23 Jan Atlassian revenue up 37 per cent
Last year the company’s annual revenue broke through the $US1 billion mark for the first time and it is now approaching $US1.6 billion in revenue.
In its latest results, Atlassian said its marketplace crossed $US1 billion in lifetime sales for the first time.
In a letter to shareholders, founders and joint chief executives Mike Cannon-Brookes and Scott Farquhar said it had been a strong quarter for the company as it continued to progress on its cloud-first strategy delivering its products remotely rather than on company servers.
“The phrase ‘software is eating the world’ has never been more true,” Mr Cannon-Brookes and Mr Farquhar said. “Software increasingly drives how companies run their businesses and empower their teams.”
The pair said there were two areas of improvement for Atlassian in the second quarter with “stronger than anticipated” new and renewal activity from customers ahead of a price hike by Atlassian.
“This level of demand was higher than we expected,” they said.
Atlassian also underspent relative to its forecast as a result of the pace of research and development hiring.
“These two factors led to a higher than anticipated operating margin,” Mr Cannon-Brookes and Mr Farquhar said. “While a strong result on paper, we’d prefer to have invested more in our long term goals. We aim to improve on both fronts.”
The founders said key to those long term goals was growing an enduring business.
In its results, Atlassian also announced its long-time president Jay Simons would leave the company in July 2020.
Mr Simons has been with Atlassian for 12 years and Mr Cannon-Brookes described him as an “invaluable partner, mentor and friend”.
“Jay helped us pioneer our unique low friction business model over the last decade,” he said on a call with analysts.
Atlassian shares have continued to boom since its 2015 initial public offering on the US Nasdaq exchange. The shares were trading at $US132.64 on Friday giving the company a market capitalisation of $US32.38 billion.
In a call with analysts on Friday morning, Mr Cannon-Brookes and Mr Farquhar discussed taking a steady approach to future growth as more and more businesses employ multiple teams for technology-driven projects.
When asked about whether the company’s strong cash flows would mean more acquisitions, Mr Farquhar pointed to the dozens of companies Atlassian has acquired in recent years.
“Just know that over time we’ll continue to do M&A in a similar fashion to what we’ve done historically,” he said.
The founders also pointed to their focus in further investment in automation technologies, saying their Jira product suite was increasingly being used right across the workflows of big institutions.
Mr Farquhar pointed to conversations with “a large Australian bank” last week, which outlined how Atlassian’s software was responsible for a larger array of functions and workflows.
“It basically manages their entire business,” he said.
Cara is the small business editor for The Age and The Sydney Morning Herald based in Melbourne
Emma is the small business reporter for The Age and Sydney Morning Herald based in Melbourne.