Atlassian's quarterly earnings show the cost of keeping staff

Photo: Getty

Tech company Atlassian reported its third quarter results overnight, and the market reacted positively.

Q3 revenue rose by 36% to $US159.9 million, and the company is projecting Q4 revenue to be in the range of $US170 million to $US172 million.

Despite significant growth in headline revenue, Atlassian reported a quarterly loss of $US17.46 million, resulting in negative earnings for the quarter of -$US0.08 per share.

Atlassian’s earnings per share figures are compliant with International Financial Reporting Standards (IFRS). The IFRS calculations included added expenses for share-based compensation of $US37.72 million.

Non-IFRS earnings per share, with share-based payments and some other expenses added back, were in positive territory at $US0.08.

Here’s the summary of Atlassian’s IFRS-compliant net earnings for Q3 2017:

Atlassian Shareholder Letter

This chart shows Atlassian’s consistent trend of revenue growth since December 2015:

Atlassian Shareholder Letter

The two biggest contributors to Q3 revenue were subscription fees and maintenance revenue. Subscription fees for access to Atlassian’s cloud computing services was $US63.4 million, up 63% over the year.

Maintenance revenue, which Atlassian describes as “fees earned from providing customers updates, upgrades and technical product support for our perpetual license products,” was US$67.1 million – a yearly increase of 19%.

In its shareholder letter, Atlassian projected full year revenue of $US445.6 million for the 12 months to June 2017, up from $US329.4 million in the prior year.

“Free cash flow for Q3’17 was $68.3 million, comprised of cash flow from operations of $72.9 million, less capital expenditures of $4.6 million. Free cash flow margin, defined as free cash flow as a percentage of revenue, was 42.7%,” Atlassian said.

The company finished Q3 with $US503.6 million in cash and cash equivalents. It spent $US362.8 million of cash in the quarter to purchase Trello, a web-based application that enables collaboration on projects.

“Excluding Trello, Atlassian ended the third quarter of fiscal 2017 with a total customer count of 72,242, a 26% year-over-year increase”, it said.

Atlassian’s shares rose almost 2% overnight following the release of the company’s earnings report. This chart from shows the rise.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at

Tagged In

atlassian us