Atlassian boasts strong Q3 revenue growth in wake of two-week outage

Customer credits unlikely 'to be material to the financial statements'


Atlassian has reported robust figures for its Q3 2022 ended March 31 in which revenues were up, net income was in the red and questions over the recent outage continue to linger.

As a reminder, Atlassian's very own Who, Me? moment occurred April 4 when a script used to deactivate instances of a standalone application instead managed to delete the sites of approximately 400 customers, according to a lengthy explanation by CTO Sri Viswanath.

It took until the end of April 18 for the company to recover everything.

The incident scored a mention during the company's financial results [PDF] last night, slotted in beneath 60 percent year-on-year growth in cloud revenue and claims about "a high level of demand."

During a call with analysts following the publication of the company's finances, co-founder and co-CEO Mike Cannon-Brookes addressed the elephant in the room, repeating that only a very small subset of customers were affected (less than half a percent) but that "one customer is too many."

The question was not so much the number of customers affected (Viswanath put the deletion at around 400 customers, while Cannon-Brookes said 775 were "impacted") but the effect the incident might have on the pace of cloud adoption as well as customer credits issued.

The true impact, in terms of customer confidence, will not be felt until later this year – these figures predate the incident. However, chief revcenue officer Cameron Deatsch told analysts that customers had "questions."

"They're tough conversations," he said, but "most customers completely understand and it turns into a collaborative discussion on moving forward."

Deatsch did not elaborate on how a borked script and process could end up deleting data, or how it could take the best part of a fortnight to recover from the mistake.

CFO James Beer said: "I would expect that there would be compensation," but that this would show up Q4's figures rather than in Q3. "I would not expect the level to be material to the financial statements," he added.

As for the Q3 figures [PDF], Atlassian reported a jump in subscription revenue to $555m, up from $350m a year ago. Maintenance revenues were $120m, down from $133m. Overall, revenues stood at $740m, up from $569m.

The company's net loss for the nine months to March 31 stood at $509m, up from the $483m for the same period last year. The three-month net loss was $31m.

One of the more unfortunate customer quotes dropped into the shareholder letter was "Jira, or it didn't happen."

We can imagine variations on the theme uttered by subscribers recovering from April's prolonged outage. ®

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