Atlassian pre-announces fiscal Q3 revenue well above analysts’ expectations

Atlassian said results were boosted by a “short-term” variability as customers bought more on-premise software ahead of cloud migrations and price changes.

DevOps software pioneer Atlassian this afternoon pre-announced revenue for the fiscal Q3 that was well above Wall Street's perspective, and well above its own forecast, driven by customers bulking up on on-premise licenses ahead of price changes.

The report sent Atlassian shares up about 3% in late trading

CEO and co-founder Scott Farquhar emphasized that the results were a short-term phenomenon, stating that the revenue upside was "driven by short-term dynamics related to our server and data center products."

"Our goal is to separate out this discrete impact from our long-term focus of delivering innovation and customer value," said Farquhar.

Atlassian is best known for the Jira helpdesk ticketing software and the Trello workgroup collaboration software.

Atlassian said the upside was because customers loaded up on traditional on-premise licenses: 

Third-quarter revenue outperformance was primarily driven by accelerated short-term demand for on-premises products as a result of customers purchasing ahead of both the discontinuation of new server license sales and price changes to on-premises products during the quarter. Atlassian believes this heightened demand strength is short-term 'event-driven' in nature as both the discontinuation of new server license sales and on-premises product price increases became effective in Q3'21.

Revenue in the three months ended in March is now expected in a range of $566 million to $572 million, the company said. That is well above the forecast offered on January 28th for revenue of $475 million to $490 million.

Analysts have been modeling $487 million.

Atlassian expects to make its full results known on April 29th, after market close, along with its forecast for fiscal Q4.