Atlassian Earnings: Strong Quarter Led by Booming Data Center Revenue Growth

Narrow-moat Atlassian reported strong third-quarter results, including upside to both our top- and bottom-line expectations. Management also provided good guidance for the fourth quarter. That said, we are maintaining our fair value estimate of $225 per share as we await fiscal-2025 guidance with next quarter's results. In our view, Atlassian is performing well against its migration road map, and we are further encouraged with positive demand trends amid an improving environment. We acknowledge demand issues from smaller customers, though. We are unconcerned about the 6% drop in share price after-hours given the firm's strong fundamentals and view the stock as attractive.