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Atlassian Acquires Again From App Marketplace

Posted on Monday, Oct 21st 2019

According to a recent MarketsandMarkets report, the global enterprise collaboration market size is projected to grow from $31 billion in 2019 to $48.1 billion by 2024 at a CAGR of 9.2%. Billion Dollar Unicorn Atlassian (Nasdaq: TEAM) is a leading service provider in this market, which recently reported first quarter results that just about beat estimates.

Atlassian’s Financials

Atlassian’s first quarter revenues grew 36% to $363.4 million, ahead of the market’s forecast of $351.8 million. Net income was $69.3 million or $0.28, compared with net loss of $242.4 million or $1.03 per share a year ago. Adjusted EPS was $0.28 per share compared with the Street’s forecast of an EPS of $0.24.

By segment, Subscription revenues grew 50% to $201.1 million and maintenance revenues grew 19% to $110.1 million. Perpetual license revenue grew 13.5% to $24.7 million and Other revenues increased 48% to $27.5 million.

The company ended the quarter with a total customer count of 144,038 on an active subscription or maintenance agreement, adding more than 7,060 net new customers during the quarter.

For the second quarter, Atlassian expects revenues of $386-$390 million with an adjusted EPS of $0.27. The Street was looking for revenues of $381.5 million and an EPS of $0.26 for the quarter.

For the full fiscal year 2020, Atlassian expects revenue in the range of $1.56 to $1.574 billion. Adjusted EPS is expected to be $1. Analysts expect EPS of $1.01 on revenue of $1.55 billion.

Atlassian’s New Offerings and Acquisitions

Atlassian updated its Cloud platform with new Free and Premium editions. Free plans of Jira Software, Confluence, Jira Service Desk, and Jira Core provide teams of all sizes, even small ones, a set of fundamental capabilities for team collaboration. Cloud Premium plans of Jira Software, Confluence, and Jira Service Desk enable teams to scale reliably with advanced features, higher availability, unlimited storage, and Premium Support.

During the earnings call, Atlassian announced the acquisition of Code Barrel, the maker of Automation for Jira, a tool that simplifies routine operations in Jira without writing code. Automation for Jira, which was earlier available exclusively available on the Atlassian marketplace, is already used by over 6,000 organizations, from financial services firms like Visa to tech giants like Cisco to consumer companies like Airbnb and Trip Advisor. They use it to simplify routine operations like auto-assignment and creating recurring tasks and automate parts of more advanced workflows. Terms of the deal were not disclosed.

Sydney-based Code Barrel was founded in 2016 by Nick Menere and Andreas Knecht, who were part of the engineering team at Atlassian that built Jira. With the acquisition, Atlassian will have easy-to-use automation that will greatly increase Jira’s utility for customers and teams of all types, from DevOps and ITSM to marketing and HR teams.

Atlassian has been investing steadily on its platform. It has built a thriving marketplace that offers more than 1,500 Jira apps and nearly 850 Confluence apps. The third-party developed apps help organizations with services ranging from IT Service Management, Project Management, Customer Support to providing Visualization Capabilities. Earlier this year, from its PaaS marketplace, it had acquired Good Software, a developer focused on its Confluence Platform. The latest acquisition of Code Barrel is another important step to enhance its cloud products.

Atlassian’s stock is trading at $116.86 with a market capitalization of $28.4 billion. It touched a 52-week high of $149.8 in August. It hit a 52-week low of $65.17 nearly a year ago.

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