Founded in the early 2000s, Atlassian (TEAM 0.57%) started before cloud computing became a popular way to use software products. As a result, the company has many of its older customers using its on-premise server-based products. But this is changing. On a Fool Live episode recorded on May 12, Fool contributor Brian Stoffel covers the most recent quarterly results and explains why going forward, things might be a little choppy for this team collaboration software specialist.

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Brian Stoffel: I will go first. First company we're covering is Atlassian, the ticker symbol is TEAM as in "team." This company makes tools that make it easier for companies to collaborate. Obviously, that was becoming more important for a while, became monstrously more important when the pandemic hit.

The interesting thing that's going on here is that the company was started in 2003 [note: the company was started in 2002] so a lot of the software that they have for their legacy, their older customers has been on-premise. Those customers like having it on-premise, but they announced that everybody has to move to the cloud, to migrate to the cloud over the next couple of years. The idea was that this is going to create some lumpy returns.

Well, when the company both pre-announced and then announced their results for the calendar first quarter of the year, the results were really great. Revenue was up 38% but subscription revenue was up 43%. Free cash flow over the last nine months, because that's their fiscal year, we're three quarters in, is up 47%, and their customer count was up 24%.

Their outlook is calling for 21% revenue growth. I am guessing that that's sandbagging, but the thing that we've got to keep in mind is because of this kind of choppy migration to the cloud, the revenue growth rate is going to modulate up and down a little bit over the coming quarters. All in all, I think it was a really solid quarter and it continues to be a company that I own and have very high conviction on.