What happened

Shares of Atlassian Corporation PLC (NASDAQ:TEAM) were moving higher last month as the cloud-based team collaboration specialist posted a strong fourth-quarter earnings report and announced a new partnership with Slack. As a result, the stock finished up 16% for the month of July, according to data from S&P Global Market Intelligence.

As the chart below shows, the stock spiked toward the end of the month when the earnings report came out:

TEAM Chart

TEAM data by YCharts.

So what

Atlassian delivered another strong round of growth. Revenue jumped 40% in the period to $243.8 million, beating estimates of $233 million, as the company added 6,600 net new customers in the quarter to finish the fiscal year with 125,796 customers. On an adjusted basis, operating margin rose from 14% to 19%, and the company reported earnings per share of $0.13, up from $0.09 a year ago. That also topped expectations by a penny.

A graphic depicting a growing office space

Image source: Atlassian.

However, the bigger news in the report seemed to be Atlassian's new strategic partnership with Slack, the privately held office-messaging platform. Atlassian said it would sell the intellectual property of its two messaging products, HipChat and Stride, to Slack, which would discontinue the products. Management said the two companies would deepen existing product integrations such as Jira Cloud, Bitbucket Cloud, Trello, and the eponymous Slack.

The market cheered the move, as it both eliminates competition for Atlassian and gives the company a powerful new collaborator. Atlassian also made an equity investment in Slack for an undisclosed amount.

Now what

For the fiscal year ahead, Atlassian sees revenue of $1.146 billion to $1.154 billion, representing 31.6% growth, and projects an adjusted operating margin of 20%, along with adjusted EPS of $0.77, up from $0.49 last year. Shares had already been on a run before the recent earnings report, gaining 42% through the first half of the year. The partnership with Slack should only enhance the company's position in enterprise solutions -- Atlassian already serves two-thirds of the Fortune 500.

There's good reason to expect more growth ahead for Atlassian.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Atlassian. The Motley Fool has a disclosure policy.