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What's in the Offing for Atlassian's (TEAM) Q3 Earnings?

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Atlassian (TEAM - Free Report) is scheduled to report third-quarter fiscal 2021 results on Apr 29.

Atlassian projects fiscal third-quarter revenues to lie between $566 million and $572 million (mid-point $569 million). The Zacks Consensus Estimate for revenues is pegged at $540.8 million, suggesting growth of 31.4% from the year-ago period.

The company anticipates non-IFRS earnings of 20-21 cents per share. The Zacks Consensus Estimate is pegged at 29 cents per share, 16% higher than the 25 cents reported in the year-ago quarter.

Notably, the company’s earnings surpassed estimates in all of the trailing four quarters, the average surprise being 20.1%.

Let’s see how things have shaped up prior to the upcoming announcement.

Factors at Play

Atlassian’s fiscal third-quarter performance is likely to have benefited from the rising demand for remote-working tools amid the COVID-19 pandemic-led work-from-home trend.

The rising adoption of the company’s cloud-based solutions and massive digitalization of work in organizations, big or small, is likely to have driven its quarterly performance. Increasing demand for the company’s cloud products from new customers as well as the existing clients using on-premises products might have been another tailwind.

Moreover, in the third-quarter preliminary results reported on Apr 14, the company had stated that the last quarter’s top-line performance was driven by the elevated short-term demand for its on-premises products, as customers rushed to purchase ahead of both the planned price changes and discontinuation of new server license sales.

Furthermore, healthy demand for core products like Jira and Confluence, coupled with the rising uptake of new products like Jira Service Desk, Jira Ops and Bitbucket, is anticipated to have been a key growth driver during the period in discussion. Improvement in product quality and performance, multiple product launches and increased pricing are likely to have boosted the firm’s quarterly revenues.

Robust growth in subscription revenues, aided by the solid uptake of the company’s cloud-service offerings, will likely reflect on the to-be-reported results as a consistent key catalyst.

What Our Model Says

Our proven model predicts an earnings beat for Atlassian this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Atlassian currently carries a Zacks Rank of 2 and has an Earnings ESP of +24.48%.

Other Stocks With Favorable Combinations

Here are some other companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Avnet, Inc. (AVT - Free Report) has an Earnings ESP of +0.89% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Facebook, Inc. has an Earnings ESP of +1.87% and holds a Zacks Rank of 3, currently.

Apple Inc. (AAPL - Free Report) has an Earnings ESP of +3.73% and carries a Zacks Rank #3, at present.

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