Is Atlassian Still Ahead of the Pack?

Is Atlassian Still Ahead of the Pack?

We are long-term investors here at MyWallSt and recommend companies that we believe will have consistent growth for years to come. Updates are an opportunity for us to reaffirm our stance on a company while keeping you up to date on its developments. By renewing our comments with the latest information, we ensure that investors have confidence in our selections, regardless of their start date.

A recent survey conducted by PWC asked 5,050 CEOs across the globe how they plan on leading their companies in a post-pandemic world. Unsurprisingly, 43% of them indicated that they would increase spending on their company’s digital transformation by 10% or more over the next three years. As a company that has been a pioneer of the workplace collaboration industry for the past decade, Atlassian is set to be one of the beneficiaries as offices must now facilitate remote working, global teams, international projects, and a truly distributed workforce. 

Of course, with all of this new attention brought to the industry, we were bound to see some new competitors come to try and knock Atlassian off its perch, not least of which the two recent blockbuster IPOs of Asana and While both have been growing like gangbusters, there is one key difference between them and Atlassian, and that is how these companies spend their money. 

Atlassian has consistently spent twice as much on research and development compared to sales and marketing in what is an inverse to its newer competitors. Thanks to its first-mover advantage and land-and-expand sales model, it has lowered acquisition costs significantly. This has led to the company developing a flywheel of sorts. As it has to spend less to acquire customers, this money can then be spent on research and development and acquisitions to expand its product suite. These additional products can then be easily upsold to its existing customer base — as indicated by a 130% net expansion rate amongst medium and large businesses — further reducing acquisition costs and bringing in more revenue which can then be reinvested in R&D, and on and on it goes. 

While the industry is certainly busier than it was when we first recommended the stock in 2018, we believe this product-focused approach will allow Atlassian to maintain its advantage over the chasing pack for years to come.

We have updated our comments on Atlassian. To read them, click the stock button below.


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