Atlassian (TEAM) 30 Jul 212021 Q4 Earnings call transcript

Good afternoon. Thank you for joining Atlassian’s Earnings Conference Call for the Fourth Quarter of Fiscal Year 2021.

As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Atlassian’s website following this call. I will now hand the call over to Martin Lam, Atlassian’s Head of Investor Relations. Sir, please go ahead.

to quarter welcome XXXX fiscal and call. earnings afternoon, Atlassian’s of fourth year Good joining us for you Thank today.

Officer, today, find call Co-Founder and commentary Cannon-Brookes; Financial for and the press Co-CEO, Beer. On today, financial quarter Mike and we release with our our results shareholder fourth issued a shareholder we Investor other Atlassian’s have work where and the our Relations Atlassian’s James full letter Earlier earnings of and and on you’ll Chief and materials, press fiscal life supplemental sheet. earnings-related available also year including the investor letter is XXXX. website, section The our release blog data

statements. During the the time call on brief opening today, forward-looking make This remainder remarks and of we’ll then Q&A. spend include call will

risks, different from or future achievements Forward-looking other results, implied forward-looking and and by actual cause or involve factors any materially or may known achievements be the expressed performance unknown uncertainties results, performance to that statements statements.

upon predictions should forward-looking You statements events. rely of as not future

our included could Forward-looking obligation recent Company’s X-K. affect Further in and Securities other factors statements are assume to Form change that current. management’s we cease we Form as these only on financial revise in and made, such assumptions no results XX-F quarterly make the Exchange or from most the and titled date update time-to-time, statements of should Factors statements section or Risk be is Commission filings and and such the with they including the represent information to beliefs our

of performance financial letter, IFRS reconciliation on not earnings superior shareholder in investor IFRS. sheet with we measures financial prepared addition and website. our available today’s in a measures measures. the between are financial will measures accordance call, in These are non-IFRS or and non-IFRS discuss IR for release to substitute and data is financial During to also The non-IFRS

next and upfront to easily please Q&A, fair Mike turn the that be can remarks. the ask speaker. move I’ll During so With call to we through your that, opening over full question for

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As you’ve net of XX% added a revenue customers. up already We was quarter, our ripper We a letter, say. of our over $XXX QX as we in new year-over-year. read shareholder XX,XXX generated million,

Importantly, up XX% And that we with to revenue migration grew cloud momentum subscription XX% revenue cloud year-over-year build. continues year-over-year.

have before. incredibly difficult FY strong Our capabilities headwinds, non-technical year. we’re We and proud surge off resilience, execute top deliver staring proud innovation our to products during a ability and pass to We’ve billion on customers, and I’m we’ll through new never building offense. in than new class world we cloud We do. entered followed offense ever the Atlassian more and would we to and revenue. those team, We X,XXX greater. opportunities. in We played of to on We’ve been have work to our lot $X XXXX and do. what front But Atlassian’s our XXXX year and our QX caps seize beyond. into we continued We we said FY down of play continue another And to platform. XXX,XXX opportunities to still came teams, that of of that a than stronger added of. exited technical

the and every we quarter. thank your operator customers passion that innovation month want commitment drive whose the Q&A, to every to I and move to for to a deliver world XXXXs around of we that, resilience, I’ll every pass Atlassian With day, take to the Before moment to continue questions. our the

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Luke Thanks taking is this for for DJ. question. guys, Hey on the

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been we’ve and we when almost very go doubling from drumbeat a two, the existed. as build then IT we’ve and down every quarter after then, space, were continued that how to three think months six consistent thoughtful, the grown seen said you’ve steady capabilities we ago, that since or in we’ve improvements, of and I years opportunities on

in going And from space, we we’re company We And the think companies. can the the person still companies broader keep future that. very unique all IT companies the up that address way person opportunities in those We’re XXX,XXX XX to deeply. believe any only requirements. doing those to

in breadth you span and unique there, results. our the see and in up very a We’re turning

that believe in think the – of position and guess front don’t than and I the concrete have us getting I customers. resonates uniqueness answer deeply in opportunity So, I showing a area, other we’re our it’s the in it’s and we in

Thank you.

question the Morgan comes Stanley. line Keith from Your of Weiss from next

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guys, fiscal quarter year. has in quarters. It shifted to fantastic the has something the or something seems really two catalyzed and like past over really Great

be coming compared little over point And more momentum just year what of distribution the overall catalyst that the prior the in pace did in Is on show? the to sort just say environment You cloud to ipoping are cautious bit a talked read transition. something in ago. and this cloud XX,XXX the customers as an the large number XXXX is you to, jelling customer there the strategy? seems product the a the acceleration letter inflection like like you point additions? strategy that you particular guys Is on to could about like macro for something customers a or just XX% strategy of in

Keith. Yes, Look, a take to across perfect. long-term continue great board. in position in our we And That’s mind. I we’re thoughts think hi, the

in to have to a on heads. months think last about really on moves very And customers. maelstrom, boneheaded months, our sensible long-term focus you and the easy the been such our last year, and we We’ve kept this are If to throughout about make. continue focus how XX made XX decisions we’ve

on the areas in which particular so long-term of the can things very pace to last asked And team integration of so over don’t work of cloud the to much And the four worth certainly strategy, continue right, value of of has been the consistent can that point we’ve for pay shift strength whole questions that And which different the that a comes many few capabilities really in migration bringing are various significantly free, point answers our that that ways, which and Atlassian us platform, continuing top number to Atlassian the probably the to thousands across continued progress the all of all fantastic have changed you to is to the the in from yourself of to made say series continues philosophy us. it years off things board the I think brings always of years. make more is our and very to broader that that customers really in four thoughtful, those and cloud, And same. the customer Trello has and our and part ability decisions. family you of funnel that drive from lot gives paths in other the Trello. you’re as I last the anything And our decisions like the important grow and have expanded seeing years individual and customers. and a than of to Trello smart,

So, changed. there’s any that’s don’t thing shift. I individual think a I don’t have singular

a and again very years is decisions execute history that making think very, it’s XX level decisions high I our, – long-term to those Atlassian it of continue continues. to and that that

Thank you.

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we cloud. world working. in at we unique to can’t look to important are that’s the of cloud XXX% be They Hey, do always the capabilities have our our in they’re channel sales value over forward. that in they’re partner see extremely that we business be up them Probably marketplace that when channel in – bring the bring, right, a look sales. And Rob, parts our in continue be. and you year-on-year case customers really continued can shareholder they’re for and to you of letter, geographies, the continues that in going cloud their that industries, said that to Again, the pillars can’t bring we so

philosophy their help have journey. lot partners nothing shared journey. to It’s a our our of done of business. partners customers, we’ve that’s through work this strength and Atlassian’s understand that customers different that’s to And the a we with get migration to cloud. the are our So, the customers big the channel resonating working – really and that channel have get migration we through than And our

to So, terms of always and in in have lot of extensible Obviously, marketplace, and our customers view we We’ve been from general. migration, products, partners cloud that customers’ driving been in the products. both but we hallmark in continue do to ability allowing extend partner extend which and our with is point Atlassian the cloud believe of technology a great always the philosophy. also Forge assets progress a our build the of highly of our to

engineering an that incredibly talked that. about going do SaaS really we’ve that compliance that first And is the to we’re are way Forge approach businesses a that regulatory for requirements taking meets and to cloud, challenging forward.

Forge will that now as grow. with allows continue we parties gives the more us to problems to than XXX mentioned, peace apps extensions from using and expect security of to on technologies. And and to we and number mind customers third and customers great improve, solve those both to platform, those fourth the continue we’ve

broad partner with to [indiscernible]. we So no question us doubt to in continue them, long-term they help philosophy your ecosystem, help but journey the on continue the and to around migration

jump for second of I’ll part Well, in your the question.

with certainly We’re about orientation the their that to increasing year-over-year. Xx and we we that the we broadly, activity then quarter-over-quarter, along timeline. growing XX% quarter-over-quarter. developing mentioned we think pleased element migrations those regard is saw so Mike this activities year-over-year. those cloud them migrations momentum XXXX saw, of migration talked are our statistic users sale More XXX% the the partners with And volume customers, plus, another I our – migration larger important have were of

this server year facts momentum. into those came than around nice less customers. a demonstrating So, with a with XX,XXX process, We little clearly what ago

we’re So work that ahead got us. plenty we’ve yep, momentum, for of of pleased

on. And have our the ramp. We order We larger equate on a to in that little half that fiscal overall to it’s the and ability that those timetable ramp change thinking customers we’ve good execute about our spoken is And around execute to of probably a be to two the that migrating of expect But early about. around to time of that thirds of table. something would would XXXX. in migrating feel that customers we XXXX

cloud I – of enterprise be The is, ready server be important to mention another pleased terms the think of our element to me these will cloud I in thing, more customers move the the of And larger to early over cloud. bringing of we’re other would additions that pace products. be to excuse

Thank you, sir.

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for question. the Yes, thanks

side, on? R&D wondering collaborative work hiring both letter, kind sales the most in to is plan of investments? guess, just I on side, you’ve there, cloud I as that’s majority reps like hiring know, on these focused of the and much are was of cloud seemed investments management talk products complex? And in are Salesforce the where your what you. going. on things and your you sales I have about customers talked side, if just and you transition talked it are where historically you then You make how in introducing the there the be some the R&D about could focused marketing it been Thank to Is kind enterprise bulk about more important R&D, new space.

adding continued in over that haven’t more and the we the made as foot quite to did people say has said that, have X,XXX, year can everybody that continued more opportunities in Hey, we build do that ended continue our think of to third, really the year stage, talent third ago, to be ago, to shareholder to been office, adding stepped XXXX going us. we’re important a again, at at achievement the fantastic had the we point into Tyler, this our staff I take take than that we’ve Atlassians, letter, a around which on for again, we’d teams front we’ve We’ve an is clear we to a team a business ever. a are Look, one. year than this our I that continued up

some of Part that been It’s that. do So, of there the see year to the been this an in is We going continue we’ve extremely ahead. side play in front I expect interesting to shareholder in And done hasn’t a well things. on of in we’ve what of hiring. for questions we’re against saying that continue the challenges. we’re offense going And to year around detail lot opportunity greater, to had we’re letter us that. and

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it’s competitors to the ourselves an into the differentiate and them hire months but integrate both ability really to to starting going to big And over world, differentiate believe to area. XX in in the it also and this last our pay staff into is R&D, important. culture we’re the for But to areas in. to really, Our all learn us in other see a execute that’s And but change in lot to have mentioned them that is out from it’s believe see I marketing, company, that XX also a I there. months, you you off, we opportunity sales

been. it what of R&D terms the is probably has same It’s as focusing always on? In

in our fantastic We’ve and markets. a quarter, our A whole stage at different talked we are opportunities Point are a have have in all at have of We Point them, series last the this on that three set with of three little program the five in that very about of markets. areas in customers bit resonating huge products front collaborating co-developing products A we them, across well major of moment

are the And so doing and What the products to the try an up intending world-class at in are we capabilities, extremely platform we platform. cloud way and aspects aspects will our all furthering and continue a scale nontrivial invest to platform, our to those in cloud cloud scale of of what asset. broader cloud is platform we our Enterprise the

continuing investment and day behalf our strategy. wise, to R&D again, the of out goes lot platform consistent marketing improve we’ve been very day engineering a and maintain of there’s on so our Sales it that And in and into to customers.

marketing that We velocity, have sure well high are with. a familiar sales model I’m and you

Enterprise to our and up to are the seize marketing teams us the largest We landing customers base. and customer and front every quarter, And largest value customers and sales the continuing way that are of deliver that thousands work of in to the customers opportunities in with goes from team that marketing in continuing with them our to staff. sales our all our thousands

you. Thank

Your Moskowitz of comes from Mizuho. next Gregg from question the line

Your line is now open.

on year you only And Okay, a a also what much. very thank transformative terrific but been Atlassian. has for not congratulations quarter,

And think So view in if of cloud year-over-year acceleration degree data helpful. of could increase? getting past my would XX%, what speak that impressive customers over changed But sort more rapidly might the customer James, this Obviously, anything, one most significant for, days to with migrations cloud has quarter. you XX% to quarter-over-quarter. revenue back just recognized. again, cloud drive I What up Thank XX versus that that, get of points do in migrating is to prior the XX%, was acceleration then you. comfortable be large drove Mike, you the think a for large if

be our I particular have the cloud premium revenue. marketplace much very performance the can of pleased for year Gregg, with that your the The I the underlying of to now a editions first the or customers. around in would three are business, drivers. been part Really take with question proving popular two point

the to we’re the there’s we edition. an the who offer. very talked greater a And a development for who greater really and a increasing customers are strategy is standard this to migrating capability new long product. in cloud number functionality, capabilities firewall do that, over total we’ve And are a our behind much premium of the attraction as premium There’s of nice from the that continue now. a And adding additions. expanding and very of customers following indeed these proportion approval consistently others of to new time see We about choosing

if have think getting strategy free, just with I of enterprise we’re edition. with full then and premium, And a just ladder, standard, is edition. Now, Enterprise another to really this will, this going starting illustration then the long-term that you

that’s us feel So very important strategy for an on. executing I that we’re well

And the consistent we those pursuing. initially the are perhaps we’re customers premium also plans. have edition of who paid that And I’d to The the plan second from the migrating of very the our a convert be utilizing then, point are What nicely thing year the stickier. the value that would That the to in customers of to at cloud, our is not We current choose continues how thing, few with behind consistent, to are long-term number stickier. who just expansion very I been customers users go strategies things our that rates surprisingly, who in obviously for There or I out our thing products. improving same two. Enterprise. free finding around next illustrative seeing We’ll see here see then churn. then going customers. with the is the think offerings on is are firewalls, I third my that to point think a plays that And cloud are of much would expectation

So, different there. you’ve got a drivers few

be we’ve to the to where as of of months churn, the areas the year, that dynamics and used we’ve In of initiatives, a might usage understanding different identify customers, products see been work have fact the so, marketplace specific those to for minds. to addition their XX where able potential had we to able front get or variety last in change the of and to cloud we and our

of other relatively time to cloud One would And a say last small far. I rate then driver thing on another year, remember, been impact other thing business. the is cloud also, per $XX in the about remember in that’s in our the so And as growth we XXXX, to about the migrations important talked stewing this se, many that thus of fiscal that had that of headwind parts really, we in the lockdowns the QX those that world impacting fact million were all months. revenue of a And cloud was a business. result

comp A tailwind proving well. strong the in as fiscal XXXX. bit yield drivers our made QX, little that’s very really of cloud a But those So mentioned, I generally. easier, a business that are for this variety that to

quick well. year larger James. then any if on have Super driving cloud Thank what’s Mike, some for as thoughts be And customer helpful. the migrations, you. Thanks that’ll color, great you

earlier. the probably some we’ve it’s about Greg, of factors talked the Yes,

that obviously, sure, For is with I the probably the we the one driving customers, comfortable more channel some helping getting the they likely is sort cloud aspect see more larger them. of that mentioned are partner more,

continuing So build momentum, to that’s which is good.

The access and have say them from cloud we’re Enterprise, long-term time. on adding James continuing would customers. it’s second to continue that roadmap work Premium as that to in resonate the what over the public through them those come with about last will much over last years, is, the few with as in capabilities and our particularly And, mentioned, we the have roadmaps to and not hard, editions quarter, thing I Enterprise as we

the of that enterprise part performance in when governance are our XX each we and to that not and require. roadmap, continuing third do we’ve year, deliver for tell up customer base. things them large buying But in of against the months. see here’s in have just the that thing to we’re the of Well, that that done go and next going customers more the we what an us is and the just last deliver against what builds we confidence customer the base. And some customers and customer base, capabilities that particularly scale older part coming the you, So into then do quarter the customers

continue data that broadly. in more it’s last in a like do direction. Enterprise fourth year the evolve platform And one, probably we’ll with the there’s And that if continuing things residency. our capabilities to to You saw

capabilities, sit automation to because sort more resonate help So larger smart you driven the of we machine customers, features and the on them probably which have, you more more we quickly smart data driving more all much platform the data largest do it’s in that scale, bigger that the of learning are, of the AI because to you collection come or Automation teams the can you. for with success. things small factors features for part users more actually a that build that continue the customers that until the

you. Thank

question next James Your the line Sandler. from of Piper comes from Fish

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not this stack Congrats takes on point in Thanks, a long us to guys. of and I up the through curve understating ripper up moving or average, of months. bit of how on premium at the guess within details enterprise, of up it quarter point, XX you could the the to little going customers to Enterprise, this is standards the walk but might any it. I those adoption over to move the next quarter back more guess move buckets sense at can mix and on be free in the idea Premium why to this

Yes.

their frankly, funnel is, making our standard. easier you offering, each as move change in the by, of edition, the to through the of it expanded if others has and you with quarters continue I factor. with prior saying experience, up so so trial in And to not will requiring user impressive to associated team, the that free talked the marketing way. forth, our the things will quarter We how about the by we invite an a someone Xx go goes admin, on One an refine top start really type in free

refine our the plan. So is benefits user to introduced to and the offering, but we also continue value free then the of experiences standard additional from way, the gains paid

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editions of of a their customer of different on at in the we and like different their and at pace can That’s opportunities that areas. customers depending each different So so on can single different markets buy products grow adoption designed own that time, that areas purpose have. same the

Thank you.

comes from the of next Bachman from Your question BMO. Keith line

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Hi, for the many taking thanks question.

year? cloud parity catalyze to are I is of, what do how that of where great hear in that change for would first particularly parody. So you migrating wanted might that the with? late you’ve the you, The James And mean cycle? one, customers in those mentioned, next is, started to data momentum be little the of say you capabilities Mike think terms bit already I reaching about feature terms you server a now offering, enterprise versus versus to the in already large over are Where platform the the terms still And think in on I by center? targeting cloud

we are is that said it through firstly, The this as incredibly we in repeatedly, should question. said, capabilities migration Hi, already. is, And be the evolve firstly, to as continue be cloud, mentioned, journey. multi are Look, journey. unique we’ve with journey. should go year very customers we Keith our early great a will of the This – it that are

So choice between of capabilities already And differentiations give that cloud big enterprise two, its our a continue deployment then has in option. you some we build the terms capabilities. the the out to

that, and and of mentioned lot saw residency, explain resonating you haven’t that couple You very in that’s improve to we requirements. really data we continuing Again, to compliance a with we’re against public things where of the and other that roadmap, largest those FedRAMP, and how with are we like at requirements the roadmap customers customers. enterprise customers; last executing larger quarters

go migrations a that. continue from spot a and over impact So, journey that in customers we step. that And XX. to singular center. we good had that should customer server early not of Often through those in journey. we’ve as time, in in mentioned, for as And I is modest are think It be that journey are Slide And it data how center. we data terms said, said coming on through relatively in a we’re power really the largest you

users, just group, data them demonstrate can that on total those choose demonstrate capabilities with So our for let’s give to of the the to customer XXX move them remainder test they within and experience, cost the unique purpose. is customer. XXXX it’s project sorry, say will they then for ownership move see company. their that choose that of users, that or lets the strengths center, the XX,XXX office, might the that confident have a offering That to XXX it let that like to we will to us a they great where cloud we a to often, a we that that And a XXXX large can enterprise are them of move, our cloud, Maybe cloud resonate particular equation to department great a geographic maybe is give we users. behavior And us. customers, through

that rest becomes customer they hope would over center a as both capabilities. in example. would move that And time, demonstrate data our cloud So the then our customer, and we we

to Yes, add just one. Mike. that, on Thanks

the customers. the cloud have our where are data seeing center. of centers coming the data tended larger we’ve into our the from to And seats We’re obviously, now migrating XX%

I again, in think enterprise editions as so the more cloud more and two plus capable, become of expect I center the years. trend to only increase would cloud migrations will And that next data

you. Thank

line next Moving Research. on, Ari from Terjanian of from question comes Cleveland your the

Your line is now open.

thanks question result. for the Hi all the taking great congratulations and on

customers Thanks. most in geography like is to some there if any pattern surprises Is the starting non-traditional XXX points? the vertical? fair enterprise any America’s of click is of the cloud expect double customer more So well? only basis seen to see to or customer decelerated, it on among Or growth to start in wondering, these terms of are of you’re these as migrate larger type performance you’d of say cloud in teams type terms

a just that. thought Yes, on

the or with been the behind Africa focused has a this been One East region. that a actually cloud very, has on pleased we’re that bit of quarter very quite chatted the is solutions. things a type little firewall that take And seeing more Europe, we world ago, about part so utilizing how we’re Middle of up within

the partners to customers so their opportunity, that to offerings, see the then on pleased and the value themselves. we’re cloud based And obviously really our understanding of European taking customers

there So scale adoption. longer versus again, would the history a Americans I relatively early days wide say cloud has were, been of days

encouraged we’re angle. by what continue that. so to And work obviously, at will that And

Thank you.

question comes George next line of Iwanyc Your the Oppenheimer. from from

open. Your line is now

competitive automation with on taking you offense, on then color you seeing continuing work for speaking with context and my be the can work progress specifically, some share front? Thank of in question. maybe what the Mike, to maybe management? you’re Maybe broadly

competitive Sure. with obviously, I positive very, be, opportunities continues big always what we I put about I and management, that. any to with done first, Look, the actually broadly we does our very have automation, continue as always the Talking work so easy offerings, that. say that a grow. brief the that different of in landscape, time. Trello has Trello sits, targeting a are a would have strongly, to to not a on to I we philosophically reasons. focus very say it different we say continued of have very very series number as we we of how strongly along power it’s continues We doing aware for The continue where don’t space absolutely can we we really really over that work quarter, have very in customers, to change a a – with sit big, space large that to it’s whole very a try be, where answer And and is be talk long that, customers happy way. about about customers. to last resonate And competitors that that. seen would company for

cloud into of a rigor last so. Jira, some bring terms business Jira And done to Inside a and work parts of exciting of area into Over lot excellent Point for that our again, in Jira those our is that family leverages structure year is ways really our which be needed really by fantastic of lot job. the innovation leverages and very a work It an Work team’s A to platform, some of automation capabilities, really in broader arena. that new and connecting Management good the and platform exciting continues is the areas. of enterprises management doing

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Thank you.

Your from line from comes next of Fred Macquarie. question the Havemeyer

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center raise We months prices on around also five ago. the business data

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us that. seen to you’ve think I continue do

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our Ladies concludes for you any to Mr. I for presenters. Cannon-Brookes hand Thank remarks. gentlemen, back closing for over will Q&A Mike that session today. and it

continued and loved continuing quarter. all of say you and appreciate your the to very to today. look we’ll talk to you for ones We you wanted fantastic power hope Atlassian you wherever I safe a call Just your We you the thank you in remain support forward future. Thank everyone questions. healthy. on year. Thank the joining to the to And much. and are next into world

and Thank Thank you today’s gentlemen. for participation. you your conference ladies call. This concludes

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