Have you assessed how the international operations of Atlassian (TEAM Quick QuoteTEAM - Free Report) performed in the quarter ended December 2024? For this company, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.

In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. For investors, understanding a company's reliance on overseas markets has become increasingly crucial, as it offers insights into the company's sustainability of earnings, ability to tap into diverse economic cycles and overall growth potential.

Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.

Upon examining TEAM's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.

The company's total revenue for the quarter amounted to $1.29 billion, marking an increase of 21.4% from the year-ago quarter. We will next turn our attention to dissecting TEAM's international revenue to get a clearer picture of how significant its operations are outside its main base.

Trends in TEAM's Revenue from International Markets

During the quarter, EMEA contributed $525.48 million in revenue, making up 40.85% of the total revenue. When compared to the consensus estimate of $494.23 million, this meant a surprise of +6.32%. Looking back, EMEA contributed $469.27 million, or 39.51%, in the previous quarter, and $425.29 million, or 40.12%, in the same quarter of the previous year.

Of the total revenue, $141.82 million came from Asia Pacific during the last fiscal quarter, accounting for 11.02%. This represented a surprise of +4.33% as analysts had expected the region to contribute $135.93 million to the total revenue. In comparison, the region contributed $134.01 million, or 11.28%, and $120.38 million, or 11.36%, to total revenue in the previous and year-ago quarters, respectively.

International Revenue Predictions

It is projected by analysts on Wall Street that Atlassian will post revenues of $1.35 billion for the ongoing fiscal quarter, an increase of 13.3% from the year-ago quarter. The expected contributions from EMEA and Asia Pacific to this revenue are 40.1% and 10.9%, translating into $540.22 million and $146.8 million, respectively.

Analysts expect the company to report a total annual revenue of $5.17 billion for the full year, marking an increase of 18.6% compared to last year. The expected revenue contributions from EMEA and Asia Pacific are projected to be 40.3% ($2.08 billion) and 11.1% ($573.93 million) of the total revenue, in that order.

Key Takeaways

Relying on global markets for revenues presents both prospects and challenges for Atlassian. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.

In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.

Emphasizing a company's shifting earnings prospects is a key aspect of our approach at Zacks, especially since research has proven its substantial influence on a stock's price in the short run. This correlation is positively aligned, meaning that improved earnings projections tend to boost the stock's price.

Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.

Currently, Atlassian holds a Zacks Rank #2 (Buy), signifying its potential to outperform the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

A Look at Atlassian's Recent Stock Price Performance

Over the preceding four weeks, the stock's value has appreciated by 29.7%, against an upturn of 2.1% in the Zacks S&P 500 composite. In parallel, the Zacks Computer and Technology sector, which counts Atlassian among its entities, has depreciated by 0.8%. Over the past three months, the company's shares have seen an increase of 30.9% versus the S&P 500's 1.2% increase. The sector overall has witnessed an increase of 0.6% over the same period.