Value Investigator
Quality-Growth Investor, Fundamental Research & Portfolio Strategy
Atlassian is far less cash-rich than it looks once stock-based compensation is treated as a real cost. About $1.3 billion of operating cash flow and only $50 million of capex look strong, but roughly $1.5 billion of SBC is the real spend, $165 million more than operating cash flow. Paying employees in stock flatters cash flow while diluting shareholders, and buybacks only partially offset SBC rather than reducing the share count. x.com x.comÂ
Atlassian is hard to buy despite strong contracted demand, because insiders have sold so heavily. Remaining performance obligations, contracted revenue not yet recognized and a precursor to reported revenue, accelerated sharply in Q2 2026. Even so, it does not look like the best opportunity in the market. x.com x.comÂ
Atlassian is flagged as bullish with no reason given, only a ticker mention and a link. x.comÂ
Atlassian is not a buy even after an ~80% drawdown since January 2025 to an $18b market cap. Its products aren't that great, and it lacks the customer lock-in that Salesforce enjoys. x.comÂ
Atlassian won't grow beyond inflation because nearly everyone already owns its product, so its rally is simply the market bidding up software as money rotates out of semiconductors. @sv_techie notes 28% growth last quarter and 26% for fiscal 2026, but guidance of 19.7% for the next quarter and about 13% for fiscal 2027. x.comÂ
Atlassian has been punished by narrative-driven selling rather than fundamentals, since its estimates have only gone up. Goldman Sachs and other banks pushed AI-loser baskets, pods reinforced the narrative despite tiny position sizes, and Millennium front-ran the resulting index removal, sending the stock from 140 to 56 and back in six months. Such extreme moves risk becoming reflexive, pushing companies toward layoffs or bad management decisions. x.com x.comÂ
Okta, Salesforce and Atlassian look insanely expensive at nine times forward revenue against roughly 10% year-over-year growth. Many SaaS firms also have high sales and marketing costs. A commenter flags inference spending, which SaaS investors worry could compress margins; if free cash flow, growth, retention or gross margins weaken, their price-to-sales multiples could collapse. x.com x.com x.com x.comÂ
Atlassian's rally is hard to justify as growth heads to the teens. Revenue grew 28% last quarter and 26% for FY26, but Q1 FY27 is guided to 19.7% and full FY27 implies about 13%. With EV/sales still in single digits, the stock is probably at fair value for high-teens growth. In some places git is replacing Jira, which is ancient technology. x.com x.com x.com x.comÂ
Atlassian's results show AI boosting the business rather than hurting it, corroborating all eight qualitative estimates made in the original thesis. x.comÂ
ServiceNow's costs are rising far faster than revenue without the RPO acceleration management promised. Q3 revenue rose 21%, while total cost of revenue climbed 56% and net income fell 45%; stock compensation appears to be using about half of free cash flow. The selloff looks deserved, though the shares are now closer to fair value. Sustainable margins and measurable returns remain the test. x.com x.com x.com x.com x.com x.comÂ