Atlassian impacted by macroeconomic headwinds

Atlassian has blamed macroeconomic impacts for its continued decrease in the rate of free to paid plan conversions and the slowing of paid user growth from existing customers.

Down to their last squillion.

In the company’s Q1 FY23 letter to shareholders, penned by co-founders and co-CEOs Scott Farquhar and Mike Cannon-Brookes, as well as chief revenue officer Cameron Deatsch and chief financial officer Joe Binz, the Atlassian senior leadership team expects these trends to continue as companies tighten spending, and slow the pace of hiring.

According to the letter, “Atlassian is not immune to broader macro impacts. Our outlook assumes these trends will persist, but we’ll monitor, respond, and keep you updated accordingly.”

The organisation is lowering its revenue outlook for FY23 as a result of the economic environment and global instability, but insists that it is positioned to capitalise on the opportunity.

“We have the right products, the right leaders, and the right strategies in place to come out of this downturn in an even stronger position,” the letter states.

“When obstacles emerge along the way, we’ll navigate around them as we always have: with vigilance, pragmatism, and agility."  

Key results from Q1 include a 31 percent growth in revenue year on year, up from $614 million for the first quarter of 2022, to $807.4 million in the first quarter of 2023.

Atlassian boasts $1.5 billion of cash and cash equivalents, including short-term investments on the balance sheet and has added 6,550 net new customers this quarter.

According to Farquhar, “We are proud of our Q1 results, growing subscription revenue 50 percent year-over-year, and we continue to have line of sight to $10 billion in annual revenue.”

Cannon-Brookes said, “Q1 was another momentous quarter of execution against our long-term initiatives. We announced a new subscription offering in Atlassian Together, launched Atlas into general availability, and held Work Life, our first large-scale customer event focused on a single market.

“We also continue to execute well towards our strategy of hiring and retaining the best talent around the world.”