According to a Research and Markets report, the global enterprise collaboration market is estimated to grow 11% annually over the next five years to $53.83 billion by 2023 from $31.74 billion in 2018. The market is dominated by large enterprises, but the growth in SME adoption is expected to grow at higher rate in the coming years as these companies move to SaaS-based technologies as well. A leading player in the market is Billion Dollar Unicorn Atlassian (Nasdaq: TEAM) that is growing fast to bring in over a billion dollars in annual revenue.

Atlassian’s Financials

Atlassian recently announced its first quarter results for fiscal 2019. Revenues for the quarter grew an impressive 37% over the year to $267.3 million. The market was looking for revenues of $260 million for the quarter. Adjusted EPS of $0.20 was also better than the Street’s estimated $0.19. But on a GAAP basis, the company reported a loss of $242.4 million due to revaluation of debts.

By segment, revenues from subscription services grew 55% to $134.1 million and maintenance segment grew 22% to $92.7 million. Perpetual License revenues reported a 12% growth to $21.8 million and Other was up 39% to $18.7 million.

Among operating metrics, it ended the quarter with a total customer count, on an active subscription or maintenance agreement basis, of 131,684, an addition of nearly 5,890 net new customers during the quarter.

For the current quarter, Atlassian expects revenues of $287-$289 million, and a non-IFRS EPS of $0.21. It expects to end the year with revenues of $1.175-$1.183 billion and non-IFRS EPS of $0.78. The Street was looking for revenues of $281 million and an EPS of $0.20 for the quarter.

Atlassian’s IT Operations Expansion

Atlassian has been reorganizing its business portfolio to diversify its market offerings. Recently, it sold its corporate team chat businesses to Slack Technologies. The sale included the IP for its Stride and Hip Chat offering for an undisclosed sum. Atlassian had been in the messaging market for over six years and was facing significant competition from players like Microsoft, which has been expanding aggressively in the market. Earlier this year, Microsoft had launched its workplace collaboration tool Team.

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