Shares of collaboration and productivity software developer Atlassian Corporation (NASDAQ: TEAM) jumped over 42% year to date through the first week of July, according to data from S&P Global Market Intelligence.
The business has continued to grow revenue at a healthy rate in recent quarterly periods, hinting that several acquisitions in recent years are being successfully integrated, and that new product offerings are gaining traction. While the company has ramped up marketing and other expenses to propel growth higher in the last year or so, thus piling up losses, a healthy amount of cash flow has (so far) quelled any concerns from investors. The strong financial performance reported in the last six months has pushed the company's market cap past $15 billion.
During the second quarter of fiscal 2018 (which ended on the last day of December 2017), revenue grew 43% compared to the year-ago period. The year-over-year growth rate was a similarly gaudy 40% in the subsequent three-month period. However, during the first nine months of the company's current fiscal year, the business racked up a net loss of $93.5 million, compared to just $21.8 million in the year-ago period.
Atlassian Corporation has managed just fine, though, as it delivered $229 million in operating cash flow during the first nine months of fiscal 2018. Even after accounting for investing and financing inflows and outflows, the business has grown its cash position $149 million since the beginning of the fiscal year. In other words, investors have plenty of trust that management's growth strategy is working. Then again, it's difficult to argue with 40% top-line growth.
As a strong cash flow suggests, the company sure won't be hurting for liquidity anytime soon. The business ended March with over $763 million in cash and investments, then followed up one month later by selling up to $1 billion in debt notes. That could signal that the company is gearing up for its next major acquisition. Either way, given the rare combination of size and sustainable growth, investors may want to take a closer look at Atlassian Corporation stock in the second half of the year.
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