Tech’s mixed bag: Atlassian tumbles, Facebook soars

Shares in Australian software giant Atlassian tumbled by nearly 10 per cent in after-hours trading, capping a tumultuous week for global tech stocks, with Amazon and Facebook parent company Meta soaring after posting strong results.

Atlassian, led by Sydney-based billionaire co-founders Scott Farquhar and Mike Cannon-Brookes, posted its first ever $US1 billion ($1.52 billion) revenue quarter on Friday and surpassed 300,000 customers globally, while slashing its net loss to $US84.5 million from $US205 million a year earlier.

Atlassian co-CEO Mike Cannon-Brookes.Credit: The Age

In the three months to December 31, Atlassian posted total revenue of $US1.06bn, up 21 per cent from a year earlier, as the company deployed AI capabilities across its software products, which help teams – particularly IT teams – collaborate.

Market optimism in global technology companies has see-sawed over the past 12 months, frequently causing big swings in share prices – including for Atlassian.

“The momentum we’re seeing into Q3 only strengthens our conviction in our long-term strategy,” co-founders Cannon-Brookes and Farquhar wrote in a letter to shareholders.

“Our position is an enviable one: huge market opportunities, increasing commitment from customers in response to the drumbeat of innovation, a world-class team, and a unique position to combine over 20 years of insights with the immense power of AI.”

The results beat Wall Street consensus expectations – it posted profit per share of 73¢, beating analyst estimates of 62¢ – yet investors punished Atlassian shares, which are listed on the Nasdaq, sending them down 8.6 per cent to $US254.9.

Cannon-Brookes has an estimated fortune of $16.1 billion, just ahead of his co-founder Farquhar on $15.6 billion, and the pair have each held on to about 20 per cent of the company they started more than 20 years ago.

If the after-hours drop materialises when the Nasdaq reopens, the founders’ holdings will fall by nearly $US1 billion each.

Atlassian recently marked 1000 days of running a fully geographically spread workforce, and was one of the most aggressive companies to enact a remote-work policy during the pandemic.

“Atlassians can choose to work from one of our offices, or not, on any given day,” the company says.

It was a different story for US tech giant Meta, parent company of Instagram and Facebook, which jumped more than 11 per cent in after-hours trading after lifting revenues by 25 per cent year-on-year to $US40.1 billion.

“We had a good quarter as our community and business continue to grow,” Meta chief executive Mark Zuckerberg said on Friday.

“We’ve made a lot of progress on our vision for advancing AI and the metaverse.”

The results came just a day after Zuckerberg and other tech CEOs were grilled at a US Senate hearing into child safety, at which Zuckerberg apologised directly to parents who said their children had been harmed due to social media.

The company announced its first cash dividend to investors – a 50¢ quarterly dividend – as it laid out its new AI-centric battle plan.

Key to Meta’s fortunes, against the likes of Microsoft and Google parent company Alphabet, is its own set of private data, which Zuckerberg said will help embed generative AI across Facebook’s suite of products.

“There are hundreds of billions of publicly shared images and tens of billions of public videos, which we estimate is greater than the common crawl data set,” Zuckerberg said on Meta’s earnings.

Meta CEO Mark Zuckerberg.Credit: AP

“We’ll be building the most popular and advanced AI products and services. If we succeed, everyone who uses our services will have a world-class AI assistant to help get things done.”

Joining Meta in heavy AI investments is fellow tech titan Apple. Its chief executive, Tim Cook, said Apple was spending a “tremendous amount of time and effort” on AI features to be announced in coming months.

Apple shares dipped slightly after the company posted a 13 per cent sales decline in China, one of its key markets. The company is gearing up to launch its Vision Pro virtual reality headset, available in the US for $US3500.

“We are announcing these results on the eve of what is sure to be an historic day as we enter the era of spatial computing,” Cook said. “Moments like these are what we live for at Apple, they’re why we do what we do.

“As we look ahead we will continue to invest in these and other technologies that will shape the future that includes artificial intelligence, where we continue to spend a tremendous amount of time and effort, and we’re excited to share the details of our ongoing work in that space later this year.”

Apple chief Tim Cook is banking on the new product being a big hit.Credit: Bloomberg

Apple posted revenue of $US119.6 billion for the quarter ending December 31, slightly beating analyst expectations of $US117.9 billion.

Shares in Amazon, meanwhile, climbed after it also beat expectations, posting revenue of $US170 billion for the quarter compared to consensus analyst expectations of $US166.2 billion. The company, like many others across the sector, laid off thousands of employees last year, shedding around 27,000 staff between late 2022 and mid-2023.

“This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon,” Amazon chief executive Andy Jassy said in a statement. “As we enter 2024, our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about.”

Investors and analysts will be closely watching next week’s set of technology results which include Spotify, Snap, Uber, PayPal and Cloudflare.

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