Atlassian (TEAM) 2 Feb 232023 Q2 Earnings call transcript

Good afternoon. And thank you for joining Atlassian’s Earnings Conference Call for the Second Quarter of Fiscal Year 2023.

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.

Welcome to Atlassian’s second fiscal year 2023 earnings call. us joining for you today. Thank

Chief the Joining Co-Founders Revenue we Binz. and Atlassian’s today, Co-CEOs, me Officer, Scott Deatsch; Chief on and our Farquhar have Cannon-Brookes; Joe call and Officer, Financial Cameron Mike

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

As shareholder our commentary insights and for the always, contains letter quarter. management’s

will So remarks brief opening focus Q&A. during today, and the we have our call then time on

include statements. forward-looking will This call

unknown from and such uncertainties or involve results Forward-looking assumptions assumptions. or any and materially statements or implied risks the incorrect, statements of known differ the any prove could if we the materialize make. uncertainties forward-looking expressed by results If our risks,

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

Forward-looking our management’s we should of statements change statements such we revise to represent made cease current. or only be assumptions or and update date no are the undertake they as such obligation belief, to statements

section and that annual Risk information with filed in the financial filings from Factors Further the Commission recently could we in reports. most quarter Securities other these titled on results and including factors time-to-time, make our our affect is included quarterly and Exchange

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

Please will our in to rejoin the question to that, Please keep time. of as you come if have at take we the session. or will one would possible. a participate mind, you like do we facilitate allow best as and a another in Q&A question we to you to later many in queue To follow-up back

will the opening for Mike With call over turn remarks. that, I to

Thank you all us joining for today.

shareholder everything has you have out in closed accomplished not current our in already we read proud unpredictable year. the of we yet XXXX, changed. letter, front macroeconomic in massive the As us of another have Despite opportunities environment,

to relentless continue strides with great our and are XXXX. focus make goals we We towards ready to in long-term execute

value completing of impressive shipping in ITSM residency in the stories Confluence, ton launching achieved growth, platform large our have the with from swap-out deliver enhancements delight our a the unique cloud Xx nearly and industry that and prior multiple several including many and market to-date quarter, customers cloud, up delivering largest these incredible analysts with to our a our a the position are customers automation examples. showcasing We recognition to and handful of this as data helping migrations in and product year features by Germany, migrations in just customer leader

we and downstream all up challenging customers turn ourselves customers our helping seeing prioritized operate business about are better. for Atlassian asking We have these a businesses vendor success. absorbing increasingly be to setting on will continued first as always their putting times, XXXX navigate our and the our to trust customers how impacts long-term

pass for to Operator look and I will the Q&A. forward call your I the that, to With questions

Gregg comes Securities. first [Operator ahead. Moskowitz go Instructions] Your Please question from Mizuho from

everyone. much, Okay. Thank afternoon, and you good very

no migration macro has the it some like even in activity so seeing had sounds it impact really, you So areas. though far, on are other

migrations they But cloud their revenue clearly XX in is think belt, that add this where growth to continue though migrations environment tightening it expecting well, even unabated? why customers you helpful? customers is still compel to color are an of real you. Is year. any enough there end You make Thank points a are support would have strong a having impact will financial the as date commitment, to advantage be of TCO the

is details will Mike some and start this will with from probably he’s let I I Cameron. Gregg, then more what off add Hey, seeing. some

our you as more been journey, we we two ever than years end both and upcoming move So, ago, helping cloud know, server this of from and since customers our server then, center migration on-premises announced life of data our already have the products, to offerings. on

to that our customers to able customers from to ROI privacy and day perspective, the but goes our them savings have I to uncertain additional the am cloud, that ability been in convince even there and by, in that we of not ability contractual, say every from benefits macroeconomic the get to And attract have the times, move only cloud, legal going data our through to cloud. additional a to our confident aspects our get to I the increasing more feature the

data experience. obviously better. are once actually goes and actually their the their we huge and years into single an understand strides complex This extremely there users and new made migrating cloud the be by, been again, their every two to from this they We in have we so day getting can then onboarding users But exercise.

compelling our want this an would timeframe, products, to that over in of built move. it along engineered customers way loyalty three-year kind discounts, using improvements path also recognize for to events our provide so the I this purposely we

to establishes have additional continue the that just to forward. migrations do strong we our add? from feel for further see and about demand going growth we that coming migrations XX% you this anything And Mike,

their to I where Look, as it’s model operate increasing I the software. to cloud. It’s and through you customers is recognition itself to and Yeah. TCO of moving this are ownership in customers think efficiency cheaper there’s them environment wanted the the them. optimize a for run great well our in to an looking and spend, help own way their talked that for cloud a Thanks, get environment important to about incredibly do to say, Gregg. just

the trying products, more them job allows that platform do benefits help have times. secondly, to especially especially time, of are integration consume the we more across to things, our of products, and our new built become the Atlassian’s difficult experimenting as they is which so And efficient their while in and them these at businesses efficient, businesses, making same more is the what and

So well are positioned really I that think we way. in

guys. Okay. Very Thank you, helpful.

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

talked came taking guys by bit. comes better about margin performance of operating like a really versus you the current the the really margin letter, a that in up a half. from Excellent. sort focused full most target doesn’t Thank the changing it basis investment sort more shareholder But and year you seem the it go-forward the little In on investments for question. -- for seems second for profile the of quarter of

offset you more So of is point, moderation the potential you perhaps could talk moderating there to work about bit margin us environment historically we a where are them and maybe where be back to low XXs? investment, sort the really in kind a the considering to to the drive and little of saw not why to

will thoughts. this start pass yeah. will off it for Keith, I then additional will I is Scott start Joe. I and to --

quarter. changed are from prior our fundamentally HX You right, has view overall not the of margin

We QX. HX impacts growth moderate to in expect driven macro by we revenue saw in

and savings some repeat forward long-term of to invest will HX against impact see. hire into QX the terrific we pull we on had And then timing opportunities won’t that in addition, OpEx continue we and in the

the are those So primary factors.

comes shapes. You we there of there, takes a in different the are What different the say of work I happening asked broader would flavors and lot work about that reprioritization. doing around lot a

about a moving could level strategy model, Sometimes adjustment. funding stopping something a be about it’s on something. structurally sequencing of more the It to based milestone-based the investment lowering events,

the I we and the right flavor it’s these around focused things have all about really as to included think work overall business outcome. So doing of resource allocation, some been reprioritization drive

continue against revenue anything. balancing he it will long-term the Scott, and And conjunction will in invest I would growth. with to, we environment like macro so And costs to opportunities, if being to add over to responsive in the managing pass while that

of around us migrations, launching just our serving customers enterprise investors repeating cluster back our may Day growing we that new saw is opportunity -- we have better opportunities and Atlassian there, for you, of four April, share were of cloud product risk those about platform. those and market ahead that talked prior we reminder ITSM we At the the made to new a on at to Back the and of the in growth Investor take chatted our Joe, you, Atlassian story. be that in investments with built we

great we are what returns. though, have areas four is that those And having seen,

about think get times want the returns. over to in And We things said and where incredible and times right long-term, of in four the as long-term Atlassian have choices that got to areas. make bad business we a we momentum of good the for invest the right we those about

And macro so commitments these you. we invest and shared areas given we you, of with out we regarding portfolio in opportunities to those four responsive identified environment into we course, the continue from great have are on have and to our of other that that to areas, current it our targets

Thank Excellent. guys. helpful. you, That’s

from Fred Havemeyer Please question next comes Macquarie. Your ahead. from go

Certainly this during much. just and are about how the you we and perhaps the you just as product wanted of innovation to another can as think of and growth of on in talk Hi, to terms could talking development side I about leg of you notable, there. ask very innovate moment think investing a regards Thank where navigate are you innovation drive about and take product in Atlassian what other you ITSM, environment? focus macroeconomic period. is this just

take I may you. Look, like Fred, to answer sound a can it Yeah. that boring one.

in we the years thought way ago, product environment think think year ago, about change about I right? the ago it way we a or to three innovation years two doesn’t the current

we the every really customers customers their efficient but all have that North Star a and their as running all about we whatever our can’t can making or potential rockets unleash job services, drugs to provide is a team cars more our Again, that’s them to it our and or businesses. of markets. are at keep financial make team We or doing, help across efficient more make is we of try

continue from we hear as and we we look to time, priorities same our the rebalance resourcing. customers At at our as

which R&D, would companies a around are be. little in able large more is I is to a those than quite may advantages, our of investment resources fluidly move we One bit is unique, having other say,

work a products is Atlas, So in couple things. the discovery, customers we of lot alpha and have Encompass to a like to that years of innovate, ship we built ability over we continue of new in product and with like we are examples and Jira beta. ones have and to couple of things continue upcoming testing, last Those new

investment analytics and together platform platform ability question manage with to our one deepen to the Atlassian a of products earlier, thing. continue customers sort of consume and things we them across the when things and of like our time, ability innovation Smartlinks same mentioned, to in and and just I their the cloud, via Gregg’s the infrastructure to the or running huge that At investment them advantage as connect all from that multiple move of comes cloud to all the is

doesn’t At same innovation the product just come form. the in new time,

cloud we work scale enterprise aspects our of the and continue accessibility. in terms performance, So in big terms to of on of

data residency and us regions residency to our comes BaFin the new customers As and that out things continue what soup and the work regions like this they of acronym roll all enterprise. on data we said, remain, with this to want month with see sorts HIPAA you

all At and innovate try didn’t we want to to the are continue launched. R&D So are to things the on customers that for. of environment obviously the just where dollars our spend are examples same we time, those to looking we that responsive

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

the question. Hey, taking there. Thanks. Appreciate you

fiscal assumptions the range the target, new just what useful in expand can some goes macro you into forward? year. language cloud makes on range that the the that second around the just letter, the of and in what the half worsened going On right some There’s

if impacts going everything sorting out or is or worse in what and December color am you especially Any as things that’s are, you. of can as maybe getting how pronounced. if we on curious are what just kind gets trends better? say anything So there calls are on helpful? whether just there’s the I through letter just those those January Thank consistent worse

cloud a our months HX in clearer take And and using much the trend our did picture environment and a of We Joe. you is prior from as have in result, line. This Michael. worse Thanks, and mentioned from trend Yeah. prior range guide points, lines a change assumes into continue more we data guidance including gets quarter that have fundamental the of which that, December, macro we HX. the the cloud HX, three

maintained paid held seat XXXX have on half that seen notice range, end have up with low You not first of also migration. in weakness that will continued also conversions areas we and really assuming a macro through only range the expansions have and guidance but upsell some X-point of frankly, year-to-date, FY that that we well, churn, free-to-paid impact like the

So largely of the is in better months rest than the ago. picture or line three

have with in into have the that assumptions we say, seen the overall we formulate I’d what it’s of consistent incorporated January, terms and that the we approach. In guidance

you. Thank

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

Hi. you Thank much. very

that like leading we where so happened can signs step rest should at the assess, you cloud us What be all, the moved it a the therefore, that your at the kind get confidence, Thank again. confidence could the signs did any down shape. forecast cloud have right the the Are how in we it can think, you seems that worse of pretty cloud that indicators once I in help the at are gives of of targets, business of you stabilization be So indicators slightly at on? are bringing we in decent looking for note the we comfort are any the consecutively. for get couple business December have what quarters point we looking the that September taken stability much you But ended on a are does than leading look forecast. seeing and what of to hence

take will one. I Cameron. that is This Yeah.

trends plenty in our QX. So up to see the headwinds into continuing coming products. site, in conversions of try we still click are of spoke versions our about for seeing that that free-to-paid today button free are primary we two that QX We signing our the customers and the

a They more out are how to we QX paid in at trends they taking rate obviously, what and their -- definitely continuing as than slower to are forward can that’s know they from are many QX. converting just But, card looking, see see customers, we historic credit we signing and customers. them are just versions XXth our are out to and people actively using up those know and the convert free paid know We the activation get our rates their to are of a for trying there to We products. we customer. products of add they simply

people expansion Jira user basically other This from the that’s Jira of another On are the XX side, major is seeing. headwind. That, we too, to headwind users is of Software. Software XX going users

in again, forward. adding in QX that we pronounced We that overall are see across we slowed customer down QX, going that see monthly we QX largely and our within in users billing seeing became and more base. Once and people the the activity smaller see rates, their

people have downgrading compared from the particular into this That from of amount or and QX or said, XX our start to to That’s actually seen plans all were quarter customers more that’s to little the down January a XX back that free we downloading XX look users in going to largely or nine plan. as paid bit come from positively. QX, users, we subside

customer year the headwinds forward. any of those half trends geographies, so the on two are looking segments, across understand in believe those going are forward telemetry the and of and we of second So plenty have that to we changing still are industries we if our

for you stability are in close how we me. leading at have mean you That’s indicators are a looking I it those if it. to view? Got

variability Listen, plenty today. of business overall in the there’s

the to coming the and between are in or and stable will the top say of variability basically QX going they The much site our feel some hard very I see converted. might growth people is whether it leveling out change be be user in to and QX. that end that’s future. harder On predict to funnel, to we

from Your question ahead. go comes Jefferies. from Brent Please next Thill

Sodha Thill. for This Luv is taking you for Brent Hi. my Thank on question.

guess going suite? thank in forward. have growth Management what traction does those ask, you Together and you, laying and Atlassian four Jira those that top Thank you. I out to wanted priorities with priorities product where Just rank for Scott, seen Work

Yeah. be our bullishness I Work incredible Luv, take to maintain in Look, continues Trello a we monster. Management grow on one. to the that can continues position space. Confluence strongly. really really,

that during as see other with things the the in as You all improvements of shipped enterprise of automation and quarter. cloud, also the we well

confident to very software it’s unique play. overall get and position the digital, companies increasingly we a we position Management connection ITSM and its are have we the more that with So spaces especially in both in very as Work

that structure is of strategy, they Trello, Management vectors, to have the of what part Work coming depending and out, looking Management, Work where in on and pointed are for have. as are already Jira leading people and terms A you Confluence multiple they from

for Work are the of already. We see terms great Management usage people in into role traction heavily in Jira Jira who

Jira Atlassian an If Jira Software, family, you the well. Jira Thanks the and are It’s add logical very integrates into Management, the all to platform you have to platform. Work Service obviously, for with Jira rest the our products and of Management. you Jira step entirely

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a in, forms Confluence to bit vendors and the suite. other with work and moving It’s project of to and people and sort are a see year we on collaboration continue vendors increasingly and customers. are standardization We gratifying standardize management of off where Atlassian Jira to

of mentioned part things Atlassian One able beforehand, a Smartlink across to have investing And being see our automate you turning is story, is customers product us things. Together. are that why secondly, Atlassian I set what you mentioned big in for. to automation, two that’s analytics, And the like platform

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Thank you. Great.

Alex Your go Please ahead. comes Zukin from from question Wolfe next Research.

for taking Hey, guys. Thanks question. the

out growth. to how So for SMB contextualize exposures up parse maybe closer enterprise picked date got way deeper Is and or look the cloud more wanting revenue maybe any where to the a customers customers then of the end the their And terms or either to center. the trends many a two-parter. some stable server support service in into to migrating coming before January? just a the side worse December little there of that If around bit we anecdotes little just of the we from trends similarly, bit are and in data maybe wait side get cloud versus

get there or would a what ago I sense terms versus are a So ago love you assumptions. a your year seeing to just of of in quarter guys

into this dive again of Happy those. Cameron. is Once both Great. to

So, it smaller first and customer foremost, we or enterprise. versus on when the -- to last quarter SMB what see down came growth did

saw expansion was customers our stated, free are down to that definitely the was pronounced or monthly we that we the from monthly we primary who in QX. in new that smaller headwind tier saw and contracts piece user we of have more information on As already largely within moving are our QX

upgrade as our other with Jira continue and standard-to-premium very to stable with side Align, strong of On cross-sell with side, our our our Service business base. Management within and customer remain offerings addition the enterprise Jira enterprise as premium-to-enterprise provide well growth exceedingly migrations

massive we globally mix Obviously, and long-term geographies believe of a advantage our with a all enterprise more SMB is customers, than having a base, massive across and such that industries for customer XXX,XXX business.

core them become big Atlassian the businesses that’s big bringing and more businesses been and small going those importantly, people the standards time. see to and small for strategy some companies into preferred or As with tools from companies

transition center goals the was there we multiyear question on couple and mentioned, or already more server have focus of customers your journey, Like, the of years all cloud customers set I that migrate side and this migrations journey answer our this news. we a for core obviously, migrating that’s line whole to cloud we to of with ago. largely data ever a to the as server is their since started of good are in things, To

end customers did However, whenever you and the when we transition, going know life an news through of product, we announce of the are the over couple good we here some this, data expected. is, a lose last probably staying have and the number numbers, many move you see but we we for on of an increasing customers years, customers seen well than center that as to longer server in to of of as

forward. good continue overall, shows that go before to to going or customers, going That’s choose into products our how they our cloud go are shows center. thing. to February until it our sticky a our -- will actually XXXX are going But I applications data mission-critical are see retain and customers shows how to ability

long-term And chooses the products. as cloud, feel increasingly the server Jira over customers regardless. or get or that future to to and center all to I data shows cloud data our those investment server you. mentioned, commitment Thank confident ability our Atlassian within whether to I in And to customer center

Any follow-up. cloud, of that there? enterprise is XX-XX, is percentage basis, that small, small kind it from is for weighted much quantification And just towards maybe SMB to a And Perfect. of than it -- it enterprise. is -- possible revenue more is SMB

Yeah. the SMB We versus split out not do enterprise. break of

before, I we SMB the QX saw mentioned in in headwinds As expansion. one user was the uptick

to continues strong. enterprise Our remain business

Perfect. you, guys. Thank

from comes question Turits next ahead. from Michael Please KeyBanc. go Your

Yeah.

because headcount, large of in there’s will well, I question headcount numbers take I tech. been cuts a developer I think -- obviously, think, just regarding

are from impacted most it engineering. that’s worse than where for the that down projects But any For I or came getting in the you slow user part, new don’t as disproportionately still are into you development there discussion you out are seeing terms or people that what of hear think others you side? of better of seeing developer case same development what team? What on the being selling we since seeing? is maybe Is development your on

Yeah.

We within look have QX, into in no to there’s our competitive there’s customer mentioned, differentiation, as headwind base. that primary changed. we so smaller taken which -- user that, is no seen competitive one was have we dynamic different I the back When that’s expansion

So it’s new their choosing to or not the largely the last other like other people that hiring, products down couple to and see options offering. some are these their over slowing potentially trying we that customers years. competitive turning It’s they of that licensing consolidate of software some

But is driver all major across we many to believe that only and different many different of companies long-term, a technology continue grow geographies. still will growth across industries, and

So all that we companies, broadly engineering-focused in the happening, at we industry, we every trends are geography customer or just entire and why the it’s bases. but not across in see companies look have it’s happens these We look adopted base. technology different these across that our that tech customer every see whenever

to is rest future work on our believe, set to up there technology, collaborate more of going products use that advantage to and we the that with their growth. be are get multiple we the business? to more long-term, and So our of Absolutely offerings the with going are take in developers

developers serving for business, for for correct? versus the Okay. decele But teams software for enterprise work no relative for versus in is IT between difference that

just the one. an Look, code. developer that in always the organization, reminder, Yeah. serving person writing we Michael, started is on This on early just a obviously, talking, Scott,

the helping organization. around developers, those with have rest We collaborate the of

And into of through latest product so that lot our into is exactly the we something work the rest software there. writing the of it teams the organizations quarter like the I is IT get our to managers and out broader a now of number coordinating through code ops, and technology all -- that believe software broader users go a way of and developers offering benefit we designers the our ITSM

how solve we get whilst is think work problem developers maybe of so really products point developers. across we actually that’s their I broader strong is for what And like we people we core that where done of helping organizations. the And remain just do are development sort versus

pick still -- part is in And no things am the am last not to finding they and other other companies the up people those jobs one companies, What haven’t previously that, that but I other hire these developers, other it’s now is couldn’t that early heard is developers are before. days getting to of elsewhere. echo where of I I struggled Cameron’s able

And so I think development more software points not that not the further is and broadly at that anywhere is trend. going long-term proof

And bumps developers in don’t because think very as and up the I software. down, trend are more we like, seeing. certain on so, long-term yeah, are long there and just five more we unemployment sitting an line for is

Thanks.

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

ITSM Perfect. for opportunity. wanted Thank you, the and guys, taking the I question. to touch JSM on

what that a partner ITSM the from capabilities product. to in some larger a you positioning larger to are with already pick You customers about in developed JSM there’s may we the you do in that How lot of can of you compared it shareholder have JSM, that the customer and up, have how certainly excitement talked lot about solution letter an the that you are selling increasingly market? are incumbents are And as how enterprise place? that --

Arjun. and the Thanks, the like its it. to to at front end consumer-like buy because three JSM install offering. solution offering reason question. use built it is of our will something people there our remain customers else That’s that I end, One in ITSM We consumer-like back great a choose out a and the areas is

guess where put a so of in some proof advantage at to with great for I And the in situations existing all systems in there. we solutions very we organizations, get front coexistence just fight that’s sort large end point us. that’s

are our they with that with willing XX-month along our that that the financial so to value all subset, XXX the and is smaller means enterprise that of six-month many our can and much that’s stuff solutions, value onboarding the to second competitors the time to second for taking goes value a pay services in prop. to The we our Fortune time target and target whereas

And the with bring been and our we together, can long tools. developers third their that And is say our integration work closer history development of prop one the association all and no of IT for again, that’s else us value and deep with that.

our a one. this is And approach to long-term so market

We customers end we take and serve if with need with, that mechanism a where IT to Fortune in the people switch did out check loved product because go are XXX. want. market in by start you long-term delivery to you is check not want build box something largest that’s a you the box product aiming feature not to the that, every this order to We to up and

And so, the a of want large the that some we the coexistence, bandwidth they the out but looking we where that instances, people can’t, provide. incumbents to or haven’t the desire largest got bring that incumbents break the core things can those of find systems

we for coexistence In where very areas, just those out you that and small, will are large operate believe we other us, don’t at happy cases, that But space it’s and all. play long-term in make we those and advantages market over a time. sales the the in with gain mid three

Yeah. And other…

ahead. Go

Sorry.

espoused money. even taken house, to uncertainty. items have other like, expansion listen, in People of But of side have of time. month, are couple is save for because a share add just we the just last trying there the benefits from will go-to-market some our actually I macroeconomic we the advantage obviously,

a increased you have for for actually company free, entry if like, think to the level will which largely it, actually most. agents free of XXX people Service In agents XX three Management, for, XX is from Jira we agents at about

to many, we we will to Jira door our the time, many course, products. are in no many, start anger our And get to move new paid upgrade using customers whatsoever. or Management coming of So in over them premium Service to cost of the of at customers helping versions plans get or existing continue really

once we capture advantage So, downturn, in taking this market again, share. to are

we go a the can to replace strategy. while a the absolutely that’s not a about basically a we have at little hey, entire the on where think side been do be companies primary platform, more fast like, department, IT in then to larger help bit -- or into, of more bit ripping and little in we house, it And start nimble, team our how

and that the many of However, there to are to compared to. alternatives massive a compelling offering move for spend we many industry customers save companies money, Service Management trying give and the is savings out there consolidate great in trying Jira to are to a

the So quarters. we have Board off the other recent in seen strategies across pay

Thank helpful. you Perfect. much. very Very

Barclays. Your comes next from go Ryan from ahead. MacWilliams Please question

the for taking Thanks question.

instead of moderating at as continues to this share data what point expected a commentary Thanks. stronger data the of half? sales. Are migrations center in data center you percentage driving seeing cloud center your is for the So and gain than to growth second

fantastic I yeah, center, Yeah. is it’s have people a just scale, customers demand, of say Like, This to is many center a reason especially again. criticality many Cameron provides use that customers. the our data offering. data in performance largest there’s that. of And mission enterprise our

to cloud and server we destination our we multiyear rates a making those customers prior, migration and As away all primary from this much cloud, journey seeing been hitting I to is line in have for very data and with cloud these center, and the been expectations. have mentioned about

However, or server customers seen longer that on are alternative have say data the we solutions many potentially centers. choosing potentially might to go of

have our an we data many the to server So of continue customers interim. in for space of seen be increasing center demand

from end. to moving call data continue is center need the also path I that see But server many -- cloud. center from treat to data to We not a people to out dead

of the half on-premises to from migrated our fact, In center go come cloud. seats customers from that data paid

So absolutely for us we a our products it’s is data future sets to cloud The great in Atlassian, to the investment in commitment and more moving center as to future just migrations thing. up a see years -- come. this

to then, your part And Ryan, take the second question. of

In moderate revenue primarily terms HX, to the that’s some center data lapping of event are growth the we because of continue in the to expect driven guide, growth year. prior in we

months three highlight, the is saw. our expected by QX than billings we would driven we ago, that strong performance also though, I outlook better

center be portion upfront given recognition revenue And volatile DC to lastly, growth everyone it’s that the then, always remind sales. good data of in can revenue

that are month. being you changes of business as as keep pricing well So, implemented the the as about performance, that in DC think this some mind,

color. Appreciate the Thanks.

Your next Ittai Oppenheimer. comes question ahead. from go from Please Kidron

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I appreciate it. Thank you.

Please question from next Bernstein. comes Weed ahead. from go Your Peter

Thank you all other these that details today for the all on my questions. and taking you question been have providing

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Mark Your next comes go Raymond from question from James. Please ahead. Cash

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

taking question. you Yes. the for Thank

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Ari. Hi, Yeah.

would a on our the point long the doing, transformation one multiyear the view to then and about of Cameron consistent take as a journey, the we oriented what first enterprise of I me right? be of over and long-term you been continue the space decade, will business From of we as do on have half leave We argue. thoughtful how we the and contracts. are second major last approach Let that half

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Thanks.

Thank the the questions now will to all for have Scott time turn closing today. call you. That’s over I for remarks. we

today. call our joining for everyone Thanks

We virtually and support. As at all or Agile to DevOps you hope either your our person that the the able in and over questions we resiliency. for Atlassian continued next And your to world appreciate event, and or join Berlin always, thank dedication thoughts all in week, you Unleash. us your are