Australian tech giant Atlassian says its remote work policy is central to its recent success, posting better-than-expected financial results as business leaders and commercial real estate interests debate the benefits of back-to-office measures.
Atlassian shared its full financial year results on Thursday, beating market expectations with revenues of US$939.1 million for the fourth quarter of 2022-2023.
The company behind productivity and team management software Jira shaved its losses, posting a net loss of US$59.0 million for the fourth quarter, after a loss of US$90.6 million in the prior corresponding period.
It now predicts first-quarter revenues in the vicinity of US$950 million to US$970 million, and expects year-on-year cloud revenue growth of up to 27%.
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The company’s NASDAQ share price jolted in after hours, lifting 23.5% to US$209.50 a share at the time of writing.
In a letter to shareholders, the company’s leadership team declared Atlassian was “putting in the hard yakka” in the face of a “challenging economy”, which saw the company lay off 500 employees in March.
Its “biggest bets” on cloud offering, enterprise-level business, and IT service management offerings “are paying off, further strengthening our conviction in our strategy”.
“Distributed teams are the future of work”: Atlassian
Atlassian also celebrated “another big bet” in its shareholder letter: its declaration of a remote-first policy three years ago, during the tumultuous pandemic response of August 2020.
“Whether all-remote or hybrid, distributed teams are the future of work,” the company said.
“We’re committed to living that future now and pioneering solutions to the challenges of working across geographies and time zones.”
The tech giant framed that policy as vital to its most recent successes, hitting back at other leaders critical of remote-first policies.
“While some business leaders accuse us of abandoning something essential to our esprit de corps, we see it differently,” the company said.
“We see a chance to lead. Atlassian is one of the only enterprise companies to go all-in on distributed work. Customers and peers are turning to us for advice, inspired by the example we’re setting.”
Atlassian claims broad company buy-in to the policy, which allows staff to work remotely, or in person in Atlassian’s own offices, with teams physically meeting when appropriate for major strategy and planning sessions.
Return-to-office calls growing louder
The letter cuts against a broader trend in remote work policies, where an increasing number of major corporate leaders are requesting their staff to return to the office for at least a few days per week.
Many critics of unrestricted remote work privileges say in-person collaboration produces better results.
Others believe centralised work provides accountability for staff who would otherwise evade the watchful eye of management.
Atlassian co-founder Scott Farquhar has publicly feuded with Twitter/X and Tesla CEO Elon Musk over the latter’s views on in-person work.
In May, Musk declared working from home “morally wrong”.
Closer to home, Australia’s banking institutions are slowly requesting senior staff complete more of their work in central locations (in the case of NAB, workers last month secured a new pay deal enshrining some WFH rights).
Public figures like former Victorian Premier Jeff Kennett have also declared those who work from home ought to be paid less, as they save on transportation costs to the physical workplace.
CBD office vacancy on the rise
External to perceived concerns about worker productivity, the state of Australia’s commercial property market is a growing concern.
On Thursday, the Property Council of Australia (PCA), an industry group representing the commercial real estate sector, revealed overall CBD office vacancy increased from 12.6% to 12.8% nationally in the first half of 2023.
Some of that increase was the result of new office capacity hitting the market.
Demand remained positive in all capital cities excluding Sydney and Melbourne, said chief executive Mike Zorbas.
Yet the declining demand in those two centres requires attention, he said.
“We know that face-to-face teamwork supports deeper team relationships and brings about positive outcomes for organisations, the economy, and society at large,” Zorbas said.
“There have been big advances in the inclusiveness of our workplaces through flexibility in ways of working over the past decade, but we also need the balance of governments leaning in and supporting the vibrancy of our CBDs,” he added, echoing the argument that working from the city can stimulate smaller, local businesses catering to those workers.
“Thriving CBDs are an essential part of our national economic prosperity and support the viability of large-scale public transport systems and investments in public amenities.”
But for Atlassian — which is itself behind a major new office development in Sydney — the argument appears to be settled.
“The more we lean in here and lead the way, the deeper our competitive advantage,” its shareholder letter said.