“Steady As She Goes”: Predictable Growth at Scale Sends Atlassian Stock Price Soaring

November 1, 2021

Following the release of its 2022 Q1 Earnings Report, Atlassian’s stock price has once again soared hitting, at the time of writing, $450. This gives Atlassian a valuation of $115bn, up from $45bn this time last year (a 155% increase). To put this in perspective, ServiceNow (valued at $138bn) has seen its overall valuation increase by a still-impressive 44%. Over the past year, Atlassian has been rapidly closing the gap on ServiceNow as more and more customers see the value that its products can supply across their organizations.

Atlassian’s recent 2022 Q1 Earnings again beat the expectations of analysts and there were a number of reasons detailed in the report explaining Atlassian’s recent financial success. Here are our takeaways from the report: 

The Cloud Trio

Atlassian’s move towards a Cloud future is absolutely on track since they announced the end of Server in October 2020. When looking at both new customers and existing customers, the news is solid when it comes to Cloud.

  1. Over 99% of Atlassian’s 11,746 new customers in Q1 opted for Cloud.
  2. With improvements in data residency (including the ability to host in Australia with many more countries to come) and the release of the consolidated Migration Center, increasing numbers of larger Atlassian customers are opting to migrate. For instance, Commonwealth Bank (Australia’s largest bank) migrated its 20,000 Jira and 25,000 Confluence users to the Cloud during Q1.
  3. Customers already on Cloud are upgrading to Premium at record rates. Not wanting to miss out on global and multi-project Jira Automation, more and more Cloud customers are seeing the incredible time and cost effectiveness of Automation for Jira.

These three factors: new customers opting for Cloud, existing larger users increasingly migrating to the Cloud, and existing Cloud customers upgrading have all contributed to an increase in Cloud revenue of 53% year-over-year.

Integrated Tools

In Q1 Atlassian again signaled their ever growing desire to enable customers to enhance their development toolchains through their $75 million investment in developer security tool Snyk.

Atlassian is fostering partnerships with organizations such as Snyk, Launch Darkly, Datadog, and many others to create Open DevOps: a development experience that makes a diverse toolchain feel like an all-in-one solution.

Snyk is a security tool that integrates with the existing workflow of a developer (for instance in Bitbucket or GitHub) and checks vulnerabilities as you go rather than relying on a one-off code audit.

The idea of Open DevOps is to allow teams to “choose the best tools and technology without sacrificing the ability to collaborate across the company” by letting “teams use the tools of their choice, and integrated so collaboration doesn’t come at the expense of velocity”. All of the tools in Open DevOps are already connected and can be integrated with just one click. You can read more about Open DevOps here.

Enhancing their partnership with Snyk, Atlassian is showing their commitment to this integrated model and their desire to provide the best experience possible to developers. They are seeing success in this space too with their research showing that “89% of Jira Software customers have either embraced DevOps already or plan to adopt this model in the next 12-24 months”.  


Atlassian has continued to enforce its commitment to fostering a healthy environment and society with the release of its 3rd Annual Sustainability Report.

Atlassian has made good progress when it comes to reducing emissions, protecting customer privacy, and supporting philanthropic causes and is planning on increasing its investment and commitment to its diversity, equality, and inclusion goals.

You can read the report in full here.

Respect in ITSM

In Q1 Gartner finally acknowledged Jira Service Management as a “Visionary” in their ITSM Magic Quadrant™.

This is great news for Atlassian who are finally getting the respect they deserve in this space. However, it is our belief that although this is a step in the right direction from Gartner, they are still majorly underestimating JSM as a platform for ITSM. The Atlassian Marketplace is unique in its scale and quality among competing platforms and were it to be properly acknowledged by Gartner, JSM would undoubtedly be a leader in this space.

However the numbers don’t lie as JSM has already hit 35,000 customers (up from 25,000 since launching JSM in late 2020)!

Atlassian Financials

At the time of writing Atlassian’s share price is hovering at around the $450 mark following the release of 2022 Q1 Earnings. Subscription revenue (Atlassian’s main revenue source) is up 57% year-over-year with Cloud revenue up 53% and DC revenue up 68%.

In September we put together an analysis of Atlassian’s financial success and why it’s good news for customers. You can read the report here.

Customer Growth

The main thrust of our argument in our report on Atlassian’s financial success is that its growth is being driven by increasing customer numbers as more and more organizations recognize the value that Atlassian can and do provide to their business operations and are thus introducing it/expanding their footprint.

This is again demonstrated in the 2022 Q1 figures with Atlassian netting 11,746 customers taking their total to 216,500.

It’s important to note that this quarter Atlassian have restructured how they record customers and are no longer including single-user Trello accounts and are therefore being more conservative in their accounting. These single-user Trello accounts are therefore recorded among the millions of customers using Free Cloud products and Starter licenses that (with Atlassian’s land and expand model) may one day become official customers.

We hope that you found our breakdown useful. You can read the full report here and feel free to get in touch with us at hello@blendedperspectives.com with any questions.