Atlassian co-founder Mike Cannon-Brookes reassured investors about the company’s future amidst skepticism, emphasizing that Atlassian is building a “f..king great business.” The software company announced a 23 percent increase in sales, reaching $US1.6 billion ($2.3 billion) in the December quarter. Despite this notable growth, Atlassian’s shares took a hit, plummeting 6.3 percent on Wall Street, marking nearly a 70 percent decline over the past year.
Investors are concerned that Atlassian’s corporate users may increasingly replace tools like Jira and Trello with artificial intelligence solutions. Cannon-Brookes acknowledged these concerns, stating, “I’m convinced AI is great for Atlassian. Others think software is dead.” He expressed that the current market environment tends to amplify negative sentiment, often overshadowing more nuanced discussions about the company’s potential.
During the quarter, Atlassian recorded a net loss of $US42.6 million. However, when adjusted for certain expenses, the company highlighted a profit of $US320.9 million. Additionally, earnings per share of $US1.22 surpassed the expectations of analysts, who had forecasted $US1.14.
In after-hours trading, the stock continued to struggle, falling another 6 percent as free cash flow declined by 51 percent to $US168.5 million. Atlassian attributed this drop to the timing of billings and various one-off payments during the quarter. Nonetheless, the company maintained an optimistic outlook, raising its revenue growth guidance to 22 percent for the fiscal year 2026.
During this quarter, Atlassian’s stock-based compensation totaled $US452.6 million, with the company employing around 13,800 people. For employees with unvested stock options worth $1 million, the current market scenario has drastically affected valuations, bringing their worth down to approximately $300,000 amidst the stock’s tumultuous performance.
Despite the challenges, the emphasis on growth and the adjustment of revenue projections suggests a commitment to resilience in a shifting tech landscape. As Atlassian navigates these turbulent times, the potential integration of AI may trigger further innovations in its product offerings, positioning the company favorably for future success.