Australian software champion Atlassian led three of the world’s largest technology companies in a share price downturn as each reported disappointing results on Friday morning.
Atlassian, which makes workplace collaboration software, was punished with a 13 per cent fall in its share price in after hours trading while Apple, Google owner Alphabet and Amazon all saw modest slides between 3 and 4.2 per cent at 11am AEDT.
Atlassian founders Scott Farquhar and Mike Cannon-Brookes told shareholders that the company was dealing with a difficult macro environment.Credit:Louie Douvis
The sharp slide cut billions from Atlassian’s value, hitting the wealth of its high-profile founding duo, Mike Cannon-Brookes and Scott Farquhar, who remain major shareholders.
Bloomberg’s billionaires index put Cannon-Brookes and Farquhar’s net wealth at about $US11 billion each on Thursday (US time), with the news outlet reporting each man holds 22 per cent of Atlassian’s stock as the dominant source of their fortune.
The company was worth $US46.6 billion ($66 billion) on Friday AEDT, before the share price fall, which suggests the value of each of the founders’ holdings will fall by about $US1.2 billion if the after-hours drop materialises when the NASDAQ reopens.
Atlassian reported 27 per cent revenue growth for the quarter to $US873 million, but its net losses widened substantially to $US205 million and its gross margins slipped about one per cent. Its forecast earnings were below analysts’ hopes.
Cannon-Brookes and Farquhar wrote in a letter to shareholders that a harsh macroeconomic environment was continuing, with Atlassian signing up new paying customers and expanding existing subscriptions at a slower rate. The company would shift more resources to its highest growth areas, such as its cloud products and large enterprise customers.
“We’ve played offence amid uncertainty more than once in our 20 years as a company, and we’re confident that our trademark vigilance and discipline will guide us through successfully once again,” Cannon-Brookes and Farquhar wrote.
Chief financial officer Joe Binz said that Atlassian would save money by prioritising better.
“Sometimes it’s about stopping something,” Binz told bank analysts on a conference call. “It could be about sequencing of the events, moving something to a more milestone-based funding model [or] structurally lowering the investment level based on a strategy adjustment.”
Some big-name tech shares are facing heavy losses when Wall Street reopens. Credit:AP
Atlassian’s shares have been on a tumultuous ride in recent months, losing almost a quarter of their value in one after-hours session in November when the company last reported earnings but recovering much of that value in the new year.
Many technology giants have recently seen strong share price growth as investors hoped some of the worst inflation figures and interest rate rises, which had weighed on the market, were over. They were buoyed by earnings from Meta, which owns Instagram, Facebook and WhatsApp, earlier in the week that pushed other shares up.
But while Meta is reliant on advertising, Apple makes most of its money from selling high-end hardware and services to support them. Google has a huge advertising business too but is also a major player in cloud and productivity services. Amazon is best known for its retail business but makes most of its profit from its web services division.
With the notable exceptions of Apple and Atlassian, most major US technology firms have cut staff over the last few months, with some slashing thousands of workers to lower costs.
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