Scott Farquhar, co-founder and co-CEO of the software company Atlassian, speaks during a jobs and skills summit at Parliament House on September 1, 2022 in Canberra, Australia. The Australian government is bringing together political, business, union and community group leaders at Parliament House to address issues facing the Australian economy and workforce as inflation and interest rates continue to rise.

Martin Ollman | Getty Images

Atlassian shares fell as much as 22% on Thursday after the collaboration software maker reported lower earnings than analysts expected and issued a disappointing outlook.

Here’s how the company did:

  • Earnings: 36 cents per share, adjusted, vs. 38 cents per share as expected, according to Refinitiv.
  • Revenue: $807.4 million, vs. $806.4 million as expected, according to Refinitiv.

Revenue increased 31% year over year in the quarter that ended Sept. 30, according to a statement. Net loss narrowed to $13.7 million from $411.2 million one year ago, thanks to a mark-to-market accounting adjustment on strategic investments.

For the fiscal second quarter, Atlassian sees $835 million to $855 million in revenue, below the Refinitiv consensus of $879.2 million. The guidance assumes that macroeconomic current conditions persist through the rest of the 2023 fiscal year.

Scott Farquhar, Atlassian’s co-founder and co-CEO, told analysts that the company has been feeling the impact of a volatile global economy. The rate at which free users of Atlassian’s software are converting to the paid offerings is cooling, as is the expansion of the number of paid users at existing customers, which are slowing the pace of hiring.

Read more about tech and crypto from CNBC Pro

Atlassian added 6,550 customers, resulting in a total of 249,173. Analysts polled by StreetAccount had expected 250,700.

Farquhar said Atlassian will slow down its own headcount growth going forward.

The company’s competitive position relative to rivals has not been changing, said Cameron Deatsch, Atlassian’s chief revenue officer.

Prior to the after-hours plunge, shares of Atlassian had fallen 54% for the year, compared with a 20% drop in the S&P 500.

WATCH: Companies like MongoDB and Atlassian are more defensive places to be, says Citi’s Radke