Atlassian co-founders Scott Farquhar and Mike Cannon-Brookes. Photo / Supplied

Australian billionaires Mike Cannon-Brookes and Scott Farquhar copped a massive blow of A$1.6 billion ($1.7b) as the market reacted badly to the duo's software group's outlook for the fiscal year.

The co-founders of NASDAQ-listed firm Atlassian, which is currently valued at A$34b, had its US-listed shares plummet overnight, falling eight per cent from US$111.19 ($166.28) to US$100.92.

It resulted in the pair collectively losing A$1.6b.

In its outlook for this financial year, the company said it expected earnings to sit at US$0.82 per share, falling short of expectations for earnings by US$0.10.

According to The Sydney Morning Herald, they had stakes worth A$10b before the overnight plunge.

But analysts say it's just a temporary slip and won't affect the future of the company and despite the plunge, Atlassian is still trading at around 114 times its future earnings, according to Bloomberg statistics.

The company, which was established by the Sydney duo and university students back in 2002, makes a range of enterprise software products including project management tool JIRA.

For the 2019 March quarter Atlassian generated revenue of US$309 million, up 38 per cent on the same period a year earlier, the Sydney Morning Herald reported.

In a letter to stakeholders, the pair described their business as being at maximum speed working to release the potential of every team.

The duo, who last year topped the Financial Review Young Rich List with a combined net worth of A$14.2b, founded the business software company 17 years ago while still living in a share house and "eating ramen noodles every day".

Farquhar said it wasn't until 2003 that they scored their first major customer. The fax with the purchase order from American Airlines still hangs outside his office in Sydney.

"That was the turning point when we knew we'd make it," he told the BBC.

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They went from having just several employees to now boasting a team of members around the world including Sydney, San Francisco, Austin, Amsterdam and Manila.

Atlassian floated on the US stock market in 2015.

But Farquhar insisted Atlassian wasn't an "overnight success".

"It has taken 17-and-a-half years," he told the BBC. "We've made mistakes along the way. We've launched products too late — recently we had to shut down a product that didn't make it in the market."

The tech duo broke consecutive records for the biggest property sales in Australia's history when they purchased side-by-side mansions in Sydney's exclusive Point Piper.

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