On Thursday, Atlassian announced third-quarter revenue exceeding estimates and raised its annual revenue forecast, demonstrating high demand for its AI-enabled cloud services in the enterprise software market. This news led to a 16% surge in its shares during extended trading.
The company is capitalizing on the growing popularity of AI-powered project management and productivity software, reflecting a trend among businesses to enhance efficiency and cut costs.
Atlassian's solid performance was attributed to robust enterprise sales execution, resulting in better-than-expected revenue from both cloud and data center offerings. Financial Chief Joe Binz stated, Strong enterprise sales execution drove better-than-expected revenue across both our cloud and data center offerings, as we delivered 30% year-over-year growth in subscription revenue in the second quarter.
With a customer base of over 300,000, including United Airlines and Reddit, Atlassian's collaboration tools like Jira and Confluence are widely used for planning, project management, and content creation.
Introduced in October 2024, Atlassian's new AI assistant, Rovo, enhances search, learning, and automation capabilities across enterprise data.
For the upcoming quarter, Atlassian anticipates revenue between $1.35 billion and $1.34 billion, surpassing analysts' expectations of $1.31 billion. The company has revised its fiscal year 2025 revenue growth forecast to between 18.5% and 19%, up from the previous guidance of 16.5% to 17%.
During the three months ending December 31, Atlassian recorded revenue of $1.29 billion, outperforming the analysts' average estimate of $1.24 billion. Cloud revenue increased by around 30% to $847 million, while data center revenue rose by nearly 32% to $362.28 million.