Atlassian tumbles as earnings spook jittery market

Earlier this week the tech-heavy NASDAQ hit its lowest level in more than a year, 22 per cent down on its record close in November.

Despite the share price fall, Atlassian’s earnings had actually contained plenty of positive news, and beaten analysts’ expectations across the board. The introduction of three new products so far this year helped propel revenue 30 per cent higher to $US740.5 million from $US569.7 million.

Mr Farquhar and Mr Cannon-Brookes said they had hired Rajeev Rajan as the new chief technology officer. Mr Rajan has spent the last four years as vice president and head of engineering for the Facebook app at Meta, and before that spent two decades at Microsoft.

Partial Russian lockout

Following Russia’s attack on Ukraine, Atlassian updated its network infrastructure to prohibit customer data flowing through the affected region, suspended licenses owned by the Russian government and businesses supporting the war effort. It also paused new sales within Russia and Belarus.

But the company stopped short of banning all trade with Russian entities.

“We continue to honor the obligations we have to our other existing customers in Russia,” Mr Farquhar and Mr Cannon-Brookes said in a letter to shareholders.

“We believe cutting ties with the perpetrators of this war while still supporting customers who are uninvolved is the best way to live our mission and values.”

Atlassian projected said fourth-quarter revenue will come in between $US710 million and $US725 million, with adjusted earnings of US24¢ a share.

The company flagged that hiring and migrating on-premise customers to Atlassian’s cloud-based solutions will weigh on Atlassian’s gross and operating margins.

Atlassian has hired 791 people since April last year, mainly in research and development, boosting the entire company’s staff to 8179 people.

The company said it is also looking at redomiciling its parent holding company to the US from the UK, aiming to tap into a broader investor base.

Atlassian also confirmed that an outage that disrupted 775 customers earlier this month was not caused by a cyberattack.

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