Yahoo Finance Atlassian (TEAM) Q3 Earnings and Revenues Beat Estimates
Atlassian TEAM reported stronger-than-expected third-quarter fiscal 2024 results. Its non-GAAP earnings per share of 89 cents beat the Zacks Consensus Estimate of 61 cents. The figure surged 64.8% from the year-ago quarter’s non-GAAP earnings of 54 cents per share, mainly driven by double-digit year-over-year growth across segments like Cloud and Data Center.
TEAM’s fiscal third-quarter revenues jumped 30% to $1.19 billion and surpassed the consensus mark of $1.10 billion. The top line was primarily driven by strong migrations, robust growth across Cloud and Data Center, as well as growing enterprise sales execution.
Quarterly Details
Segment-wise, Subscription revenues soared 40.8% year over year to $1.07 billion, driven by the ongoing shift toward cloud. Our estimate for Subscription revenues was pegged at $998.2 million.
Atlassian Corporation PLC Price, Consensus and EPS Surprise
Atlassian Corporation PLC price-consensus-eps-surprise-chart | Atlassian Corporation PLC Quote
Sales from the Maintenance business plunged 68.7% year over year to $29.5 million. The decline was primarily due to the company’s planned end of providing maintenance and support for its Server offerings, which began in February 2024. Our estimate for Maintenance revenues was pegged at $38.3 million.
Atlassian’s Other revenues (including perpetual license revenues) jumped 45.7% year over year to $88.24 million. Our estimate for Other revenues was pegged at $57.7 million.
During the fiscal third quarter, Cloud revenues were $703 million, representing 31.43% year-over-year growth. Meanwhile, revenues from the Data Center surged 64.4% to $364.1 million. Marketplace and services revenues were $92.2 million, which climbed 42.7% year over year. However, revenues from server plunged 68.5% to $29.7 million.
Our revenue estimates for the Cloud, Data Center, Marketplace and Services, as well as Server businesses, were pegged at $698.7 million, $299.1 million, $26.2 million and $70.2 million, respectively.
The company’s non-GAAP gross profit climbed 29.1% year over year to $100.5 billion. The non-GAAP gross margin remained flat at 85% during the quarter.
TEAM’s non-GAAP operating income surged 60.6% year over year to $316.5 million, while its non-GAAP operating margin rose to 27% from 22% in the year-ago quarter. The operating income is benefiting from successful enterprise sales execution and strong migrations.
Balance Sheet
The company ended the third quarter of fiscal 2024 with cash and cash equivalents and short-term investments of $2.11 billion, up from $1.61 billion at the end of the previous quarter.
In the fiscal third quarter, TEAM generated operating and free cash flows of $565 million and $555 million, respectively.
Guidance
The company provided guidance for the fiscal fourth quarter. For the fourth quarter of fiscal 2024, the company anticipates revenues between $1.12 billion and $1.135 billion. The Zacks Consensus Estimate is pegged at $1.10 billion.
The non-GAAP gross margin for the fiscal fourth quarter is estimated to be approximately 83.5%. The non-GAAP operating margin is anticipated to be approximately 18.5% in the fiscal fourth quarter.
Zacks Rank and Stocks to Consider
Currently, Atlassian carries a Zacks Rank #3 (Hold). Shares of the company have returned 30.8% in the past year.
Some better-ranked stocks from the broader technology sector are Dell Technologies DELL, Arista Networks ANET and Crexendo CXDO, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DELL’s 2024 earnings per share has been revised upward by 54 cents to $7.64 in the past 60 days. Shares of DELL have surged 193.9% in the past year.
The Zacks Consensus Estimate for ANET's 2024 earnings per share has been revised upward by 3 cents to $7.49 in the past 30 days. Shares of ANET have gained 71.3% in the past year.
The Zacks Consensus Estimate for CXDO’s 2024 earnings per share has been revised upward by 6 cents to 23 cents in the past 60 days. Shares of CXDO have skyrocketed 230% in the past year.
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