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Atlassian (TEAM) to Report Q2 Earnings: What's in Store?

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Atlassian (TEAM - Free Report) is slated to report second-quarter fiscal 2022 results on Jan 27.

Atlassian projects fiscal second-quarter revenues between $630 million and $645 million (mid-point of $637.5 million). The Zacks Consensus Estimate for revenues is pegged at $638.6 million, suggesting growth of 27.4% from the year-ago reported figure.

The company estimates non-IFRS earnings between 35 cents and 38 cents per share for the fiscal second quarter. The Zacks Consensus Estimate is pegged at 38 cents per share, suggesting an increase of 2.7% from 37 cents in the year-ago period.

The company’s earnings beat earnings estimates in three of the trailing four quarters and missed once, the average surprise being 5.2%.

Atlassian Corporation PLC Price and EPS Surprise Atlassian Corporation PLC Price and EPS Surprise

Atlassian Corporation PLC price-eps-surprise | Atlassian Corporation PLC Quote

Factors to Note

The fiscal second-quarter results are likely to reflect gains from the rising demand for remote-working tools amid the COVID-19 pandemic-induced work-from-home trend.

The rising adoption of Atlassian’s cloud-based solutions and massive digitalization of work in organizations, big or small, might have benefited the fiscal second-quarter’s performance. Increasing demand for the company’s cloud products from new customers and existing clients using on-premises products may have acted as a tailwind. The company’s data center offerings have been witnessing growth as several of its existing Server customers have been switching to data center services.

With more and more customers migrating to the cloud amid the coronavirus-induced work-from-home and online learning wave, Atlassian has been witnessing strong demand for its premium and Enterprise edition of cloud offerings. This is likely to get reflected in the fiscal second-quarter’s results.

Healthy demand for core products like Jira and Confluence and the rising adoption of new products like Jira Service Desk, Jira Ops and Bitbucket may have acted as key catalysts in the quarter to be reported. Improvement in product quality and performance, multiple product launches and increased pricing are likely to have boosted the firm’s fiscal second-quarter performance.

Atlassian expanded Jira's portfolio with the addition of customers like Avalara, Bayer, SeaWorld and UiPath in the first quarter.  The company is expected to have improved this further in the second quarter with the continuous transition of non-technical Jira customers.

Robust growth in subscription revenues, aided by the solid uptake of the company’s cloud-service offerings, is likely to get reflected in the to-be-reported quarter’s results.

Nonetheless, increased investments in its systems and infrastructure, research & development, sales and marketing initiatives might have weighed on the bottom line in the quarter under review.

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.

Atlassian currently has a Zacks Rank #3 and an Earnings ESP of +4.92%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combinations

Per our model, General Motors (GM - Free Report) , Advanced Micro Devices (AMD - Free Report) and Starbucks (SBUX - Free Report) also have the right combination of elements to post an earnings beat in their upcoming releases.

General Motors has a Zacks Rank #2 and an Earnings ESP of +12.02%. The company is scheduled to report fourth-quarter 2021 results on Feb 1. Its earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 46.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for the fourth-quarter bottom line of General Motors is pegged at earnings of $1.04 per share, suggesting a year-over-year decline of 46.1%. The consensus mark for revenues stands at $29.35 billion, indicating a year-over-year decrease of 21.8%.

AMD is slated to report fourth-quarter 2021 results on Feb 1. The stock has a Zacks Rank #2 and an Earnings ESP of +3.47%. Its earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 14%.

The Zacks Consensus Estimate for AMD’s quarterly earnings is pegged at 75 cents per share, suggesting a year-over-year improvement of 44.2%. Its quarterly revenues are estimated to increase 39.4% year over year to $4.52 billion.

Starbucks has a Zacks Rank #3 and an Earnings ESP of +2.22%. The company is scheduled to report first-quarter fiscal 2022 results on Feb 1. Its earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 15.3%.

The Zacks Consensus Estimate for Starbucks’ first-quarter earnings is pegged at 80 cents per share, suggesting year-over-year growth of 31.2%. The consensus mark for revenues stands at $7.99 billion, indicating a year-over-year improvement of 18.4%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.