Atlassian to offensively price itself through the post-pandemic patch
(2020/05/01)
- Reference: 1588318209
- News link: https://www.theregister.co.uk/2020/05/01/atlassian_q3_2020/
- Source link:
Atlassian has re-iterated that its business model is “playing offense in stormy weather” and will use the coronavirus crisis to acquire customers with freebies and maybe make some opportunistic acquisitions.
The Australian collaboration organisation posted its Q3 results on Thursday, with revenue of $411.6 million representing a 33 percent year-over-year jump and a nice improvement on guidance of $295m to $399m revenue for the quarter. That translated into a loss of $19.9m and executive comment that the company emerged “unscathed” in the quarter ending March 30th.
Co-CEOs Scott Farquhar and Mike Cannon-Brookes popped out a [1]letter to shareholders in which they were supremely upbeat, telling investors that Atlassian used $10 software to get through the 2009 financial crisis and plan to use cut-price code to get through this one.
The company has therefore released free cloud editions of its products and the co-CEOs told investors they “have the potential to significantly expand our user base, build new long-term relationships, fuel word-of-mouth advocates, and drive millions of user insights to improve our products. We’re happily making the trade-off again, choosing long-term gain over short-term ROI.”
“Over the coming months, we’ll continue to maintain hiring momentum and up-level our talent, just like we did in 2009. We’ll look for innovative ways to leverage our competitive advantages and lessons learned from the past. We believe the more we use tools like pricing and packaging and smart acquisitions, the more share we’ll gain in massive markets and the stronger our platform will be over the long-term.”
Investors were told cloud remains a big part of the company’s plans. 125,000 of 171,000 customers are already there and on-prem-to-cloud migrations jumped 60 percent across the last year of business.
Asked if April numbers looked soft, execs replied that performance appears steady and Atlassian’s customers are spread across enough sectors and business sizes that it thinks it can ride out a COVID-19-created slump. That 85 percent of revenue is recurring and increasing quantities come from subscriptions were also cited as suggesting stability, while strong customer acquisition figures across the quarter were welcomed as having the potential to strengthen future balance sheets.
Indeed, as other firms braced for impact, Atlassian said it hired more people in March 2020 than it had ever hired in any previous month.
The company has $2.1 billion in cash and short-term investments to play with and plenty of free cash flow, too.
But behind all that optimism lay some less-lovely numbers, specifically a full-year prediction revenue between $1.584bn to $1.599bn. That’s a little softer than the Revenue $1.59bn to $1.5bn predicted when the company last reported numbers. Investors didn’t like the look of that wobble and sent the company’s share price down around four percent. ®
Sponsored: [2]Choosing A Low-Code Vendor
[1] https://s2.q4cdn.com/141359120/files/doc_financials/2020/q3/TEAM-Q3-2020-Shareholder-Letter.pdf
[2] https://go.theregister.co.uk/tl/1936/-8579/choosing-a-low-code-vendor?td=wptl1936
The Australian collaboration organisation posted its Q3 results on Thursday, with revenue of $411.6 million representing a 33 percent year-over-year jump and a nice improvement on guidance of $295m to $399m revenue for the quarter. That translated into a loss of $19.9m and executive comment that the company emerged “unscathed” in the quarter ending March 30th.
Co-CEOs Scott Farquhar and Mike Cannon-Brookes popped out a [1]letter to shareholders in which they were supremely upbeat, telling investors that Atlassian used $10 software to get through the 2009 financial crisis and plan to use cut-price code to get through this one.
The company has therefore released free cloud editions of its products and the co-CEOs told investors they “have the potential to significantly expand our user base, build new long-term relationships, fuel word-of-mouth advocates, and drive millions of user insights to improve our products. We’re happily making the trade-off again, choosing long-term gain over short-term ROI.”
“Over the coming months, we’ll continue to maintain hiring momentum and up-level our talent, just like we did in 2009. We’ll look for innovative ways to leverage our competitive advantages and lessons learned from the past. We believe the more we use tools like pricing and packaging and smart acquisitions, the more share we’ll gain in massive markets and the stronger our platform will be over the long-term.”
Investors were told cloud remains a big part of the company’s plans. 125,000 of 171,000 customers are already there and on-prem-to-cloud migrations jumped 60 percent across the last year of business.
Asked if April numbers looked soft, execs replied that performance appears steady and Atlassian’s customers are spread across enough sectors and business sizes that it thinks it can ride out a COVID-19-created slump. That 85 percent of revenue is recurring and increasing quantities come from subscriptions were also cited as suggesting stability, while strong customer acquisition figures across the quarter were welcomed as having the potential to strengthen future balance sheets.
Indeed, as other firms braced for impact, Atlassian said it hired more people in March 2020 than it had ever hired in any previous month.
The company has $2.1 billion in cash and short-term investments to play with and plenty of free cash flow, too.
But behind all that optimism lay some less-lovely numbers, specifically a full-year prediction revenue between $1.584bn to $1.599bn. That’s a little softer than the Revenue $1.59bn to $1.5bn predicted when the company last reported numbers. Investors didn’t like the look of that wobble and sent the company’s share price down around four percent. ®
Sponsored: [2]Choosing A Low-Code Vendor
[1] https://s2.q4cdn.com/141359120/files/doc_financials/2020/q3/TEAM-Q3-2020-Shareholder-Letter.pdf
[2] https://go.theregister.co.uk/tl/1936/-8579/choosing-a-low-code-vendor?td=wptl1936
Re: I wanted to adopt their Hip chat server a few years back...
Anonymous Coward
On behalf of those of us that have to suffer Jira, Confluence, Bitbucket etc. and their recent UI "improvements", for god's sake please don't inflict them on your devs! Better to muddle through and get the job done with less mature tools than spend 50% of your day waiting for the simplest things to be rendered by the browser.
D.A.
Allow me to be the first to say that Jira is a massive pile of crap, and one of the worst things to happen to software engineering in decades.
I wanted to adopt their Hip chat server a few years back...
It had E2E encryption, allowed you to do video and desktop sharing, audio and file sharing with registered or LDAP users. No meeting crashers, safe sharing of confidential material, etc. It even worked through the GFW and various endpoint security without a hitch. I was impressed.
Then, as I was setting up a production internal server, they took a page out of the Google/Apple playbook, and sold it off/discontinued it. VCs wanting to exit and take the cash maybe?
Anyhow, I am yet to deploy a single Jira or Confluence instance as a result. Without users already in the ecosystem, these steps present a bigger challenge, especially in small orgs, as each needs an internal champion to make it over the adoption hump.
I'm yet to summon the courage to do this, so our staff persist with our various and less mature tools. I still wish their HipChat was there; the alternatives remain utter rubbish.
The Atlassian crew do seem to only care about cloud-based solutions though. Products like Trello appear proud that they will never offer a 'off-cloud' version. When I read that in their Doco/FAQ it was another nail in the coffin to me deciding to sign up to their other products. This is a real shame as their startup prices and offering is perhaps the best in the industry.
Not sure how all today's cloud providers think startups and small orgs don't value security, or centralised data storage or surety over the location they host their data in. I'm yet to meet a founder that doesn't...