What happened

Shares of Atlassian (TEAM -0.33%) gained 12.7% in April 2021, according to data from S&P Global Market Intelligence. The Australia-based maker of project management software and application development tools crushed Wall Street's estimates in the third quarter, though the stock gains would have been larger if Atlassian had followed the report up with equally impressive guidance targets.

So what

Atlassian saw revenue rise 38% year over year to $569 million. Adjusted earnings tripled from $0.21 to $0.63 per diluted share. Analysts would have settled for earnings near $0.29 per share on sales in the vicinity of $534 million.

Looking ahead to the fourth quarter, management expects earnings of roughly $0.17 per share on revenue near $520 million. Here, your average analyst was expecting earnings of $0.23 per share on sales in the neighborhood of $505 million.

Three consultants having a conversation in a dark data center office.

Image source: Getty Images.

Now what

The bulk of Atlassian's gains fell on April 13, when the company pre-announced revenue. The full report sparked a smaller jump, and the general market's retreat from high-growth stocks kept this stock in check. It should be noted that the company stopped selling perpetual software licenses in February, ending technical support for these legacy products in February 2024. Atlassian is all about cloud-based subscription contracts now, like most of the enterprise software world. Financial results have been choppy in recent quarters as Atlassian's customers adjusted to the new pricing model. At the same time, the stock has been quite stable, trading in a fairly tight range between $160 and $262 per share over the last year.