Atlassian Corporation (NASDAQ:TEAM) reported third-quarter results that exceeded expectations on both earnings and revenue, but shares plunged over 16% in pre-market trading as the company’s fourth-quarter guidance fell well short of Wall Street forecasts.
The collaboration software provider posted adjusted earnings of $0.97 per share, well above the $0.78 consensus estimate. Revenue reached $1.36 billion, also beating expectations and marking a 14% year-over-year increase.
Despite the strong Q3 performance, investor sentiment turned negative following Atlassian’s fourth-quarter revenue forecast of $1.349 billion to $1.359 billion—substantially below the $1.6 billion analysts had anticipated. The disappointing outlook overshadowed solid growth in the company’s core Cloud segment, which saw revenue jump 25% year-over-year.
Cloud annualized recurring revenue (ARR) also reflected healthy momentum, with the number of customers contributing over $10,000 in ARR rising 14% to 50,715.
CFO Joe Binz emphasized the company’s focus on long-term growth through strategic investments in enterprise solutions, artificial intelligence, and its broader “System of Work” platform. However, the near-term guidance raised concerns about slower-than-expected cloud transition revenue and macro-driven headwinds.
While Atlassian’s fundamentals remain strong, the softer guidance introduced uncertainty that sparked a sharp sell-off despite the company’s ongoing operational and product strength.
