Atlassian reported third-quarter results that beat expectations, with strong cloud growth and data center revenue.

The company’s stock has been hit hard in the “SaaS-pocalypse” that has hit software names this year as AI threatens their business models.

Atlassian CEO Mike Cannon-Brookes told CNBC that concerns plaguing the broader software sector may be overblown.

Atlassian shares jumped more than 29% on Friday after the software corporation topped Wall Street’s expectations for the fiscal third quarter, reporting strong cloud growth and data center revenue.

Here’s how the corporation did compared with LSEG estimates:

Revenue: $1.79 billion vs. $1.69 billion expected

Atlassian’s stock has been among the hardest hit by the “SaaS-pocalypse” this year, with shares down more than 45% year to date.

The phrase refers to the sell-off in digital systems stocks following the release of software built on top of artificial intelligence models from companies like OpenAI and Anthropic. Software executives have responded by saying core business metrics have not deteriorated.

In March, Atlassian laid off about 10% of its workforce, or roughly 1,600 jobs, saying the move would allow it to “self-fund further investment in AI and enterprise sales, while strengthening our financial profile.”

Atlassian CEO Mike Cannon-Brookes told CNBC on Thursday that the corporation saw “incredible strength” in its business during the quarter and that the concerns plaguing the broader software sector may be overblown.

“We’re seeing jobs numbers be continually strong in the areas that individuals have worried about, so I’m not sure those fears are going to play out,” Cannon-Brookes noted in an interview with CNBC’s “Closing Bell: Overtime.” “They’re certainly not playing out in Atlassian’s numbers, in terms of how our customers continue to expand the adopt of our software as a strategic partner to their business.”

Atlassian’s revenue grew 32% year over year in the quarter, which ended on March 31. Cloud was a bright spot in the report, with revenue jumping 29% year over year to $1.13 billion. Analysts were expecting $1.08 billion in cloud sales, according to FactSet. This also touches on aspects of dividends.

Data center revenue came in at $561 million, blowing away the $515 million expectation.

The business boosted its full-year guidance for cloud and data center revenue growth, which it forecast to be 26.5% and 21.5%, respectively.

Analysts at BTIG commented in a research note on Friday that Atlassian’s Teamwork Collection product, a bundled set of applications, is “standing out as a significant growth engine” as customers upgrade to secure more AI credits. The firm has a acquire rating on Atlassian’s stock.

“While it’ll take more time and execution to sound the all-clear on AI disruption risk, this print shows that TEAM is turning that threat into a distinct competitive edge by leveraging the unique context of its Teamwork Graph,” BTIG analysts wrote. “We expect this fundamental momentum to drive follow-through beyond the +25% AH move.”

Atlassian posted a net deficit of $98.39 million, a deficit of 38 cents per share, widening from a year ago, when it reported a net depletion of $70.81 million, a shortfall of 27 cents per share.

CNBC’s Jordan Novet contributed to this article.