Why Atlassian Shares Are Surging After Hours Thursday

Shares of software company Atlassian Corporation are surging Thursday after reporting fourth quarter financial results and first quarter guidance.

What Happened: Atlassian Corporation TEAM reported fourth-quarter revenue of $759.8 million, up 36% year-over-year. The revenue total beat a Street estimate of $722.2 million, according to data from Benzinga Pro.

Subscription revenue was up 55% year-over-year, and cloud revenue was up 55% year-over-year in the fourth quarter. The company attributed strong cloud revenue growth from existing customers.

Atlassian ended the fiscal year with over 200,000 Cloud customers.

The company reported fourth-quarter earnings per share of 27 cents, beating a street estimate of 26 cents.

Related Link: 8 Analysts Have This To Say About Atlassian Corporation 

What’s Next: The company is guiding for first-quarter revenue to hit a range of $795 million to $810 million, compared to a Street estimate of $773 million.

The company sees first-quarter earnings per share hit 37 cents to 38 cents versus a Street estimate of 37 cents per share.

“We firmly believe that Atlassian is uniquely positioned, having deep-seated momentum and a differentiated business model,” the company said.

The company cited Atlassian as being a small line item in overall IT budgets, which could help it be one of the last cost reductions from companies.

“Because our products are already the low-cost option, there aren’t further savings to be had from switching to a competitor.”

Cloud revenue growth is expected to continue “at a healthy pace,” the company added.

TEAM Price Action: Atlassian shares are up 10% after hours to $253.02.