Atlassian's Q1 revenue beats estimates on cloud demand

Overview

• US collaboration software firm's fiscal Q1 revenue rose 24% yr/yr, beating analyst expectations

• Adjusted EPS for fiscal Q1 increased yr/yr

• Company cites cloud and subscription growth as key drivers for the quarter

Outlook

• Atlassian sees Q2 revenue between $1.825 bln and $1.835 bln

• Company expects FY27 total revenue growth of about 13.75% year-over-year

• Atlassian expects FY27 cloud revenue growth of about 26% year-over-year

Result Drivers

• CLOUD AND SUBSCRIPTION GROWTH - Co attributed Q1 revenue growth to increased cloud revenue and subscription ARR

• SERVICE COLLECTION EXPANSION - Growth in Service Collection ARR and customer base driven by adoption across multiple enterprise functions

• OPERATIONAL DISCIPLINE - Co said improved operating margin and free cash flow reflected focus on profitability

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 29 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for Atlassian Corp is $225.00, about 18.5% above its November 4 closing price of $189.88

• The stock recently traded at 32 times the next 12-month earnings vs. a P/E of 17 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)