Atlassian (NASDAQ:TEAM) reported impressive results for its most recent quarter but shares of the IT company dropped on Friday after forecasting slowing growth in the coming quarters.
During its fiscal 1Q 2024, Atlassian (NASDAQ:TEAM) achieved a 21.1% year-on-year increase in revenue, reaching $977.8 million, marking a substantial acceleration in growth.
Atlassian (NASDAQ:TEAM) also recorded a non-GAAP profit of $0.65 per share, a substantial improvement from $0.36 per share in the same quarter the previous year.
However, free cash flow experienced a 39.6% decline from the previous quarter, and the gross margin (GAAP) decreased from 82.7% in the corresponding quarter last year to 81.8%.
Atlassian provides software as a service that facilitates project management, particularly for large teams involved in software development.
The company has seen strong year-on-year revenue growth of 21.1%, but guidance for the upcoming quarter indicates an anticipated 16.9% year-on-year revenue growth. This projection represents a deceleration compared to the 26.7% year-on-year increase witnessed during the corresponding quarter in the previous year.
Prior to the release of the earnings results, industry analysts were already foreseeing a 16.5% sales growth over the next 12 months.
Shares of Atlassian lost 5.1% on Friday morning following the results.