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Atlassian's (TEAM) Q2 Earnings and Revenues Beat Estimates
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Atlassian (TEAM - Free Report) reported second-quarter fiscal 2023 non-GAAP earnings per share of 45 cents, beating the Zacks Consensus Estimate of 31 cents. The figure increased 4.7% from the year-ago quarter’s non-GAAP earnings of 43 cents per share.
Atlassian’s fiscal second-quarter revenues increased 27% to $873 million and surpassed the consensus mark of $842.5 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 40% year over year to $711 million. Sales from the Maintenance business decreased 16.6% year over year to $106 million, while Other revenues (including perpetual license revenues) increased 5.7% year over year to $55.5 million.
During the fiscal second quarter, cloud revenues were $512.3 million, indicating 41% year-over-year growth. Meanwhile, revenues from the data center rose 40% to $194.3 million. Marketplace and services revenues were $59.9 million, reflecting a 20% year-over-year surge. Revenues from Server declined 22% to $106.2 million.
Atlassian Corporation PLC Price, Consensus and EPS Surprise
Atlassian added 4,004 net new customers, bringing the total count to 253,177 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 25.1% year over year to $741 million. The non-GAAP gross margin contracted 100 basis points (bps) to 85% during the quarter.
Atlassian’s non-GAAP operating income decreased 1.1% year over year to $174.8 million, while its non-GAAP operating margin contracted 600 bps to 20%.
Balance Sheet
The company ended the second quarter of fiscal 2023 with cash and cash equivalents and short-term investments of $1.67 billion, up from $1.52 billion at the end of the fiscal first quarter of 2023.
During the fiscal second quarter, TEAM generated operating and free cash flows of $150.5 million and $146.5 million, respectively.
Outlook
For the third quarter of fiscal 2023, the company anticipates revenues to be between $890 million and $910 million. The guided range is slightly higher than the Zacks Consensus Estimate of $889.8 million.
The non-GAAP gross margin is estimated to be approximately 84%. Non-GAAP operating margin is projected to be approximately 15%.
Zacks Rank & Key Picks
Atlassian currently carries a Zacks Rank #5 (Strong Sell). Shares of TEAM have decreased 47.9% in the past year.
The Zacks Consensus Estimate for Axcelis’ fourth-quarter 2022 earnings has been revised 41 cents northward to $1.46 per share over the past 30 days. For 2022, earnings estimates have improved by 8.5% to $5.21 per share over the past 30 days.
ACLS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 23.2%. Shares of the company have risen 94.6% in the past year.
The Zacks Consensus Estimate for Bandwidth’s fourth-quarter 2022 earnings has been revised by a penny to 4 cents per share over the past 90 days. For 2022, earnings estimates have moved north by 25 cents to 37 cents per share in the past 90 days.
BAND's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 301.8%. Shares of the company have declined 55.3% in the past year.
The Zacks Consensus Estimate for Nutanix's second-quarter fiscal 2023 loss has been revised a penny north to 13 cents per share over the past 30 days. For fiscal 2023, earnings estimates have moved north by 3 cents to 17 cents per share in the past 90 days.
NTNX’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 86.1%. Shares of the company have jumped 11.7% in the past year.
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Atlassian's (TEAM) Q2 Earnings and Revenues Beat Estimates
Atlassian (TEAM - Free Report) reported second-quarter fiscal 2023 non-GAAP earnings per share of 45 cents, beating the Zacks Consensus Estimate of 31 cents. The figure increased 4.7% from the year-ago quarter’s non-GAAP earnings of 43 cents per share.
Atlassian’s fiscal second-quarter revenues increased 27% to $873 million and surpassed the consensus mark of $842.5 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 40% year over year to $711 million. Sales from the Maintenance business decreased 16.6% year over year to $106 million, while Other revenues (including perpetual license revenues) increased 5.7% year over year to $55.5 million.
During the fiscal second quarter, cloud revenues were $512.3 million, indicating 41% year-over-year growth. Meanwhile, revenues from the data center rose 40% to $194.3 million. Marketplace and services revenues were $59.9 million, reflecting a 20% year-over-year surge. Revenues from Server declined 22% to $106.2 million.
Atlassian Corporation PLC Price, Consensus and EPS Surprise
Atlassian Corporation PLC price-consensus-eps-surprise-chart | Atlassian Corporation PLC Quote
Atlassian added 4,004 net new customers, bringing the total count to 253,177 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 25.1% year over year to $741 million. The non-GAAP gross margin contracted 100 basis points (bps) to 85% during the quarter.
Atlassian’s non-GAAP operating income decreased 1.1% year over year to $174.8 million, while its non-GAAP operating margin contracted 600 bps to 20%.
Balance Sheet
The company ended the second quarter of fiscal 2023 with cash and cash equivalents and short-term investments of $1.67 billion, up from $1.52 billion at the end of the fiscal first quarter of 2023.
During the fiscal second quarter, TEAM generated operating and free cash flows of $150.5 million and $146.5 million, respectively.
Outlook
For the third quarter of fiscal 2023, the company anticipates revenues to be between $890 million and $910 million. The guided range is slightly higher than the Zacks Consensus Estimate of $889.8 million.
The non-GAAP gross margin is estimated to be approximately 84%. Non-GAAP operating margin is projected to be approximately 15%.
Zacks Rank & Key Picks
Atlassian currently carries a Zacks Rank #5 (Strong Sell). Shares of TEAM have decreased 47.9% in the past year.
Some top-ranked stocks from the broader Computer and Technology sector are Axcelis Technologies (ACLS - Free Report) , Bandwidth (BAND - Free Report) and Nutanix (NTNX - Free Report) . While Axcelis sports a Zacks Rank #1 (Strong Buy), Bandwidth and Nutanix carry Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Axcelis’ fourth-quarter 2022 earnings has been revised 41 cents northward to $1.46 per share over the past 30 days. For 2022, earnings estimates have improved by 8.5% to $5.21 per share over the past 30 days.
ACLS’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 23.2%. Shares of the company have risen 94.6% in the past year.
The Zacks Consensus Estimate for Bandwidth’s fourth-quarter 2022 earnings has been revised by a penny to 4 cents per share over the past 90 days. For 2022, earnings estimates have moved north by 25 cents to 37 cents per share in the past 90 days.
BAND's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 301.8%. Shares of the company have declined 55.3% in the past year.
The Zacks Consensus Estimate for Nutanix's second-quarter fiscal 2023 loss has been revised a penny north to 13 cents per share over the past 30 days. For fiscal 2023, earnings estimates have moved north by 3 cents to 17 cents per share in the past 90 days.
NTNX’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 86.1%. Shares of the company have jumped 11.7% in the past year.