Shares of productivity software company Atlassian (TEAM) rallied over 19% in Thursday’s extended trading after reporting upbeat earnings for the second quarter of Fiscal 2025. The company also impressed investors by raising its full-year revenue growth guidance.
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Atlassian Delivers Robust Results and Guidance
Atlassian reported a 21% year-over-year growth in its Q2 FY25 revenue of $1.29 billion, which surpassed analysts’ estimate of $1.24 billion. The company witnessed a 30% growth in its subscription revenue, reflecting solid traction for its artificial intelligence (AI)-enabled project management and productivity offerings that help clients improve efficiency and reduce costs.
Meanwhile, Atlassian’s Q2 FY25 EPS surged more than 31% to $0.96, crushing the Street’s consensus estimate of $0.75.
Looking ahead, the company expects Q3 FY25 revenue in the range of $1.345 billion to $1.353 billion, exceeding analysts’ consensus estimate of $1.31 billion. Further, Atlassian raised its full-year revenue growth guidance to the range of 18.5% to 19.0% compared to the previous outlook of 16.5% to 17%. The company’s top line is expected to benefit from the continued demand for its existing products and the launch of new offerings like Rovo, which is an AI assistant that enables enhanced search, learning, and automation across enterprise data.
Is Atlassian Stock a Buy, Hold, or Sell?
Wall Street is cautiously optimistic on Atlassian stock, with a Moderate Buy consensus rating based on 16 Buys and seven Holds. The average TEAM stock price target of $287.43 implies about 8% upside potential.
It is important to note that these ratings and price targets could change further in reaction to the strong results and outlook.
