Atlassian Corp. (TEAM) reported fiscal third-quarter results after Thursday's closing bell, and the numbers were impressive enough to send shares soaring in extended trading. The company beat analyst estimates on both earnings and revenue, with a standout performance from its Service Cloud product.

Here's a closer look at what drove the rally.

Q3 Earnings: A Clean Beat

Atlassian posted quarterly earnings of $1.75 per share, well above the analyst consensus of $1.32 — a beat of 32.58%, according to MarketDash data. Revenue came in at $1.79 billion, topping the $1.69 billion estimate and jumping from $1.36 billion in the same quarter last year.

Operating income was $607.2 million for the quarter, compared with $348.3 million a year ago. The operating margin expanded to 34% from 26% in the prior-year period, showing improved profitability alongside growth.

Cash flow from operations was $567.5 million, and free cash flow reached $561.3 million.

CEO: 'Strategy in Action'

“Our strong Q3 results show the power of our strategy in action, with total revenue growing 32% year-over-year to $1.8 billion, as customers sign bigger, longer-term commitments, and connect their teams and workflows on our AI-powered platform,” said Mike Cannon-Brookes, Atlassian CEO.

He highlighted a key milestone: “Service Cloud eclipsed $1 billion in ARR, and is growing over 30% year-over-year, as it continues to take share and reinforce our conviction in the long-term growth opportunity of the Atlassian System of Work.”

Q4 Guidance

For the fourth quarter, Atlassian expects revenue in the range of $1.65 billion to $1.66 billion, versus the analyst estimate of $1.66 billion. The midpoint of guidance is roughly in line with expectations.

Shares of Atlassian were up 17.08% to $80.31 in Thursday's extended trading session.