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Atlassian (TEAM) Q3 Earnings Report Preview: What To Look For

TEAM Cover Image

IT project management software company, Atlassian (NASDAQ:TEAM) will be reporting results tomorrow afternoon. Here’s what to expect.

Atlassian met analysts’ revenue expectations last quarter, reporting revenues of $1.13 billion, up 20.5% year on year. It was a mixed quarter for the company, with an impressive beat of analysts’ EBITDA estimates but underwhelming revenue guidance for the next quarter.

Is Atlassian a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Atlassian’s revenue to grow 18.2% year on year to $1.16 billion, slowing from the 21.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.65 per share.

Atlassian Total Revenue

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Atlassian has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 2.5% on average.

Looking at Atlassian’s peers in the productivity software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. ServiceNow delivered year-on-year revenue growth of 22.2%, beating analysts’ expectations by 1.9%, and Pegasystems reported a revenue decline of 2.9%, in line with consensus estimates. ServiceNow traded up 5.4% following the results while Pegasystems was also up 14.7%.

Read our full analysis of ServiceNow’s results here and Pegasystems’s results here.

There has been positive sentiment among investors in the productivity software segment, with share prices up 7.7% on average over the last month. Atlassian is up 19.1% during the same time and is heading into earnings with an average analyst price target of $218.52 (compared to the current share price of $192.25).

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