My take on TEAM (ATLASSIAN) and why its a disappointing investment even at 79$. Maybe a buy at 70$...
$5.2B revenue, 20% YoY growth, but $130M operating loss, like wth
$1.36B in stock based compensation last year, 26% of total revenue, one of the highest in software (its a common thing in the swe community that atlassian is a 'cushy' job that pays crazy.. but that pay is pointless if you still aren't profitable, so i blame the leadership for creating a chill unproductive cushy environment where investors basically just burn money)
Headcount doubled during COVID, now sitting at 14,000 employees (like what!!?! For a freaking software company? After Claude exists? Is the CEO on drugs?)
85% of customers are Fortune 500 but generate only 10% of revenue (really odd, explains that they never were able to get a good moat cause fortune can quickly move away if prices are raised)
Recent 10% layoffs dressed up as "AI restructuring" don't move the needle (i smell complete BS)
Tools like Claude Code mean what took Atlassian years to build can be replicated fast, the technical moat is gone
Stewardship has been poor, org bloat and equity handouts while the moat is quietly disappearing
Could get interesting at $70 if they cut 30%+ (atleast) of headcount.
Gross margins are solid, free cash flow exists, enterprise customers are sticky. But needs actual leadership accountability and cutting a lot of bloat, also that stock based compensation is atrocious
Overall stock beaten and will be beaten more (possibly to oblivion) because leadership is not cutting costs and actually competent