Atlassian shares dropped 14% in intra-day trading after the Australian software company announced a slow growth forecast for the upcoming quarter as enterprise customers cut spending due to economic instability.
Total revenue was US$1.35 billion for Q3 FY25, up 14% from $1.19 billion year-on-year.
- Operating income (loss) was $12.5 million for the third quarter of fiscal year 2025, compared with operating income of $17.8 million for the third quarter of fiscal year 2024.
- Net income (loss) was $70.8 million for the third quarter of fiscal year 2025, compared with net income of $12.8 million for the third quarter of fiscal year 2024.
The tech business has downgraded its Q4 revenue however, expected to be in the range of $1.35 billion to $1.36 billion and marketplace and other revenue growth year-on-year is expected to be flat.
Atlassian did have a healthy $3 billion balance sheet though, with cash and equivalents of $3 billion at the end of March - and a 25% growth in cloud revenue also bodes well for the future.
Atlassian’s CEO and co-Founder Mike Cannon-Brookes remained upbeat about the company's long-term investments - including a focus on its Rovo AI solution, which is now implemented in all premium and enterprise editions of its Jira and Confluence.
“Our long-term investments in building a world-class Cloud platform have enabled us to advance the Atlassian System of Work and bring Rovo’s powerful AI capabilities to the centre," Cannon-Brookes said.

"Our vision for the future of human-AI collaboration is resonating deeply with customers, and we are more excited than ever to execute on our mission of unleashing the potential of every team.
“We remain committed to balancing operational discipline with continued focused investment in key strategic areas like enterprise, AI, and the Atlassian System of Work to drive future growth.”
Shares in Atlassian (NASDAQ : TEAM) dropped a heavy 16.6% in after-hours trade at time of writing to swap for US$229.07.