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Shares in Mike Cannon-Brookes and Scott Farquhar’s productivity software provider Atlassian (NASDAQ: TEAM) have slipped by more than 12 per cent in after-hours trading after the company posted its third-quarter results detailing a net loss of $209 million.
The results, prepared on a GAAP-basis, compare to net income of $4.7 million achieved in the prior corresponding period, and also include an operating loss of $161.6 million.
Total revenue was $915.5 million for the third quarter, up 24 per cent on the same period in 2022, and the company says it has $2 billion on its balance sheet as of 31 March.
On a non-GAAP basis - which excludes certain gains, losses and charges of a non-cash nature - Atlassian reported its net income was $138 million while operating income was $197.1 million, with both figures up on the prior corresponding third quarter.
Commenting on the results, co-founder and co-CEO Farquhar said the third quarter results exceeded the team’s expectations.
“We delivered a solid quarter of financial results exceeding our expectations with quarterly revenue of $915 million, up 24 per cent year-over-year, driven by subscription revenue growth of 37 per cent year-over-year,” Farquhar said.
“Our customers are turning to Atlassian for help to transform the way work gets done and we’re incredibly excited about the significant opportunities in front of us.
“We’ve made tough calls and now, looking ahead, we’re laser-focused on executing to drive faster at our largest growth opportunities and strategic initiatives.”
The co-founder is likely referring to the company’s decision to let go of 500 staff - representing 5 per cent of its team - as the ‘tough calls’.
Announced in March, the group said the decision came with the ‘heaviest of hearts’, and that the layoffs were made in order to rebalance the company in light of a ‘challenging and difficult macroeconomic environment’.
During the quarter, the Atlassian Marketplace surpassed $3 billion in lifetime sales since its inception in 2012, and the company ended March with a total customer count of 259,775 customers - adding 6,598 during the quarter.
Looking forward, the company is expecting revenue for the fourth quarter to be in the range of $900 million to $920 million, with cloud revenue growth expected to be between 26 per cent and 28 per cent.
Shares in TEAM are down 12.7 per cent in after-hours trading to $150 per share, pushing the company’s share price down by more than $19 per share.
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