Atlassian stock popped Friday after the software maker reported fiscal first quarter earnings and revenue that topped Wall Street targets amid its shift to a subscription, cloud-based business model.
The company reported September quarter Atlassian earnings after the market close on Thursday.
In fiscal Q1, Atlassian said it earned 77 cents a share, up 18% from the year-earlier period. Analysts predicted adjusted profit of 64 cents.
Also, Atlassian said revenue for TEAM stock rose 21% to $1.19 billion, topping views for $1.155 billion.
"Fiscal Q1 saw largest Cloud beat relative to guide (+31% year-over-year vs. 27% guide) since management started guiding to it," said Jefferies analyst Brent Thill in a report.
At BMO Capital Markets, analyst Keith Bachman also holds a positive view.
"After several quarters of relatively disappointing performance, TEAM delivered a solid quarter, including raising fiscal 2025 revenue guidance," he said. "Importantly, cloud revenue growth of 31% in the September quarter was significantly ahead of our estimates for 27% growth. Cloud growth was driven by seat expansion, migrations, cross-sell and early traction with new products."
For the December quarter, Atlassian said it expects total revenue in a range of $1.23 billion to $1.24 billion versus estimates of $1.23 billion.
On the stock market today, Atlassian stock popped 21% to 229.51 in early trading.
Atlassian Stock Technical Ratings
If the gain holds, Atlassian could erase 2024 losses. Atlassian stock had retreated 20% thus far in 2024 heading into the earnings report.
Founded in Sydney in 2002, Atlassian sells project management and collaborative software for software developers and information technology engineering teams.
The software maker is transitioning to a cloud-computing business model. In addition, Atlassian is phasing out sales of on-premise software used in the data centers of corporate customers.
Meanwhile, Atlassian stock holds a Relative Strength Rating of 42 out of a best-possible 99, according to IBD Stock Checkup.
In addition, TEAM stock has clawed back above its 200-day moving average.
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