Atlassian (NASDAQ:TEAM) shares fell hard Friday after the collaboration software maker reported lower earnings than analysts expected and issued a disappointing outlook.
Earnings came in at 36 cents per share as opposed to 38 cents per share as expected, on revenue of $807.4 million, vs. $806.4 million as expected.
Revenue increased 31% year over year in the quarter that ended Sept. 30, according to a statement. Net loss narrowed to $13.7 million from $411.2 million one year ago, thanks to a mark-to-market accounting adjustment on strategic investments.
For the fiscal second quarter, Atlassian sees $835 million to $855 million in revenue, below the Refinitiv consensus of $879.2 million. The guidance assumes that macroeconomic current conditions persist through the rest of the 2023 fiscal year.
Scott Farquhar, Atlassian’s co-founder and co-CEO, told analysts that the company has been feeling the impact of a volatile global economy. The rate at which free users of Atlassian’s software are converting to the paid offerings is cooling, as is the expansion of the number of paid users at existing customers, which are slowing the pace of hiring.
Atlassian added 6,550 customers, resulting in a total of 249,173. Analysts polled by StreetAccount had expected 250,700.
Farquhar said Atlassian will slow down its own headcount growth going forward.
TEAM shares slipped $46.03, or 26.4%, to $128.14.