Atlassian reported fiscal third quarter earnings and revenue that topped estimates and announced that Scott Farquhar will step down as co-chief executive effective in August. Atlassian stock fell on Friday amid the news.
Mike Cannon-Brookes, a co-founder of the company along with Farquhar, will lead Atlassian as the sole CEO.
The enterprise software maker reported March quarter earnings after the market close on Thursday.
"Atlassian reported fiscal Q3 growth of 31% above street at 20%, with upside driven by data center outperformance," said TD Cowen analyst Derrick Wood in a report. He added: "We think leadership change, slower than hoped Cloud growth trajectory & tough comps next year will remain (TEAM stock) overhangs."
In fiscal Q3, Atlassian said it earned 89 cents a share, up 65% from a year earlier. Analysts predicted adjusted profit of 62 cents for the period ending March 31.
Also, Atlassian said revenue rose 30% to $1.189 billion, topping views for $1.098 billion.
For the June quarter, Atlassian said it expects total revenue in a range of $1.12 billion to $1.135 billion versus estimates of $1.106 billion.
On the stock market today, Atlassian stock fell 11.6% to 175.29 in early trading.
Further, Atlassian had $2.1 billion in cash and equivalents on its balance sheet at the end of the March quarter.
An investor day for Atlassian stock is slated for May. 1.
Atlassian Stock: Technical Ratings
Atlassian stock had retreated 16% thus far in 2024 heading into the earnings report. But shares were up 39% from a year ago.
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 52 out of a best-possible 99, according to IBD Stock Checkup.
In addition, TEAM stock trades near its 50-day moving average.
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