Atlassian Shares Surge After First Quarterly Profit in Two Years

Shares of Atlassian Corp. surged as much as 38 percent in after-hours trading following a fiscal fourth-quarter report that exceeded Wall Street expectations. For the period ending June 30, the company reported revenue of $1.77 billion, a 28 percent year-over-year increase, and a GAAP net income of $139 million. This result marks the company's first quarterly operating profit in over two years, with operating income reaching $211 million.

Cloud revenue served as a primary growth driver, rising 31 percent to $1.21 billion. The company also highlighted the success of its AI assistant, Rovo, which is now used by over 80 percent of Fortune 500 companies, and noted that AI-related tools have surpassed one million monthly active users. Bank of America responded to the results by upgrading the stock to Buy and raising its price target to $175.

Chief Executive Mike Cannon-Brookes announced a plan to purchase up to $250 million of company stock on the open market to signal confidence in the company's trajectory. Despite the quarterly gain, Atlassian reported a full-year accounting loss of $54 million and warned that profit margins would remain tight in the coming year. To prevent shareholder dilution, the company recently shifted staff bonuses from shares to cash. Atlassian provided first-quarter revenue guidance between $1.705 billion and $1.72 billion, surpassing analyst estimates.