Rose Celine Investments
Equity Investor
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 not run for shareholders, because its stock-based compensation is as large as its free cash flow, leaving owner earnings at zero. That holds even if, as a reply argues, Jira and Confluence have strong moats and AI worries have unfairly hit the stock. 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 is flagged as bullish with no reason given, only a ticker mention and a link. 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
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
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
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
ServiceNow's high stock-based compensation does not break the thesis, though it raises the valuation hurdle. Q2 SBC was $655 million, about 16.4% of revenue, yet diluted shares fell from 1.047 billion to 1.034 billion as H1 buybacks of 20.1 million shares outpaced 6.7 million issued. If the $160 base-case value is remotely right, buybacks near $108 were accretive. The thesis breaks if growth slows while SBC stays near 15%, buybacks stop offsetting issuance or the sub-10% 2029 target is missed. … Show more
Atlassian at $57-60 trades near decade lows while still growing 24%, and could reach $200+ in a few years if software becomes the next bubble after semiconductors. Its own AI agents, such as Rovo, are a plus. A replier who works in software warns that big-company contract cancellations slated for 2027 could be high, though that may already be in the price. x.com x.com 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
