Atlassian Q1 Earnings Beat: Will Upbeat Sales View Lift the Stock?

Atlassian TEAM reported first-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Its non-GAAP earnings per share of 77 cents beat the Zacks Consensus Estimate of 63 cents. The figure jumped 18.5% from the year-ago quarter’s non-GAAP earnings of 65 cents per share, driven by strong top-line growth and disciplined cost management.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.TEAM’s fiscal first-quarter revenues climbed 21.5% year over year to $1.19 billion and beat the Zacks Consensus Estimate of $1.15 billion. The top line was primarily driven by robust paid seat expansion, growing ARPU and strong migrations.Buoyed by strong top-line and bottom-line performances, Atlassian raised its revenue guidance for the full year. The better-than-expected first-quarter results, along with upbeat fiscal 2025 guidance, can give a fresh boost to Atlassian’s share price. Shares of TEAM have lost 20.7% year to date, underperforming the Zacks Internet – Software industry’s growth of 25.6%.Atlassian Corporation PLC Price, Consensus and EPS Surprise Atlassian Corporation PLC price-consensus-eps-surprise-chart | Atlassian Corporation PLC QuoteQuarterly DetailsSegment-wise, Subscription revenues soared 33% year over year to $1.13 billion, driven by the ongoing shift toward cloud. Our estimate for Subscription revenues was pegged at $1.09 billion.The Maintenance business registered no revenues due to the closure of its operations.Atlassian’s Other revenues (including perpetual license revenues) declined 55.6% year over year to $55.8 million. Our estimate for Other revenues was pegged at $53.3 million.During the fiscal first quarter, Cloud revenues were $792.3 million, up 31% year over year growth. Meanwhile, revenues from the Data Center soared 38% to $335.6 million. Marketplace and Services revenues were $59.8 million, which climbed 16% year over year. The Server segment registered no revenues due to the closure of operations.Our revenue estimates for the Cloud, Data Center and Marketplace and Services, were pegged at $762 million, $328.2 million and 60.8 million, respectively.The company’s non-GAAP gross profit climbed 21.4% year over year to $998.5 million. The non-GAAP gross margin remained flat year over year at 84% during the quarter.TEAM’s non-GAAP operating income increased 19.2% year over year to $268 million, while its non-GAAP operating margin remained flat year over year at 23%. The operating income is benefiting from strong migrations to the cloud and high growth in Data Center, as well as Marketplace and Services revenues. Disciplined cost management also contributed to the robust operating income.Balance SheetThe company ended the first quarter of fiscal 2024 with cash and cash equivalents and short-term investments of $2.22 billion, down from $2.34 billion reported at the end of the previous quarter.In the fiscal first quarter, TEAM generated operating and free cash flows of $80 million and $74 million, respectively.Q2 and FY25 GuidanceFor the second quarter of fiscal 2025, the company anticipates revenues between $1.23 billion and $1.24 billion. The Zacks Consensus Estimate is pegged at $1.23 billion.The non-GAAP gross margin is estimated to be 84%. The non-GAAP operating margin is projected to be 21%.For fiscal 2025, Atlassian expects its revenues to grow in the range of 16.5-17.0% year over year, up from the previously announced growth rate of 16%. Atlassian expects the non-GAAP gross margin to be 83.5% and the operating margin to be in the range of 22-22.5%.Atlassian’s Zacks Rank & Stocks to ConsiderAtlassian currently carries a Zacks Rank #4 (Sell).Some better-ranked stocks in the broader technology sector are Shopify SHOP, Fortinet FTNT and Adobe ADBE. While Shopify and Fortinet sport Zacks Rank #1 (Strong Buy) each, Adobe carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.The consensus mark for Shopify’s 2024 earnings has been revised upward by 13 cents to $1.12 per share over the past 90 days, indicating a 51.31% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 39.2%. Shares of SHOP have gained 2.7% in the year-to-date period.The Zacks Consensus Estimate for Fortinet’s 2024 earnings has been revised upward by 2 cents to $2.03 per share in the past 30 days, indicating an increase of 24.5% on a year-over-year basis. It has a long-term earnings growth expectation of 16.3%. Shares of FTNT have jumped 34.5% in the year-to-date period.The Zacks Consensus Estimate for ADBE’s fiscal 2024 earnings has been revised upward by a penny to $18.28 per share in the past 30 days, suggesting a year-over-year increase of 13.8%. It has a long-term earnings growth expectation of 13.1%. Shares of ADBE have plunged 19.9% in the year-to-date period.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Adobe Inc. (ADBE): Free Stock Analysis Report Fortinet, Inc. (FTNT): Free Stock Analysis Report Shopify Inc. (SHOP): Free Stock Analysis Report Atlassian Corporation PLC (TEAM): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks