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Atlassian's (TEAM) Q3 Earnings and Revenues Beat Estimates
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Atlassian (TEAM - Free Report) reported third-quarter fiscal 2023 non-GAAP earnings per share of 54 cents, which beat the Zacks Consensus Estimate of 33 cents. The figure increased 25.6% from the year-ago quarter’s non-GAAP earnings of 43 cents per share.
Atlassian’s fiscal third-quarter revenues increased 24% to $915 million and surpassed the consensus mark of $898.7 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 37% year over year to $760.7 million. Sales from the Maintenance business decreased 21.7% year over year to $94.2 million, while Other revenues (including perpetual license revenues) slumped 6.9% year over year to $60.5 million.
During the fiscal third quarter, cloud revenues were $535 million, indicating 33.9% year-over-year growth. Meanwhile, revenues from the data center rose 46.7% to $221.6 million. Marketplace and services revenues were $64.6 million, reflecting a 12.2% year-over-year surge. Revenues from Server declined 28.6% to $94.4 million.
Atlassian Corporation PLC Price, Consensus and EPS Surprise
Atlassian added 6,598 net new customers, bringing the total count to 259,775 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 22% year over year to $779 million. The non-GAAP gross margin contracted 100 basis points (bps) to 85% during the quarter.
Atlassian’s non-GAAP operating income increased 11.1% year over year to $197.1 million, while its non-GAAP operating margin contracted 200 bps to 22%.
Balance Sheet
The company ended the third quarter of fiscal 2023 with cash and cash equivalents and short-term investments of $1.98 billion, up from $1.67 billion at the end of the fiscal second quarter of 2023.
During the fiscal third quarter, TEAM generated operating and free cash flows of $352.4 million and $349.7 million, respectively.
Outlook
For the fourth quarter of fiscal 2023, the company anticipates revenues between $900 million and $920 million. The Zacks Consensus Estimate is pegged at $898.7 million.
The non-GAAP gross margin is estimated to be approximately 83.5%. Non-GAAP operating margin is projected to be approximately 17%.
Zacks Rank & Key Picks
Atlassian currently carries a Zacks Rank #3 (Hold). Shares of TEAM have declined 34.5% in the past year.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised 14% upward to $2.79 per share over the past seven days. For 2023, earnings estimates have moved north by 12.1% to $11.76 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have gained 14.6% in the past year.
The Zacks Consensus Estimate for Momo’s first-quarter 2023 earnings has been revised southward from 36 cents to 32 cents per share over the past 30 days. For 2023, earnings estimates have moved down by 3 cents to $1.55 in the past 30 days.
MOMO's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 31.9%. Shares of the company have gained 59.4% in the past year.
The Zacks Consensus Estimate for ServiceNow’s second-quarter 2023 earnings has been revised northward by 12 cents to $2.04 per share over the past seven days. For 2023, earnings estimates have moved up by 32 cents to $9.54 in the past seven days.
NOW's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.4%. Shares of the company have inched down 5.8% in the past year.
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Atlassian's (TEAM) Q3 Earnings and Revenues Beat Estimates
Atlassian (TEAM - Free Report) reported third-quarter fiscal 2023 non-GAAP earnings per share of 54 cents, which beat the Zacks Consensus Estimate of 33 cents. The figure increased 25.6% from the year-ago quarter’s non-GAAP earnings of 43 cents per share.
Atlassian’s fiscal third-quarter revenues increased 24% to $915 million and surpassed the consensus mark of $898.7 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 37% year over year to $760.7 million. Sales from the Maintenance business decreased 21.7% year over year to $94.2 million, while Other revenues (including perpetual license revenues) slumped 6.9% year over year to $60.5 million.
During the fiscal third quarter, cloud revenues were $535 million, indicating 33.9% year-over-year growth. Meanwhile, revenues from the data center rose 46.7% to $221.6 million. Marketplace and services revenues were $64.6 million, reflecting a 12.2% year-over-year surge. Revenues from Server declined 28.6% to $94.4 million.
Atlassian Corporation PLC Price, Consensus and EPS Surprise
Atlassian Corporation PLC price-consensus-eps-surprise-chart | Atlassian Corporation PLC Quote
Atlassian added 6,598 net new customers, bringing the total count to 259,775 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 22% year over year to $779 million. The non-GAAP gross margin contracted 100 basis points (bps) to 85% during the quarter.
Atlassian’s non-GAAP operating income increased 11.1% year over year to $197.1 million, while its non-GAAP operating margin contracted 200 bps to 22%.
Balance Sheet
The company ended the third quarter of fiscal 2023 with cash and cash equivalents and short-term investments of $1.98 billion, up from $1.67 billion at the end of the fiscal second quarter of 2023.
During the fiscal third quarter, TEAM generated operating and free cash flows of $352.4 million and $349.7 million, respectively.
Outlook
For the fourth quarter of fiscal 2023, the company anticipates revenues between $900 million and $920 million. The Zacks Consensus Estimate is pegged at $898.7 million.
The non-GAAP gross margin is estimated to be approximately 83.5%. Non-GAAP operating margin is projected to be approximately 17%.
Zacks Rank & Key Picks
Atlassian currently carries a Zacks Rank #3 (Hold). Shares of TEAM have declined 34.5% in the past year.
Some better-ranked stocks from the broader Computer and Technology sector are Meta Platforms (META - Free Report) , Momo (MOMO - Free Report) and ServiceNow (NOW - Free Report) . While Meta Platforms and Momo sport a Zacks Rank #1 (Strong Buy), ServiceNow carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised 14% upward to $2.79 per share over the past seven days. For 2023, earnings estimates have moved north by 12.1% to $11.76 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have gained 14.6% in the past year.
The Zacks Consensus Estimate for Momo’s first-quarter 2023 earnings has been revised southward from 36 cents to 32 cents per share over the past 30 days. For 2023, earnings estimates have moved down by 3 cents to $1.55 in the past 30 days.
MOMO's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 31.9%. Shares of the company have gained 59.4% in the past year.
The Zacks Consensus Estimate for ServiceNow’s second-quarter 2023 earnings has been revised northward by 12 cents to $2.04 per share over the past seven days. For 2023, earnings estimates have moved up by 32 cents to $9.54 in the past seven days.
NOW's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.4%. Shares of the company have inched down 5.8% in the past year.