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Atlassian TEAM reported second-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Its non-GAAP earnings per share of 96 cents beat the Zacks Consensus Estimate by 31.5%. The figure jumped 31.5% from the year-ago quarter’s non-GAAP earnings of 73 cents per share, driven by strong top-line growth and disciplined cost management.
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TEAM’s fiscal second-quarter revenues climbed 21.4% year over year to $1.29 billion and beat the Zacks Consensus Estimate of $1.24 billion by 4.12%. The top line was primarily driven by robust paid seat expansion, cross-selling of additional products, 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 second-quarter results, along with upbeat fiscal 2025 guidance, can give a fresh boost to Atlassian’s share price. Shares of TEAM have gained 4.7% year to date, underperforming the Zacks Internet – Software industry’s growth of 39.1%.
Atlassian Corporation PLC Price, Consensus and EPS Surprise
Atlassian Corporation PLC price-consensus-eps-surprise-chart | Atlassian Corporation PLC Quote
Atlassian’s Quarterly Details
Segment-wise, Subscription revenues soared 30.2% year over year to $1.21 billion, driven by the ongoing shift toward cloud. Our estimate for Subscription revenues was pegged at $1.16 billion.
The Maintenance business registered no revenues due to the closure of its operations.
Atlassian’s Other revenues (including perpetual license revenues) declined 42.8% year over year to $73.2 million. Our estimate for Other revenues was pegged at $68.2 million.
During the fiscal second quarter, Cloud revenues were $846.9 million, up 29.7% year over year. Meanwhile, revenues from the Data Center soared 32% to $362.3 million. Marketplace and Services revenues were $77.2 million, which climbed 22.6% 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 $811.6 million, $346.6 million and 67.9 million, respectively.
The company’s non-GAAP gross profit climbed 23% year over year to $1.1 billion. The non-GAAP gross margin increased 100 basis points year over year to 85% during the quarter.
TEAM’s non-GAAP operating income rose 33.7% year over year to $335.1 million, and its non-GAAP operating margin increased 200 basis points year over year to 26%. 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.