Atlassian shares soar over 9% after beating Wall Street estimates and posting $1 billion in annual revenue for the first time ever
- Atlassian, the Aussie software giant, beat Wall Street expectations on the top and bottom lines, sending shares soaring over 9% in after-hours trading.
- An analyst says that Atlassian will focus on investing in IT operations this year and establishing its presence there, and its acquisition of Opsgenie last quarter shows it.
Atlassian's stock was up over 9% in after-hours trading after the $22 billion Aussie software giant posted quarterly earnings that handily beat Wall Street estimates. The icing on the cake: The company generated over $1 billion in revenue in 2018, the first time it's ever done that in a calendar year.
Here's what Atlassian reported, including guidance for the next quarter:
- Revenue: $299 million, up 39% from the same period of 2017. Analysts were expecting $288.32 million.
- Net income per diluted share: $0.25. Wall Street was looking for $0.21.
- Revenue (next quarter): $303 million to $305 million. Analysts had predicted $300.74 million.
- Net income per diluted share (next quarter): $0.18. Wall Street was forecasting $0.18.
In the coming year, Atlassian will focus on investing in the market for serving IT professionals. Just in October, Atlassian closed the $295 million acquisition of incident management platform Opsgenie, which helped increase Atlassian's customer count to a total of 6,551 net new customers for the quarter.
Pat Walravens, director of technology research and senior analyst at JMP Securities, says that in the near future, Atlassian will likely plan on deepening its functionality in IT operations and establishing its presence there. Right now, although Atlassian is known for its project management and developer-focused software - including the Jira issue-tracking tool, ubiqitious among software developers - it's not as well-known in the IT market.
"The big trend is, as the world moves to the cloud, the people who develop software are increasingly responsible for maintaining it," Walravens told Business Insider. "They're making sure it's reliable and making sure it's secure. In the old days, developers would just write the code and they would go work on the next thing. They don't get to do that anymore. Now, that's this whole world of IT operations management."
Atlassian has three main products that will drive this particular business forward: Statuspage, Jira Ops and Opsgenie. In the past quarter, Atlassian made moves in rebranding Opsgenie and making it accessible to more companies by slashing prices. It expects to continue adding customers through Opsgenie in the coming quarter.In general, though, Walravens lauds Atlassian's business model for helping it reach these heights.
"The pricing is completely transparent and you buy it online," Walravens said. "It's a totally self-service model and that's part of the reason it's so profitable."