Atlassian Corp. rallied more than 20% in extended trading after delivering a forecast for the new year that quelled investor anxieties over a slowdown in internet technology spending.
(Bloomberg) — Atlassian Corp. rallied more than 20% in extended trading after delivering a forecast for the new year that quelled investor anxieties over a slowdown in internet technology spending.
Cloud revenue will grow in the fiscal year ending June 2024 by 25% to 30%, the collaboration software company said Thursday in a statement. That’s in line with an average of estimates compiled by Bloomberg.
“We closed out a challenging year with strong momentum in cloud migrations,” Co-Chief Executive Officer Scott Farquhar said in the statement.
Analysts had expressed caution about the durability of Atlassian’s cloud growth in the lead up to earnings. KeyBanc analyst Michael Turits had lowered his price target for the company this weak over fear that cloud migrations could slow due to increased churn.
The shares jumped to a high of $213.70 in extended trading after closing at $169.65 in New York. The stock gained 32% through Thursday’s close, which is short of the 37% rally in the iShares Expanded Tech-Software Sector ETF. Like many peers, Atlassian has introduced new artificial intelligence features into its line of products this year, which includes Jira and Confluence.
In the fiscal fourth quarter, revenue increased 24% to $939 million, slightly exceeding analyst estimates. Profit, excluding some items, was 57 cents a share. Analysts, on average, projected 45 cents.
“The strong execution on costs should be viewed positively,” wrote Bloomberg Intelligence analyst Sunil Rajgopal.
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