Billion Dollar Unicorns: What Will Atlassian Acquire Next?

Collaboration software maker Atlassian (Nasdaq: TEAM) has had an impressive run in the two years that it has been public. It had a successful IPO that valued it at $5.8 billion and today its value has almost tripled. The company recently reported another strong quarter and is taking strong strides toward annual revenue of $1 billion.

Atlassian’s Financials

Atlassian recently reported a strong third quarter that beat analyst estimates. Revenue in Q3 grew 40% to $223.7 million. Net loss narrowed to $14.3 million or $0.06 per share from $17.5 million or $0.08 per share a year ago. Non-IFRS net income increased to $24.6 million or $0.10 per share from $18.9 million or $0.08 per share last year. Analysts expected adjusted earnings of $0.08 per share on revenue of $218.8 million.

By segment, revenues from subscription rose 67% to $105.6 million, maintenance grew 22% to $81.9 million, perpetual license increased 9% to $21.3 million, and other revenues 49% grew to $14.9 million.

During the quarter, Atlassian added 6,587 net new customers, taking its total customer count to 119,158. It ended the quarter with cash and short-term investments of $763.9 million.

For the fourth quarter, Atlassian expects revenue to be in the range of $232 million to $234 million. IFRS gross margin is expected to be approximately 81%. IFRS Net loss per diluted share is expected to be approximately ($0.05), and non-IFRS net income per diluted share is expected to be approximately $0.12. While the revenue outlook beat analyst estimate of $232 million, the EPS forecast was below the average estimate of $0.14.

For the fiscal year 2018, Atlassian expects annual revenues in the range of $862 million to $864 million IFRS Gross margin is expected to be approximately 80%. IFRS Net loss per diluted share is expected to be in the range of ($0.44) to ($0.43). Non-IFRS net income per share is expected to be in the range of $0.47 to $0.48. Analysts expect earnings of $0.48 per share on revenue of $857.4 million.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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