Work management software leader Atlassian ( TEAM 2.51% ) has been a great example of a business that has grown in grand fashion, but delivered little in the way of positive shareholder returns. Share prices are down well over 20% so far in 2024, doing little to reverse what has been a lackluster story in the wake of the pandemic and cloud software stock meltdown.
That said, Atlassian has made plenty of other stakeholder accomplishments over its lifespan, and there could be tremendous value here. Indeed, where many growing software stories have totally withered, this one has endured by many counts. Is it time to buy the dip on Atlassian despite the risks? Lots of growth, just not the kind investors want right now Atlassian has been on a multi-year journey migrating customers from "Server" products (a perpetual license to use software) to "Data Center" and Atlassian "Cloud" (cloud being the ultimate goal to migrate customers to, where the company fully manages the product and delivers frequent updates, enhancements, and new features).
Server products were sunsetted a few years ago, with ongoing support migrating to Data Center and Cloud products. In the third quarter of fiscal 2024 (the three months ended in March), management reported a heat-up in migrations to Data Center and Cloud. This included a record 64% year-over-year increase in Data Center revenue as some existing customers decided to finally pull the plug and move away from the old non-supported Atlassian on-premises.
