Billion Dollar Unicorns: Atlassian Teams Up With Slack To Go Lean

Collaboration and productivity software maker Atlassian (NASDAQ: TEAM) recently reported an impressive fourth quarter. But what has impressed analysts the most is its partnership with rival Slack and its decision to get out of the communications market.

Atlassian’s Financials

Revenue in Q4 grew 40% to $243.8 million. Net loss widened to $25.9 million or $0.11 per share from $20.7 million or $0.09 per share a year ago. Non-IFRS net income increased to $33 million or $0.13 per share from $21.6 million or $0.09 per share last year. Analysts expected adjusted earnings of $0.12 per share on revenue of $233.4 million.

By segment, revenues from subscription rose 62% to $117.4 million, maintenance grew 22% to $87.3 million, perpetual license increased 16% to $22.5 million, and other revenues 53% grew to $16.5 million.

During the quarter, Atlassian added 6,6038 net new customers, taking its total customer count to 125,796. It ended the quarter with cash and short-term investments of $1.7 billion, up from $763.9 million at the end of the third quarter. The company raised cash by selling $850 million of senior notes in April.

Fiscal 2018 revenue grew 41% to $874 million. IFRS net loss widened to $119.3 million or $0.52 per share from $42.5 million or $0.19 per share. Non-IFRS net income increased to $118.6 million or $0.49 per share from $84.9 million or $0.36 per share.

For the first quarter, Atlassian expects revenue to be in the range of $258 million to $260 million. IFRS gross margin is expected to be approximately 82%. IFRS net loss per diluted share is expected to be approximately ($0.13), and non-IFRS net income per diluted share is expected to be approximately $0.19. Analysts expected earnings of $0.15 per share on revenue of $252.4 million.

For the fiscal year 2019, Atlassian expects annual revenues in the range of $1.146 billion to $1.154 billion. IFRS Gross margin is expected to be 82%-83%. IFRS Net loss per diluted share is expected to be $0.30. Non-IFRS net income per share is expected to be $0.77. Analysts expect earnings of $0.67 per share on revenue of $1.1 billion.

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