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Atlassian has 16,000 employees worldwide and reported a net loss of $257 million last year. In fact it has not had a single profitable year since its IPO in 201

by paxys 8mo ago

Atlassian has 16,000 employees worldwide and reported a net loss of $257 million last year. In fact it has not had a single profitable year since its IPO in 2015. And as expected its stock price is in the dumpster, down to $75 from its peak of $440 in 2021 (-83%). So, like a lot of the tech industry this is simply a case of overhiring, overspending and general mismanagement. And like every other layoff announcement “AI” is a convenient scapegoat to hide executive dysfunction.

disqard 8mo ago
Your assessment is spot-on! These entities have been on shaky ground for a while, and AI is a convenient scapegoat for justifying their unavoidable downsizing.
- luckymate 8mo ago
  this sounds like generic AI comment without any input into conversation
  - disqard 8mo ago
    Does your comment pass that bar?
fhub 8mo ago
Profit is just one metric that affects the stock. YoY Revenue growth was historically in 40s and high 30% year on year. But last year was sub 20%. Investors are re-evaluation SaaS company multiples through a new lens of AI. Personally I wonder if Fortune 500 can renegotiate lower margin pricing with the "We could just build this with AI in house" BATNA argument.
BirdieNZ 8mo ago
This is a pretty surface level analysis; Atlassian also has stock buybacks of billions of dollars each year. It's an intentional choice to not declare a profit and pay a dividend, and instead to reinvest in acquisitions and pay shareholders via stock buybacks. You'll find it much more interesting to look at metrics like free cashflow, which is a better indicator as to whether the company is generating more cash during operations than it spends. This is a lot closer to the layman's idea of profit, and in a small business like a restaurant or single store it's often analogous to profit. In publicly traded companies, net profit and loss are borderline meaningless.
- cmiles8 8mo ago
  The only reason it’s buying back the stock is because the price has been destroyed by the company’s underperformance. Also yes buybacks will reduce profit but an unprofitable company doing buybacks is not a healthy one. Agree with the above general assessment that this is a company doing layoffs to address years of bad decisions and underperformance, and the broader issue of SaaS valuations as folks question valuations there. Just another case of “AI” as a PR puff excuse to avoid simply admitting this is about correcting prior bad management decisions.
  - a10c 8mo ago
    TIL that 20-30% revenue growth year over year is underperforming. Atlassian does >$1B/year in free cash flow. the GAAP losses are almost entirely stock-based comp, which is non-cash. the buyback exists specifically to offset that dilution. > buybacks will reduce profit wrong. its a balance sheet transaction. cash goes down, shares go down.
- paxys 8mo ago
  Atlassian also issues billions worth of RSUs to employees every year. The buybacks are necessary to offset that. Shareholders are getting nothing out of it, and the fact that the stock price has been in freefall for years despite the buybacks shows that. Software companies hid behind “free cash flow” and “YoY revenue growth” and “non-GAAP profit” for years in the zero interest world. Now that the heat has turned up a notch investors can see what I said before - most of these companies are wildly overstaffed and addicted to spending.
- moomoo11 8mo ago
  They’re long themselves
- gizmondo 8mo ago
  There is no connection between profits and dividends, some monstrously profitable companies pay little to no dividends and return money to shareholders via buybacks. The act of doing an acquisition by itself also does not affect profits. The reason Atlassian doesn't "declare a profit" is that they are not profitable - they pay a lot with SBC, thus diluting shareholders year after year and not returning anything.
mvdtnz 8mo ago
> In fact it has not had a single profitable year since its IPO in 2015. What's frustrating is that the company was profitable from its second year, and a really good little money maker too. I was working there at the time and I was proud to be working at one of the few tech companies actually turning a profit. Then IPO came, then literally overnight we switched gears and "reinvested every dollar into growth" and decided we'd just be another dumb money losing tech company.
intexpress 8mo ago
Atlassian was famously bootstrapped and profitable since inception. They were one of the only profitable tech companies at a time when everyone else was busy making bigger and bigger losses. If they have really been unprofitable for the last decade that is very sad.

by paxys 8mo ago

disqard 8mo ago

Your assessment is spot-on! These entities have been on shaky ground for a while, and AI is a convenient scapegoat for justifying their unavoidable downsizing.

luckymate 8mo ago
this sounds like generic AI comment without any input into conversation
- disqard 8mo ago
  Does your comment pass that bar?

fhub 8mo ago

Profit is just one metric that affects the stock. YoY Revenue growth was historically in 40s and high 30% year on year. But last year was sub 20%. Investors are re-evaluation SaaS company multiples through a new lens of AI. Personally I wonder if Fortune 500 can renegotiate lower margin pricing with the "We could just build this with AI in house" BATNA argument.

BirdieNZ 8mo ago

This is a pretty surface level analysis; Atlassian also has stock buybacks of billions of dollars each year. It's an intentional choice to not declare a profit and pay a dividend, and instead to reinvest in acquisitions and pay shareholders via stock buybacks. You'll find it much more interesting to look at metrics like free cashflow, which is a better indicator as to whether the company is generating more cash during operations than it spends. This is a lot closer to the layman's idea of profit, and in a small business like a restaurant or single store it's often analogous to profit. In publicly traded companies, net profit and loss are borderline meaningless.

cmiles8 8mo ago
The only reason it’s buying back the stock is because the price has been destroyed by the company’s underperformance. Also yes buybacks will reduce profit but an unprofitable company doing buybacks is not a healthy one. Agree with the above general assessment that this is a company doing layoffs to address years of bad decisions and underperformance, and the broader issue of SaaS valuations as folks question valuations there. Just another case of “AI” as a PR puff excuse to avoid simply admitting this is about correcting prior bad management decisions.
- a10c 8mo ago
  TIL that 20-30% revenue growth year over year is underperforming. Atlassian does >$1B/year in free cash flow. the GAAP losses are almost entirely stock-based comp, which is non-cash. the buyback exists specifically to offset that dilution. > buybacks will reduce profit wrong. its a balance sheet transaction. cash goes down, shares go down.
paxys 8mo ago
Atlassian also issues billions worth of RSUs to employees every year. The buybacks are necessary to offset that. Shareholders are getting nothing out of it, and the fact that the stock price has been in freefall for years despite the buybacks shows that. Software companies hid behind “free cash flow” and “YoY revenue growth” and “non-GAAP profit” for years in the zero interest world. Now that the heat has turned up a notch investors can see what I said before - most of these companies are wildly overstaffed and addicted to spending.
moomoo11 8mo ago
They’re long themselves
gizmondo 8mo ago
There is no connection between profits and dividends, some monstrously profitable companies pay little to no dividends and return money to shareholders via buybacks. The act of doing an acquisition by itself also does not affect profits. The reason Atlassian doesn't "declare a profit" is that they are not profitable - they pay a lot with SBC, thus diluting shareholders year after year and not returning anything.

mvdtnz 8mo ago

> In fact it has not had a single profitable year since its IPO in 2015. What's frustrating is that the company was profitable from its second year, and a really good little money maker too. I was working there at the time and I was proud to be working at one of the few tech companies actually turning a profit. Then IPO came, then literally overnight we switched gears and "reinvested every dollar into growth" and decided we'd just be another dumb money losing tech company.

intexpress 8mo ago

Atlassian was famously bootstrapped and profitable since inception. They were one of the only profitable tech companies at a time when everyone else was busy making bigger and bigger losses. If they have really been unprofitable for the last decade that is very sad.