Billions wiped from Atlassian duo’s fortunes

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Australian tech billionaires Mike Cannon-Brookes and Scott Farquhar have had about a billion dollars wiped from each of their fortunes in a matter of hours, after shares in their enterprise software firm Atlassian sank by more than 10 per cent in after-hours trading.

Investors pummeled Atlassian’s shares on Friday morning AEDT, after the workplace software provider’s net loss widened to $US31.9 million ($49.7 million), compared with a net loss of $US13.7 million a year earlier. The company, which is listed on the US-based Nasdaq, is yet to post a full-year profit.

Atlassian co-CEOs Mike Cannon-Brookes and Scott Farquhar.Credit: Louie Douvis

Two of Australia’s wealthiest people, Cannon-Brookes has an estimated fortune of $16.1 billion, just ahead of his co-founder Farquhar on $15.6 billion, and the pair have each held on to about 20 per cent of the company they started more than 20 years ago.

If the after-hours drop materialises when the Nasdaq reopens, the founders’ holdings will fall by about $US1 billion each.

In its financial results for the first quarter of fiscal year 2024 on Friday, Atlassian posted total revenue of $US978 million, up 21 per cent from a year earlier, while growth slowed for a fifth consecutive quarter. Its results were largely in line with analyst expectations.

Excluding the after-hours drop, Atlassian shares are up by 41 per cent over the past 12 months, compared with the broader S&P 500 index which has risen by 12 per cent.

Cannon-Brookes and Farquhar warned shareholders in a letter that the macroeconomic environment remained uncertain, leading to caution from customers to pay for software products.

“Our guidance assumes that macroeconomic headwinds continue to negatively impact growth in paid seat expansion at existing customers and free-to-paid conversion rates, and that the trends we’ve seen in these areas throughout the last year persist in financial year 2024,” the pair said in the letter.

“Atlassian has a strong track record for anticipating workplace trends and making bold moves to capitalise on them. We believe a ripper team, an expanding customer base, and our steady drumbeat of innovations will drive long-term durable growth.”

The company’s collaboration and IT service management applications, including Jira, Confluence and Trello, have more than 265,000 customers globally, according to its latest figures.

It has made two major acquisitions this year, including enterprise video chat maker Loom for $US975 million, Melbourne-based cloud platform provider AirTrack, and has added AI functionality across its product suite.

Atlassian in March joined other technology companies in laying off 5 per cent of its workforce, and said it would be “reinvesting in roles that better support our priorities”. It said on Friday that its headcount had reached 11,151 workers, which was 14 per cent higher than a year ago.

Speaking on the sidelines of Atlassian’s Teams summit in Las Vegas in April, Cannon-Brookes said he had no plans to depart the company he co-founded more than two decades ago, despite rising commitments relating to environmental activism and philanthropy.

“I’ve had a 90/10 rule for many years… And I don’t intend to change that,” Cannon-Brookes said.

“Ninety per cent of my hours are spent here [at Atlassian], 10 per cent are spent outside.

“I have a lot of great teams of people outside, but this is something that’s a very intentional choice of how to spend my time, and that’s how I can have the greatest impact.”

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