Atlassian Stock Climbs To 3-Year High After-Hours On Beat-And-Raise Q2 But Retail Sentiment Lags

CEO Mike Cannon-Brookes said the company has infused AI throughout its cloud platform, empowering all teams to accelerate collaboration and unlock organizational knowledge.

Atlassian Corp. ($TEAM) stock surged higher in Thursday’s after-hours session after the San Francisco, California-based company announced better-than-expected fiscal 2025 second-quarter results. It also lifted its full-year revenue outlook.

The company reported second-quarter non-GAAP earnings per share (EPS) of $0.96, up from $0.73 last year, and revenue of $1.29 billion, up 21% year-over-year (YoY). 

The results exceeded the consensus estimates, which called for non-GAAP EPS of $0.75 and revenue of $1.24 billion, and also bettered the guidance of $1.23 billion to $1.24 billion.

Atlassian, which provides collaboration software, services, and tools like Jira, Confluence, Trello, and Loom, said its subscription revenue climbed 30% to $1.21 billion, slowing from the 33% rate in the previous quarter.

The company ended the quarter with 49,449 customers with over $10,000 in annualized recurring revenue (ARR), up 15% YoY. The growth decelerated from the 17% pace in the first quarter.

Mike Cannon-Brookes, Atlassian’s CEO and co-founder, said, “By infusing AI throughout our world-class cloud platform, we’re empowering all teams to accelerate collaboration and unlock organizational knowledge, further enabling them to unleash their full potential.”

CFO Joe Binz attributed the better-than-expected revenue across its Cloud and Data Center business to strong enterprise sales execution. 

Looking ahead, Atlassian expects third-quarter revenue in the range of $1.345 billion to $1.353 billion, with an estimated 23.5% growth in Cloud revenue and 7% growth in Data Centers. The Street estimate is at $1.32 billion, according to Yahoo Finance data.

It models non-GAAP gross margin of 84.5%.

The company guided full-year revenue growth to 18.5%-19%, up from the previous outlook of 16.5%-17% and better than the consensus estimate of 17.2% growth.

Non-GAAP Gross margin is expected at 84%-84.5%.

On Stocktwits, retail sentiment turned ‘bearish’ (36/100) from ‘neutral’ a day ago, with message volume staying at ‘normal’ levels.

Bearish stock watchers on the platform balked at the valuation. Some said they were shorting the stock

Atlassian stock last traded up 19.50% at $319 in Thursday’s after-hours session, marking the highest levels since Feb. 16, 2022. The stock has gained nearly 10% in January.

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