The Class: Robbins LLP reminds investors that a shareholder filed a class action on behalf of all purchasers of Atlassian Corporation (NASDAQ: TEAM) ordinary shares and/or common stock between August 5, 2022 and November 3, 2022, for violations of the Securities Act of 1934. Atlassian develops and sells collaboration and project-management software that operates both on premises and in the cloud.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Atlassian. Shareholders who want to act as lead plaintiff for the class must file their papers by April 4, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
What is this Case About: Atlassian Corporation (TEAM) Misled Investors Regarding the Company's Financial Viability and Business Prospects
According to the complaint, leading up to the class period, defendants touted the Company's financial viability. After markets closed on August 4, 2022, defendant Co-Chief Executive Officer Scott Farquhar reiterated the Company’s guidance of 50% year-on-year cloud growth for fiscal years 2023 and 2024. In a call with analysts that day, defendant and Chief Revenue Officer Cameron Deatsch assured investors the Company was “being exceedingly vigilant watching all stages of our funnel” and that “we have yet to see any specific trend . . . that gives us pause or worry to date.” According to CRO Deatsch, the “demand for collaboration products continue[s] to be strong.”
In reality, Atlassian overstated its financial guidance by concealing trends of slowing conversions from free users to paying customers and slowing growth in paying-user expansion. As a result, defendants’ positive statements about the Company’s business, operations, and prospects during the class period were materially false and /or misleading.
On November 3, 2022, Atlassian issued a letter to shareholders and held a conference call with analysts to discuss its financial results for the fiscal first quarter of 2023 ended September 30, 2022. In the letter to shareholders, defendants revealed that “[b]ased on the macro headwinds,” the Company was “lowering our Cloud revenue growth outlook to a range of approximately 40% to 45% year-over-year” for fiscal year 2023. In describing the “macro impacts” on the Company, the letter to shareholders revealed that (1) the Company “saw a decrease in the rate of Free instances converting to paid plans,” calling it a “trend [that] became more pronounced” in the quarter and (2) the Company experienced “a slowing in the rate of paid user growth from existing customers.” In response to these revelations, the price of Atlassian stock declined almost 29% the following trading day, from a closing price of $174.17 per share on November 3, 2022 to a closing price of $123.73 per share on November 4, 2022. More than $7 billion in shareholder value evaporated. Analysts reported being “surprised by the magnitude of the slowdown” as defendants “delivered unusually disappointing” results.
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