Why Did Atlassian Plunge 16%? Cloud Growth Slows

On May 2, 2025, Atlassian's stock experienced a significant drop of 15.96% in pre-market trading, reflecting investor concerns and market sentiment.

Atlassian's recent financial outlook has been a key driver of its stock performance. The company forecasted fourth-quarter revenue to be in the range of $1.35 billion to $1.36 billion, falling short of analysts' expectations of $1.36 billion. This downbeat guidance has contributed to the recent decline in its stock price.

Despite reporting a 14% year-over-year increase in Q3 revenue to $1.36 billion, exceeding estimates of $1.29 billion, Atlassian's stock dropped by over 16% after hours. The company also reported a net loss of $70.8 million, compared to a net profit of $12.8 million in the previous year. This financial performance has raised concerns about the company's profitability and growth prospects.

Atlassian's cloud revenue growth is another area of focus. The company expects a 23% increase in cloud revenue for the current quarter, which represents a slowdown from the previous quarter's 25% growth rate. This deceleration in cloud revenue growth has added to investor worries about the company's ability to maintain its momentum in the cloud market.