY24 OM came in lower than expected (confirming our thesis that the current investment cycle may take longer than expected), we were pleased with management calling for expansion starting in FY25,” they said.
Bernstein analysts also lifted the price target by $42 per share.
“Not only did FQ4 QoQ Cloud growth accelerate 90 bps from FQ3 (5.3% vs. 4.4%), but the company seemed to signal QoQ growth will accelerate more into FQ1’24 (25-27% YoY Cloud guide is 5.4-7.1% QoQ). And the full FY24 guide (25-30%) clearly anticipates some more acceleration as the year progresses. This was joined by re-confirmation that macro-induced issues remain constrained to seats,” they wrote in a note.
