Shares of collaboration software provider Atlassian dropped as much as 22% on Thursday after releasing poor results and outlook reports.

Here is how the business fared:

Earnings: 36 cents per share, adjusted, versus the Refinitiv consensus estimate of 38 cents per share.

Refinitiv reports that revenue was $807.4 million as opposed to the predicted $806.4 million.

According to a statement, revenue grew 31% year over year in the quarter that concluded on September 30. Due to a mark-to-market accounting adjustment on strategic investments, net loss decreased from $411.2 million to $13.7 million from the prior year.
Atlassian expects sales for the fiscal second quarter of $835 million to $855 million, which is less than the Refinitiv average of $879.2 million. The forecast assumes that the macroeconomic environment will remain unchanged for the remainder of the 2023 fiscal year.

Co-founder and co-CEO of Atlassian Scott Farquhar told analysts that the business has been affected by a shaky global economy. The rate at which free users of Atlassian’s software upgrade to the commercial services is dropping, and existing customers are adding less paying users at a slower rate, which is slowing the hiring process.

The total number of clients for Atlassian increased by 6,550, reaching 248,173. StreetAccount surveyed analysts, and they had predicted 250,700.
According to Farquhar, Atlassian will eventually scale down its own rate of workforce expansion.
According to Cameron Deatsch, chief revenue officer of Atlassian, the company’s competitive position in relation to competitors has not changed.
Prior to the after-hours crash, shares in Atlassian had dropped 54% for the year, while the S&P 500 had only dropped 20%.