TEAM Earnings

Investment Analysis Clubs Saul’s Investing Discussions
1

Atlassian is a SaSS and enterprise provider that I own and use. I personally feel they have a very strong moat as a company whose core product are really at the center or any companies software deliver cycle.

They reported last night, beating on revenue and earnings, and raised their expectations for both.
Quick snippet:
For the quarter ended Dec. 31, the provider of project management and workflow software reported revenue of $408.7 million, up 37% from the year-ago quarter, and ahead of the Wall Street analyst consensus at $388 million. Adjusted profits of 37 cents a share were 10 cents ahead of the Street consensus estimate at 27 cents.

For the third quarter, Atlassian (ticker: TEAM) projects revenue of $395 million to $399 million, with adjusted profits of 20 cents a share; Street consensus had been for revenue of $397.1 million and earnings of 22 cents a share.

For the full fiscal year ending in June 2020, the company sees revenue of $1.59 to $1.6 billion, with adjusted profits of $1.03 to $1.09 a share; analyst consensus has been $1.57 billion and $1.01 a share.

“We had a strong quarter, growing revenue 37% year-over-year and generating record profitability and free cash flow,” Co-CEO Scott Farquhar said in a statement. “Subscription revenue grew 50% year-over-year, underscoring the progress we continue to make in our cloud-first strategy.”

The company also announced that its President, Jay Simons, will leave Atlassian in July 2020. He had been with the company for 12 years.

27 Likes
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Wall street was very impressed because they beat consensus. But why would the street be surprised with 37% revenue growth? Here are the last qtrs growth from prior qtr and then going backwards to each previous reporting period: 36%, 37%, 36%, 38%, 39%, 37%

The company has been a model of execution with no real deviation in growth over the prior 2 years.

Rob

6 Likes
3

Rob,

Perhaps additional drivers resulting in the 10% pop included:

  • Adjusted earnings per share were $0.37, up from $0.25 from last year and ahead of $0.27 consensus, or

  • Subscription revenue increased 50% Y-o-Y

Not a bad pop when positive news is combined with the announcement that president, Jay Simons, will be leaving in July.

I’ll take it!

Harley
Long on TEAM

1 Like
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I think TEAM will increase their profitability as they go forward because as the continue to rapidly increase their sales their Gross Profits should increase at a faster rate; if they careful. Also because their subscription revenue increase 50% that is also a good sign for increased profitability. It will be interesting to see if they can increase their growth rate but high 30s is still pretty darn good. High growth with profitability is a very good combination.

Long Team
VT