NASDAQ listed Atlassian (NASDAQ:TEAM) is still trying to achieve profit, despite breaking through the $4 billion revenue barrier. The company’s shares tumbled 13.4% to US$150 in after-hours trade in the US on Thursday night after it said it expected to deliver 16% revenue growth.
The company recorded a 20% increase in total revenue for the fourth quarter to US$1.13 billion.
Revenue growth to US$4.4 billion (A$6.77 billion) keeps Atlassian (NASDAQ:TEAM) on target to hit US$10 billion over the next five years.
Despite this, the latest result has not produced a profit for the Mike Cannon-Brookes and Scott Farquhar founded company. Cannon-Brookes and Farquhar owns 40% of the US$45 billion company.
Atlassian, which was founded in 2001, has forecast that revenue growth will slow over the next year to about 16%. The company’s operating loss in the fourth quarter increased to US$67.0 million, from US$50.4 million a year earlier.
The net loss for the quarter more than tripled to US$196.9 million from US$59.0 million in the fourth quarter of FY23. However, the company’s operating loss in fiscal 2024 narrowed sharply to US$117.1 million from US$345.2 million in 2023.
Despite the lack of profit, Cannon-Brookes describes fiscal 2024 as a year of achievements, focusing on the company’s continued growth.
“This past year we’ve once again proved to ourselves that we can accomplish big things,” Cannon-Brookes said in an investor note.
“We grew revenue to US$4.4 billion, generated free cash flow of over US$1.4 billion, and surged past 300,000 customers.
“We announced transformative innovations for our customers like Rovo, the latest human-AI technology reshaping the way we work.”
Rovo enables businesses to create AI "agents" that can handle a multitude of simple tasks, aiming to boost overall productivity. These agents track corporate goals and objectives through straightforward verbal commands.
According to Atlassian, this approach eliminates the need for biannual performance reviews, allowing employees to respond more swiftly to shifts in company strategies and priorities.
“We achieved significant milestones like FedRAMP’s ‘In Process’ status, a huge step towards supporting the US public sector in the cloud, and we wound down support for Server,” Cannon-Brookes said.
The Federal Risk and Authorisation Management Program (FedRAMP) is a United States government-wide initiative that provides a standardised approach to security assessment, authorisation, and continuous monitoring of cloud products and services.
“With this setup, we feel tremendously optimistic about what is ahead of us. We’re excited to build on this momentum and get cracking on FY25.”
Net loss improves and milestones ahead
Atlassian reported a net loss of US$300.5 million for the fiscal year 2024, improving from the previous year's net loss of US$486.8 million.
A notable achievement for the company is the 48% rise in customers spending over US$1 million each year.
Farquhar departure imminent
In a significant leadership change, Scott Farquhar will resign as co-CEO at the end of this month, following his April announcement to devote more time to his family, engage in philanthropic activities, and support the global technology sector.
“When I look back on the last 23 years, I am filled with pride at what two mates from Australia built,” Farquhar said.
“We created a global company with over 12,000 employees, tens of thousands of champions across the Atlassian ecosystem, and over 300,000 customers.
“We’ve helped companies big and small all over the world solve some of the most interesting and challenging problems - from the development of electric vehicles and life-saving medical advancements to space exploration. And yet our best days are still ahead.
“I leave the co-CEO role knowing Atlassian is incredibly well-positioned to capitalise on the huge opportunities ahead and live its mission of unleashing the potential of every team.
“I look forward to continuing along the journey, albeit from a slightly different seat.”