Atlassian Corp 8-K/A, filed Feb 3, 2023
Atlassian Corp (TEAM)
8-K/A
2023-02-03
For: 2023-02-02
View Original
Added on
April 08, 2026
About this 8-K/A
Atlassian Corp filed this 8-K/A on February 3, 2023, reporting on events of February 2, 2023.
Items reported
- Item 2.02: Financial results
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-K/A
(Amendment No. 1)
_________________
_________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 2, 2023
(Exact Name of Registrant as Specified in its Charter)
_________________
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||||||||
(Address of principal executive offices and Zip Code)
(415 ) 701-1110
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
_________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||||||
Securities registered pursuant to Section 12(b) of the Act: | |||||||||||||||||||||||
Title of each class | Trading Symbol | Name of each exchange on which registered | |||||||||||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Explanatory Note
Atlassian Corporation (the “Company”) is filing this Amendment No. 1 (the “Amendment”) to its Current Report on Form 8-K (the “Original Form 8-K”) filed with the U.S. Securities and Exchange Commission on February 2, 2023 to file an amended version of the press release attached as Exhibit 99.1 to the Original Form 8-K. The Company has corrected errors included under “Changes in operating assets and liabilities” for the three months ended December 31, 2021 in the Condensed Consolidated Statements of Cash Flows table included in the press release. Exhibit 99.2 has been incorporated into this Amendment by reference from the Original Form 8-K. No other modifications have been made to the Original Form 8-K, which is restated in its entirety, as amended, below.
Item 2.02. Results of Operations and Financial Condition.
On February 2, 2023, Atlassian Corporation (the “Company”) issued a press release announcing its results for the quarter ended December 31, 2022 (the “Press Release”). A copy of the Press Release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein. The Company also published a letter to its shareholders announcing its financial results for the quarter ended December 31, 2022 (the “Shareholder Letter”). The full text of the Shareholder Letter is attached as Exhibit 99.2 to this current report on Form 8-K and is incorporated by reference herein.
The information in this Item 2.02, including Exhibit 99.1 and Exhibit 99.2, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 8.01. Other Events.
On February 2, 2023, the Company also announced, as part of the Press Release, that its Board of Directors authorized a program to repurchase up to $1 billion of the Company’s Class A Common Stock (the “Share Repurchase Program”). The Company may repurchase shares of Class A Common Stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, in accordance with applicable securities laws and other restrictions. The Share Repurchase Program does not have a fixed expiration date, may be suspended or discontinued at any time, and does not obligate the Company to acquire any amount of Class A Common Stock. The timing, manner, price, and amount of any repurchases will be determined by the Company at its discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description | |||||||
| 99.1* | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). | |||||||
* Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ATLASSIAN CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||
Date: | February 3, 2023 | By: | /s/ Joseph Binz | ||||||||||||||||||||||||||||||||||||||||||||
Joseph Binz | |||||||||||||||||||||||||||||||||||||||||||||||
Chief Financial Officer | |||||||||||||||||||||||||||||||||||||||||||||||
Atlassian Announces Second Quarter Fiscal Year 2023 Results
Quarterly revenue of $873 million, up 27% year-over-year
Quarterly subscription revenue of $711 million, up 40% year-over-year
Quarterly GAAP operating margin of (11)% and non-GAAP operating margin of 20%
Quarterly cash flow from operations of $151 million and free cash flow of $146 million
TEAM, Anywhere/AUSTIN (February 2, 2023) — Atlassian Corporation (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its second quarter of fiscal year 2023 ended December 31, 2022 and released a shareholder letter available on Atlassian’s Work Life blog at http://atlassian.com/blog/announcements/shareholder-letter-q2fy23. The shareholder letter was also posted to the Investor Relations section of Atlassian’s website at https://investors.atlassian.com.
“We closed out 2022 with quarterly revenue of $873 million, up 27% year-over-year, driven by subscription revenue growth of 40% year-over-year,” said Scott Farquhar, Atlassian’s co-founder and co-CEO. “We are proud of everything we have accomplished in yet another unpredictable year. 2023 will be all about helping our customers navigate these challenging times, absorbing the macro-driven impacts on our business, and setting Atlassian up for long-term success.”
“Our track record of making smart investment decisions in the service of long-term payoffs continues to yield results as we recently surpassed 45,000 Jira Service Management customers, making it one of our fastest-growing products. On top of that, Atlassian has also been recognized as a Leader by Gartner in the ITSM space” added co-founder and co-CEO Mike Cannon-Brookes. “We’ll keep playing offense across our three large markets while being pragmatic.”
Second Quarter Fiscal Year 2023 Financial Highlights:
On a GAAP basis, Atlassian reported:
•Revenue: Total revenue was $872.7 million for the second quarter of fiscal year 2023, up 27% from $688.5 million for the second quarter of fiscal year 2022.
•Operating Income (Loss) and Operating Margin: Operating loss was $99.2 million for the second quarter of fiscal year 2023, compared with operating income of $23.0 million for the second quarter of fiscal year 2022. Operating margin was (11)% for the second quarter of fiscal year 2023, compared with 3% for the second quarter of fiscal year 2022.
•Net Loss and Net Loss Per Diluted Share: Net loss was $205.0 million for the second quarter of fiscal year 2023, compared with a net loss of $22.3 million for the second quarter of fiscal year 2022. Net loss per diluted share was $0.80 for the second quarter of fiscal year 2023, compared with a net loss per diluted share of $0.09 for the second quarter of fiscal year 2022. Net loss for the second quarter of fiscal year 2023 includes a non-recurring income tax charge of $83.1 million which increased net loss per diluted share by $0.32.
•Balance Sheet: Cash and cash equivalents plus short-term investments at the end of the second quarter of fiscal year 2023 totaled $1.7 billion.
On a non-GAAP basis, Atlassian reported:
•Operating Income and Operating Margin: Operating income was $174.8 million for the second quarter of fiscal year 2023, compared with operating income of $176.8 million for the second quarter of fiscal year 2022. Operating margin was 20% for the second quarter of fiscal year 2023, compared with 26% for the second quarter of fiscal year 2022.
•Net Income and Net Income Per Diluted Share: Net income was $114.7 million for the second quarter of fiscal year 2023, compared with net income of $110.4 million for the second quarter of fiscal year 2022. Net income per diluted share was $0.45 for the second quarter of fiscal year 2023, compared with net income per diluted share of $0.43 for the second quarter of fiscal year 2022.
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•Free Cash Flow: Cash flow from operations was $150.5 million and free cash flow was $146.5 million for the second quarter of fiscal year 2023. Free cash flow margin for the second quarter of fiscal year 2023 was 17%. Cash flow from operations and free cash flow for the second quarter of fiscal year 2023 include a discrete tax payment of $57.0 million. Excluding this payment, cash flow from operations would have been $207.4 million, free cash flow would have been $203.4 million, and free cash flow margin would have been 23%.
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:
•A Leader in the 2022 Gartner® Magic Quadrant™ for IT Service Management Platforms: Atlassian was named a Leader in the 2022 Gartner Magic Quadrant for IT Service Management Platforms1. Atlassian aims to unlock high-velocity teams across the enterprise with Jira Service Management. Today, Jira Service Management powers service delivery at more than 45,000 customers.
•Recognized in The Forrester Wave for Collaborative Work Management Tools: Atlassian was recognized as a Strong Performer in The Forrester Wave™: Collaborative Work Management Tools, Q4, 2022. Atlassian’s work management solutions for business teams - Trello, Confluence, Jira Work Management, Atlas and Jira Align - enable every team to choose the best tool for their needs. Today, over 150,000 organizations around the world use Atlassian work management products.
•Recognized in The Forrester Wave for Value Stream Management Solutions: Atlassian was recognized as a Strong Performer in The Forrester Wave™: Value Stream Management Solutions, Q4 2022. Atlassian’s product vision spans the entire software delivery organizational chart by leveraging the Jira suite as the centerpiece of its Value Stream Management strategy.
•Automation for Confluence: Atlassian launched Automation for Confluence, a feature that manages system maintenance so teams can focus on continuous collaboration. Automation gives admins the ability to manage content, organize spaces, streamline teamwork, and notify teams of important updates without the manual overhead.
•Atlassian Presents: Unleash: Atlassian will hold an agile & DevOps tailored event on February 9, 2023. Discover how Atlassian tools, such as the Jira suite, and the right practices can unleash your team’s ability to find success and take opportunities from idea to impact. Unleash will give attendees a unique opportunity to innovate with industry experts, master complexity through collaboration, and bring discovery into the software lifecycle. Unleash will be held in person at the bcc Berlin in Berlin, Germany, as well as virtually. Learn more at https://events.atlassian.com/unleash.
•Customer Growth: Atlassian ended its second quarter of fiscal year 2023 with a total customer count, on an active subscription or maintenance agreement basis, of 253,177 customers, adding 4,004 net new customers during the quarter.
Share Repurchase Program Authorization
In January 2023, the Board of Directors authorized a program to repurchase up to $1 billion of Atlassian's Class A Common Stock. Atlassian may repurchase shares of Class A Common Stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The share repurchase program does not have a fixed expiration date, may be suspended or discontinued at any time, and does not obligate Atlassian to acquire any amount of Class A Common Stock. The timing, manner, price, and amount of any repurchases will be determined by Atlassian at its discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations.
Financial Targets:
Atlassian is providing its financial targets as follows:
1 Gartner, Magic Quadrant for IT Service Management Platforms, Rich Doheny, Chris Matchett, Siddharth Shetty, 31 October 2022.
Gartner Disclaimer- Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner research organization and should not be construed as statements of fact. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Gartner Peer Insights Customers’ Choice constitute the subjective opinions of individual end-user reviews, ratings, and data applied against a documented methodology; they neither represent the views of, nor constitute an endorsement by, Gartner or its affiliates. GARTNER and MAGIC QUADRANT are a registered trademark and service mark, and PEER INSIGHTS is a trademark and service mark, of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved.
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Third Quarter Fiscal Year 2023:
•Total revenue is expected to be in the range of $890 million to $910 million.
•Gross margin is expected to be approximately 81% on a GAAP basis and approximately 84% on a non-GAAP basis.
•Operating margin is expected to be approximately (14%) on a GAAP basis and approximately 15% on a non-GAAP basis.
Fiscal Year 2023:
•Total revenue growth year-over-year is expected to be approximately 25%.
•Cloud revenue growth year-over-year is expected to be in the range of 35% to 40%.
•Operating margin is expected to be approximately (11%) on a GAAP basis and approximately 17% on a non-GAAP basis.
For additional commentary regarding financial targets, please see Atlassian’s second quarter fiscal year 2023 shareholder letter dated February 2, 2023.
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 https://atlassian.com/blog/announcements/shareholder-letter-q2fy23, 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, February 2, 2023 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 agile & DevOps, IT service management and work management software helps teams organize, discuss, and complete shared work. The majority of the Fortune 500 and over 250,000 companies of all sizes worldwide - including NASA, Kiva, Deutsche Bank, and Salesforce - rely on our solutions to help their teams 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/.
Investor Relations Contact
Martin Lam
IR@atlassian.com
Media Contact
Marie-Claire Maple
press@atlassian.com
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,” 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 risks and uncertainties related to statements about our products, customers, macroeconomic environment, anticipated growth, outlook, technology, share repurchase program and other key
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strategic areas, and our financial targets such as 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 20-F and 10-Q. These documents are available on the SEC Filings section of the Investor Relations section of our website at: https://investors.atlassian.com/.
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 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 operating income, 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. Excludes expenses related to stock-based compensation and amortization of acquired intangible assets.
•Non-GAAP operating income. 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, non-coupon impact related to exchangeable senior notes and capped calls, gain on a non-cash sale of a controlling interest of a subsidiary and the related income tax effects on these items, and a non-recurring income tax adjustment.
•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.
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Atlassian Corporation
Condensed 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, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Subscription | $ | 711,199 | $ | 508,987 | $ | 1,362,183 | $ | 944,283 | |||||||||||||||
| Maintenance | 106,023 | 127,059 | 219,588 | 257,649 | |||||||||||||||||||
| Other | 55,482 | 52,480 | 98,325 | 100,618 | |||||||||||||||||||
| Total revenues | 872,704 | 688,526 | 1,680,096 | 1,302,550 | |||||||||||||||||||
| Cost of revenues (1) (2) | 155,945 | 110,191 | 295,337 | 206,447 | |||||||||||||||||||
| Gross profit | 716,759 | 578,335 | 1,384,759 | 1,096,103 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development (1) (2) | 473,676 | 318,569 | 872,682 | 590,709 | |||||||||||||||||||
| Marketing and sales (1) (2) | 186,191 | 121,046 | 346,319 | 220,375 | |||||||||||||||||||
| General and administrative (1) | 156,131 | 115,678 | 299,024 | 205,500 | |||||||||||||||||||
| Total operating expenses | 815,998 | 555,293 | 1,518,025 | 1,016,584 | |||||||||||||||||||
| Operating income (loss) | (99,239) | 23,042 | (133,266) | 79,519 | |||||||||||||||||||
| Other income (expense), net | (6,749) | (22,343) | 22,540 | (478,147) | |||||||||||||||||||
| Interest income | 8,963 | 74 | 14,106 | 351 | |||||||||||||||||||
| Interest expense | (7,508) | (21,022) | (13,629) | (32,540) | |||||||||||||||||||
| Loss before income taxes | (104,533) | (20,249) | (110,249) | (430,817) | |||||||||||||||||||
| Provision for income taxes | (100,498) | (2,079) | (108,523) | (2,715) | |||||||||||||||||||
| Net loss | $ | (205,031) | $ | (22,328) | $ | (218,772) | $ | (433,532) | |||||||||||||||
| Net loss per share: | |||||||||||||||||||||||
| Basic | $ | (0.80) | $ | (0.09) | $ | (0.86) | $ | (1.72) | |||||||||||||||
| Diluted | $ | (0.80) | $ | (0.09) | $ | (0.86) | $ | (1.72) | |||||||||||||||
| Weighted-average shares used in computing net loss per share: | |||||||||||||||||||||||
| Basic | 255,874 | 252,960 | 255,520 | 252,533 | |||||||||||||||||||
| Diluted | 255,874 | 252,960 | 255,520 | 252,533 | |||||||||||||||||||
(1)Amounts include stock-based compensation as follows:
| Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Cost of revenues | $ | 18,553 | $ | 8,453 | $ | 29,166 | $ | 14,370 | |||||||||||||||
| Research and development | 169,342 | 90,120 | 279,471 | 154,402 | |||||||||||||||||||
| Marketing and sales | 38,156 | 21,873 | 61,351 | 36,367 | |||||||||||||||||||
| General and administrative | 39,734 | 25,374 | 69,428 | 41,588 | |||||||||||||||||||
(2)Amounts include amortization of acquired intangible assets, as follows:
| Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Cost of revenues | $ | 5,697 | $ | 5,599 | $ | 11,394 | $ | 11,288 | |||||||||||||||
| Research and development | 93 | 93 | 187 | 187 | |||||||||||||||||||
| Marketing and sales | 2,506 | 2,266 | 5,011 | 4,537 | |||||||||||||||||||
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Atlassian Corporation
Condensed Consolidated Balance Sheets
(U.S. $ in thousands)
(unaudited)
| December 31, 2022 | June 30, 2022 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 1,636,615 | $ | 1,385,265 | |||||||
| Marketable securities | 36,069 | 73,294 | |||||||||
| Accounts receivable, net | 354,844 | 308,127 | |||||||||
| Assets held for sale | — | 60,265 | |||||||||
| Prepaid expenses and other current assets | 107,232 | 70,002 | |||||||||
| Total current assets | 2,134,760 | 1,896,953 | |||||||||
| Non-current assets: | |||||||||||
| Property and equipment, net | 100,334 | 100,662 | |||||||||
| Operating lease right-of-use assets | 254,811 | 277,276 | |||||||||
| Strategic investments | 237,181 | 159,064 | |||||||||
| Intangible assets, net | 84,248 | 100,840 | |||||||||
| Goodwill | 723,229 | 722,838 | |||||||||
| Deferred tax assets | 7,657 | 10,335 | |||||||||
| Other non-current assets | 71,795 | 58,862 | |||||||||
| Total assets | $ | 3,614,015 | $ | 3,326,830 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 130,318 | $ | 81,220 | |||||||
| Accrued expenses and other current liabilities | 308,930 | 406,139 | |||||||||
| Deferred revenue, current portion | 1,158,743 | 1,066,059 | |||||||||
| Operating lease liabilities, current portion | 46,659 | 40,638 | |||||||||
| Total current liabilities | 1,644,650 | 1,594,056 | |||||||||
| Non-current liabilities: | |||||||||||
| Deferred revenue, net of current portion | 115,338 | 116,621 | |||||||||
| Operating lease liabilities, net of current portion | 257,653 | 274,434 | |||||||||
| Term loan facility | 999,506 | 999,419 | |||||||||
| Deferred tax liabilities | 2,489 | 312 | |||||||||
| Other non-current liabilities | 16,887 | 14,616 | |||||||||
| Total liabilities | 3,036,523 | 2,999,458 | |||||||||
| Stockholders’ equity | |||||||||||
| Common stock | 2 | 2 | |||||||||
| Additional paid-in capital | 2,621,776 | 2,182,536 | |||||||||
| Accumulated other comprehensive income | 43,516 | 13,864 | |||||||||
| Accumulated deficit | (2,087,802) | (1,869,030) | |||||||||
| Total stockholders’ equity | 577,492 | 327,372 | |||||||||
| Total liabilities and stockholders’ equity | $ | 3,614,015 | $ | 3,326,830 | |||||||
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Atlassian Corporation
Condensed Consolidated Statements of Cash Flows
(U.S. $ in thousands)
(unaudited)
| Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||||||||
| Net loss | $ | (205,031) | $ | (22,328) | $ | (218,772) | $ | (433,532) | |||||||||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||||||||
| Depreciation and amortization | 15,476 | 12,298 | 30,096 | 25,602 | |||||||||||||||||||
| Stock-based compensation | 265,785 | 145,820 | 439,416 | 246,727 | |||||||||||||||||||
| Deferred income taxes | 3,291 | (427) | 4,813 | (2,041) | |||||||||||||||||||
| Net loss on exchange derivative and capped call transactions | — | — | — | 424,482 | |||||||||||||||||||
| Amortization of debt discount and issuance cost | 117 | 16,975 | 235 | 26,816 | |||||||||||||||||||
| Net loss on strategic investments | 7,563 | 22,135 | 19,076 | 53,557 | |||||||||||||||||||
| Net foreign currency gain | (2,203) | (5,258) | (5,828) | (11,656) | |||||||||||||||||||
| Gain on a non-cash sale of a controlling interest of a subsidiary | (2,066) | — | (45,158) | — | |||||||||||||||||||
| Other | (5) | 297 | (5) | (318) | |||||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||||
| Accounts receivable, net | (107,805) | (54,992) | (46,491) | (68,203) | |||||||||||||||||||
| Prepaid expenses and other assets | (2,690) | (3,897) | (25,367) | (25,082) | |||||||||||||||||||
| Accounts payable | 18,587 | 10,284 | 49,734 | 20,507 | |||||||||||||||||||
| Accrued expenses and other liabilities | 58,260 | 21,119 | (50,183) | (63,287) | |||||||||||||||||||
| Deferred revenue | 101,246 | 64,429 | 91,401 | 77,884 | |||||||||||||||||||
| Net cash provided by operating activities | 150,525 | 206,455 | 242,967 | 271,456 | |||||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||||||||
| Business combinations, net of cash acquired | — | (2,701) | (600) | (3,839) | |||||||||||||||||||
| Purchases of property and equipment | (4,040) | (12,581) | (20,536) | (19,462) | |||||||||||||||||||
| Purchases of strategic investments | (1,100) | (42,000) | (9,450) | (95,000) | |||||||||||||||||||
| Purchases of marketable securities | — | — | (10,000) | (21,003) | |||||||||||||||||||
| Proceeds from maturities of marketable securities | 18,750 | 7,600 | 47,700 | 61,487 | |||||||||||||||||||
| Proceeds from sales of marketable securities and strategic investments | 363 | — | 621 | 186,262 | |||||||||||||||||||
| Net cash provided by (used in) investing activities | 13,973 | (49,682) | 7,735 | 108,445 | |||||||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||||||||
| Proceeds from term loan facility | — | 350,000 | — | 1,000,000 | |||||||||||||||||||
| Repayment of exchangeable senior notes | — | (1,234,376) | — | (1,548,686) | |||||||||||||||||||
| Proceeds from settlement of capped call transactions | — | 104,519 | — | 135,497 | |||||||||||||||||||
| Proceeds from other financing arrangements | — | 4 | 1,396 | 5 | |||||||||||||||||||
| Net cash provided by (used in) financing activities | — | (779,853) | 1,396 | (413,184) | |||||||||||||||||||
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 3,522 | (246) | (1,417) | (2,355) | |||||||||||||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 168,020 | (623,326) | 250,681 | (35,638) | |||||||||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 1,469,949 | 1,519,213 | 1,386,686 | 931,023 | |||||||||||||||||||
| Net decrease in cash and cash equivalents included in assets held for sale | — | 4,182 | 602 | 4,684 | |||||||||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 1,637,969 | $ | 900,069 | $ | 1,637,969 | $ | 900,069 | |||||||||||||||
7
Atlassian Corporation
Revenues by Deployment Options
Revenues by Deployment Options
(U.S. $ in thousands)
(unaudited)
| Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Cloud | $ | 512,335 | $ | 364,099 | $ | 987,378 | $ | 682,002 | |||||||||||||||
| Data Center | 194,264 | 139,108 | 365,492 | 250,303 | |||||||||||||||||||
| Server (1) | 106,168 | 135,519 | 219,981 | 275,066 | |||||||||||||||||||
| Marketplace and services (2) | 59,937 | 49,800 | 107,245 | 95,179 | |||||||||||||||||||
| Total revenues | $ | 872,704 | $ | 688,526 | $ | 1,680,096 | $ | 1,302,550 | |||||||||||||||
(1) Included in Server is perpetual license revenue. Perpetual license revenue is captured as other revenue on the Condensed 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 Condensed Consolidated Statements of Operations as the services are delivered over the term of the arrangement.
8
Atlassian Corporation
Reconciliation of GAAP to Non-GAAP Results
(U.S. $ and shares in thousands, except per share data)
(unaudited)
| Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| GAAP gross profit | $ | 716,759 | $ | 578,335 | $ | 1,384,759 | $ | 1,096,103 | |||||||||||||||
| Plus: Stock-based compensation | 18,553 | 8,453 | 29,166 | 14,370 | |||||||||||||||||||
| Plus: Amortization of acquired intangible assets | 5,697 | 5,599 | 11,394 | 11,288 | |||||||||||||||||||
| Non-GAAP gross profit | $ | 741,009 | $ | 592,387 | $ | 1,425,319 | $ | 1,121,761 | |||||||||||||||
| Operating income | |||||||||||||||||||||||
| GAAP operating income (loss) | $ | (99,239) | $ | 23,042 | $ | (133,266) | $ | 79,519 | |||||||||||||||
| Plus: Stock-based compensation | 265,785 | 145,820 | 439,416 | 246,727 | |||||||||||||||||||
| Plus: Amortization of acquired intangible assets | 8,296 | 7,958 | 16,592 | 16,012 | |||||||||||||||||||
| Non-GAAP operating income | $ | 174,842 | $ | 176,820 | $ | 322,742 | $ | 342,258 | |||||||||||||||
| Net income | |||||||||||||||||||||||
| GAAP net loss | $ | (205,031) | $ | (22,328) | $ | (218,772) | $ | (433,532) | |||||||||||||||
| Plus: Stock-based compensation | 265,785 | 145,820 | 439,416 | 246,727 | |||||||||||||||||||
| Plus: Amortization of acquired intangible assets | 8,296 | 7,958 | 16,592 | 16,012 | |||||||||||||||||||
| Plus: Non-coupon impact related to exchangeable senior notes and capped calls | — | 16,856 | — | 450,829 | |||||||||||||||||||
| Less: Gain on a non-cash sale of a controlling interest of a subsidiary | (2,067) | — | (45,158) | — | |||||||||||||||||||
| Plus (less): Income tax adjustments | 47,750 | (37,879) | 15,202 | (75,200) | |||||||||||||||||||
| Non-GAAP net income | $ | 114,733 | $ | 110,427 | $ | 207,280 | $ | 204,836 | |||||||||||||||
| Net income per share | |||||||||||||||||||||||
| GAAP net loss per share - diluted | $ | (0.80) | $ | (0.09) | $ | (0.86) | $ | (1.72) | |||||||||||||||
| Plus: Stock-based compensation | 1.04 | 0.57 | 1.72 | 0.98 | |||||||||||||||||||
| Plus: Amortization of acquired intangible assets | 0.03 | 0.03 | 0.06 | 0.06 | |||||||||||||||||||
| Plus: Non-coupon impact related to exchangeable senior notes and capped calls | — | 0.07 | — | 1.77 | |||||||||||||||||||
| Less: Gain on a non-cash sale of a controlling interest of a subsidiary | (0.01) | — | (0.17) | — | |||||||||||||||||||
| Plus (less): Income tax adjustments | 0.19 | (0.15) | 0.06 | (0.29) | |||||||||||||||||||
| Non-GAAP net income per share - diluted | $ | 0.45 | $ | 0.43 | $ | 0.81 | $ | 0.80 | |||||||||||||||
| Weighted-average diluted shares outstanding | |||||||||||||||||||||||
| Weighted-average shares used in computing diluted GAAP net loss per share | 255,874 | 252,960 | 255,520 | 252,533 | |||||||||||||||||||
| Plus: Dilution from dilutive securities (1) | 304 | 3,072 | 673 | 3,178 | |||||||||||||||||||
| Weighted-average shares used in computing diluted non-GAAP net income per share | 256,178 | 256,032 | 256,193 | 255,711 | |||||||||||||||||||
| Free cash flow | |||||||||||||||||||||||
| GAAP net cash provided by operating activities | $ | 150,525 | $ | 206,455 | $ | 242,967 | $ | 271,456 | |||||||||||||||
| Less: Capital expenditures | (4,040) | (12,581) | (20,536) | (19,462) | |||||||||||||||||||
| Free cash flow | $ | 146,485 | $ | 193,874 | $ | 222,431 | $ | 251,994 | |||||||||||||||
(1) The effects of these dilutive securities were not included in the GAAP calculation of diluted net loss per share for the three and six months ended December 31, 2022 and 2021 because the effect would have been anti-dilutive.
9
Atlassian Corporation
Reconciliation of GAAP to Non-GAAP Financial Targets
| Three Months Ending March 31, 2023 | |||||||||||
| GAAP gross margin | 81% | ||||||||||
| Plus: Stock-based compensation | 2 | ||||||||||
| Plus: Amortization of acquired intangible assets | 1 | ||||||||||
| Non-GAAP gross margin | 84% | ||||||||||
| GAAP operating margin | (14%) | ||||||||||
| Plus: Stock-based compensation | 28 | ||||||||||
| Plus: Amortization of acquired intangible assets | 1 | ||||||||||
| Non-GAAP operating margin | 15% | ||||||||||
| Fiscal Year Ending June 30, 2023 | |||||
| GAAP operating margin | (11%) | ||||
| Plus: Stock-based compensation | 27 | ||||
| Plus: Amortization of acquired intangible assets | 1 | ||||
| Non-GAAP operating margin | 17% | ||||
10