Atlassian defies tech stock nosedive

Productivity software giant Atlassian has rebounded from technology stocks’ recent sell-off, up 10 per cent in after hours trading in New York after it beat analysts’ expectations and recorded near $1 billion revenue for the most recent quarter.

Other technology stocks that had soared because of the pandemic, such as Netflix, have crashed back to earth recently, with the streaming service trading this week at prices in line with those not seen since the start of the coronavirus crisis.

Atlassian, which was founded in Sydney two decades ago, was trading at $US320 ($454) a share before the Nasdaq opened on Friday afternoon, AEDT, off the back of the results. That is still well down on its peak of about $US450 in October but about $US70 more than this time last year and more than double its share price when the pandemic started.

As with most technology companies, the $US73 billion Atlassian offers shares to many employees as part of their pay packets, so the uptick in its value will aid its plans to hire 5000 more staff in Australia over several years against a backdrop of low unemployment.

Scott Farquhar, a co-founder and co-chief executive of the company, said the company’s decision to allow its staff to work from anywhere the company has a legal right to hire workers was helping it attract and retain staff.

“There’s been talk of the Great Resignation [where workers quit their jobs en masse to search for more fulfilling lives or higher pay] across particularly North America, but we haven’t seen an uptick in similar ways, that our peers have seen an uptick around that,” Mr Farquhar said.

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The earnings growth was driven by more than 10,000 net new customers on Atlassian software such as Jira and Confluence, which are commonly used by technology teams to track projects and document their work, with 98 per cent in cloud products.

“We also saw subscription revenue grow 64 per cent year-over-year, which reflects our continued investment in our cloud platform and the strong focus and effort we have put in to helping our customers seamlessly move to cloud,” Mr Farquhar said in a statement.

On an earnings call several analysts, who had on average been expecting Atlassian to record $US641 million for the quarter, congratulated Mr Farquhar and the company for the $US688 million it took in during the quarter that ended December 31 last year. Yet it still posted an operating loss of $US66.7 million.

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