Atlassian Reports 21% Revenue Growth, Net Loss Widens in Q3 2024

Atlassian Corporation reported significant financial developments in its 10-Q filing for the quarter ending September 30, 2024. The company achieved total revenues of $1,187.8 million, marking a 21% increase from $977.8 million in the same period of 2023. Subscription revenues were a key driver, rising 33% to $1,131.9 million, up from $852.0 million year-over-year. This growth was primarily attributed to increased customer adoption of cloud offerings, which generated $792.3 million, a 31% increase from the previous year.

Despite the revenue growth, Atlassian reported a net loss of $123.8 million for the quarter, compared to a net loss of $31.9 million in the prior year. The operating loss also widened to $32.0 million from $18.9 million, reflecting increased operating expenses, which rose to $1,002.1 million from $818.6 million. The rise in expenses was driven by higher research and development costs, which increased by 25% to $603.1 million, and marketing and sales expenses, which grew by 30% to $252.4 million.

The company’s cash and cash equivalents decreased to $2.1 billion from $2.2 billion at the end of June 2024. Accounts receivable also fell to $484.1 million from $628.0 million, indicating a tightening of cash flow. Free cash flow for the quarter was reported at $74.3 million, down significantly from $163.3 million in the same period last year.

Atlassian continued its strategic initiatives, including the completion of an acquisition of Loom, Inc. in November 2023, aimed at enhancing its product offerings. The company also authorized a new share repurchase program of up to $1.5 billion in September 2024, following a previous $1.0 billion program initiated in January 2023. During the quarter, Atlassian repurchased approximately 1.1 million shares for about $183.9 million.

The company’s total assets decreased to $4.99 billion from $5.21 billion, while total liabilities also fell to $3.96 billion from $4.18 billion. The accumulated deficit increased to $(3.51) billion from $(3.20) billion, reflecting ongoing losses.

Atlassian's market strategy remains focused on expanding its customer base, with over 300,000 customers as of September 30, 2024, including 46,844 customers generating more than $10,000 in Cloud annual recurring revenue. The company continues to invest heavily in research and development, particularly in AI and cloud technologies, despite the challenges posed by economic conditions and competitive pressures.