Atlassian Corp.’s ($TEAM) fiscal year 2025 first-quarter results topped the consensus while the guidance for the running quarter and the year also exceeded expectations.
San Francisco, California-based Atlassian reported non-GAAP net income of $169 million or $0.77 for the first quarter compared to $169 million or $0.65 per share last year.
The non-GAAP earnings per share (EPS) far exceeded the $0.64 consensus estimate.
Revenue of the U.S-Australian software company that provides collaboration software, services and tools such as Jira, Confluence, Trello and Loom, climbed 21% year-over-year (YoY) to $1.19 billion, ahead of the $1.16-billion consensus.
Subscription revenue, which accounted for $1.13 billion or roughly 95% of the total revenue, climbed 33%.
CEO and co-founder Mike Cannon-Brookes said, “We’re delivering differentiated value for customers through the power of Atlassoan’s cloud platform and our Teamwork Graph - enabling teams to unlock organizational knowledge at scale across both first-party and third-party applications.”
Non-GAAP operating margin remained steady at 25%.
For the second quarter, Atlassian expects revenue of $1.23 billion to $1.24 billion, with YoY cloud revenue growth estimated at about 25.5%.
The company guided full-year revenue growth to 16.5%-17.5%, and non-GAAP gross margin to 83.5%.
The consensus estimates model second-quarter revenue of $1.23 billion, and 2025 revenue of $5.07 billion, translating to 16.30% growth.
Following the quarterly report, Wall Street firms raised their price targets for Atlassian stock, according to the Fly. KeyBanc upgraded Atlassian stock from “Sector Weight” to “Overweight.” “Atlassian’s guidance is appropriately set to facilitate a more consistent ‘beat/raise cadence going forward’” the firm said.
KeyBanc sees a positive set-up for shares due to stable paid seat expansion over the past two quarters, the company’s risk-adjusted guidance and survey data points that point to some optimism in IT budgets in 2025.
On Stocktwits, retailers expressed mostly bullish views about the stock.
A bullish technical breakout is imminent, said one user.
As of 9:21 am ET, Atlassian stock jumped 24.09% to $233.96.
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