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Gary Alexander reporting on Atlassian’s latest quarter.

He thinks the valuation is a bit rich currently at 11.7x EV/FTM based on expected growth of 35% slowing from 41% this past year. Customer growth and free cash flow look quite good.

It looks like TEAM is in the same spot as many of our companies. High valuation based on great historical growth but facing a potential slowdown. I haven’t followed the company closely enough to speculate on future growth at this point.

There is a chart on customer growth in Gary’s article. Two specific occurrences caused large growth in the past - the acquisition of Trello and changes in billing of one of their products. You’ll note two large step gains in specific quarters where these occurred.

Finally, look at the R&D spend. 37.2% of sales!!!
That is about as high as I’ve seen. That suggests some nice future growth in earnings if it can be throttled.

Anyone else have opinions?

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