Atlassian (NASDAQ: TEAM) reported Q2 EPS of $0.37, $0.05 better than the analyst estimate of $0.32. Revenue for the quarter came in at $501 million versus the consensus estimate of $471.66 million.

• Quarterly revenue of $501 million, up 23% year-over-year
• Quarterly subscription revenue of $311 million, up 36% year-over-year
• Quarterly IFRS operating margin of 6% and non-IFRS operating margin of 29%
• Quarterly cash flow from operations of $200 million and free cash flow of $180 million

“Our Q2 results reflect steady progress towards our long-term goals as we crossed $500 million in quarterly revenue for the first time, up 23% year-over-year, and drove subscription revenue growth of 36% year-over-year,” said Scott Farquhar, Atlassian’s co-founder and co-CEO. “Total customers rose to 194,000, an increase of over 11,600 during the quarter. This increase is a new record illustrating our progress and commitment to continuous customer innovation in the cloud.”

“Through the strength of our cloud platform, we’re delivering customers powerful new products like Jira Service Management, which unleashes the potential of technical teams in the ITSM market,“ said Mike Cannon-Brookes, Atlassian’s co-founder and co-CEO. “This is one example of the value we deliver to organizations large and small across the Fortune 500,000 to power their most mission-critical workflows. We’re excited to continue that momentum in the second half of fiscal year 2021.”

GUIDANCE:

Atlassian sees Q3 2021 EPS of $0.20-$0.21, versus the consensus of $0.25. Atlassian sees Q3 2021 revenue of $475-490 million, versus the consensus of $472.08 million.

Atlassian is providing its financial targets for the third quarter of fiscal year 2021. The company’s financial targets are as follows:

Third Quarter Fiscal Year 2021:

• Total revenue is expected to be in the range of $475 million to $490 million.
• Gross margin is expected to be approximately 82% on an IFRS basis and approximately 84% on a non-IFRS basis.
• Operating margin is expected to be approximately (7%) on an IFRS basis and approximately 16% on a non-IFRS basis.
• Net loss per diluted share is expected to be in the range of ($0.15) to ($0.14) on an IFRS basis, and net income per diluted share is expected to be in the range of $0.20 to $0.21 on a non-IFRS basis.
• Weighted average share count is expected to be in the range of 250 million to 252 million shares when calculating diluted IFRS net loss per share and in the range of 255 million to 257 million shares when calculating diluted non-IFRS net income per share.

For earnings history and earnings-related data on Atlassian (TEAM) click here.