Atlassian stock tumbled after the software maker reported December-quarter earnings that topped estimates but the company's revenue outlook for TEAM stock met expectations. Management pointed to slowing revenue growth from cloud computing services on the company earnings call with analysts.
After the market close on Thursday, Atlassian said it earned 45 cents a share, up 4% from a year earlier. Analysts predicted adjusted profit of 31 cents.
Atlassian said its fiscal second-quarter revenue rose 27% to $873 million, topping views for $850 million.
"TEAM reported a mixed Q2, with total revenue/billings beating estimates, but weak cloud growth," said Cowen analyst Derrick Wood in a report.
He added: "reduced cloud guidance weighed on shares. Weakness in cloud was driven by free-to-paid conversions of new customers worsening in the quarter, continuing the trend that began in Q1."
TEAM stock tumbled 7.2% to close at 169.30 on the stock market today. TEAM stock had gained more than 40% thus far in 2023 heading into the Atlassian earnings report. However, Atlassian stock was still down 40% from a year ago as of Thursday's market close.
TEAM Stock: Shift To Cloud
For the March quarter, Atlassian said it expects total revenue of $900 million at the midpoint of guidance, in line with estimates. In addition, Atlassian said its board of directors has approved a $1 billion stock buyback.
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. Atlassian is phasing out sales of on-premise software used in the data centers of corporate customers.
Meanwhile, TEAM stock holds a Relative Strength Rating of 13 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
