Atlassian stock sinks 23% after the bell on guidance cut, slowing paid user growth
Khanchit Khirisutchalual


Atlassian (NASDAQ:TEAM) stock slumped 23% after the bell on Thursday after the software firm cut FY23 revenue outlook to reflect slowing paid user growth amid macroeconomic headwinds that led to customers reeling in spending.
FY23 cloud revenue growth is expected to be ~40-45% Y/Y. Gross margin is projected to decrease modestly in FY23 due to continued business mix shift to the cloud and investments to support cloud migrations.

Atlassian (TEAM) maintained its mid-teens % operating margin outlook for the year.
The firm expects Q2 revenue of $835M-$855M, missing consensus estimate of $879.58M.
Atlassian (TEAM) reported Q1 results largely in line with estimates.
"Last quarter, we saw a decrease in the rate of Free instances converting to paid plans. That trend became more pronounced in Q1," the company said in a shareholder letter.
"This quarter, we started to see a slowing in the rate of paid user growth from existing customers. These two trends are the result of companies tightening their belts and slowing their pace of hiring," it added.
Atlassian (TEAM) expects these trends to persist in FY23.
Shares of the company dropped 50% YTD.