Atlassian Corporation PLC, a team collaboration and productivity software provider, published its Q2 results last week and surpassed all expectations. The company is making good use of the recent trend of the cloud adoption responsible for maintaining quality, reliability and security of cloud offerings with developers. Analysts also believe that the $20 million IT operations and service management sector, currently dominated by ServiceNow Inc. (NOW), will soon be overcome by Atlassian.
TEAM’s Q2 earnings report witnessed an accelerated billing with an 49% billing growth, ahead of estimates by 10%. Billings benefited from early renewals of maintenance contracts ahead of the annual price increase, as well as a shift to multi-year contracts.
Despite the impressive performance, analysts note that shares are fairly valued due to the possible increased sales investment, and increased competition with ServiceNow as focus shifts to IT with unclear signs for collaborations beyond IT.
Other important achievements include Atlassian's 100,000 cloud customers, accounting for 75% of its total customers, its efforts to expand Opsgenie, and an impressive ~111% growth in the share price in 2018.
With an above-consensus FY2019 guidance, analysts have raised the price target from $108 to $118 for 2019.