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Exam Code: ACP-100 Practice test 2022 by Killexams.com team
ACP-100 Jira Administrator

Jira Administrators manage, customize, and configure Jira from within the Jira user interface. ACP Certification in Jira Administration covers the skills needed to optimize Jira for any development or business team.

- You have 2-3 years of experience administering Jira.
- You understand the specifics of Jira Server. (Cloud-specific material is no longer covered in the test except at a high level when comparing Cloud, Server and Data Center to meet a company's needs.)
- You can interpret and translate business requirements to Jira.
- You can keep Jira healthy because you grasp how your choices affect Jira's performance, scalability, and day-to-day manageability.
- Youre a guru when it comes to workflows, schemes, and other features available through Jira.
- You know how to take advantage of Atlassian resources and community to help your team implement best practices within Jira.

Advanced User Features (5-10% of exam)
Given a business requirement, create, translate, critique, and optimize JQL queries.
Demonstrate the benefits and best practices for configuring group subscriptions.
Describe the results and implications of a bulk change operation.
Describe the pre-requisites for and the results of a CSV import.
Configuring Global Settings, Layout, Design, and User Communications (5-10% of exam)
Modify Jira configuration settings to match the organization's requirements (look and feel, logo, website links in the application navigator, default language).
Judge the appropriate content for the system dashboard, user/team dashboards, and filter columns for an organization.
Determine appropriate methods for communicating information to users.
Determine which global settings to modify to meet provided business requirements (attachment options, issue links, time tracking, subtasks, white list, general configuration).
Application and Project Access and Permissions (15-25% of
Determine the appropriate use of application access, groups, roles and permissions.
Identify and troubleshoot user settings, user profiles and permissions.
Given a scenario, recommend the appropriate configuration of user and project permissions, roles and group membership.
Given a scenario, determine the impact of deleting/deactivating a user/group.
Determine if and how issue-level security should be configured in a project.
General project configuration (10-15% of exam)
Describe the appropriate use of general project settings (key, category etc.).
Determine whether to modify an existing project, and/or create a new project to meet business requirements.
Determine whether to use an existing project template, and/or modify project schemes to meet business requirements.
Describe the appropriate use of components and versions.
Determine which project activities should be delegated to the project administrators.
Authentication and Security (5-10% of exam)
Evaluate the appropriate method of authentication and sign-up.
Determine the appropriate password policy to be applied.
Assess whether or not Jira is appropriately secured.
Issue types, fields and screens (10-20% of exam)
Given a scenario, identify and implement appropriate changes to built-in fields including statuses, resolutions, priorities, translations, and issue types.
Identify the appropriate issue type configurations to satisfy business requirements.
Given a scenario, determine the effects of modifying and restructuring active issue types and schemes.
Determine the correct configuration of a field, considering field context, field configuration (scheme) and screens (schemes).
Troubleshoot the correct configuration of a field, considering field context, field configuration (scheme) and Workflows (5-15% of exam)
Describe core workflow functionality (triggers, conditions, validators, postfunctions, events, properties) and map workflows to issue types.
Given business requirements, create new workflows and/or implement appropriate changes to existing workflows and schemes.
Given a scenario, troubleshoot workflow configurations.
Setting up Notifications and Email (5-10% of exam)
Determine an appropriate notification scheme/configuration including events.
Troubleshoot a notification scheme/configuration including events.
Identify and troubleshoot the appropriate configuration of an Incoming Mail Handler.
Jira Server Administration (10-15% of exam)
Recognize the benefits of having production and non-production instances.
Given a scenario, recommend whether or not to upgrade and determine the effects of roll-back.
Evaluate the need for re-indexing following a set of modifications, and explain the effects of re-indexing.
Troubleshoot application-level problems with Jira (logging and profiling) and escalate when appropriate.
Identify and troubleshoot the appropriate configuration of an outgoing email server.
Given a workflow, describe which attributes will and will not be imported/exported.
Given a scenario, assess the impact of user directory order and configuration.
Administering and Extending Jira (3-10% of exam)
Compare and contrast the different hosting options of Jira.
Demonstrate how to appropriately configure issue collectors.
Demonstrate how to appropriately use the features of the universal plug-in

Jira Administrator
Atlassian Administrator answers
Killexams : Atlassian Administrator answers - BingNews https://killexams.com/pass4sure/exam-detail/ACP-100 Search results Killexams : Atlassian Administrator answers - BingNews https://killexams.com/pass4sure/exam-detail/ACP-100 https://killexams.com/exam_list/Atlassian Killexams : Atlassian Announces Fourth Quarter and Fiscal Year 2022 Results

Quarterly revenue of $760 million, up 36% year-over-year

Quarterly subscription revenue of $597 million, up 55% year-over-year

Quarterly IFRS operating margin of (8)% and non-IFRS operating margin of 14%

Quarterly cash flow from operations of $230 million and free cash flow of $195 million

TEAM, Anywhere/SYDNEY, August 04, 2022--(BUSINESS WIRE)--Atlassian Corporation Plc (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its fourth quarter and fiscal year ended June 30, 2022 and released a shareholder letter available on Atlassian’s Work Life blog at http://atlassian.com/blog/announcements/shareholder-letter-q4fy22. The shareholder letter was also posted to the Investor Relations section of Atlassian’s website at https://investors.atlassian.com.

"We capped off fiscal year 2022 with strong Q4 results, growing Cloud revenue 55 percent year-over-year," said Mike Cannon-Brookes, Atlassian’s co-founder and co-CEO. "We believe that Atlassian is uniquely positioned, with great momentum and a differentiated business model. While we can’t predict what the future holds at a macro level, we’re forging ahead with conviction and vigilance as we look to deepen our strategic position."

"Our strong competitive position provides us with the flexibility to invest purposefully and create value for our customers," said Scott Farquhar, Atlassian’s co-founder and co-CEO. "We’re proud of how we continue to execute against our long-term plans, which includes bringing on top-tier talent from across the globe. We added over 2,300 new Atlassians in fiscal year 2022, and they will be instrumental to helping us achieve our mission to unleash the potential of every team."

Fourth Quarter Fiscal Year 2022 Financial Highlights:

On an IFRS basis, Atlassian reported:

  • Revenue: Total revenue was $759.8 million for the fourth quarter of fiscal year 2022, up 36% from $559.5 million for the fourth quarter of fiscal year 2021.

  • Operating Loss and Operating Margin: Operating loss was $63.3 million for the fourth quarter of fiscal year 2022, compared with operating loss of $7.5 million for the fourth quarter of fiscal year 2021. Operating margin was (8)% for the fourth quarter of fiscal year 2022, compared with (1)% for the fourth quarter of fiscal year 2021.

  • Net Loss and Net Loss Per Diluted Share: Net loss was $105.5 million for the fourth quarter of fiscal year 2022, compared with net loss of $213.1 million for the fourth quarter of fiscal year 2021. Net loss per diluted share was $0.41 for the fourth quarter of fiscal year 2022, compared with net loss per diluted share of $0.85 for the fourth quarter of fiscal year 2021.

  • Balance Sheet: Cash and cash equivalents plus short-term investments at the end of the fourth quarter of fiscal year 2022 totaled $1.5 billion.

On a non-IFRS basis, Atlassian reported:

  • Operating Income and Operating Margin: Operating income was $108.9 million for the fourth quarter of fiscal year 2022, compared with operating income of $94.9 million for the fourth quarter of fiscal year 2021. Operating margin was 14% for the fourth quarter of fiscal year 2022, compared with 17% for the fourth quarter of fiscal year 2021.

  • Net Income and Net Income Per Diluted Share: Net income was $68.1 million for the fourth quarter of fiscal year 2022, compared with net income of $62.2 million for the fourth quarter of fiscal year 2021. Net income per diluted share was $0.27 for the fourth quarter of fiscal year 2022, compared with net income per diluted share of $0.24 for the fourth quarter of fiscal year 2021.

  • Free Cash Flow: Cash flow from operations was $230.4 million and free cash flow was $194.7 million for the fourth quarter of fiscal year 2022. Free cash flow margin for the fourth quarter of fiscal year 2022 was 26%.

Fiscal Year 2022 Financial Highlights

On an IFRS basis, Atlassian reported:

  • Revenue: Total revenue was $2.8 billion for fiscal year 2022, up 34% from $2.1 billion for fiscal year 2021.

  • Operating Income (Loss) and Operating Margin: Operating loss was $106.5 million for fiscal year 2022, compared with operating income of $101.6 million for fiscal year 2021. Operating margin was (4)% for fiscal year 2022, compared with 5% for fiscal year 2021.

  • Net Loss and Net Loss Per Diluted Share: Net loss was $614.1 million for fiscal year 2022, compared with net loss of $696.3 million for fiscal year 2021. Net loss per diluted share was $2.42 for fiscal year 2022, compared with net loss per diluted share of $2.79 for fiscal year 2021.

On a non-IFRS basis, Atlassian reported:

  • Operating Income and Operating Margin: Operating income was $633.0 million for fiscal year 2022, compared with operating income of $519.1 million for fiscal year 2021. Operating margin was 23% for fiscal year 2022, compared with 25% for fiscal year 2021.

  • Net Income and Net Income Per Diluted Share: Net income was $434.3 million for fiscal year 2022, compared with net income of $357.6 million for fiscal year 2021. Net income per diluted share was $1.69 for fiscal year 2022, compared with net income per diluted share of $1.40 for fiscal year 2021.

  • Free Cash Flow: Cash flow from operations was $883.5 million and free cash flow was $763.8 million for fiscal year 2022. Free cash flow margin for fiscal year 2022 was 27%.

A reconciliation of IFRS to non-IFRS financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below, under the heading "About Non-IFRS Financial Measures."

Recent Business Highlights:

  • Team growth: Atlassian ended its fourth quarter of fiscal year 2022 with a total headcount of 8,813 employees, adding 634 net new Atlassians in the quarter and over 2,300 during the year. Most of the new hires were in R&D. Atlassian will build upon this momentum and continue to play offense in fiscal year 2023.

  • Atlassian Presents: Work Life: Atlassian will hold its first ever Work Management tailored event on September 29, 2022. Challenge conventional thinking and learn how working differently, together can enable teams to do their best work. Work Life will deliver attendees a unique opportunity to learn from project management leaders and teams across diverse industries. The event will also feature inspiring sessions and product deep-dives for Trello, Confluence and more. Work Life will be held in person at the Chase Center in San Francisco, as well as virtually. Learn more at https://events.atlassian.com/worklife.

  • Customer Growth: Atlassian ended its fourth quarter of fiscal year 2022 with a total customer count, on an active subscription or maintenance agreement basis, of 242,623 customers, adding 8,048 net new customers during the quarter.

New Chief Financial Officer:

Atlassian announced that Joe Binz will join the company as its new Chief Financial Officer (CFO) and Principal Financial Officer, effective September 6, 2022. Joe brings more than 25 years of finance leadership and experience in the technology industry. Since 2014, he has held the role of Corporate Vice President, Finance at Microsoft Corporation, where he was responsible for leading the company’s financial planning and analysis, investor relations, acquisition integration, and procurement functions. Over his twenty-year career with Microsoft, he was a pivotal finance leader where he most notably guided the company’s business transformation through its multi-billion dollar move to the cloud. Prior to his time at Microsoft, Joe spent eight years at Intel Corporation where he held a variety of finance roles supporting manufacturing operations, product groups, and Intel Capital. He holds a Bachelor of Science in Finance from the University of Illinois Urbana-Champaign, and a Master of Business Administration from the University of Michigan’s Ross School of Business.

Financial Targets:

Atlassian is providing its financial targets for the first quarter of fiscal year 2023 as follows:

First Quarter Fiscal Year 2023:

  • Total revenue is expected to be in the range of $795 million to $810 million.

  • Gross margin is expected to be in the range of 80% to 81% on an IFRS basis and in the range of 84% to 85% on a non-IFRS basis.

  • Operating margin is expected to be approximately (37%) on an IFRS basis and approximately 18% on a non-IFRS basis.

  • Net loss per diluted share is expected to be approximately $1.17 to $1.16 on an IFRS basis, and net income per diluted share is expected to be approximately $0.37 to $0.38 on a non-IFRS basis.

  • Weighted average share count is expected to be in the range of 256 million to 257 million shares when calculating diluted IFRS net loss per share and in the range of 259 million to 260 million shares when calculating diluted non-IFRS net income per share.

For additional commentary regarding financial targets, please see Atlassian’s fourth quarter fiscal year 2022 shareholder letter dated August 4, 2022.

With respect to Atlassian’s expectations under "Financial Targets" above, a reconciliation of IFRS to non-IFRS gross margin, operating margin, and net income (loss) per diluted share, has been provided in the financial statement tables included in this press release.

Shareholder Letter and Webcast Details:

A detailed shareholder letter is available on Atlassian’s Work Life blog at https://atlassian.com/blog/announcements/shareholder-letter-q4fy22, and the Investor Relations section of Atlassian’s website at: https://investors.atlassian.com. Atlassian will host a webcast to answer questions today:

  • When: Thursday, August 4, 2022 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).

  • Webcast: A live webcast of the call can be accessed from the Investor Relations section of Atlassian’s website at: https://investors.atlassian.com. Following the call, a replay will be available on the same website.

Atlassian has used, and will continue to use, its Investor Relations website at https://investors.atlassian.com as a means of making material information public and for complying with its disclosure obligations.

About Atlassian

Atlassian unleashes the potential of every team. Our team collaboration and productivity software helps teams organize, discuss, and complete shared work. Teams at more than 240,000 customers, across large and small organizations - including Bank of America, Redfin, NASA, Verizon, and Dropbox - use Atlassian’s project tracking, content creation and sharing, and service management products to work better together and deliver quality results on time. Learn more about our products, including Jira Software, Confluence, Jira Service Management, Trello, Bitbucket, and Jira Align at https://atlassian.com/.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward looking, including risks and uncertainties related to statements about our products, business model, customers, employees, anticipated growth, outlook, technology and other key strategic areas, and our financial targets such as revenue, share count, and IFRS and non-IFRS financial measures including gross margin, operating margin, and net income (loss) per diluted share.

We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management’s beliefs and assumptions only as of the date such statements are made.

Further information on these and other factors that could affect our financial results is included in filings we make with the Securities and Exchange Commission from time to time, including the section titled "Risk Factors" in our most exact Forms 20-F and 6-K (reporting our quarterly results). These documents are available on the SEC Filings section of the Investor Relations section of our website at: https://investors.atlassian.com/.

About Non-IFRS Financial Measures

Our reported results and financial targets include certain non-IFRS financial measures, including non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow. Management believes that the use of these non-IFRS financial measures provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our results of operations, and also facilitates comparisons with peer companies, many of which use similar non-IFRS or non-GAAP financial measures to supplement their IFRS or GAAP results. Non-IFRS results are presented for supplemental informational purposes only to aid in understanding our results of operations. The non-IFRS results should not be considered a substitute for financial information presented in accordance with IFRS, and may be different from non-IFRS or non-GAAP measures used by other companies.

Our non-IFRS financial measures include:

  • Non-IFRS gross profit. Excludes expenses related to share-based compensation and amortization of acquired intangible assets.

  • Non-IFRS operating income. Excludes expenses related to share-based compensation and amortization of acquired intangible assets.

  • Non-IFRS net income and non-IFRS net income per diluted share. Excludes expenses related to share-based compensation, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and discrete tax impact resulting from a non-recurring transaction.

  • Free cash flow. Free cash flow is defined as net cash provided by operating activities less capital expenditures, which consists of purchases of property and equipment, and payments of lease obligations.

Our non-IFRS financial measures reflect adjustments based on the items below:

  • Share-based compensation.

  • Amortization of acquired intangible assets.

  • Non-coupon impact related to exchangeable senior notes and capped calls:

    • Amortization of notes discount and issuance costs.

    • Mark to fair value of the exchangeable senior notes exchange feature.

    • Mark to fair value of the related capped call transactions.

    • Net loss on settlements of exchangeable senior notes and capped call transactions.

  • The related income tax effects on these items and discrete tax impact resulting from a non-recurring transaction.

  • Purchases of property and equipment and payments of lease obligations.

We exclude expenses related to share-based compensation, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and discrete tax impact resulting from a non-recurring transaction from certain of our non-IFRS financial measures as we believe this helps investors understand our operational performance. In addition, share-based compensation expense can be difficult to predict and varies from period to period and company to company due to differing valuation methodologies, subjective assumptions, and the variety of equity instruments, as well as changes in stock price. Management believes that providing non-IFRS financial measures that exclude share-based compensation expense, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and discrete tax impact resulting from a non-recurring transaction allow for more meaningful comparisons between our results of operations from period to period.

Management considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by our business that can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening our statement of financial position.

Management uses non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow:

  • As measures of operating performance, because these financial measures do not include the impact of items not directly resulting from our core operations.

  • For planning purposes, including the preparation of our annual operating budget.

  • To allocate resources to enhance the financial performance of our business.

  • To evaluate the effectiveness of our business strategies.

  • In communications with our Board of Directors and investors concerning our financial performance.

The tables in this press release titled "Reconciliation of IFRS to Non-IFRS Results" and "Reconciliation of IFRS to Non-IFRS Financial Targets" provide reconciliations of non-IFRS financial measures to the most exact directly comparable financial measures calculated and presented in accordance with IFRS.

We understand that although non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow are frequently used by investors and securities analysts in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations as reported under IFRS.

Atlassian Corporation Plc

Consolidated Statements of Operations

(U.S. $ and shares in thousands, except per share data)

(unaudited)

Three Months Ended June 30,

Fiscal Year Ended June 30,

2022

2021

2022

2021

Revenues:

Subscription

$

597,297

$

385,510

$

2,096,706

$

1,324,064

Maintenance

117,095

131,080

495,077

522,971

Other

45,449

42,949

211,099

242,097

Total revenues

759,841

559,539

2,802,882

2,089,132

Cost of revenues (1) (2)

133,154

97,967

465,707

336,021

Gross profit

626,687

461,572

2,337,175

1,753,111

Operating expenses:

Research and development (1) (2)

379,000

245,929

1,397,568

963,326

Marketing and sales (1) (2)

179,308

133,429

567,691

372,909

General and administrative (1)

131,632

89,740

478,373

315,242

Total operating expenses

689,940

469,098

2,443,632

1,651,477

Operating income (loss)

(63,253

)

(7,526

)

(106,457

)

101,634

Other non-operating expense, net

(327

)

(199,401

)

(434,588

)

(620,759

)

Finance income

1,332

1,008

2,297

7,174

Finance costs

(6,611

)

(8,099

)

(25,824

)

(122,713

)

Loss before income tax benefit (expense)

(68,859

)

(214,018

)

(564,572

)

(634,664

)

Income tax benefit (expense)

(36,604

)

945

(49,552

)

(61,651

)

Net loss

$

(105,463

)

$

(213,073

)

$

(614,124

)

$

(696,315

)

Net loss per share attributable to ordinary shareholders:

Basic

$

(0.41

)

$

(0.85

)

$

(2.42

)

$

(2.79

)

Diluted

$

(0.41

)

$

(0.85

)

$

(2.42

)

$

(2.79

)

Weighted-average shares outstanding used to compute net loss per share attributable to ordinary shareholders:

Basic

254,482

251,264

253,312

249,679

Diluted

254,482

251,264

253,312

249,679

(1) Amounts include share-based payment expense, as follows:

Three Months Ended June 30,

Fiscal Year Ended June 30,

2022

2021

2022

2021

Cost of revenues

$

11,641

$

6,187

$

44,848

$

24,739

Research and development

102,375

55,093

437,607

253,328

Marketing and sales

26,356

16,754

109,338

46,978

General and administrative

23,519

16,011

115,294

60,687

(2) Amounts include amortization of acquired intangible assets, as follows:

Three Months Ended June 30,

Fiscal Year Ended June 30,

2022

2021

2022

2021

Cost of revenues

$

5,697

$

6,008

$

22,694

$

22,394

Research and development

93

44

374

168

Marketing and sales

2,491

2,298

9,330

9,192

Atlassian Corporation Plc

Consolidated Statements of Financial Position

(U.S. $ in thousands)

June 30, 2022

June 30, 2021

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

1,385,265

$

919,227

Short-term investments

73,294

313,001

Trade receivables

308,127

173,473

Tax receivables

541

2,332

Derivative assets

13,685

127,486

Prepaid expenses and other current assets

58,077

48,322

1,838,989

1,583,841

Assets held for sale

60,265

43,665

Total current assets

1,899,254

1,627,506

Non-current assets:

Property and equipment, net

98,554

66,221

Deferred tax assets

42,760

36,174

Goodwill

732,666

725,758

Intangible assets, net

100,840

124,590

Right-of-use assets, net

267,328

205,300

Strategic investments

159,064

122,159

Other non-current assets

60,740

37,636

Total non-current assets

1,461,952

1,317,838

Total assets

$

3,361,206

$

2,945,344

Liabilities

Current liabilities:

Trade and other payables

$

404,908

$

266,497

Tax liabilities

26,367

42,051

Provisions

32,796

25,148

Deferred revenue

1,066,059

812,943

Lease obligations

40,638

42,446

Derivative liabilities

23,288

772,127

Exchangeable senior notes, net

348,799

Total current liabilities

1,594,056

2,310,011

Non-current liabilities:

Deferred tax liabilities

26,457

26,625

Provisions

13,804

12,435

Deferred revenue

116,621

84,652

Term loan facility, net

999,419

Lease obligations

274,434

214,103

Other non-current liabilities

812

2,604

Total non-current liabilities

1,431,547

340,419

Total liabilities

3,025,603

2,650,430

Equity

Share capital

25,485

25,164

Share premium

461,044

461,016

Other capital reserves

2,223,820

1,516,609

Other components of equity

53,829

104,832

Accumulated deficit

(2,428,575

)

(1,812,707

)

Total equity

335,603

294,914

Total liabilities and equity

$

3,361,206

$

2,945,344

Atlassian Corporation Plc

Consolidated Statements of Cash Flows

(U.S. $ in thousands)

(unaudited)

Three Months Ended June 30,

Fiscal Year Ended June 30,

2022

2021

2022

2021

Operating activities

Loss before income tax benefit (expense)

$

(68,859

)

$

(214,018

)

$

(564,572

)

$

(634,664

)

Adjustments to reconcile loss before income tax benefit (expense) to net cash provided by operating activities:

Depreciation and amortization

13,753

14,172

51,163

55,296

Depreciation of right-of-use assets

10,857

9,542

42,795

37,552

Share-based payment expense

163,891

94,045

707,087

385,732

Net loss on exchange derivative and capped call transactions

200,513

424,482

616,446

Amortization of debt discount and issuance cost

118

5,246

4,075

109,548

Interest income

(1,332

)

(1,008

)

(2,297

)

(7,174

)

Interest expense

6,493

2,852

21,749

13,164

Net foreign currency loss (gain)

(4,032

)

(2,525

)

(12,065

)

7,650

Impairment of lease related assets

...

Thu, 04 Aug 2022 10:34:00 -0500 en-AU text/html https://au.news.yahoo.com/atlassian-announces-fourth-quarter-fiscal-200500948.html
Killexams : Atlassian Corporation Plc (TEAM) CEO Scott Farquhar on Q4 2022 Results - Earnings Call Transcript

Atlassian Corporation Plc (NASDAQ:TEAM) Q4 2022 Earnings Conference Call August 4, 2022 5:00 PM ET

Company Participants

Martin Lam - Head, Investor Relations

Scott Farquhar - Co-Founder and Co-Chief Executive Officer

Mike Cannon-Brookes - Co-Founder and Co-Chief Executive Officer

Cameron Deatsch - Chief Revenue Officer

Conference Call Participants

Fatima Boolani - Citi

Michael Turrin - Wells Fargo

Arjun Bhatia - William Blair

Quinton Gabrielli - Piper Sandler

Gregg Moskowitz - Mizuho

Luv Sodha - Jefferies

Alex Zukin - Wolfe Research

Adam Tindle - Raymond James

Steven Koenig - SMBC Nikko

Sanjit Singh - Morgan Stanley

Ari Terjanian - Cleveland Research

Fred Havemeyer - Macquarie

Kash Rangan - Goldman Sachs

Operator

Good afternoon and thank you for joining Atlassian's Earnings Conference Call for the Fourth Quarter and Full Fiscal Year 2022. As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Atlassian's website following this call.

I will now hand the call over to Martin Lam Atlassian's Head of Investor Relations.

Martin Lam

Welcome to Atlassian's fourth quarter and full fiscal year 2022 earnings call. Thank you for joining us today. Joining me on the call today we have Atlassian's co-Founders and co-CEOs, Scott Farquhar and Mike Cannon-Brookes; and our Chief Executive Officer, Cameron Deatsch.

Earlier today we published a shareholder letter and press release with our financial results and commentary for our fourth quarter and full fiscal year 2022. The shareholder letter is available on that Atlassian's Work Life blog and the Investor Relations section of our website where you will also find other earnings-related materials, including the earnings press release and supplemental investor data sheet.

As always, our shareholder weather contains management's insight and commentary for the quarter. So, during the call today we'll have a brief opening remarks and then focus our time on Q&A.

This call will include forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause real results, performance, or achievements to be materially different from any future results performance or achievements expressed or implied by the forward-looking statements. You should not look upon forward-looking statements as predictions of future events.

Forward-looking statements represent our management's beliefs and assumptions only as of such date -- such statements were made and we assume no obligation to update or revise such statements should they change or cease to be current.

Further information on these and other factors that could affect the company's financial results is included in filings we make with the Securities and Exchange Commission from time-to-time including the section titled Risk Factors in our most exact Form 20-F and quarterly Form 6-K. During today's call we will also discuss non-IFRS financial measures. These non-IFRS financial measures are in addition to and are not a substitute for or superior to measure this financial performance prepared in accordance with IFRS.

A reconciliation between IFRS and non-IFRS financial measures is available in our shareholder letter earnings release and investor data sheet on the IR website. Please keep in mind that we'd like to allow as many of you to participate in Q&A as possible. To facilitate that we'll take one question at a time. Please rejoin the queue if you have a follow-up or another question and we'll do our best to come back to you later in the session.

With that, I'll turn the call over to Scott for opening remarks.

Scott Farquhar

Thank you for joining us today. As you've already read in our shareholder letter we ended fiscal 2022 with strong Q4 results across all three of our markets: Agile and DevOps PFM and Wealth Management. Cloud revenue grew by 55% year-over-year in Q4 and ended the year with over 242000 customers. Atlassian is uniquely positioned having great momentum and a differentiated business model.

Now, while we can't predict what the future holds at a macro level we're forging ahead with conviction and vigilance as we look to continue to fuel durable growth over the long term and deepen our strategic advantages. We're incredibly proud of the way we continue to execute against our long-term goals and we're excited to take this momentum into fiscal 2023.

I'd also take the time to mention that this quarter I am operating as interim CFO. This will be my first and last earnings call as interim CFO as we welcome Joe Binz as our incoming CFO. We are so excited to bring Joe on and introduce him to you in the next earnings call next quarter.

With that, I'll pass the call to the operator for questions-and-answers.

Question-and-Answer Session

Operator

We will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Fatima Boolani from Citi. Please go ahead.

Fatima Boolani

Hey everyone. Thanks for taking my question. Just one around the cloud growth expectations for fiscal 2023 that you've reiterated which is very encouraging as well as the reiteration of the magnitude of migration impacts to that cloud growth. What I'm curious about is when you think about the fiscal 2024 dynamic which is similar to fiscal 2023, how much of the migratory impact from the prior year i.e. fiscal 2023? What type of purchasing or expansion behavior from those migrated customers are you expecting in the base in fiscal 2024?

Scott Farquhar

Scott here answering that question. As we mentioned previously in our Investor Day, a few months ago and reiterating now on this earnings call, we expect cloud growth to be approximately 50% year-on-year for FY 2023 and FY 2024 and so that remains the same. We've also said that there's high single-digit of that growth comes from migrations, in any given year. And so we expect again, that could continue.

We haven't looked in terms of the FY 2024 dynamic, of how that goes. What we do see though are migrating customers, expand at a similar rate to the customers we have in our existing instances. And we've also stated that previously, we have a net expansion rate of 130% in cloud, and 140% for our larger customers in cloud. And so that's all I can deliver you on that, at this stage.

Martin Lam

This is Martin. Just to clarify, we are expecting 10 points of growth of the 50% growth, in cloud for the next two years.

Q – Fatima Boolani

Understood. Thank you, I’ll get back in the queue.

Operator

Your next question comes from Michael Turrin from Wells Fargo. Please go ahead, Micheal.

Michael Turrin

Hi. great. Thanks and congrats on a strong end of the fiscal year. Scott, I know we won't see it often, but nice suite photo, very CFO with the materials as well. There's a great stat, you emphasized just in the letter on 90% of fiscal year revenue coming from -- we know you've generally, always run a consistent long-term playbook. So just wondering, is that number fairly consistent with prior periods? And then on the other side of that, if we do see some moderation of the newer cohorts, are you confident that there's a catch-up for the newer cohorts you're landing, can similarly contribute to the model, as you work through it just given the experience and expertise you've gathered there? Thank you.

Scott Farquhar

Yes thank you for the compliments, on how good I work on the suite. I appreciate that. And you're right we won't [indiscernible] too often in the future. What we've said historically yes, that 90% of our revenue in any given year comes from our existing customers. And we were chatting just before on this call that, if you think about the results we're getting this year, they are seasonally planned years ago in the safer [ph] planting this year come to bloom in the imports.

So this is not a business where we are trying to have a very extensive enterprise sales force, to do a particular number in a particular period. We think very carefully, about the long-term return characteristics of all the investments, that we make at any point in time. And so that 90% number we continue to see that like that's not likely, to change in any particular time, but we really think about the long-term investments that we're making now, are paying off over a two- to three-year period.

Michael Turrin

Thank you.

Operator

Your next question comes from Arjun Bhatia from William Blair. Please go ahead, Arjun

Arjun Bhatia

Thank you, guys for taking the question. Congrats on a great quarter. As you -- I know you guys addressed the macro a little bit in the Shareholder Letter. But I'm curious, as it relates to migration specifically, would you expect the shape of migration to change at all just given the macro situation to customers, pause a little bit do they reconsider or do they say hey the total cost of ownership is there, and I'm going to go full steam ahead? What are you seeing and hearing from partners and customers on that front?

Cameron Deatsch

This is Cameron, and I'll take that one. So as you know, this migration journey has been going on for a couple of years now. We announced the server end of life, over 18 months ago and gave customers more than three years heads up, to make a decision on migrating to the cloud. So none of this is a surprise.

Many are in the different stages of their planning, whether that's from a technical perspective or budgetary perspective, and we are increasingly getting good at those conversations, about honestly the larger ROI savings that customers get, when they move to the cloud, whether that's reducing administrative costs, their own hardware costs and of course unlocking a ton of new innovation in our cloud.

In addition to that, we have a Forrester Total Economic Impact report, where we've actually done deep research into the overall cost savings, that customers get when they actually move to the cloud. So the short answer is, no, our migrations plans continue as planned and we are very happy with the results to date. And you saw a lot of that, in our exact Q4 results.

Operator

Your next question comes from Jim Fish from Piper Sandler. Please state your question.

Quinton Gabrielli

Hey guys. This is Quinton on for Jim Fish. Thanks for taking my question. Sticking to the demand side for just a second, is there anything you can call out from a geographic perspective in terms of weakness or relative strength? Looking at the numbers here it looks like really strong growth across all geos. But wondering if there is one specific place that you're maybe keeping your eye on more than others? Thank you.

Cameron Deatsch

Thank you, Quinn. Cameron here again. I'd say we are being exceedingly vigilant across watching all stages of our funnel, whether that's migrations funnel, the additions upgrades, retention rates and of course our new customers coming in. And this really set up with the Russia Ukraine war back starting in February. We have been keeping a very special eye in the EMEA region.

The good news as of to date is we have yet to see any specific trend geographically or even in industry segments or in customer size that gives us pause or worry to date. So something we continue to watch like a hawk, but there's no new news to share today.

Operator

Your next question comes from Gregg Moskowitz from Mizuho. Please go ahead.

Gregg Moskowitz

Thank you very much. Congrats on a very good quarter as well. Has there been any change to the mix of products sold over the last few months? Anything different with regard to customer prioritization? And then just a quick clarification just to help everybody with their models, if I may. I believe consensus was projecting data center revenue growth somewhere in the low to mid-20s for fiscal '23. And given the comment in the Shareholder Letter about moderating growth after Q1 being somewhat vague. I'm just wondering if you're able to tell us if you're comfortable at this time with where those consensus numbers stand? Thank you.

Cameron Deatsch

This is Cameron. I'll speak to the mix. I'll let our new interim CFO, handle the second part of that question. As far as the overall mix, no we have not seen any significant shift in customer demand across our product lines. I do have to continue to call out the strong demand, we continue to see with Jira Service Management as one of our strongest cross-sell motions surpassing 40,000 Jira Service customers to-date.

And we just seem to have struck a vein there in the market with very compelling offering that's very feature complete very easy to use, as well as highly competitive from a pricing perspective. But that -- I don't want to take away from our other products. Jira Software Confluence, Trello you name it, continue to see strong demand across the board.

As we continue to see people embracing digital transformation and needing tools to help, [indiscernible] take these large technical projects that they're running and our tools help manage those projects throughout, as well as this cultural transformation. We continue to see as all of us are figuring out this new way of working whether it's remote back in the office or hybrid. We continue to see demand for collaboration products that continue to be strong. And the second half to Scott there.

Scott Farquhar

Yes, just to your question around DC shape of revenue. Again, just a reminder for those people new to the story we have end-of-life our server offerings. And so they have to make a choice whether they move to our cloud directly or if they're longer process or a longer timeframe, they're not choose to data center as a step starting to moving to cloud.

And so, we've been really happy again with our migration and actually happy about 1/3 of our migrations come. We said that at our Investor Day about 1/3 of our migrations come from the data center customers already. And so, we really starting in all directions it towards cloud.

Now specifically in our Shareholder Letter, we highlighted in terms of the data center revenue maintaining high growth through Q1 before moderating over the remaining three quarters. And we can't deliver any sort of more details on that, but really that's just to deliver you into the seasonality that we might see over the next four quarters in terms of how we think those migrations might end up happening.

Gregg Moskowitz

Yes, thank you.

Operator

Your next question comes from Brent Thill from Jefferies. Brent, please state your question.

Luv Sodha

This is Luv Sodha on for Brent Thill. Wanted to ask a real quick question on margins this quarter. It looks like there was an increase in investment in R&D. And it sounds like you're planning to continue that into the next year. Could you maybe deliver us some color into where these investments are being directed to? Thank you.

Scott Farquhar

Yes. Thanks for that question. If we -- sort of starting at our Investor Day we had a discussion with you our shareholders about the incredible opportunities we are seeing across our business. And those opportunities they're kind of in every corner of the business. And as a management team we think long-term. And we think about, how do we, invest behind those opportunities.

And the myriad of them, but a couple we've highlighted in the past are our customers migrating to the cloud. We're seeing incredible demand for that migration. And if we can Strengthen the throughput of those customers migrating to the cloud that's great for them and it's great for us. We've also seen incredible demand for our ITSM products in that market.

And again, there are some features we can add there and getting our customers onboarded to those products and great for us and for them. And I can go on. But as a result of all these opportunities we made a decision to invest heavier behind these opportunities than we had before.

And then, we said in our Investor Day that, we expect margins for FY 2023 to be in the mid-teens. And so those areas of investments are as you mentioned are largely in R&D. We are sort of really seeing huge investments there because of the features and getting our cloud to the stage where we can accommodate 100% of our customers require some more features.

You will also see some investments turn in other areas of the P&L, because for example they are some handholding to get our customers across that doesn't show in R&D as well as it shows up in other areas in the P&L. So largely R&D but you may see some other areas of P&L impacted just to the way that we're helping our customers migrate.

Luv Sodha

Perfect. Thank you.

Operator

Your next question comes from Alex Zukin from Wolfe Research. Alex, state your question.

Alex Zukin

Perfect. Thanks so much and congrats on a great quarter. I guess, maybe just two from our side. When you think about the macro impact that you are seeing in the business, I think you called out slightly slower conversion of free customers to paid customers.

I guess when you dissect what's happening in the pipeline, why do you think that's the only macro impact you're seeing versus migration delays or versus longer sales cycles and the larger customers?

Or we're not seeing kind of some of the other impacts and other companies are seeing. Is it -- like what are you learning in real time as you analyze the data in the demand environment? And then I've got a quick follow-up.

Cameron Deatsch

Yeah, I can cover that first piece. This is Cameron again. So as you mentioned and you see this in our Q4 results, across the many funnels we operate whether that's our migrations, our additions upgrades, our cross-sell of products, our overall retention continues to be exceedingly strong.

And that's been great to see. And that's been supporting our net expansion rate we've already discussed on this call here. And largely what you see is existing customers continue to have demand for what our products do to help their teams work more productively in the future. As far as that slight thing that we mentioned in the Shareholder Letter just so you all realize that we land all of our net new customers in free plans.

And this is relatively -- we're about two years into this experience, but we continue to have many, many, many thousands of customers signing up in free plans and they either need to add an 11th user which then they had a pay to get the 11th user or simply they want more premium capabilities in our standard and premium additions. Those are the reasons people enter their credit card.

And the one thing that's worth calling out, that we've seen literally just in the last month is that the cohort of customers that came in the April, May and June timeframe are converting to those paid plans at a slightly slower rate than what we've seen in previous quarters.

Now I'd love to say that's specific to a product, or a geography, or an industry. There's no specific customer segment there. It just seems that in general those cohort of customers have been signing up in the last quarter are using the products they're activating, they're getting value but they simply just haven't put those credit cards and hit those paid walls yet.

So that's one of those areas that we continue to be vigilant. We have multiple analytics teams multiple growth teams as well as our onboarding and R&D teams that are focused on ensuring that those customers remain active.

And it gives us more chances to convert them to paid plans in the future. That does not take away from the continued growth we see in our existing customer base, that also drives more than 90% of our revenue in the existing year.

Alex Zukin

Perfect. And I guess maybe just going back to the data center part of your business, the extraordinary growth that you're seeing I think accelerating growth in the quarter. How much of that growth is from data center customers expanding versus understanding what the existing customers are growing like within data center to get a sense of the growth that you're seeing in data center coming from server migration to data center? In addition and I apologize for the multipart question, just the range of migration activity from data center to cloud versus server to cloud in that 10 points of migration as a driver for the 50% cloud growth.

Cameron Deatsch

Got you. I think I can address that. So overall data center demand, I'll hit that first and then we can talk about the server to cloud or data center to cloud journey. So as we've already mentioned this server end-of-life message we deliver customers more than three years, heads up. And what you see customers doing every quarter is increasingly optioning out of going to cloud, which obviously that's where we lead with. That's where we have been putting all of our incentives to get customers to go to the cloud, so they get as most innovation as possible or they can choose data center.

And many are seeing either way it's an increased investment and commitment to Atlassian long term. And we see that those are two good decisions for customers. However, when those customers jump the data center and we see this again and again, they're seeing that as just a stepping stone to that cloud journey. But it gives them more optionality down the time and of course data center is a fantastic product.

So we've historically said, it's roughly 30% of our cloud migrations come from data center customers, which proves that stepping stone statement. And I don't, specifically know how much that drives into the overall 10% growth that we've shown that drives our overall cost growth but you can see roughly a third of our customers are coming from data center. That's all I have to share. Scott, do you have anything to add on that? Okay.

Operator

Your next question comes from Adam Tindle from Raymond James. Adam, please state your question.

Adam Tindle

Okay. Thank you very much. I just wanted to touch on the investment period and operating margin trends. You talked about mid-teens in fiscal 2023 playing offense. I think you said lower in the second half of the year. I'm wondering if that's indicative of a multiyear period of investment here. You certainly earn the right to invest based on what we've seen so far. I just wanted to level set investor expectations since I think Street is modeling improvement in fiscal 2024. I'm not sure if that's consistent with how you're thinking about things. Thank you.

Scott Farquhar

Thank you, Adam. Just remind to everyone we said back at our Investor Day, which is Atlassian has an incredible business model. And if you look historically over the arctic time, before being a public company and during the seven years we've been a public company, this business model does generate a large amount of free cash flow and margin returns. And so that's sort of the fundamentals that we have in the business.

And if we look at the long-term opportunities like they are more abundant than we've ever seen before and that's the reason to invest. Now on your specific investment period, what we've said is that FY 2023 is going through investment year and we guided to the mid-teens margins for FY 2023. We haven't given any guidance for FY 2024 and we'll be doing that at the end of FY 2023.

Operator

Your next question comes from Peter Lee [ph] from Bernstein. Peter, go ahead.

Unidentified Speaker

Thank you. So taking a look at kind of your overall migration plan. I think you had originally anticipated maintenance shrinking down a little bit more than maybe it's seen now and you're talking about a year from now getting to $75 million which I think was maybe a little bit of a slower ramp than at least I had been anticipating. How are you seeing that roll off of your existing customer base? Has it been stickier? And is it something where you're having to spend more time and effort encouraging customers to migrate? And how do you see that affecting the curiosity of the cloud migration itself?

Cameron Deatsch

Yes, this is Cameron again. As we mentioned, migration demand remains very strong. And that server customer base, they effectively have until February of 2024 to make a decision on where they want to option out whether it's going to data center or whether that's going to cloud. Obviously, we continue to remove any blockers or any reasons why customers would not adopt our cloud and we deliver people plenty of incentives along the way to move to our cloud offerings.

The good news across the board is we continue to see retention rates maintain high for the existing the entire server customer base throughout this. So as we continue to see server renewals happen, we see people option out the data center and cloud. The good part there is we continue to see these customers continue to remain in their loyal to Atlassian and largely they're figuring out what the best technical and decision long-term is for their companies. We have been focusing on cloud. And as we've already mentioned, we are largely in line with our migration plans to date. So we'll continue to be vigilant there over the next year, as we continue to incentivize our customers to choose cloud.

Unidentified Analyst

And I think you've been investing in some cloud migration personnel. Do you see that being kind of like fully built out, or are you seeing that you're going to have to continue to expand that personnel to see the success through?

Cameron Deatsch

This is Cameron again. Yeah, so we have a dedicated cloud migration management and migration support engineers as long -- as well as a dedicated migration tooling and a variety of people that can come and help these customers through the more technical migrations. We did make significant investments in the previous fiscal year across those teams and we believe they are fairly stable to date and can handle the volume that's coming in over the next coming quarters.

Unidentified Analyst

Thank you.

Operator

Your next question comes from Steven Koenig from SMBC Nikko. Steven, please go ahead.

Steven Koenig

Great. Hey, thanks a lot for taking my question. So let's see I'm wondering regarding your hiring and you're investing that you've been talking about. Your comments on your plans to hire are certainly borne out by your -- as we look at your job postings there remaining pretty solid whereas a lot of other vendors are cutting their hiring plans. I'm wondering how is your hiring progressing relative to plan in terms of your progress in finding the talent that you want? And then if I can just add a quick addendum. Any tactical pricing adjustments of note since your February 15 price increase on server on data center. And that's all for me. Thanks very much and congrats on a great quarter.

Mike Cannon-Brookes

Hey, Steve, it's Mike here. I can take that. And then be getting a lot of product questions on today's call. So let me jump in and take one of the talent ones. Look we've been pretty clear right that we're playing offense. We continue to tell that quarter in quarter out. We're using this period of time to deepen our strategic position and increase the advantages we have over the competition, right? There's less -- they say that they would go as cash funding competition. And so, we think we have a really good opportunity going forward. We also have spent a lot of time retooling our hiring pipeline over the last two years and are really, really excited with where we stand at the moment. So we've had I believe our two biggest quarters of hiring in the last two quarters and we continue to do so.

Obviously, we don't just look at the volume multipliers or that's sort of an absolute number marker. We continue to push quality of the talent that's available and we think that that will get easier in difficult circumstances. And also, obviously making sure that the cultural fit and other things that are in which is incredibly important and incredibly difficult and a huge challenge for us to do as we continue to scale. There's no doubt as Scott mentioned, the majority of that hiring is going to R&D to try to again deepen those strategic positions that we already have.

The last thing I would say is just a reminder that we made the same or similar sort of play in the 2008, 2009 period. We paused for a little while then and then we realized that we were in a very strong position as a company relative to other companies out there. And so we hired well through that period and we saw the benefits of that for the three, four and five years afterwards as we've got a real updraft with the products coming out and the results of this product. So we believe we have massive opportunities in front of us in all three of our markets. And as such we're hiring behind them.

Steven Koenig

That's great. Can you guys comment on any pricing actions of note say in the last six months since the February price increase?

Cameron Deatsch

Yeah. So this is Cameron. As you already mentioned, we did have price increases on our server and data center products in February. All of our pricing changes are made public and we -- across the board and they're all available on our websites for all of our customers, as well as we deliver our customers a relatively decent heads up on these price changes so they can plan their budgets accordingly. No other price changes to mention and our pricing strategy remains consistent.

Steven Koenig

Great. Great. Well, thanks very much for the color.

Operator

Your next question comes from Keith Weiss from Morgan Stanley. Please go ahead, Keith.

Sanjit Singh

Thank you for taking the question. This is Sanjit Singh for Keith. Somewhat annoying, we had another question on sort of the case for investment. As you sort of look at where the business stands today, you have a $3 billion business, you have 0.25 million customers, I think 10-plus monthly active users.

And if you look at sort of where you're trying to take the business, getting to one million customers, 100 million monthly active users, expanding from developers and IT to line of business teams, with the work management initiatives.

As you expand into these newer markets and this longer tail of customers, are the unit economics from here going to be as attractive versus what the business has built today to get to this $3 billion and 0.75 million customers?

I was wondering, if you could just sort of frame out how you think expanding into these -- into the longer tail of users and customers and product markets. What does that do to the sort of unit economics of the business?

Scott Farquhar

Sure. Mike, I can take that again. Look, I think obviously we feel bullish about our unit economics at the moment. And I don't see why that would change going forward. And we've always been very prudent stewards of capital in the business and continue to invest in very high ROI opportunities as we look forward.

You mentioned some of our numbers there. Obviously, there are millions and millions and millions of businesses in the world. There are around or approximately one billion knowledge workers. So we have a huge amount of expansion possibility, even just inside our existing customers.

As Cameron mentioned earlier, we remain north of 130% in our NER numbers and north of 140% in the large customer segment and we saw that again this quarter. And so, from the point of view of expansion in those large customers, we have many, many millions of employees that we do not touch in those existing customers.

And you see that in -- specifically in our Work Management segment where Trello, Confluence and Atlas are continuing to get further and further into an organization and look more to the wall-to-wall access to water all employees within those companies.

I think the other thing I would say is that, we continue to, as Cameron mentioned earlier, be incredibly focused on not just the unit economics of our funnel, the product where the growth funnel in terms of free and our evaluations and trials and we're obviously incredibly well instrumented there and we really understand the value of spending a dollar on marketing or sales and the conversion rate of expansion through our customer base.

We've got 20 years of experience doing this. I believe we're absolutely best-in-class and continue to Strengthen and evolve every single year. We also are really, really good at the enterprise and premium expansion activities when it comes to bringing in more human power and more activity to expand customers across the product set.

And again, we've got a whole lot of new products coming out, but also the same focus on being very, very capital efficient when it comes to those sales motions. We don't just take it in the automated product-led growth funnel, we take it at the same time in all of our sales activities. We're very proud of how we do that and we have to keep raising the bar on that every year. I don't think, long term, it should change the unit economics.

Sanjit Singh

Really appreciate the thoughts and congrats on the great data center and cloud subscription results this quarter. Thank you.

Operator

Your next question comes from Ari Terjanian from Cleveland Research. Ari, please go ahead.

Ari Terjanian

Hi, team. Thanks for taking the question and congrats on the great results. I just want to double-click on the Deutsche Bank cloud deal that was called out in the press release or the Shareholder Letter. I was just hoping if you could provide some more detail on that opportunity. Is that migration complete, or is it just the signing?

And what do you think caused them to pull the trigger, because I know regulated industries, banking, Germany, Europe these are areas that had historically more hesitant to move to cloud. So just wondering if you could please provide some more color on that deal and if you think it could be a beachhead and cause others in these geos and verticals to start moving. Thank you.

Cameron Deatsch

Yes. So, Cameron, again. Yes, I was deeply involved with Deutsche Bank for quite some time. In fact, they've been a customer for many years. They have been a data center customer for many years. And we've been speaking about the cloud opportunity and journey with them for quite some time.

But it shows, I think, you nailed it right there, its German bank highly regulated, massive scale like you name it from a requirements perspective they had it for our cloud. And it's a testament to the investments we've made over the last couple of years and performance and scale in regulated things like band fees, specific financial services regulation requirements in Germany that allowed us to open up that door and have that serious conversation about getting them to the cloud.

To answer your question no, we have just started the cloud journey. We've largely -- they checked all the boxes to get them to adopt our cloud and we've started our migration planning so just begin moving their users and data. And that will be a multi-month or multi-quarter journey the size of deployment and complexity that they have as well as how mission-critical applications are for the bank.

I mean they literally are running on us every single day. Many of our customers are saying that our applications are more important than e-mail for getting their work done inside the organization. So it's something that we have to plan out very diligently with them, but they've been incredible partners throughout this exploration of cloud and we are looking forward to having them 100% on the cloud in the upcoming quarters.

Ari Terjanian

Thank you.

Operator

[Operator Instructions] Your next question comes from Fred Havemeyer from Macquarie. Fred, please go ahead.

Fred Havemeyer

Hi. Thank you. I wanted to ask about your net retention rate because throughout this year you've been posting or discussing strong 130% rather north of 130% cloud net retention rates. I saw in the Shareholder Letter today that you noted that larger customers were topping 140% cloud net or rather net expansion rate.

So I wanted to ask can you help to characterize what's driving that? Is that something that is a seat-based expansion a cross-sell or upsell reach into non-technical departments expansion with new technical departments? Anything to kind of characterize that can help us understand where this growth is coming from would be greatly appreciated.

Scott Farquhar

Fred, appreciate asking the question. Yes the numbers you quoted are correct and I think we've stated in our -- from our Investor Day last year and reiterated some of them in our Shareholder Letter today.

Now if you think about Atlassian's business model it has been historically and continues to be a land and expand motion where we land inside a part of an organization maybe a small team a couple of different teams or even multiple teams across the organization that maybe aren't even coordinated with each other.

And from there they see the incredible value in our products and they expand on a number of vectors. And those vectors are -- they've been a number of seats maybe starting with one small team all the way up until large enterprise deployments such like Deutsche Bank that we talked about with tens of thousands of seats. And so there's a seat aspect where you land and expand there.

We also see that customers expand on a product basis. So they start with one product they then to the value that they've got they come back to Atlassian and discover what other products that we have that can do solve their problems and how well do these products work together, particularly, in cloud where they're deeply integrated. And so that's another one.

We have different additions now with premium and enterprise. And so customers love the functionality and they want to unlock additional functionality in the products. And so they're willing to pay for our premium and enterprise versions as well. I can go on but one I want to touch on is also our third-party application marketplace. We have one of the best marketplaces in enterprise software and customers can easily adopt incremental functionality or whole new areas of functionality in our marketplace.

And so we see expansion across all of those vectors in various ways. And there's not typically one specific part that we see our customers take, but we're very comfortable and feel very great about that going forward given how sticky our products are and how much additional functionality they can unlock across the organization once they start becoming a customer.

Fred Havemeyer

Thank you. If I can get another one in here it wouldn't you take up more time. I wanted to also ask about scaling. Because in the Shareholder Letter today I think you also noted that 35,000 user cloud instances are now available to your entire customer base. And if I recall getting to that scale has been a journey and looking across the market some of the other project management tools that are out there have some difficulties really achieving scale for large non-current users.

So I wanted to ask what has that journey been like? And generally what does it take to build such a highly scalable collaborative live project management tool? And would you view that as a competitive moat?

Mike Cannon-Brookes

Sure. I can take that question. It's Mike here. Look, there's data testament to R&D teams and specifically the infrastructural engineering teams there in terms of scaling our offerings in the cloud. There's a few things I would point to there. So a reminder for anyone listening. With a single instance of Jira Software in the case that you mentioned there we started our cloud journey at about, I think 1,000 or 2,000 seat range. We expanded to five then to 10. I think we've ended 25 and now we've just 35 and I believe we have 50,000 in early access program. So, continuing to scale a single instance of Jira Software.

At the same time, we've scaled multiple other parts of our back-end infrastructure to allow further increase beyond that amount in a single Jira Software instance. So you see that in our enterprise addition where you get unlimited instances. So you can have lots of 35,000 user instances at the moment. And obviously from an identity and scaling perspective you can go beyond there.

I would say, it's really a testament to our continued investment in our customers and the continued world-leading amount of revenue that we spend on R&D because this stuff is hard. It's just one of those problems that's very difficult. You need a lot of hard work and discipline over a long period of time to continue to work out what parts of the infrastructure are scaling and continue to obviously be ambitious and push that to upwards. We have many, many customers' on-premise and data center who were well beyond the 35,000 limits. So you won't see us stop there. We'll continue to push that limit higher and higher as we work with those larger customers.

Lastly I would say it's a testament to the platform that we've built because most of that scaling doesn't actually happen in the Jira Software world. It happens in the Atlassian cloud platform in our infrastructure layers below that everything from the networking layer all the way through to databases various shared services we have et cetera all have the scale to handle that, whether it's serving videos or whether it's mentioning users. Collaborative software is all about connecting with other people on your team.

So if you mentioned the user and it takes an awfully long time, it's a very poor customer experience you get low customer satisfaction. So it's not just about scaling the sheer numbers that's making sure that all the user experiences happen at scale very, very fast. And there's a huge amounts of smarts in AI and machine learning for example to make sure that when you mention a user, we dig across your 35,000 employees and find the exact person that you're trying to find with a couple of key strokes as fast as we can. So look we spend awful lot of time and effort on that and we'll continue to do so probably reflected in our MER and great cloud numbers and more to come.

Operator

Your next question comes from Kash Rangan from Goldman Sachs. Kash, please go ahead.

Kash Rangan

Hi, thank you very much. I wanted to say congratulations on the quarter, but [Indiscernible] a terrific executive. On that thought, how comfortable are you with the new CFO of Joe's caliber coming in, that you have reset the margins and that we can be very comfortable that you have factored in all possible investments in the company needs to make to achieve this cloud transition? Because I would imagine that our new CFO coming in probably wants to ensure that the Street is level set with respect to margin guide because you have a bag of Microsoft and cloud transition. So I'm just wondering how did Joe get comfortable with the level of investments that have already been spoken for and guided into the model? That's it for me. Thank you very much and congratulations.

Scott Farquhar

Thank you. This is Scott here. I'll answer that. Mike and I have been around for 20 years running -- last year we just celebrated our 20th anniversary in the last few months. And we've been public for seven years. And whilst each individual CFO coming into Atlassian brings a whole bunch of their experience and their opinions around how it should work, the philosophy about how we run the business and how we set guidance and how we interact with you our shareholders in an open and transparent way that is really set from mine at the top. And so, we're really excited for Joe to get here with his deep experience with Microsoft to we know they had their own cloud transition. But I don't expect there to be any material changes to the way we guide, to the way we invest and the way we interact with our shareholders as a result of that. And I'm super excited to have Joe on board. He's going to be a great addition to the team. I'm early excited about his ability to help us allocate capital across the amazing opportunities that we have in front of us. And that's really, really exciting, given he's done that extremely well at his previous positions.

Operator

Your next question comes from Michael Turits from KeyBanc Capital Markets. Michael, please go ahead.

Unidentified Analyst

Hi. This is Billy on for Michael. Thanks for taking the question. Can you just deliver us an update on the regulatory work you've been doing around the public sector, FedRAMP and maybe different industry verticals? And how much opportunity, you think is out there once you unlock these events?

Cameron Deatsch

This is Cameron. I can speak briefly to that. So as we mentioned before, over the last couple of years, actually many years with our cloud platform, we continue to invest in, not just scale, as Mike just mentioned, but all of the regulatory data and compliance requirements that our very, very diverse customer base has. And in that we've been able to knock-off these cloud requirements, and you see this every single quarter and every single quarter as we announce these new capabilities, a new cohort of customers gets unlocked to start their cloud transition.

In addition to that, we do publish all of our future-looking roadmap in this area, up on our public cloud roadmap. And that gives just increasing confidence for our customers, so that they can plan ahead as well as engage with our teams on when they should actually start their migration journey. And that's been a critical part of our overall conversation going forward. So, we've done in the last just 12 months, HIPAA, Banfi, we have all of our SOI compliance and we continue to have additional requirements across the board, and we are continuing to our work on FedRAMP.

Our federal customer base is significant and we do have customers across the federal customer base, all on server and data center today. Great part there is, although, only majority of those agencies actually have cloud-first mandates, like all of them are simply looking for the ability to go to cloud and we continue to invest in our cloud platform to hit up those specific requirements. But it doesn't stop with FedRAMP, there's still many other specific industry-related regulatory efforts that we will continue to invest in.

In addition to that, I do want to call out our Forge platform, which was our new capability to allow Marketplace apps to be run within the Atlassian cloud infrastructure. This has opened up even more opportunity for our customers to build and deploy apps as well as our Marketplace partners to build out and have them basically secured within the cloud platform, giving our customers even more confidence, if they're in highly regulated industries.

Operator

Thank you. And that concludes our question-and-answer session. I will now turn the call over to Mike for closing remarks.

Mike Cannon-Brookes

Thanks everyone. Just thank you for joining the call. Two small things before we sign-off here. Firstly, congratulations to Scott on his interim CFO role. I think he's done a fine job today. We're super excited to have Joe join to take the wheel. Barrowing any emergencies we look forward to him joining us on our October call.

Secondly, as you saw in our Shareholder Letter, building on the success of the theme 2022 earlier last quarter, we'll be holding unique events now tailored to each of our markets. So, we'll kick things off in September, on the 29th of September in San Francisco in the Chase Center with a Work Management specific event, that we're calling Work Life. So please come check it out and see how teams can work differently together.

With that, thank you everyone for joining our call today. As always, we really appreciate all of your continued support and thoughtful questions. And last but definitely not least, thank you to all the Atlassians on a fantastic year. We will talk to you next quarter.

Thu, 04 Aug 2022 13:07:00 -0500 en text/html https://seekingalpha.com/article/4529991-atlassian-corporation-plc-team-ceo-scott-farquhar-on-q4-2022-results-earnings-call-transcript
Killexams : Atlassian billionaires Mike Cannon-Brookes and Scott Farquhar slammed by Ukrainians for Russian work
  • Protestors accuse tech firm Atlassian of supporting Russia's war on Ukraine
  • Dozens of pro-Ukraine activists protested outside software giant's Sydney HQ 
  • Bosses Mike Cannon-Brookes and Scott Farquhar had vowed to do right thing
  • Company admits it's still trading in Russia but has vowed to donate all revenue 

Furious Ukrainian supporters have blasted Australia's Atlassian billionaire bosses for making money from a 'terrorist state' by doing business in Russia during the ongoing war.

A protest outside their Sydney HQ accused tech gurus Mike Cannon-Brookes and Scott Farquhar of still trading in Russia despite a vow to 'stand up for what's right'.

Dozens of pro-Ukraine activists demanded Atlassian fully withdraw from Russia, and held signs claiming the company was funding Russia's war.

One protestor angrily demanded: 'Atlassian, are you sponsoring terrorism?' 

Another raged: 'Everyone knows Russia is committing war crimes so why is Atlassian still operating in Russia? 

Furious Ukrainian supporters have blasted Australia's Atlassian billionaire bosses for 'making money from terrorism' by doing business in Russia during the ongoing war

Two Sydney-based founders  Scott Farquhar (pictured left with his wife Kim Jackson) and Mike Cannon-Brookes (pictured right with his wife Annie Todd) - worth a combined $50billion - vowed the company would try to do the right thing

Atlassian announced on March 2 that they would be pausing all new sales in Russia in the wake of President Vladimir Putin's brutal invasion on February 21.

In a personal message on the company's website, the two Sydney-based founders - worth a combined $50billion - vowed the company would try to do the right thing.

They promised to suspend all Russian government licences as well as businesses which could support the war through combat, disinformation or cyber warfare.

But they admitted the firm - which specialises in business software like project management apps Trello and Jira - would still stay in Russia for other companies.

'We are not terminating the relationships and obligations we have to our existing small business customers in Russia,' they said in March.

Dozens of pro-Ukraine activists demanded Atlassian fully withdraw from Russia, and held signs claiming the company was funding Russia's war

Atlassian announced on March 2 that it would be pausing all new sales in Russia in the wake of President Vladimir Putin's brutal invasion on February 21 but they are still operating there

The protesters say the company has put profits before the people of Ukraine with its stance on Russia's invasion

'We believe focusing on businesses with positions of power and influence is the best way to live our mission and values. 

'You have our commitment that we will lead with the Atlassian values and our own humanity.'

They added: 'We know we don't have all the answers, but we will continue to learn and be thoughtful through this challenging time.

'We have always believed in standing up for what's right, even when it's difficult to do so. 

'We'll continue to make these decisions to use our voice, our technology, our skills, and our Foundation to help in situations that impact our people, customers, and societies we exist in.'

Protesters demanded the company mounts a total boycott of all business in Russia

Atlassian has vowed to donate all revenue from Russia and Belarus operations to Ukraine

An Atlassian spokesman admitted to Daily Mail Australia on Wednesday that the company was still trading in Russia

The Rich List pair have previously won praise for their progressive views including plans to build their new Sydney HQ with sustainable timber.

Mr Cannon-Brookes and his wife Annie Todd have been buying up huge tracts of land in the NSW Southern Highlands to develop eco-friendly framing techniques.

And Mr Farquhar and his wife Kim Jackson have been behind a push for Sydney's elite private school Cranbrook to open its door to girls for the first time in its 104-year history.

But protesters say the company has put profits before the people of Ukraine with its stance on Russia's invasion.

They demanded the company mounts a total boycott of all business in Russia and added: 'The war is not over. Russia is a terrorist state.'

An Atlassian spokesman admitted to Daily Mail Australia on Wednesday that the company was still trading in Russia.

Atlassian say they have donated US$5million and donated software to Ukrainian causes

But they have now promised to donate all revenue from Russia and Belarus operations to support Ukraine.

'We continue our commitment to our existing non-sanctioned and approved non-governmental customers in Russia,' a spokesman said.

'We recognise many of them are caught up in a war that they neither chose nor have the ability to stop.  We continue to prohibit all new sales.

'Atlassian is also donating the equivalent of all forward revenue from customers in Russia and Belarus, starting with an initial donation of US$5million to causes that provide direct support to the people of Ukraine.' 

A company statement added: 'Atlassian has taken several actions to further support Ukraine, and will continue to look for ways to use our technology and resources to serve as a force for good,

'To date, we have donated hundreds of thousands of dollars in humanitarian aid to Ukraine, through the Atlassian Foundation and through employee giving programs.

'At the direct request of the Ukrainian government, we have donated licences of Atlassian software to aid their humanitarian and relief efforts.

'We also remain faithful to serving civil and human rights organisations that are working at great risk within Russia and the surrounding regions.'

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Tue, 02 Aug 2022 13:02:00 -0500 text/html https://www.dailymail.co.uk/news/article-11074691/Atlassian-billionaires-Mike-Cannon-Brookes-Scott-Farquhar-slammed-Ukrainians-Russian-work.html
Killexams : Whiteboards.io Launches as Appfire's First Expansion into Platform Agnostic Apps

New version of Whiteboards provides collaborative space for remote software and product teams to work together in real time

BOSTON, August 04, 2022--(BUSINESS WIRE)--Appfire, an enterprise collaboration software company that enables teams to plan and deliver their best work, is launching Whiteboards.io, marking a historic first step outside of the Atlassian ecosystem for the company. Whiteboards.io is a new iteration of the popular Whiteboards for Jira and Whiteboards for Confluence apps, and will offer customers the same deep integrations and features as the original, plus the additional option of live video calls while collaborating on the virtual whiteboard. This milestone signals a new era and shift in Appfire’s overall business model, as the company begins to launch standalone products that transcend development environments and help teams collaborate, no matter how, where, or when they work.

Prior to this standalone launch, Whiteboards developed a passionate following as a purpose-built resource that drastically outpaces competing whiteboard solutions. Designed as a single tool for all Agile team activities, Whiteboards.io is an answer to major pain points plaguing software and product teams, from lack of connectivity to crucial Agile planning tools to difficulties communicating complex ideas across functional teams and manual ideas transfer between other tools and their work management systems. Whiteboards.io is built from the Agile team perspective with deep two-way Jira and Confluence integration, making it a distant frontrunner in its class for flexibility, reusability, and support for both real-time and asynchronous collaboration. With Whiteboards.io, team members have a collaborative space where they can work together on brainstorming, planning, prioritizations, retrospectives, or user story mapping, and more.

"The launch of Whiteboards.io marks a significant milestone in Appfire's mission to equip and connect every team to deliver their best work," said Maciej Saganowski, Director of Product - Whiteboards at Appfire. "As the world becomes accustomed to a more permanent distributed work environment, having a tool where individuals can work together in real time is essential to boosting the productivity of remote teams."

Features of Whiteboards.io include easy diagramming, drawing tools, templates, or multi-user collaboration to help teams communicate, visualize complex ideas and keep in sync. Unlike any other tool, Whiteboards.io allows teams to instantly transfer data and decisions between the whiteboard and Jira. Users can populate their whiteboard with existing Jira issues and edit, update, or rank them with all changes synced to Jira. In addition, teams are able to kick off events quickly with reusable processes from the always-updating, easy-to-access Whiteboards.io templates library.

For more information, pricing, and insights from the Whiteboards.io blog, please visit https://whiteboards.io/.

About Appfire

Appfire is a global authority in the Atlassian ecosystem. Appfire’s popular solutions help teams with Workflow Automation, Product Portfolio Management, IT Service Management, Document Management, Business Intelligence and Reporting, Administrative Tools, Agile, Developer Tools, and Publishing. The company has the most widely adopted portfolio of apps on the Atlassian Marketplace, with 225,000 active installations worldwide. Learn more at www.appfire.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005760/en/

Contacts

Josh Payne, PR Director
joshua.payne@walkersands.com
781-264-8096

Thu, 04 Aug 2022 04:00:00 -0500 en-US text/html https://finance.yahoo.com/news/whiteboards-io-launches-appfires-first-160000581.html
Killexams : Atlassian (TEAM) Gains But Lags Market: What You Should Know

In the latest trading session, Atlassian (TEAM) closed at $191.59, marking a +1.93% move from the previous day. The stock lagged the S&P 500's daily gain of 2.76%. At the same time, the Dow added 2.43%, and the tech-heavy Nasdaq gained 0.05%.

Heading into today, shares of the company had gained 5.28% over the past month, outpacing the Computer and Technology sector's loss of 15.41% and the S&P 500's gain of 4.44% in that time.

Atlassian will be looking to display strength as it nears its next earnings release, which is expected to be August 4, 2022. On that day, Atlassian is projected to report earnings of $0.26 per share, which would represent year-over-year growth of 8.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $717.84 million, up 28.29% from the year-ago period.

It is also important to note the exact changes to analyst estimates for Atlassian. These exact revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 3.03% lower. Atlassian is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Atlassian is holding a Forward P/E ratio of 127.39. Its industry sports an average Forward P/E of 43.21, so we one might conclude that Atlassian is trading at a premium comparatively.

Also, we should mention that TEAM has a PEG ratio of 6.37. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. TEAM's industry had an average PEG ratio of 2.37 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 137, which puts it in the bottom 46% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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Wed, 20 Jul 2022 05:26:00 -0500 en-CA text/html https://ca.finance.yahoo.com/news/atlassian-team-gains-lags-market-215009703.html
Killexams : Atlassian Announces Fourth Quarter and Fiscal Year 2022 Results

Quarterly revenue of $760 million, up 36% year-over-year

Quarterly subscription revenue of $597 million, up 55% year-over-year

Quarterly IFRS operating margin of (8)% and non-IFRS operating margin of 14%

Quarterly cash flow from operations of $230 million and free cash flow of $195 million

TEAM, Anywhere/SYDNEY, August 04, 2022--(BUSINESS WIRE)--Atlassian Corporation Plc (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its fourth quarter and fiscal year ended June 30, 2022 and released a shareholder letter available on Atlassian’s Work Life blog at http://atlassian.com/blog/announcements/shareholder-letter-q4fy22. The shareholder letter was also posted to the Investor Relations section of Atlassian’s website at https://investors.atlassian.com.

"We capped off fiscal year 2022 with strong Q4 results, growing Cloud revenue 55 percent year-over-year," said Mike Cannon-Brookes, Atlassian’s co-founder and co-CEO. "We believe that Atlassian is uniquely positioned, with great momentum and a differentiated business model. While we can’t predict what the future holds at a macro level, we’re forging ahead with conviction and vigilance as we look to deepen our strategic position."

"Our strong competitive position provides us with the flexibility to invest purposefully and create value for our customers," said Scott Farquhar, Atlassian’s co-founder and co-CEO. "We’re proud of how we continue to execute against our long-term plans, which includes bringing on top-tier talent from across the globe. We added over 2,300 new Atlassians in fiscal year 2022, and they will be instrumental to helping us achieve our mission to unleash the potential of every team."

Fourth Quarter Fiscal Year 2022 Financial Highlights:

On an IFRS basis, Atlassian reported:

  • Revenue: Total revenue was $759.8 million for the fourth quarter of fiscal year 2022, up 36% from $559.5 million for the fourth quarter of fiscal year 2021.

  • Operating Loss and Operating Margin: Operating loss was $63.3 million for the fourth quarter of fiscal year 2022, compared with operating loss of $7.5 million for the fourth quarter of fiscal year 2021. Operating margin was (8)% for the fourth quarter of fiscal year 2022, compared with (1)% for the fourth quarter of fiscal year 2021.

  • Net Loss and Net Loss Per Diluted Share: Net loss was $105.5 million for the fourth quarter of fiscal year 2022, compared with net loss of $213.1 million for the fourth quarter of fiscal year 2021. Net loss per diluted share was $0.41 for the fourth quarter of fiscal year 2022, compared with net loss per diluted share of $0.85 for the fourth quarter of fiscal year 2021.

  • Balance Sheet: Cash and cash equivalents plus short-term investments at the end of the fourth quarter of fiscal year 2022 totaled $1.5 billion.

On a non-IFRS basis, Atlassian reported:

  • Operating Income and Operating Margin: Operating income was $108.9 million for the fourth quarter of fiscal year 2022, compared with operating income of $94.9 million for the fourth quarter of fiscal year 2021. Operating margin was 14% for the fourth quarter of fiscal year 2022, compared with 17% for the fourth quarter of fiscal year 2021.

  • Net Income and Net Income Per Diluted Share: Net income was $68.1 million for the fourth quarter of fiscal year 2022, compared with net income of $62.2 million for the fourth quarter of fiscal year 2021. Net income per diluted share was $0.27 for the fourth quarter of fiscal year 2022, compared with net income per diluted share of $0.24 for the fourth quarter of fiscal year 2021.

  • Free Cash Flow: Cash flow from operations was $230.4 million and free cash flow was $194.7 million for the fourth quarter of fiscal year 2022. Free cash flow margin for the fourth quarter of fiscal year 2022 was 26%.

Fiscal Year 2022 Financial Highlights

On an IFRS basis, Atlassian reported:

  • Revenue: Total revenue was $2.8 billion for fiscal year 2022, up 34% from $2.1 billion for fiscal year 2021.

  • Operating Income (Loss) and Operating Margin: Operating loss was $106.5 million for fiscal year 2022, compared with operating income of $101.6 million for fiscal year 2021. Operating margin was (4)% for fiscal year 2022, compared with 5% for fiscal year 2021.

  • Net Loss and Net Loss Per Diluted Share: Net loss was $614.1 million for fiscal year 2022, compared with net loss of $696.3 million for fiscal year 2021. Net loss per diluted share was $2.42 for fiscal year 2022, compared with net loss per diluted share of $2.79 for fiscal year 2021.

On a non-IFRS basis, Atlassian reported:

  • Operating Income and Operating Margin: Operating income was $633.0 million for fiscal year 2022, compared with operating income of $519.1 million for fiscal year 2021. Operating margin was 23% for fiscal year 2022, compared with 25% for fiscal year 2021.

  • Net Income and Net Income Per Diluted Share: Net income was $434.3 million for fiscal year 2022, compared with net income of $357.6 million for fiscal year 2021. Net income per diluted share was $1.69 for fiscal year 2022, compared with net income per diluted share of $1.40 for fiscal year 2021.

  • Free Cash Flow: Cash flow from operations was $883.5 million and free cash flow was $763.8 million for fiscal year 2022. Free cash flow margin for fiscal year 2022 was 27%.

A reconciliation of IFRS to non-IFRS financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below, under the heading "About Non-IFRS Financial Measures."

Recent Business Highlights:

  • Team growth: Atlassian ended its fourth quarter of fiscal year 2022 with a total headcount of 8,813 employees, adding 634 net new Atlassians in the quarter and over 2,300 during the year. Most of the new hires were in R&D. Atlassian will build upon this momentum and continue to play offense in fiscal year 2023.

  • Atlassian Presents: Work Life: Atlassian will hold its first ever Work Management tailored event on September 29, 2022. Challenge conventional thinking and learn how working differently, together can enable teams to do their best work. Work Life will deliver attendees a unique opportunity to learn from project management leaders and teams across diverse industries. The event will also feature inspiring sessions and product deep-dives for Trello, Confluence and more. Work Life will be held in person at the Chase Center in San Francisco, as well as virtually. Learn more at https://events.atlassian.com/worklife.

  • Customer Growth: Atlassian ended its fourth quarter of fiscal year 2022 with a total customer count, on an active subscription or maintenance agreement basis, of 242,623 customers, adding 8,048 net new customers during the quarter.

New Chief Financial Officer:

Atlassian announced that Joe Binz will join the company as its new Chief Financial Officer (CFO) and Principal Financial Officer, effective September 6, 2022. Joe brings more than 25 years of finance leadership and experience in the technology industry. Since 2014, he has held the role of Corporate Vice President, Finance at Microsoft Corporation, where he was responsible for leading the company’s financial planning and analysis, investor relations, acquisition integration, and procurement functions. Over his twenty-year career with Microsoft, he was a pivotal finance leader where he most notably guided the company’s business transformation through its multi-billion dollar move to the cloud. Prior to his time at Microsoft, Joe spent eight years at Intel Corporation where he held a variety of finance roles supporting manufacturing operations, product groups, and Intel Capital. He holds a Bachelor of Science in Finance from the University of Illinois Urbana-Champaign, and a Master of Business Administration from the University of Michigan’s Ross School of Business.

Financial Targets:

Atlassian is providing its financial targets for the first quarter of fiscal year 2023 as follows:

First Quarter Fiscal Year 2023:

  • Total revenue is expected to be in the range of $795 million to $810 million.

  • Gross margin is expected to be in the range of 80% to 81% on an IFRS basis and in the range of 84% to 85% on a non-IFRS basis.

  • Operating margin is expected to be approximately (37%) on an IFRS basis and approximately 18% on a non-IFRS basis.

  • Net loss per diluted share is expected to be approximately $1.17 to $1.16 on an IFRS basis, and net income per diluted share is expected to be approximately $0.37 to $0.38 on a non-IFRS basis.

  • Weighted average share count is expected to be in the range of 256 million to 257 million shares when calculating diluted IFRS net loss per share and in the range of 259 million to 260 million shares when calculating diluted non-IFRS net income per share.

For additional commentary regarding financial targets, please see Atlassian’s fourth quarter fiscal year 2022 shareholder letter dated August 4, 2022.

With respect to Atlassian’s expectations under "Financial Targets" above, a reconciliation of IFRS to non-IFRS gross margin, operating margin, and net income (loss) per diluted share, has been provided in the financial statement tables included in this press release.

Shareholder Letter and Webcast Details:

A detailed shareholder letter is available on Atlassian’s Work Life blog at https://atlassian.com/blog/announcements/shareholder-letter-q4fy22, and the Investor Relations section of Atlassian’s website at: https://investors.atlassian.com. Atlassian will host a webcast to answer questions today:

  • When: Thursday, August 4, 2022 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).

  • Webcast: A live webcast of the call can be accessed from the Investor Relations section of Atlassian’s website at: https://investors.atlassian.com. Following the call, a replay will be available on the same website.

Atlassian has used, and will continue to use, its Investor Relations website at https://investors.atlassian.com as a means of making material information public and for complying with its disclosure obligations.

About Atlassian

Atlassian unleashes the potential of every team. Our team collaboration and productivity software helps teams organize, discuss, and complete shared work. Teams at more than 240,000 customers, across large and small organizations - including Bank of America, Redfin, NASA, Verizon, and Dropbox - use Atlassian’s project tracking, content creation and sharing, and service management products to work better together and deliver quality results on time. Learn more about our products, including Jira Software, Confluence, Jira Service Management, Trello, Bitbucket, and Jira Align at https://atlassian.com/.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward looking, including risks and uncertainties related to statements about our products, business model, customers, employees, anticipated growth, outlook, technology and other key strategic areas, and our financial targets such as revenue, share count, and IFRS and non-IFRS financial measures including gross margin, operating margin, and net income (loss) per diluted share.

We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management’s beliefs and assumptions only as of the date such statements are made.

Further information on these and other factors that could affect our financial results is included in filings we make with the Securities and Exchange Commission from time to time, including the section titled "Risk Factors" in our most exact Forms 20-F and 6-K (reporting our quarterly results). These documents are available on the SEC Filings section of the Investor Relations section of our website at: https://investors.atlassian.com/.

About Non-IFRS Financial Measures

Our reported results and financial targets include certain non-IFRS financial measures, including non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow. Management believes that the use of these non-IFRS financial measures provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our results of operations, and also facilitates comparisons with peer companies, many of which use similar non-IFRS or non-GAAP financial measures to supplement their IFRS or GAAP results. Non-IFRS results are presented for supplemental informational purposes only to aid in understanding our results of operations. The non-IFRS results should not be considered a substitute for financial information presented in accordance with IFRS, and may be different from non-IFRS or non-GAAP measures used by other companies.

Our non-IFRS financial measures include:

  • Non-IFRS gross profit. Excludes expenses related to share-based compensation and amortization of acquired intangible assets.

  • Non-IFRS operating income. Excludes expenses related to share-based compensation and amortization of acquired intangible assets.

  • Non-IFRS net income and non-IFRS net income per diluted share. Excludes expenses related to share-based compensation, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and discrete tax impact resulting from a non-recurring transaction.

  • Free cash flow. Free cash flow is defined as net cash provided by operating activities less capital expenditures, which consists of purchases of property and equipment, and payments of lease obligations.

Our non-IFRS financial measures reflect adjustments based on the items below:

  • Share-based compensation.

  • Amortization of acquired intangible assets.

  • Non-coupon impact related to exchangeable senior notes and capped calls:

    • Amortization of notes discount and issuance costs.

    • Mark to fair value of the exchangeable senior notes exchange feature.

    • Mark to fair value of the related capped call transactions.

    • Net loss on settlements of exchangeable senior notes and capped call transactions.

  • The related income tax effects on these items and discrete tax impact resulting from a non-recurring transaction.

  • Purchases of property and equipment and payments of lease obligations.

We exclude expenses related to share-based compensation, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and discrete tax impact resulting from a non-recurring transaction from certain of our non-IFRS financial measures as we believe this helps investors understand our operational performance. In addition, share-based compensation expense can be difficult to predict and varies from period to period and company to company due to differing valuation methodologies, subjective assumptions, and the variety of equity instruments, as well as changes in stock price. Management believes that providing non-IFRS financial measures that exclude share-based compensation expense, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and discrete tax impact resulting from a non-recurring transaction allow for more meaningful comparisons between our results of operations from period to period.

Management considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by our business that can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening our statement of financial position.

Management uses non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow:

  • As measures of operating performance, because these financial measures do not include the impact of items not directly resulting from our core operations.

  • For planning purposes, including the preparation of our annual operating budget.

  • To allocate resources to enhance the financial performance of our business.

  • To evaluate the effectiveness of our business strategies.

  • In communications with our Board of Directors and investors concerning our financial performance.

The tables in this press release titled "Reconciliation of IFRS to Non-IFRS Results" and "Reconciliation of IFRS to Non-IFRS Financial Targets" provide reconciliations of non-IFRS financial measures to the most exact directly comparable financial measures calculated and presented in accordance with IFRS.

We understand that although non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow are frequently used by investors and securities analysts in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations as reported under IFRS.

Atlassian Corporation Plc

Consolidated Statements of Operations

(U.S. $ and shares in thousands, except per share data)

(unaudited)

Three Months Ended June 30,

Fiscal Year Ended June 30,

2022

2021

2022

2021

Revenues:

Subscription

$

597,297

$

385,510

$

2,096,706

$

1,324,064

Maintenance

117,095

131,080

495,077

522,971

Other

45,449

42,949

211,099

242,097

Total revenues

759,841

559,539

2,802,882

2,089,132

Cost of revenues (1) (2)

133,154

97,967

465,707

336,021

Gross profit

626,687

461,572

2,337,175

1,753,111

Operating expenses:

Research and development (1) (2)

379,000

245,929

1,397,568

963,326

Marketing and sales (1) (2)

179,308

133,429

567,691

372,909

General and administrative (1)

131,632

89,740

478,373

315,242

Total operating expenses

689,940

469,098

2,443,632

1,651,477

Operating income (loss)

(63,253

)

(7,526

)

(106,457

)

101,634

Other non-operating expense, net

(327

)

(199,401

)

(434,588

)

(620,759

)

Finance income

1,332

1,008

2,297

7,174

Finance costs

(6,611

)

(8,099

)

(25,824

)

(122,713

)

Loss before income tax benefit (expense)

(68,859

)

(214,018

)

(564,572

)

(634,664

)

Income tax benefit (expense)

(36,604

)

945

(49,552

)

(61,651

)

Net loss

$

(105,463

)

$

(213,073

)

$

(614,124

)

$

(696,315

)

Net loss per share attributable to ordinary shareholders:

Basic

$

(0.41

)

$

(0.85

)

$

(2.42

)

$

(2.79

)

Diluted

$

(0.41

)

$

(0.85

)

$

(2.42

)

$

(2.79

)

Weighted-average shares outstanding used to compute net loss per share attributable to ordinary shareholders:

Basic

254,482

251,264

253,312

249,679

Diluted

254,482

251,264

253,312

249,679

(1) Amounts include share-based payment expense, as follows:

Three Months Ended June 30,

Fiscal Year Ended June 30,

2022

2021

2022

2021

Cost of revenues

$

11,641

$

6,187

$

44,848

$

24,739

Research and development

102,375

55,093

437,607

253,328

Marketing and sales

26,356

16,754

109,338

46,978

General and administrative

23,519

16,011

115,294

60,687

(2) Amounts include amortization of acquired intangible assets, as follows:

Three Months Ended June 30,

Fiscal Year Ended June 30,

2022

2021

2022

2021

Cost of revenues

$

5,697

$

6,008

$

22,694

$

22,394

Research and development

93

44

374

168

Marketing and sales

2,491

2,298

9,330

9,192

Atlassian Corporation Plc

Consolidated Statements of Financial Position

(U.S. $ in thousands)

June 30, 2022

June 30, 2021

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

1,385,265

$

919,227

Short-term investments

73,294

313,001

Trade receivables

308,127

173,473

Tax receivables

541

2,332

Derivative assets

13,685

127,486

Prepaid expenses and other current assets

58,077

48,322

1,838,989

1,583,841

Assets held for sale

60,265

43,665

Total current assets

1,899,254

1,627,506

Non-current assets:

Property and equipment, net

98,554

66,221

Deferred tax assets

42,760

36,174

Goodwill

732,666

725,758

Intangible assets, net

100,840

124,590

Right-of-use assets, net

267,328

205,300

Strategic investments

159,064

122,159

Other non-current assets

60,740

37,636

Total non-current assets

1,461,952

1,317,838

Total assets

$

3,361,206

$

2,945,344

Liabilities

Current liabilities:

Trade and other payables

$

404,908

$

266,497

Tax liabilities

26,367

42,051

Provisions

32,796

25,148

Deferred revenue

1,066,059

812,943

Lease obligations

40,638

42,446

Derivative liabilities

23,288

772,127

Exchangeable senior notes, net

348,799

Total current liabilities

1,594,056

2,310,011

Non-current liabilities:

Deferred tax liabilities

26,457

26,625

Provisions

13,804

12,435

Deferred revenue

116,621

84,652

Term loan facility, net

999,419

Lease obligations

274,434

214,103

Other non-current liabilities

812

2,604

Total non-current liabilities

1,431,547

340,419

Total liabilities

3,025,603

2,650,430

Equity

Share capital

25,485

25,164

Share premium

461,044

461,016

Other capital reserves

2,223,820

1,516,609

Other components of equity

53,829

104,832

Accumulated deficit

(2,428,575

)

(1,812,707

)

Total equity

335,603

294,914

Total liabilities and equity

$

3,361,206

$

2,945,344

Atlassian Corporation Plc

Consolidated Statements of Cash Flows

(U.S. $ in thousands)

(unaudited)

Three Months Ended June 30,

Fiscal Year Ended June 30,

2022

2021

2022

2021

Operating activities

Loss before income tax benefit (expense)

$

(68,859

)

$

(214,018

)

$

(564,572

)

$

(634,664

)

Adjustments to reconcile loss before income tax benefit (expense) to net cash provided by operating activities:

Depreciation and amortization

13,753

14,172

51,163

55,296

Depreciation of right-of-use assets

10,857

9,542

42,795

37,552

Share-based payment expense

163,891

94,045

707,087

385,732

Net loss on exchange derivative and capped call transactions

200,513

424,482

616,446

Amortization of debt discount and issuance cost

118

5,246

4,075

109,548

Interest income

(1,332

)

(1,008

)

(2,297

)

(7,174

)

Interest expense

6,493

2,852

21,749

13,164

Net foreign currency loss (gain)

(4,032

)

(2,525

)

(12,065

)

7,650

Impairment of lease related assets

...

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