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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Atlassian Corporation PLC | NASDAQ:TEAM | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 172.77 | 175.00 | 178.80 | 16 | 09:09:38 |
Quarterly revenue of $689 million, up 37% year-over-year
Quarterly subscription revenue of $509 million, up 64% year-over-year
Quarterly IFRS operating margin of (10)% and non-IFRS operating margin of 26%
Quarterly cash flow from operations of $222 million and free cash flow of $197 million
Atlassian Corporation Plc (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its second quarter of fiscal year 2022 ended December 31, 2021 and released a shareholder letter available on Atlassian’s Work Life blog at http://atlassian.com/blog/announcements/shareholder-letter-q2fy22. The shareholder letter was also posted to the Investor Relations section of Atlassian’s website at https://investors.atlassian.com.
“Q2 was another strong quarter for Atlassian with over 10,000 net new customers this quarter, 98% of which were in the Cloud,” said Scott Farquhar, Atlassian’s co-founder and co-CEO. “We also saw subscription revenue grow 64% year-over-year, which reflects our continued investment in our Cloud platform and the strong focus and effort we have put in to helping our customers seamlessly move to Cloud.”
“The Atlassian Marketplace continues to go from strength to strength surpassing $2 billion in sales and shows no signs of slowing down,” said Mike Cannon-Brookes, Atlassian’s co-founder and co-CEO. “We recognise that the opportunities for Atlassian, our customers and our partners have never been greater as companies accelerate their future of work transformations, and we’re incredibly proud of this partner ecosystem which is fuelling innovation and helping to deliver on our mission to unleash the potential of every team.”
Second Quarter Fiscal Year 2022 Financial Highlights:
On an IFRS basis, Atlassian reported:
During the second quarter of fiscal year 2022, Atlassian drew $350.0 million from its term loan facility, used $1.2 billion in cash to settle the remaining portion of its outstanding exchangeable senior notes and received $104.5 million in cash from the unwinding of the related capped calls. The net impact resulted in cash outflows of $779.9 million, which is reflected in net cash used in financing activities on our Consolidated Statements of Cash Flows.
On a non-IFRS basis, Atlassian reported:
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:
CTO transition:
Atlassian announced today that Sri Viswanath will transition his CTO responsibilities at the end of June 2022. Sri joined as CTO in January 2016, shortly after Atlassian’s initial public offering. When Sri joined Atlassian, the company had approximately 800 employees in R&D and 54,000 customers. Sri has been instrumental in transforming the architecture of Atlassian’s platform and products to establish the foundation of its cloud-first business. As of the end of the second quarter of fiscal year 2022, the company had nearly 4,000 Atlassians under Sri’s leadership, supported more than 226,000 customers, and quarterly Cloud revenue had grown approximately 13x over his time at the company.
“To say Sri has been instrumental in this tremendous growth and scale would be an understatement. Particularly in our shift to cloud and building a world-class cloud platform,” said Mike Cannon-Brookes, Atlassian’s co-founder and co-CEO. “He is a respected and inspiring leader as well as a natural mentor, nurturing the careers of countless Atlassians during his tenure. While Scott and I are sad to see him go, we are thankful for the huge impact he has had on our customers, our growth, and our culture. We look forward to cheering him on in his next chapter — whatever that may be.”
Financial Targets:
Atlassian is providing its financial targets for the third quarter of fiscal year 2022 as follows:
Third Quarter Fiscal Year 2022:
For additional commentary regarding financial targets, please see Atlassian’s second quarter fiscal year 2022 shareholder letter dated January 27, 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 http://atlassian.com/blog/announcements/shareholder-letter-q2fy22, and the Investor Relations section of Atlassian’s website at: https://investors.atlassian.com. Atlassian will host a webcast to answer questions today:
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 225,000 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, customers, anticipated growth, sustainability, Atlassian Marketplace, partnerships, acquisitions, strategic investments, 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 recent 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:
Our non-IFRS financial measures reflect adjustments based on the items below:
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:
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 recent 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 December 31,
Six Months Ended December 31,
2021
2020
2021
2020
Revenues:
Subscription
$
508,987
$
310,675
$
944,283
$
588,639
Maintenance
127,059
131,276
257,649
258,970
Other
52,480
59,408
100,618
113,256
Total revenues
688,526
501,359
1,302,550
960,865
Cost of revenues (1) (2)
115,161
79,482
213,179
153,166
Gross profit
573,365
421,877
1,089,371
807,699
Operating expenses:
Research and development (1) (2)
374,976
241,064
654,822
473,299
Marketing and sales (1) (2)
134,659
77,151
237,587
147,437
General and administrative (1)
130,448
75,949
224,034
147,318
Total operating expenses
640,083
394,164
1,116,443
768,054
Operating income (loss)
(66,718
)
27,713
(27,072
)
39,645
Other non-operating expense, net
(319
)
(545,749
)
(425,252
)
(572,020
)
Finance income
77
2,112
357
4,702
Finance costs
(6,078
)
(91,448
)
(13,189
)
(104,023
)
Loss before income tax expense
(73,038
)
(607,372
)
(465,156
)
(631,696
)
Income tax expense
(4,434
)
(14,156
)
(12,418
)
(11,386
)
Net loss
$
(77,472
)
$
(621,528
)
$
(477,574
)
$
(643,082
)
Net loss per share attributable to ordinary shareholders:
Basic
$
(0.31
)
$
(2.49
)
$
(1.89
)
$
(2.59
)
Diluted
$
(0.31
)
$
(2.49
)
$
(1.89
)
$
(2.59
)
Weighted-average shares outstanding used to compute net loss per share attributable to ordinary shareholders:
Basic
252,960
249,188
252,533
248,601
Diluted
252,960
249,188
252,533
248,601
(1) Amounts include share-based payment expense, as follows:
Three Months Ended December 31,
Six Months Ended December 31,
2021
2020
2021
2020
Cost of revenues
$
13,631
$
6,801
$
21,476
$
12,057
Research and development
147,233
73,085
219,835
134,536
Marketing and sales
35,812
11,666
54,188
18,450
General and administrative
40,334
16,140
60,486
28,380
(2) Amounts include amortization of acquired intangible assets, as follows:
Three Months Ended December 31,
Six Months Ended December 31,
2021
2020
2021
2020
Cost of revenues
$
5,599
$
5,413
$
11,288
$
10,832
Research and development
93
42
187
83
Marketing and sales
2,266
2,317
4,537
4,616
Atlassian Corporation Plc Consolidated Statements of Financial Position (U.S. $ in thousands)
December 31, 2021
June 30, 2021
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
899,394
$
919,227
Short-term investments
86,629
313,001
Trade receivables
241,682
173,473
Tax receivables
11,337
2,332
Derivative assets
1,785
127,486
Prepaid expenses and other current assets
61,982
48,322
1,302,809
1,583,841
Assets held for sale
51,826
43,665
Total current assets
1,354,635
1,627,506
Non-current assets:
Property and equipment, net
71,155
66,221
Deferred tax assets
28,622
36,174
Goodwill
724,899
725,758
Intangible assets, net
108,578
124,590
Right-of-use assets, net
276,021
205,300
Strategic investments
163,102
122,159
Other non-current assets
33,601
37,636
Total non-current assets
1,405,978
1,317,838
Total assets
$
2,760,613
$
2,945,344
Liabilities
Current liabilities:
Trade and other payables
$
255,741
$
266,497
Tax liabilities
1,817
42,051
Provisions
32,253
25,148
Deferred revenue
913,889
812,943
Lease obligations
41,893
42,446
Derivative liabilities
14,208
772,127
Exchangeable senior notes, net
—
348,799
Total current liabilities
1,259,801
2,310,011
Non-current liabilities:
Deferred tax liabilities
16,538
26,625
Provisions
13,580
12,435
Deferred revenue
61,589
84,652
Term loan facility, net
999,332
—
Lease obligations
284,824
214,103
Other non-current liabilities
1,324
2,604
Total non-current liabilities
1,377,187
340,419
Total liabilities
2,636,988
2,650,430
Equity
Share capital
25,335
25,164
Share premium
461,020
461,016
Other capital reserves
1,872,524
1,516,609
Other components of equity
55,027
104,832
Accumulated deficit
(2,290,281
)
(1,812,707
)
Total equity
123,625
294,914
Total liabilities and equity
$
2,760,613
$
2,945,344
Atlassian Corporation Plc Consolidated Statements of Cash Flows (U.S. $ in thousands) (unaudited)
Three Months Ended December 31,
Six Months Ended December 31,
2021
2020
2021
2020
Operating activities
Loss before income tax expense
$
(73,038
)
$
(607,372
)
$
(465,156
)
$
(631,696
)
Adjustments to reconcile loss before income tax expense to net cash provided by operating activities:
Depreciation and amortization
12,153
13,807
25,317
27,218
Depreciation of right-of-use assets
11,053
9,378
21,132
18,592
Share-based payment expense
237,010
107,692
355,985
193,423
Net loss on exchange derivative and capped call transactions
—
539,102
424,482
566,598
Amortization of debt discount and issuance cost
118
87,854
3,840
97,027
Interest income
(77
)
(2,112
)
(357
)
(4,702
)
Interest expense
5,960
3,594
9,349
6,996
Net unrealized foreign currency loss (gain)
(5,258
)
4,874
(11,656
)
10,441
Net unrealized loss on investments
—
750
500
750
Loss (gain) on sale of investments, disposal of assets and other
298
51
(317
)
299
Changes in assets and liabilities:
Trade receivables
(54,992
)
(37,145
)
(68,203
)
(45,523
)
Prepaid expenses and other assets
4,585
4,057
(15,713
)
(7,361
)
Trade and other payables, provisions and other non-current liabilities
61,863
32,823
(4,162
)
(14,561
)
Deferred revenue
64,429
61,297
77,884
83,933
Interest received
191
3,298
1,086
7,454
Income tax paid, net
(42,611
)
(21,486
)
(53,941
)
(28,961
)
Net cash provided by operating activities
221,684
200,462
300,070
279,927
Investing activities
Business combinations, net of cash acquired
—
(9,700
)
—
(42,164
)
Purchases of property and equipment
(12,581
)
(9,548
)
(19,462
)
(17,365
)
Purchases of investments
(42,000
)
(36,013
)
(116,003
)
(69,265
)
Proceeds from maturities of investments
7,600
120,627
61,487
195,304
Proceeds from sales of investments
—
40,607
186,262
47,694
Change in restricted cash
11,119
(2,162
)
11,119
(2,162
)
Payment of deferred consideration
(2,701
)
—
(3,839
)
(185
)
Net cash provided by (used in) investing activities
(38,563
)
103,811
119,564
111,857
Financing activities
Proceeds from exercise of share options
4
225
5
1,147
Payments of lease obligations
(11,626
)
(11,139
)
(23,812
)
(22,235
)
Payment of issuance costs for debt
—
(4,445
)
—
(4,445
)
Interest paid
(3,603
)
(3,294
)
(4,802
)
(3,294
)
Repayment of exchangeable senior notes
(1,234,376
)
(671,489
)
(1,548,686
)
(671,497
)
Proceeds from settlement of capped call transactions
104,519
72,776
135,497
72,776
Proceeds from term loan facility
350,000
—
1,000,000
—
Net cash used in financing activities
(795,082
)
(617,366
)
(441,798
)
(627,548
)
Effect of exchange rate changes on cash and cash equivalents
(245
)
4,546
(2,353
)
7,510
Net decrease in cash and cash equivalents
(612,206
)
(308,547
)
(24,517
)
(228,254
)
Cash and cash equivalents at beginning of period
1,507,418
1,560,262
919,227
1,479,969
Net decrease in cash and cash equivalents included in assets held for sale
4,182
—
4,684
—
Cash and cash equivalents at end of period
$
899,394
$
1,251,715
$
899,394
$
1,251,715
Atlassian Corporation Plc Revenues by Deployment Options (U.S. $ in thousands) (unaudited)
Three Months Ended December 31,
Six Months Ended December 31,
2021
2020
2021
2020
Cloud
$
364,099
$
230,412
$
682,002
$
437,733
Data Center
139,108
76,060
250,303
142,410
Server (1)
135,519
153,399
275,066
303,230
Marketplace and services (2)
49,800
41,488
95,179
77,492
Total revenues
$
688,526
$
501,359
$
1,302,550
$
960,865
(1) Included in Server is perpetual license revenue. Perpetual license revenue is captured as other revenue on the Consolidated Statements of Operations.
(2) Included in Marketplace and services is premier support revenue. Premier support is a subscription-based arrangement for a higher level of support across different deployment options. Premier support is recognized as subscription revenue on the Consolidated Statements of Operations as the services are delivered over the term of the arrangement.
Atlassian Corporation Plc Reconciliation of IFRS to Non-IFRS Results (U.S. $ and shares in thousands, except per share data) (unaudited)
Three Months Ended December 31,
Six Months Ended December 31,
2021
2020
2021
2020
Gross profit
IFRS gross profit
$
573,365
$
421,877
$
1,089,371
$
807,699
Plus: Share-based payment expense
13,631
6,801
21,476
12,057
Plus: Amortization of acquired intangible assets
5,599
5,413
11,288
10,832
Non-IFRS gross profit
$
592,595
$
434,091
$
1,122,135
$
830,588
Operating income
IFRS operating income (loss)
$
(66,718
)
$
27,713
$
(27,072
)
$
39,645
Plus: Share-based payment expense
237,010
107,692
355,985
193,423
Plus: Amortization of acquired intangible assets
7,958
7,772
16,012
15,531
Non-IFRS operating income
$
178,250
$
143,177
$
344,925
$
248,599
Net income
IFRS net loss
$
(77,472
)
$
(621,528
)
$
(477,574
)
$
(643,082
)
Plus: Share-based payment expense
237,010
107,692
355,985
193,423
Plus: Amortization of acquired intangible assets
7,958
7,772
16,012
15,531
Plus: Non-coupon impact related to exchangeable senior notes and capped calls
—
626,956
427,853
663,625
Less: Income tax effects and adjustments
(40,172
)
(25,581
)
(76,639
)
(57,415
)
Non-IFRS net income
$
127,324
$
95,311
$
245,637
$
172,082
Net income per share
IFRS net loss per share - diluted
$
(0.31
)
$
(2.49
)
$
(1.89
)
$
(2.59
)
Plus: Share-based payment expense
0.93
0.44
1.40
0.78
Plus: Amortization of acquired intangible assets
0.03
0.04
0.06
0.07
Plus: Non-coupon impact related to exchangeable senior notes and capped calls
—
2.48
1.69
2.63
Less: Income tax effects and adjustments
(0.15
)
(0.10
)
(0.30
)
(0.21
)
Non-IFRS net income per share - diluted
$
0.50
$
0.37
$
0.96
$
0.68
Weighted-average diluted shares outstanding
Weighted-average shares used in computing diluted IFRS net loss per share
252,960
249,188
252,533
248,601
Plus: Dilution from share options and RSUs (1)
4,018
5,357
4,028
5,457
Weighted-average shares used in computing diluted non-IFRS net income per share
256,978
254,545
256,561
254,058
Free cash flow
IFRS net cash provided by operating activities
$
221,684
$
200,462
$
300,070
$
279,927
Less: Capital expenditures
(12,581
)
(9,548
)
(19,462
)
(17,365
)
Less: Payments of lease obligations
(11,626
)
(11,139
)
(23,812
)
(22,235
)
Free cash flow
$
197,477
$
179,775
$
256,796
$
240,327
(1) The effects of these dilutive securities were not included in the IFRS calculation of diluted net loss per share for the three and six months ended December 31, 2021 and 2020 because the effect would have been anti-dilutive.
Atlassian Corporation Plc Reconciliation of IFRS to Non-IFRS Financial Targets (U.S. $)
Three Months Ending
March 31, 2022
Revenue
$690 million to $705 million
IFRS gross margin
82% to 83%
Plus: Share-based payment expense
2
Plus: Amortization of acquired intangible assets
0
Non-IFRS gross margin
84% to 85%
IFRS operating margin
(10%) to (9%)
Plus: Share-based payment expense
26
Plus: Amortization of acquired intangible assets
1
Non-IFRS operating margin
17% to 18%
IFRS net loss per share - diluted
($0.33) to ($0.31)
Plus: Share-based payment expense
0.70
Plus: Amortization of acquired intangible assets
0.03
Less: Income tax effects and adjustments
(0.11)
Non-IFRS net income per share - diluted
$0.29 to $0.31
Weighted-average shares used in computing diluted IFRS net loss per share
253 million to 254 million
Dilution from share options and RSUs (1)
4 million
Weighted-average shares used in computing diluted non-IFRS net income per share
257 million to 258 million
(1) The effects of these dilutive securities are not included in the IFRS calculation of diluted net loss per share for the three months ending March 31, 2022 because the effect would be anti-dilutive.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220127005959/en/
Investor Relations Contact Martin Lam IR@atlassian.com Media Contact M-C Maple press@atlassian.com
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