Collaboration and application software firm Atlassian Corp. Plc. delivered solid fiscal second-quarter results today, beating expectations on revenue, adding more than 10,000 new customers and growing its subscription revenue.

The company followed up with strong guidance for the next three-month period, sending its stock almost 10% higher in late trading.

Atlassian reported a net loss of $77.5 million, or 31 cents per share, down from a net loss of $621.5 million a year ago, on revenue of $688.5 million, up 37% from a year ago.

Adjusted for costs such as stock compensation, the company reported a 50-cent-per-share profit. Wall Street had been modeling adjusted earnings of 35 cents per share on lower revenue of $642.47 million.

Atlassian co-founder and co-Chief Executive Scott Farquhar (pictured) hailed the company’s “strong quarter,” noting that 98% of its more than 10,000 new customers were in the cloud.

Atlassian is the developer of the popular Jira family of work management tools, which are used by teams in areas such as software development to coordinate their activities. The company also sells Trello, another best-selling project management application, and its Confluence collaboration software.

The company has been working for some time to transition its business to cloud subscriptions, phasing out sales of licensed software that’s hosted in private data centers. Atlassian is making the transition in order to secure a more reliable stream of subscription revenue, rather than rely on one-off license sales.

That transition is well underway, with Atlassian reporting subscription revenue of $509 million in the quarter, up 64% from a year ago.

The company also revealed that its Atlassian Marketplace hit a key milestone, surpassing $2 billion in lifetime sales during the quarter. “The Atlassian Marketpace continues to go from strength to strength surpassing $2 billion in sales and shows no signs of slowing down,” said Atlassian’s other co-founder and co-CEO Mike Cannon-Brookes.

In other news, Atlassian announced it has acquired a small artificial intelligence startup called Percept.AI. Officially known as Buddy AI Inc., Percept.AI has created AI-powered virtual agent technology that automates customer support. Atlassian said the plan is to integrate Percept.AI with its Jira Service Management product to help support teams deliver great service faster and at more scale.

Looking to the third quarter, Atlassian said it’s expecting revenue of between $690 million and $705 million, an estimate that comes in well ahead of Wall Street’s forecast of $641.3 million.

Photo: Atlassian/Facebook