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Yahoo
16-05-2025
- Business
- Yahoo
TEAM Q1 Earnings Call: Cloud Expansion, AI Integration, and Evolving Go-to-Market Drive Outlook
IT project management software company, Atlassian (NASDAQ:TEAM) met Wall Street's revenue expectations in Q1 CY2025, with sales up 14.1% year on year to $1.36 billion. The company expects next quarter's revenue to be around $1.35 billion, close to analysts' estimates. Its non-GAAP profit of $0.97 per share was 5.2% above analysts' consensus estimates. Is now the time to buy TEAM? Find out in our full research report (it's free). Revenue: $1.36 billion vs analyst estimates of $1.35 billion (14.1% year-on-year growth, in line) Adjusted EPS: $0.97 vs analyst estimates of $0.93 (5.2% beat) Adjusted Operating Income: $348.3 million vs analyst estimates of $321.9 million (25.7% margin, 8.2% beat) Revenue Guidance for Q2 CY2025 is $1.35 billion at the midpoint, roughly in line with what analysts were expecting Operating Margin: -0.9%, down from 1.5% in the same quarter last year Free Cash Flow Margin: 47%, up from 26.6% in the previous quarter Billings: $1.53 billion at quarter end, up 2.5% year on year Market Capitalization: $57.98 billion Atlassian's first quarter results reflected ongoing momentum in its cloud business and rising adoption of AI-powered features. CEO Mike Cannon-Brookes attributed the quarter's performance to rapid advancements in the company's AI platform, Rovo, and a continued emphasis on enterprise customers. Management highlighted that embedding Rovo into core products has already led to over 1.5 million monthly active AI users, and that premium enterprise editions are seeing significant uptake, with sales up more than 40% year-over-year. Looking ahead, management explained that the decision to broadly include Rovo is intended to accelerate user adoption, even if it may defer some near-term monetization. CFO Joe Binz stated, 'We remain confident and on track to the plans we laid out at Investor Day,' reaffirming Atlassian's multi-year revenue growth targets. Executives pointed to expanded enterprise offerings, cloud migrations, and continued product innovation as key drivers for the company's full-year outlook, while also noting increased deal complexity and a cautious approach to macroeconomic risk. Atlassian's leadership focused on the integration of AI, expansion of enterprise offerings, and enhancements to its cloud platform as primary factors shaping the quarter. AI Platform Expansion: The integration of Rovo AI into core products is increasing user engagement, with over 1.5 million monthly active AI users. Management sees this as a foundation for long-term growth and wider platform adoption. Enterprise Customer Growth: Sales of premium and enterprise cloud editions grew by more than 40% year-over-year, reflecting heightened demand from larger, more complex customers. The company noted that enterprise customers now account for over 40% of sales, up from 15% five years ago. Cloud Migration Progress: Atlassian achieved FedRAMP Moderate authorization, enabling it to serve U.S. federal government customers and partners. The launch of Atlassian Government Cloud and Isolated Cloud addresses customers with high security and compliance requirements, supporting continued migrations from data center to cloud. Operational Efficiency Gains: Engineering investments have improved cloud gross margins, with management attributing these gains to optimized infrastructure and support costs. These efficiency improvements are expected to be structural and sustainable. Go-to-Market Evolution: The appointment of a new Chief Revenue Officer is expected to further align the company's sales approach with enterprise needs. Leadership indicated that ongoing changes in go-to-market strategy are necessary to address a diversified and expanding customer base. Management's outlook centers on expanding cloud adoption, embedding AI across the product suite, and capturing more enterprise business, while balancing efficiency and risk. AI Adoption and Monetization: Embedding Rovo AI throughout Atlassian's platform is expected to increase user engagement and drive future upgrades, though management is patient with near-term monetization as adoption ramps up. Enterprise Expansion and Migrations: Continued focus on large, complex customers and facilitating migrations from data center to cloud are expected to contribute to multi-year revenue growth and support Atlassian's long-term targets. Evolving Deal Complexity: Management noted that longer sales cycles and greater deal complexity, particularly among enterprise accounts, may impact revenue recognition timing and require ongoing investments in sales and support resources. Sanjit Singh (Morgan Stanley): Asked if embedding Rovo AI in core products would affect Atlassian's long-term growth targets. Management said maximizing user adoption supports durable growth and that multi-year targets remain intact. Gregg Moskowitz (Mizuho): Questioned the impact of late-closing enterprise deals on cloud revenue. CFO Joe Binz explained the timing led to some deferred revenue recognition, but underlying demand and billings remain healthy. Mark Cash (Raymond James): Inquired about the effects of cloud migrations and changes to data center contract durations. Management expects stronger migration contributions in future years, with ongoing data center growth driven by pricing and expansion. Keith Bachman (BMO): Sought clarity on risk adjustments in guidance and the impact of bundled pricing (Teamwork Collection) on long-term growth. Management said guidance remains conservatively risk-adjusted and views bundling as a long-term growth driver by simplifying customer purchasing. Rob Oliver (Baird): Asked about the strategy behind Isolated Cloud and the margin impact of supporting single-tenant solutions. Leadership cited the need to serve customers with strict compliance requirements, while maintaining a focus on cost management and sustainable margins. In the coming quarters, the StockStory team will monitor (1) the pace of enterprise cloud migrations, particularly among government and highly regulated customers, (2) growth in adoption and usage of Rovo AI across the product suite, and (3) the impact of ongoing go-to-market changes, including the new Chief Revenue Officer's influence on large deal execution. Progress on cost optimization and structural margin improvements will also be key areas of focus. Atlassian currently trades at a forward price-to-sales ratio of 9.8×. At this valuation, is it a buy or sell post earnings? The answer lies in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
01-05-2025
- Business
- Yahoo
Atlassian Announces Third Quarter Fiscal Year 2025 Results
Revenue of $1,357 million, up 14% year-over-year Subscription revenue of $1,273 million, up 19% year-over-year GAAP operating margin of (1)% and non-GAAP operating margin of 26% Cash flow from operations of $653 million and free cash flow of $638 million TEAM Anywhere/SAN FRANCISCO, May 01, 2025--(BUSINESS WIRE)--Atlassian Corporation (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its third quarter ended March 31, 2025. A shareholder letter was posted on Atlassian's Work Life blog at and in the Investor Relations section of Atlassian's website at Third Quarter Fiscal Year 2025 Earnings Results "I am filled with immense pride as I reflect on Team '25 and our customers' and partners' reactions to our relentless focus on innovation," said Mike Cannon-Brookes, Atlassian's CEO and co-Founder. "Our long-term investments in building a world-class Cloud platform have enabled us to advance the Atlassian System of Work and bring Rovo's powerful AI capabilities to the center. Our vision for the future of human-AI collaboration is resonating deeply with customers, and we are more excited than ever to execute on our mission of unleashing the potential of every team." "We delivered total revenue of $1.4 billion in the quarter, driven by Cloud revenue growth of 25% year-over-year," said Joe Binz, Atlassian's CFO. "We remain committed to balancing operational discipline with continued focused investment in key strategic areas like enterprise, AI, and the Atlassian System of Work to drive future growth." Third Quarter Fiscal Year 2025 Financial Highlights: On a GAAP basis, Atlassian reported: Revenue: Total revenue was $1,356.7 million for the third quarter of fiscal year 2025, up 14% from $1,189.1 million for the third quarter of fiscal year 2024. Operating Income (Loss) and Operating Margin: Operating loss was $12.5 million for the third quarter of fiscal year 2025, compared with operating income of $17.8 million for the third quarter of fiscal year 2024. Operating margin was (1%) for the third quarter of fiscal year 2025, compared with 1% for the third quarter of fiscal year 2024. Net Income (Loss) and Net Income (Loss) Per Diluted Share: Net loss was $70.8 million for the third quarter of fiscal year 2025, compared with net income of $12.8 million for the third quarter of fiscal year 2024. Net loss per diluted share was $0.27 for the third quarter of fiscal year 2025, compared with net income per diluted share of $0.05 for the third quarter of fiscal year 2024. Balance Sheet: Cash and cash equivalents plus marketable securities at the end of the third quarter of fiscal year 2025 totaled $3.0 billion. On a non-GAAP basis, Atlassian reported: Operating Income and Operating Margin: Operating income was $348.3 million for the third quarter of fiscal year 2025, compared with operating income of $316.5 million for the third quarter of fiscal year 2024. Operating margin was 26% for the third quarter of fiscal year 2025, compared with 27% for the third quarter of fiscal year 2024. Net Income and Net Income Per Diluted Share: Net income was $261.5 million for the third quarter of fiscal year 2025, compared with net income of $232.5 million for the third quarter of fiscal year 2024. Net income per diluted share was $0.97 for the third quarter of fiscal year 2025, compared with net income per diluted share of $0.89 for the third quarter of fiscal year 2024. Free Cash Flow: Cash flow from operations was $652.7 million and free cash flow was $638.3 million for the third quarter of fiscal year 2025. Free cash flow margin for the third quarter of fiscal year 2025 was 47%. A reconciliation of GAAP to non-GAAP 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-GAAP Financial Measures." Recent Business Highlights: Atlassian Team '25: Thousands of customers and partners traveled to Anaheim to witness the latest product announcements and innovations including: Rovo for All: Atlassian announced that its AI solution, Rovo, is now included in all premium and enterprise editions for Jira, Confluence, and Jira Service Management, with standard edition soon to follow. This move brings advanced AI-powered enterprise search, chat, and agents to the center of the Atlassian Platform. Teamwork Collection: Atlassian announced Teamwork Collection, a curated selection of apps - Jira, Confluence, and Loom - alongside Rovo agents powered by the Atlassian Cloud Platform - that helps technical and business teams break down silos, use AI more effectively, and reduce context switching. Strategy Collection: Atlassian announced Strategy Collection, an Enterprise Strategy and Planning solution that brings three apps - Focus, Talent, and Jira Align - together to provide leaders a clear view of the most important priorities and ensures their teams are driving towards the highest value outcomes. Customer Service Management: Atlassian announced its Customer Service Management app, a new AI-powered app designed to connect support, product, development, and operations teams to deliver high-velocity customer service. Expanded Cloud Offerings: Atlassian announced two new offerings: Government Cloud and Isolated Cloud. Atlassian achieved FedRAMP® authorization at the Moderate level for its Government Cloud to enable U.S. government agencies and their industry partners to take advantage of the capabilities of the Atlassian Cloud Platform. Atlassian also announced Isolated Cloud, an Atlassian-managed virtual private cloud option for organizations that need a dedicated cloud environment. Learn more about these announcements at Atlassian Williams Racing: Atlassian announced a long-term partnership to be the official title and technology partner of Williams Racing, a storied Formula 1 franchise. This partnership will bring Atlassian's AI-powered collaboration software to the track in front of customers and millions of fans, as it helps Williams Racing accelerate its digital transformation through the power of the Atlassian System of Work. Customers with >$10,000 in Cloud ARR: Atlassian ended its third quarter of fiscal year 2025 with 50,715 customers with greater than $10,000 in Cloud annualized recurring revenue (Cloud ARR), an increase of 14% year-over-year. Recognized on Fortune's List of 100 Best Companies to Work For® 2025: Atlassian was recognized, for the seventh consecutive year, as one of Fortune's 100 Best Companies to Work For®. This achievement reflects the commitment, dedication, and collaborative nature of all Atlassians who carry this remarkable culture. Board of Directors Update: Atlassian appointed Karen Dykstra to its Board of Directors. Karen is the former Chief Financial Officer at VMware, Inc., AOL Inc., and Automatic Data Processing, Inc., and currently sits on the board of directors at Gartner Inc. and Arm Holdings PLC. Karen brings more than 30 years of financial leadership and strong operational experience across many diverse industries, which will be invaluable in supporting Atlassian as it continues to expand its enterprise capabilities. Financial Targets: Atlassian is providing its financial targets as follows: Fourth Quarter Fiscal Year 2025: Total revenue is expected to be in the range of $1,349 million to $1,359 million. Cloud revenue growth year-over-year is expected to be approximately 23.0%. Data Center revenue growth year-over-year is expected to be approximately 16.5%. Marketplace and other revenue growth year-over-year is expected to be approximately flat. Gross margin is expected to be approximately 82.5% on a GAAP basis and approximately 84.5% on a non-GAAP basis. Operating margin is expected to be approximately (5.0%) on a GAAP basis and approximately 22.0% on a non-GAAP basis. For additional commentary regarding financial targets, please see Atlassian's third quarter fiscal year 2025 shareholder letter dated May 1, 2025. With respect to Atlassian's expectations under "Financial Targets" above, a reconciliation of GAAP to non-GAAP gross margin and operating margin 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 and the Investor Relations section of Atlassian's website at Atlassian will host a webcast to answer questions today: When: Thursday, May 1, 2025 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 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 as a means of making material information public and for complying with its disclosure obligations. About Atlassian Atlassian unleashes the potential of every team. A recognized leader in software development, work management, and enterprise service management software, Atlassian enables enterprises to connect their business and technology teams with an AI-powered system of work that unlocks productivity at scale. Atlassian's collaboration software powers over 80% of the Fortune 500 and 300,000+ customers worldwide - including NASA, Rivian, Deutsche Bank, United Airlines, and Bosch - who rely on our solutions to drive work forward. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. In some cases, you can identify these statements by forward-looking words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "should," "estimate," "further," or "continue," and similar expressions or variations, but these words are not the exclusive means for identifying such statements. All statements other than statements of historical fact could be deemed forward looking, including but not limited to risks and uncertainties related to statements about our platform, offerings and planned offerings, investments, System of Work, AI solutions, customers, strategic partnerships, leadership transitions, strategic priorities, anticipated growth, outlook and results, and our financial targets such as total revenue, Cloud, Data Center, and Marketplace and other revenue, and GAAP and non-GAAP financial measures including gross margin and operating margin. 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 (the "SEC") from time to time, including the section titled "Risk Factors" in our most recently filed Forms 10-K and 10-Q. These documents are available on the SEC Filings section of the Investor Relations section of our website at About Non-GAAP Financial Measures In addition to the measures presented in our condensed consolidated financial statements, we regularly review other measures that are not presented in accordance with U.S. generally accepted accounting principles ("GAAP"), defined as non-GAAP financial measures by the SEC, to evaluate our business, measure our performance, identify trends, prepare financial forecasts and make strategic decisions. The key measures we consider are non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share and free cash flow (collectively, the "Non-GAAP Financial Measures"). These Non-GAAP Financial Measures, which may be different from similarly titled non-GAAP measures used by other companies, provide supplemental information regarding our operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or that occur relatively infrequently and/or that management considers to be unrelated to our core operations. Management believes that tracking and presenting these Non-GAAP Financial Measures provides management, our board of directors, investors and the analyst community with the ability to better evaluate matters such as: our ongoing core operations, including comparisons between periods and against other companies in our industry; our ability to generate cash to service our debt and fund our operations; and the underlying business trends that are affecting our performance. Our Non-GAAP Financial Measures include: Non-GAAP gross profit and non-GAAP gross margin. Excludes expenses related to stock-based compensation and amortization of acquired intangible assets. Non-GAAP operating income and non-GAAP operating margin. Excludes expenses related to stock-based compensation and amortization of acquired intangible assets. Non-GAAP net income and non-GAAP net income per diluted share. Excludes expenses related to stock-based compensation, amortization of acquired intangible assets, gain on a non-cash sale of a controlling interest of a subsidiary and the related income tax adjustments. 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. We understand that although these Non-GAAP Financial Measures are frequently used by investors and the analyst community in their evaluation of our financial performance, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. We compensate for such limitations by reconciling these Non-GAAP Financial Measures to the most comparable GAAP financial measures. We encourage you to review the tables in this press release titled "Reconciliation of GAAP to Non-GAAP Results" and "Reconciliation of GAAP to Non-GAAP Financial Targets" that present such reconciliations. Customers with >$10,000 in Cloud ARR We define the number of customers with Cloud ARR greater than $10,000 at the end of any particular period as the number of organizations with unique domains with an active Cloud subscription for two or more seats and greater than $10,000 in Cloud ARR. We define Cloud ARR as the annualized recurring revenue run-rate of Cloud subscription agreements at a point in time. We calculate Cloud ARR by taking the Cloud monthly recurring revenue ("Cloud MRR") run-rate and multiplying it by 12. Cloud MRR for each month is calculated by aggregating monthly recurring revenue from committed contractual amounts at a point in time. Cloud ARR and Cloud MRR should be viewed independently of revenue and do not represent our revenue under GAAP, as they are operational metrics that can be affected by contract start and end dates and renewal rates. Atlassian Corporation Condensed Consolidated Statements of Operations (U.S. $ and shares in thousands, except per share data) (unaudited) Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Revenues: Subscription $ 1,272,876 $ 1,071,355 $ 3,618,072 $ 2,855,518 Other 83,840 117,773 212,888 371,495 Total revenues 1,356,716 1,189,128 3,830,960 3,227,013 Cost of revenues (1) (2) 219,675 213,425 660,426 585,990 Gross profit 1,137,041 975,703 3,170,534 2,641,023 Operating expenses: Research and development (1) (2) 685,320 576,490 1,968,634 1,595,007 Marketing and sales (1) (2) 295,832 223,814 820,119 637,894 General and administrative (1) 168,345 157,595 483,694 458,249 Total operating expenses 1,149,497 957,899 3,272,447 2,691,150 Operating income (loss) (12,456 ) 17,804 (101,913 ) (50,127 ) Other expense, net (14,861 ) (10,990 ) (42,292 ) (23,964 ) Interest income 27,767 21,414 81,917 69,233 Interest expense (7,804 ) (8,453 ) (22,413 ) (26,430 ) Income (loss) before income taxes (7,354 ) 19,775 (84,701 ) (31,288 ) Provision for income taxes (63,453 ) (7,023 ) (148,083 ) (72,312 ) Net income (loss) $ (70,807 ) $ 12,752 $ (232,784 ) $ (103,600 ) Net income (loss) per share attributable to Class A and Class B common stockholders: Basic $ (0.27 ) $ 0.05 $ (0.89 ) $ (0.40 ) Diluted $ (0.27 ) $ 0.05 $ (0.89 ) $ (0.40 ) Weighted-average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders: Basic 262,671 259,717 261,423 258,738 Diluted 262,671 261,778 261,423 258,738 (1) Amounts include stock-based compensation as follows: Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Cost of revenues $ 20,980 $ 17,840 $ 62,225 $ 53,874 Research and development 240,847 190,322 694,570 528,587 Marketing and sales 43,071 33,383 122,323 103,832 General and administrative 41,944 40,974 132,600 121,652 (2) Amounts include amortization of acquired intangible assets, as follows: Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Cost of revenues $ 10,131 $ 12,454 $ 30,377 $ 25,282 Research and development 94 94 281 281 Marketing and sales 3,672 3,646 11,017 8,723 Atlassian Corporation Condensed Consolidated Balance Sheets (U.S. $ in thousands) (unaudited) March 31, 2025 June 30, 2024 Assets Current assets: Cash and cash equivalents $ 2,660,859 $ 2,176,930 Marketable securities 313,592 161,973 Accounts receivable, net 642,036 628,049 Prepaid expenses and other current assets 158,728 109,312 Total current assets 3,775,215 3,076,264 Non-current assets: Property and equipment, net 93,003 86,315 Operating lease right-of-use assets 164,322 172,468 Strategic investments 217,304 223,221 Intangible assets, net 258,682 299,057 Goodwill 1,292,942 1,288,756 Deferred tax assets 5,515 3,934 Other non-current assets 76,733 62,118 Total assets $ 5,883,716 $ 5,212,133 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 192,915 $ 177,545 Accrued expenses and other current liabilities 661,036 577,359 Deferred revenue, current portion 2,092,287 1,806,269 Operating lease liabilities, current portion 44,645 48,953 Total current liabilities 2,990,883 2,610,126 Non-current liabilities: Deferred revenue, net of current portion 275,916 308,467 Operating lease liabilities, net of current portion 198,723 214,474 Long-term debt 987,232 985,911 Deferred tax liabilities 20,433 20,387 Other non-current liabilities 41,607 39,917 Total liabilities 4,514,794 4,179,282 Stockholders' equity Common stock 3 3 Additional paid-in capital 5,223,786 4,212,064 Accumulated other comprehensive income (loss) (26,355 ) 25,300 Accumulated deficit (3,828,512 ) (3,204,516 ) Total stockholders' equity 1,368,922 1,032,851 Total liabilities and stockholders' equity $ 5,883,716 $ 5,212,133 Atlassian Corporation Condensed Consolidated Statements of Cash Flows (U.S. $ in thousands) (unaudited) Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Cash flows from operating activities: Net income (loss) $ (70,807 ) $ 12,752 $ (232,784 ) $ (103,600 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 23,178 23,464 69,154 55,560 Stock-based compensation 346,842 282,519 1,011,718 807,945 Deferred income taxes 1,746 3,207 (1,183 ) (98 ) Amortization of interest rate swap contracts (6,337 ) — (20,357 ) — Net loss on strategic investments 6,643 4,060 24,546 11,750 Net foreign currency loss (gain) (5,169 ) (2,276 ) (7,750 ) 142 Other (264 ) 412 (241 ) (680 ) Changes in operating assets and liabilities, net of business combinations: Accounts receivable, net 53,770 (119,819 ) (13,955 ) (166,494 ) Prepaid expenses and other assets (294 ) (35,986 ) (65,967 ) (59,528 ) Accounts payable (93 ) 28,227 14,626 28,850 Accrued expenses and other liabilities 131,508 67,149 53,804 54,958 Deferred revenue 171,958 301,681 253,467 393,135 Net cash provided by operating activities 652,681 565,390 1,085,078 1,021,940 Cash flows from investing activities: Business combinations, net of cash acquired (994 ) — (5,969 ) (844,727 ) Purchases of property and equipment (14,366 ) (10,520 ) (29,853 ) (19,522 ) Purchases of strategic investments (1,100 ) (4,250 ) (26,650 ) (8,250 ) Purchases of marketable securities (116,716 ) (74,544 ) (277,039 ) (213,690 ) Proceeds from maturities of marketable securities 53,584 63,000 125,212 79,150 Proceeds from sales of marketable securities and strategic investments 2,622 — 6,935 61,392 Net cash used in investing activities (76,970 ) (26,314 ) (207,364 ) (945,647 ) Cash flows from financing activities: Principal payments of term loan facility — (12,500 ) — (25,000 ) Repurchases of Class A Common Stock (134,305 ) (35,377 ) (387,156 ) (203,029 ) Other — — (3,143 ) — Net cash used in financing activities (134,305 ) (47,877 ) (390,299 ) (228,029 ) Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash 1,783 (2,769 ) (3,709 ) (1,986 ) Net increase (decrease) in cash, cash equivalents, and restricted cash 443,189 488,430 483,706 (153,722 ) Cash, cash equivalents, and restricted cash at beginning of period 2,218,639 1,461,763 2,178,122 2,103,915 Cash, cash equivalents, and restricted cash at end of period $ 2,661,828 $ 1,950,193 $ 2,661,828 $ 1,950,193 Atlassian Corporation Revenues by Deployment Options (U.S. $ in thousands) (unaudited) Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Cloud $ 880,429 $ 703,036 $ 2,519,697 $ 1,960,893 Data Center 388,516 364,134 1,086,391 881,835 Server — 29,720 — 177,645 Marketplace and other (1) 87,771 92,238 224,872 206,640 Total revenues $ 1,356,716 $ 1,189,128 $ 3,830,960 $ 3,227,013 (1) Included in Marketplace and other is premier support revenue. Premier support consists of subscription-based arrangements for a higher level of support across different deployment options. Premier support is recognized as Subscription revenue on the Condensed Consolidated Statements of Operations as the services are delivered over the term of the arrangement. Atlassian Corporation Reconciliation of GAAP to Non-GAAP Results (U.S. $ and shares in thousands, except percentage and per share data) (unaudited) Three Months Ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 Gross profit GAAP gross profit $ 1,137,041 $ 975,703 $ 3,170,534 $ 2,641,023 Plus: Stock-based compensation 20,980 17,840 62,225 53,874 Plus: Amortization of acquired intangible assets 10,131 12,454 30,377 25,282 Non-GAAP gross profit $ 1,168,152 $ 1,005,997 $ 3,263,136 $ 2,720,179 Gross margin GAAP gross margin 84 % 82 % 83 % 82 % Plus: Stock-based compensation 2 2 2 1 Plus: Amortization of acquired intangible assets — 1 — 1 Non-GAAP gross margin 86 % 85 % 85 % 84 % Operating income GAAP operating income (loss) $ (12,456 ) $ 17,804 $ (101,913 ) $ (50,127 ) Plus: Stock-based compensation 346,842 282,519 1,011,718 807,945 Plus: Amortization of acquired intangible assets 13,897 16,194 41,675 34,286 Non-GAAP operating income $ 348,283 $ 316,517 $ 951,480 $ 792,104 Operating margin GAAP operating margin (1 %) 1 % (3 %) (2 %) Plus: Stock-based compensation 26 25 27 26 Plus: Amortization of acquired intangible assets 1 1 1 1 Non-GAAP operating margin 26 % 27 % 25 % 25 % Net income GAAP net income (loss) $ (70,807 ) $ 12,752 $ (232,784 ) $ (103,600 ) Plus: Stock-based compensation 346,842 282,519 1,011,718 807,945 Plus: Amortization of acquired intangible assets 13,897 16,194 41,675 34,286 Less: Gain on a non-cash sale of a controlling interest of a subsidiary — — — (1,378 ) Less: Income tax adjustments (1) (28,427 ) (78,969 ) (103,777 ) (146,271 ) Non-GAAP net income $ 261,505 $ 232,496 $ 716,832 $ 590,982 Net income per share GAAP net income (loss) per share - diluted $ (0.27 ) $ 0.05 $ (0.89 ) $ (0.40 ) Plus: Stock-based compensation 1.29 1.08 3.82 3.11 Plus: Amortization of acquired intangible assets 0.05 0.06 0.16 0.13 Less: Gain on a non-cash sale of a controlling interest of a subsidiary — — — (0.01 ) Less: Income tax adjustments (1) (0.10 ) (0.30 ) (0.39 ) (0.56 ) Non-GAAP net income per share - diluted $ 0.97 $ 0.89 $ 2.70 $ 2.27 Weighted-average diluted shares outstanding Weighted-average shares used in computing diluted GAAP net income (loss) per share 262,671 261,778 261,423 258,738 Plus: Dilution from dilutive securities (2) 5,959 — 3,601 1,273 Weighted-average shares used in computing diluted non-GAAP net income per share 268,630 261,778 265,024 260,011 Free cash flow GAAP net cash provided by operating activities $ 652,681 $ 565,390 $ 1,085,078 $ 1,021,940 Less: Capital expenditures (14,366 ) (10,520 ) (29,853 ) (19,522 ) Free cash flow $ 638,315 $ 554,870 $ 1,055,225 $ 1,002,418 (1) We utilize a fixed long-term projected non-GAAP tax rate in our computation of the non-GAAP income tax adjustments in order to provide better consistency across interim reporting periods. In projecting this long-term non-GAAP tax rate, we utilized a three-year financial projection that excludes the direct and indirect income tax effects of the other non-GAAP adjustments reflected above. Additionally, we considered our current operating structure and other factors such as our existing tax positions in various jurisdictions and key legislation in major jurisdictions where we operate. For fiscal years 2025 and 2024, we determined the projected non-GAAP tax rate to be 26% and 27%, respectively. This fixed long-term projected non-GAAP tax rate eliminates the effects of non-recurring and period specific items which can vary in size and frequency. Examples of the non-recurring and period specific items include but are not limited to changes in the valuation allowance related to deferred tax assets, effects resulting from acquisitions, and unusual or infrequently occurring items. We will periodically re-evaluate this long-term rate, as necessary, for significant events. The rate could be subject to change for a variety of reasons, for example, significant changes in the geographic earnings mix or fundamental tax law changes in major jurisdictions where we operate. (2) The effects of these dilutive securities were not included in the GAAP calculation of diluted net loss per share for the three and nine months ended March 31, 2025 and nine months ended March 31, 2024, because the effect would have been anti-dilutive. Atlassian Corporation Reconciliation of GAAP to Non-GAAP Financial Targets Three Months Ending June 30, 2025 GAAP gross margin 82.5% Plus: Stock-based compensation 1.5 Plus: Amortization of acquired intangible assets 0.5 Non-GAAP gross margin 84.5% GAAP operating margin (5.0%) Plus: Stock-based compensation 26.0 Plus: Amortization of acquired intangible assets 1.0 Non-GAAP operating margin 22.0% View source version on Contacts Investor Relations Contact Martin LamIR@ Media Contact Marie-Claire Maplepress@
Reuters
30-01-2025
- Business
- Reuters
Atlassian issues upbeat forecasts on strong demand, shares soar
Jan 30 (Reuters) - Atlassian (TEAM.O), opens new tab on Thursday projected third-quarter revenue above estimates and raised its annual revenue forecast, signaling strong demand for the enterprise software maker's artificial intelligence-enabled cloud services, sending its shares up 16% in extended trading. Atlassian is benefiting from the accelerated adoption of AI-enabled project management and productivity software as companies seek to improve efficiency and reduce costs. "Strong enterprise sales execution drove better-than-expected revenue across both our cloud and data center offerings, as we delivered 30% year-over-year growth in subscription revenue in the second quarter," said Financial Chief Joe Binz. The company's collaboration tools, such as Jira for planning and project management and Confluence for content creation, serve over 300,000 customers. Atlassian's latest offering, Rovo, which was released in October 2024, is an AI assistant that allows users to do enhanced search, learning and automation across enterprise data. For the third quarter, Atlassian sees revenue in the range of $1.35 billion to $1.34 billion, while analysts expect $1.31 billion, according to data compiled by LSEG. It now expects fiscal year 2025 revenue growth to be between 18.5% to 19%, up from its prior projection of 16.5% to 17%. The enterprise software developer's revenue stood at $1.29 billion in the three months to Dec. 31, compared with analysts' average estimate of $1.24 billion.
