Investors hammered Atlassian Corp. stock in after-hours trading after the Australian software company missed earnings forecasts and gave a lower outlook than had been expected by analysts.

For its fiscal quarter ended Sept. 30, Atlassian reported net income of $92.5 million, or 36 cents per diluted share, down from $94.4 million, or 37 cents in the same quarter of last year. Revenue rose 31%, to $807.4 million. Analysts had been expecting earnings per share of 38 cents on revenue of $806.4 million.

Atlassian added 6,550 new customers in the quarter, its 10th quarter of customer growth, bringing its total number of customers to 249,173. The total number was below an expected 250,700 customers, however. Slowing growth was a theme throughout Atlassian’s shareholder letter, with co-founders and co-Chief Executive Officers Mike Cannon-Brookes and Scott Farquhar warning that Atlassian is not immune to the broader macroeconomic market.

Both said that Atlassian has continued to see a slower rate of free use of its software converting to paid plans and has started to see a slower rate of growth in paid seats from existing customers as companies slow their pace of hiring.

Business highlights in the quarter included the launch of Atlassian Together, a new, single subscription to its work management products Trello, Confluence, Atlas and Jira Work Management. The subscription service includes Access, an enterprise-grade identity and access solution that connects Atlassian products to third-party providers.

The company also launched Atlas, a new teamwork directory designed to assist organizations in providing alignment across teams, apps and work regardless of what tools their teams use. A new partnership with Accenture PLC is also said to help enterprises embrace agile working methods.

While still headquartered in Australia, Atlassian changed its corporate domicile from the U.K. to the U.S. in the quarter, resulting in its transitioning to new accounting standards. The move is said to increase access to a broader set of investors and provide more flexibility in accessing capital.

For its second quarter fiscal 2023 ending Dec. 31, Atlassian predicts revenue of $835 million to $855 million. Analysts had expected $879.2 million. The outlook also came with a warning that it’s based on current macroeconomic conditions not changing. Given the worsening global outlook, that’s unlikely.

After plunging over 25% in late trading, Atlassian shares settled somewhat and were down almost 23%.

Photo: Atlassian