Atlassian issues upbeat forecasts on strong demand, shares soar

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(Reuters) – Atlassian on Thursday projected third-quarter revenue above estimates and raised its annual revenue forecast, signaling strong demand for the enterprise software maker’s artificial intelligence-enabled cloud services, sending its shares up 16% in extended trading.

Atlassian is benefiting from the accelerated adoption of AI-enabled project management and productivity software as companies seek to improve efficiency and reduce costs.

“Strong enterprise sales execution drove better-than-expected revenue across both our cloud and data center offerings, as we delivered 30% year-over-year growth in subscription revenue in the second quarter,” said Financial Chief Joe Binz.

The company’s collaboration tools, such as Jira for planning and project management and Confluence for content creation, serve over 300,000 customers, including United Airlines and social media platform Reddit.

Atlassian’s latest offering, Rovo, which was released in October 2024, is an AI assistant that allows users to do enhanced search, learning and automation across enterprise data.

For the third quarter, Atlassian sees revenue in the range of $1.35 billion to $1.34 billion, while analysts expect $1.31 billion, according to data compiled by LSEG. 

It now expects fiscal year 2025 revenue growth to be between 18.5% to 19%, up from its prior projection of 16.5% to 17%.

The enterprise software developer’s revenue stood at $1.29 billion in the three months to Dec. 31, compared with analysts’ average estimate of $1.24 billion.

Cloud revenue grew about 30% to $847 million in the quarter, while data center revenue was up nearly 32% to $362.28 million.

(Reporting by Juby Babu in Mexico City; Editing by Alan Barona)