So, like a lot of the tech industry this is simply a case of overhiring, overspending and general mismanagement. And like every other layoff announcement “AI” is a convenient scapegoat to hide executive dysfunction.
You'll find it much more interesting to look at metrics like free cashflow, which is a better indicator as to whether the company is generating more cash during operations than it spends. This is a lot closer to the layman's idea of profit, and in a small business like a restaurant or single store it's often analogous to profit. In publicly traded companies, net profit and loss are borderline meaningless.
Software companies hid behind “free cash flow” and “YoY revenue growth” and “non-GAAP profit” for years in the zero interest world. Now that the heat has turned up a notch investors can see what I said before - most of these companies are wildly overstaffed and addicted to spending.
Agree with the above general assessment that this is a company doing layoffs to address years of bad decisions and underperformance, and the broader issue of SaaS valuations as folks question valuations there. Just another case of “AI” as a PR puff excuse to avoid simply admitting this is about correcting prior bad management decisions.
Atlassian does >$1B/year in free cash flow. the GAAP losses are almost entirely stock-based comp, which is non-cash. the buyback exists specifically to offset that dilution.
> buybacks will reduce profit
wrong. its a balance sheet transaction. cash goes down, shares go down.
The reason Atlassian doesn't "declare a profit" is that they are not profitable - they pay a lot with SBC, thus diluting shareholders year after year and not returning anything.
If they have really been unprofitable for the last decade that is very sad.
What's frustrating is that the company was profitable from its second year, and a really good little money maker too. I was working there at the time and I was proud to be working at one of the few tech companies actually turning a profit. Then IPO came, then literally overnight we switched gears and "reinvested every dollar into growth" and decided we'd just be another dumb money losing tech company.