Atlassian shares rose as much as 10% in extended trading on Thursday after the provider of collaboration software reported fiscal second-quarter earnings that topped estimates and raised its forecast for subscription revenue.

Here’s how the company did:

• Earnings: 50 cents per share, adjusted, vs. 39 cents as expected by analysts, according to Refinitiv.
• Revenue: $688.5 million, vs. $641.3 million as expected by analysts, according to Refinitiv.

Revenue rose 37% in the quarter, which ended on Dec. 31, Atlassian said in a letter to shareholders. The company narrowed its net loss to $77.5 million from $621.5 million in the year-ago quarter.

For the full fiscal year, Atlassian said subscription revenue will increase by about 50%, up from the previous projection of growth in the mid-40’s range. Subscriptions represent 86% of total revenue. Atlassian reported $975.5 million in deferred revenue, above the StreetAccount consensus of $971.0 million.

Atlassian is increasing prices of its data center and server products next month. The hikes will range from 10% to 25% and will not affect customers that use Atlassian’s cloud offerings, the company said.

While Atlassian beat expectations for its key financial metrics, the company ended the quarter with 226,521 customers, below the StreetAccount estimate of 237,100.

The trend of people leaving workplaces that has come to be known as the great resignation has not played out at Atlassian, Scott Farquhar, a co-founder and co-CEO of the company, said on a conference call with analysts. However, he said, “we have seen some minor upticks in compensation.”

Also on Thursday, Atlassian said it has acquired virtual agent start-up Percept.ai, “bolstering our investments in automation and machine learning.”

Excluding the after-hours jump, Atlassian shares have fallen about 23% since the start of the year, while the S&P 500 index is down around 9%. Atlassian has gotten caught in a broad rotation out of fast-growing cloud-software stocks as interest rate concerns push investors into assets deemed less risky.

However, ServiceNow and Qualtrics both popped on Thursday after beating estimates in their quarterly results. Investors will be looking to earnings reports from a bunch of cloud companies in the coming weeks as an early indicator for how well the businesses are holding up as the economic and fiscal environment changes.

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