Why I'm Very Confident in the Future of Atlassian Stock

Considering Atlassian's (TEAM -1.06%) latest earnings report, now might be an optimal time to invest in the software stock. In this clip from "3 Minute Stocks Updates" on Motley Fool Live, recorded on May 11, Motley Fool contributor Brian Withers discusses Atlassian's recent outage and how the company addressed it, and assesses its recent earnings report.

Brian Withers: Moving on to Atlassian. This is one of my favorite companies to talk about. There has been a lot going on with Atlassian. They had an outage that was widely publicized in the news. They had a recent investor day. They released a bunch of new products. They're moving their headquarters from being a foreign company outside the U.S., remember, they were originally founded in Australia, to the U.S. over the next year or so. They had earnings and they released a detailed forecast for the fiscal '23. We can't cover all of these things. I wanted to cover some highlights from the outage and the earnings. I really appreciate that this company has been very transparent in the fact that it impacted. When you look at their hundreds of thousands of customers that they have, it's a tiny, less than a half percent, I think, of their customers were actually impacted by this outage. But they have an open company, no BS value. One of the other values is don't F the customer. Having the customers be out for weeks and losing access to their data was a big deal for Atlassian, but they came out in their earnings report, they said, we really understand this, we're going to learn from it, and by the end of the week, we're going to report a detailed dive into what happened, what we're doing to fix it, and we're going to publish it out on our blog. So, I'm going to be certainly watching for that and seeing that the company is learning from their mistakes. But the earnings report is really, they're moving customers from their server version. You can see the server segment here down 19%, over to their data center and Cloud, which is either Cloud-ready or all Cloud applications, and they hit a 30% revenue growth. You can see the last one to six quarters there, solid revenue growth over the period. You might notice the 4% down in marketplace and services, but that's more because as more customers move to the Cloud, they're using Cloud-based marketplace additions that have a lower margin for Atlassian. So a purposeful move in that point. They made an acquisition of Chartio in February 21, and they announced that they're building it into their platform across all other ways. So not more than a year out, they've taken this niche acquisition and built it into their set of tools. I really like what this company is doing, and I feel like they had a great earnings report, and I'm very highly confident in the future with these guys.