Atlassian (TEAM) 2 Nov 232024 Q1 Earnings call transcript

Good afternoon, and thank you for joining Atlassian's earnings conference call for the 1st quarter of fiscal year 2024.

As a reminder, this conference call is being recorded and will be available for replay on 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 1st Quarter of Fiscal Year 2024 Earnings Call. Thank you for joining us today.

Joe call and have Officer, Mike and Financial the co-CEOs, co-founders Cameron on Chief Farquhar, Scott Cannon-Brookes, Officer, me today, Atlassian's we and Deatsch; Joining Binz. Chief Revenue shareholder Earlier today, financial and year for commentary and fiscal release Xst of with results quarter letter our XXXX. we our press a published and Relations find letter website, release where our is Work investor other The earnings of materials, supplemental on shareholder the Life Blog will also section Atlassian's available in earnings-related including the Investor [indiscernible]. you press

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

During the Q&A. remarks our call This today, then on opening we'll statements. have time looking and brief call foward will focus

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

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

annual the only represents Forward or our statements Further of change to statements obligation undertake revise or looking are or and such update be these should other management's assumptions made. information to current. no they We as date affect cease make beliefs quarterly from including is on statements financial performance business in filings and reports. titled Risk Exchange included section the most we factors and filed time our could with that recent and our Securities time, the results Commission to in Factors

measures website. release in letter, in substitute investor financial or accordance prepared will available reconciliation non-GAAP to measures also shareholder measures. Relations we the the section are in During and Investor our non-GAAP earnings GAAP discuss our measure and A GAAP. financial superior of [indiscernible] and for non-GAAP call, on a financial between These addition is today's with are to not performance financial

allow We'd in as as to participate you many Q&A to of like possible.

for we'll turn the opening for call over respect of on that, Scott I'll at to others the And time. question with take call, remarks. one As a

Thank today. you us for joining

already executing we've read letter, in we've 'XX We shareholder and by been effects. well our busy. FY As playing keep off

on We our pay shipping off. push enterprise cloud, products and to innovation bets hard also continue bets, ever to our ITSM more and continuing customers. those and new to We're biggest

we some wanted capabilities. We experience Jira service AI customers access at and Service JIRA of program by Service our we the our IT XXX,XXX to heels investment AI availability innovation us. Jira [indiscernible] powered allow and or the work building at legacy even platform, of Along is the already. how from way of People through credible by sites The here platform. We of are to built Service waste. human across about already Atlassian applied I and Management early a discovery happening their our solutions Sydney information which who's and here platform. to customers we and the realizing and and the presents will . is for our last host encompass thousands they Virtual availability, Intelligence. collaborate to here opportunities video customers that been turning to as Atlassian collaborate to be on has trust be the video excited on network. within now High-velocity video just and event our debuted our with and bring Management asynchronous cloud on will in ITSM incredibly start seamlessly management thousand [indiscernible] quarter, assets the their deeply into service base across of are migrated that This we're capabilities [indiscernible] which with same general product introduced Management of and passionate Atlassian, has can and when terrific, announced the to acquisition in to critical WOM delivering off across of firmly the previous a heard globe fantastic organizations. consumer [ feedback value incredibly landing several are will we're opportunity power better enable products organic cloud the was announced [indiscernible] Agent a customer account from teams distributor shared who also all our are excited Through additional early exceptional stay messaging enterprises the increasingly AI to their a our ], of to quarter, believe general

acknowledge And this the Sales over experience to solutions on further We're with offense WOM I Q&A. and years to for Cost an as his the is our looking to the grateful unleash Chief gives in are his us. our Atlassian Atlassian also provide all Marketing Officer; incredibly customers Rao be adding the [ and of potential us we're to also Mike leaders. dedication, playing and friendship. operator across great cornerstone of Officer. that, focused impact talent. our for Officer, including bring success, great ] want promoted as our welcomed space, pass the Chief will most team. I Our XX I'll company, earnings whom of are With leadership talent to and teams. all call senior recently collaboration the opportunity and of retaining call to amazing them Cameron, incredible Vikram we Zane of Egan We as on Ozdemir Chief Kevin to their last and

Will question-and-answer now session. question Instructions] Your begin comes MacWilliams Ryan [Operator the from Barclays. first from

the to migrations. just question. remaining the you timing appreciate I taking double-click on love guys the of I'd

that point, likely on data remaining composition this invested those like and server so. is go a model cloud move little than are will expected customers when from to of revenue like be they center over expectation or Any remaining here? more for might more there the to migrations those a at think a the I

have I here, then Joe Cameron. is follow-up. I'll This and first take the

the our We all cease going aggressively center, server get the And very last this coming over And to very mid-February. years, then our few months, across for this date. line It's for next our that support after server essentially pipeline. data years. you the has customers server have of that that all make we So But out as over will up in see with we positive Cloud. gone few there the these many of they customers to we've many of actively plans them in there last and decision. And few wait today been know, end been us. until the customers life to moment up enterprise before obviously, are

months. up next with few pipeline have going We over a the healthy migrations enterprise

as that's still post clear migrations. want will sure make As I here what to many far is, have very February, we

data to those customers server customers the So many and cloud customers be data February for years. will those in to center will be going cloud. But choose preferably or between now the center to data coming migrating center, that from either continue we

short with we activity February, big date. So migrations post there to anything of few that do February compelling add? over the a next have event continue yes, the answer Joe, see in months is, the expect you to flurry but will

dynamics terms what really that Ryan, server we the last the support Thanks, our from guidance. change of Yes. are in quarter Cameron. baked into and no discussed

to when in server based customers There end and support ultimately may those choose quarter-to-quarter mentioned, as migrate. server Cameron significant be XXXX. how variability, products for Cameron we on As mentioned,

who to will migrate migrate will assumptions continue migrate, that seats those we consistent and to guidance. expect also data data seats will that FY factored not up to server support be and helps. we assume choose into our continue to end prudent with hold percentage continue remaining then for center with trends that moment. on We account between end in of migrated most historical hope split customers center 'XX, to to and of cloud the support, I that's to And relatively of

Your Karl from UBS. next question comes from Keirstead

Just the ask observations about macro. about your

seeing the is investor versus made the the SMB a I'd think elaborate pressure on space And skew in about remarks. of space. seat across talk SMB perhaps the growth with, in I you're Could bit say, every you on enterprise? some you prepared trends comment some challenges seeing, the then towards a the line

question, asking. Carl. Great Yes. Thanks for

stabilization continued environment. recall end QX, the as quarter. seeing played largely out the improvement very we You SMB healthy by trends and during and in of QX signs a expected enterprise Those into we of were and

typically we have Now and a enterprise big mind, significant from for not keep quarter QX is us deals, revenue SMB. to large in mix comes when it

cloud largely at said aspect expansion trends there's of expected. what QX, with to business and by top pressure into cloud consistent those conversion X of impacted and does having Now were or The the the funnel. in the continued to In between performance the call continue on paid out seat that, also really be free-to-paid noteworthy QX QX, we nothing in the to relation customer QX saw we segments. unusual those relative

stabilization those see deceleration as slightly. of rate the areas to continue we Although some of moderate continue signs to in

regions cloud our trends linearity perspective, to fairly of I verticals. all to a in expect products, see, quarter upsell parts that from And and other those business in customer consistent hope our then cross-sell, be the line what the perform healthy continue were linearity very The helps. with and across is to churn, you'd and higher-priced and color migrations, expectations. versions, impacts

at question. Also one risk of the to there three add answering just on people

One of seen consolidation. we've is the tailwinds

across they small one to across the actually. customers are stores the X installation, And number simplify A was of are we on. to X across trying and across XXXX that they seeing the down tools that that customer that consolidate of more vendors that runs seeing there. they of mission-critical, example I'm the we're with to Atlassian more and are because Management the using market, world And Service out Asia is having Jira that of Domino's, the conversations. We good consolidated and sort more actually and more and conversations large of them to, tools Pac pizza so turn

Jefferies. from from comes question next Brent Thill Your

Just overall on Karl's question macro. on the

kind $X to about to close Loom. saw the was between few In on and anything your add to many that quarters, different enterprise. Or that there quarter? you just a of about complete for that the you seen in linearity, what was consistent of that drove will, transaction? you've you're the point And if the was could terms pretty what billion of in magic last comments Kind that desire quarters price asking sauce, you also, SMB type also throughout of of if

linearity Linearity address Mike exactly I'll the was of expect in part up on then quarter, to the your Loom first the will pick regarding question it the what Brent. you'd in Thanks, and see. quarter question.

strange So nothing or linearity a there unusual from perspective was overall. Mike? about QX

from handle comes case. Atlassian. of us in for well distributed The the lot particular that's Sure. desire of view, a strategic Hi, a the that. first is we this we everyone. a view, acquisition collaboration always and think of of Look, are Loom great think is firstly, I point really asynchronous from can increasing a businesses. leaning for across product financial that Joe, into lots for point trends different rationale It working work

the shift a that of the that over are From video be part as the we've And workforce. I business the enterprise, specifically financial way way in rationale, it created certainly, part a to Secondly, think and time. really work on Lorne all the is continue will in and that can individual is the just a generation, in as make the itself product we collaborate said. of consuming interesting sharing product, people more that look, become AI consumed more a it changing ways video stand-alone the going at formats of the younger and and

mentioned and a itself. Scott in in his it's and now, that of a the space remarks, over brand, standalone got fantastic As is leader XXX,XXX fast-growing business it's and customers in

combining lot and we infrastructure of opportunities a Loom's in for infrastructure Secondly, video believe team our there's video with ourselves, team. obviously video

citizen We of across as have platform products a video first-class our today. family

whether XXX,XXX management customers. the opportunity will for or, in lastly, Loom our already product of service products, as obviously improve to in in collaboration business base cross-sell or software spaces, do Atlassian an that into us of combine obviously, with bit a more broad together But us to a our existing little as there's seen than you've And teams. capabilities of each course, long in that's

know So, we as think deal. We're it we've think it's great Atlassian super for do of excited a family. time. can of I about it the things a part product been customers fantastic the long

from from Your next Goldman comes Rangan Sachs. Kash question

It it products? to I'm And the the compelling you of curious see your you growth markets. be like as make that cloud to business the see, about outpacing stability product center how should proposition growth to flipped XX%. data way. of would for on Nice server incrementally probably that, Cloud, you a to do might thoughts think data profile? that at be was what value terms for sure things in doing we the would view like refined I you to in end and the rate would seems customer other any center too. more cloud the functionality opposed the go the be

start. is Yes, Kash, Joe. I'll this

It XX% at seat data was data platform. And strong of the to customers. on ahead it an another right. committed will a growth. strong the have and because noting expansion You're for how moving for That with by customers cloud. is significant of cloud our Cameron? is for who and to really those high-class from Atlassian migrations server a stepping map to stone installed good existing slightly the driven installed migrations was center was and are we're base growing big a quarter sign And data great cloud It's worth at expectations, which on to center, center base to the problem the a currently are future that a fuel blocked having renewals, moment. it's road

I've having long-term both that of many with them conversations our are and is data a of dozens see Yes. many largest the customers And cloud exact of reality center this we about decision making. as competitive advantage. had

Atlassian, optionality we in these the coming for years. For customers provide

the or customization able where their compliance is, there to not very their requirements, cloud. for As perspective, to requirements, few scale, data all been far their the customers privacy part needs good we handle requirements, as their their functionality is have

to where to over. In go those [indiscernible] business? to investment ready? there data get data compelling know a functionality with can't are I shown conversation cloud them timing either the they center that to with down we can their in Where and needs. understand we've record way, just It's migration? conversations, customers technical over. a investment customers move and to Atlassian. we'll the cloud their But in further them future. everyone strategic customers is them in cloud. get move there It business an is just is rarely longer-term really investment their comes are committed So of to the cloud Atlassian Can in the to track our the the is move along And we center And

Your Fred from next comes from question Havemeyer Macquarie.

I on course, but overarching an generate Officer has call. how thinking a Thank I of wanted you. focus in to number Good overall can't on to about fail PhD Loom, up course, notice, to product Marketing be AI summaries. being this catching Learning. you're offerings your as integrate in A new strategy. your Machine Chief of including you're AI-related describing, able of And

like an seems overarching it here. Just theme there's

as top trying course, you're to a of bottom, more spoke Of become well. it to an it, to but from seems like AI-focused company you like part

that? And branding And perhaps, AI-first think So marked? on elaborate ongoing you just Atlassian be could the company. more might you an of what perhaps how of value being and

can a Great but observation. be not on. and Scott first, obviously then does a her I capabilities huge our machine that, language PhD Atlassian, reasons. marketing, also and Yes, for different follow be She's Look, for view ChatGPT learning. if Zenith I AI take the you I'm or not excited CMO number the sure addition that on right. in that opportunity in and observe obviously fantastic that singular will to it's have by take I Fred. Thanks, in can board. Look, at bringing us live we of but AA We couldn't for reason models a more think certainly.

where businesses change transformation will markets, our each in great a ability value are of deliver which huge built. in software to the this is be to think, I customers, technology

that from custodians lot the lot customers a our a are we textual data audio have valuable data that of of. And video and of AI. increasingly, with is and effectively text We very becoming

really So be important a lot AI give able fantastic of or have we their magical answers them is which data, to in to experiences.

time building. a Secondly, have a we spent lot fantastic of we platform that

Intelligence features Atlassian that we've see shipped. you already So in that

customers' ability decade cloud having singular centralized family and features data of a having a in surfaces. all new the products of a to UI simultaneously Our result is the building those platform, the editor shift on to

incredibly obviously, them. our So And our to this R&D get our ability customers, incredibly, team to beyond on with and thirdly, we're bullish build features our a is world-class capabilities, out just technology ability engineering to transformation.

in new you or and that need we the have or internal expertise, build takes And are change space. to products lot built. or build fundamentally of products so to additions R&D existing build and way features features That a

incredibly AI we So about and feel we excited can fundamentally our value deliver. for what do can what customers

given painting customers. can business like whole materials the delivering of a create has that us paint new in we're It's products with. new with to amazing of a right and out someone the whole set set Look, we

so excited. And we're extremely

products. We are at of certainly center on placing building the our philosophies that

data we I technology people those we think that also on that company I'm can that really, AI give give certainly deliver them years means, take going are customers first governance do not a answers all when do and Scott, few to are principles to anything investing really and that any we're sure software add responsible and that's but certainly doing. investing capabilities companies of providence that. we when of them what out, our how is to the this privacy for making right And are sure that? play and we in say, form. But heavily to required AI the we and excited. well but in you'd capabilities, exactly are that what

Yes.

it's if us. And in have, business you decades what by know We has really unique of is data AI the data have the a when over unique we advantage for we've provide can that unique and couple look data you and done experiences sets, sets. all like driven been a Just unique things. you at

if are products you That's that's like our isolated our customers, want a of to which AI have simple part by inside them use advantage. opened to but as our few you, organization, help big make data that on decisions. -- train their of can't decades' is a data thing, data available Confluence, one you if AI train you Firstly, worth really on and of be sounds a to default, your people. And

that our do in lastly, long a The organization. And experiences products. the chain entire the across what workloads make about vendor allows talked we includes is and single sets But products across do provide us that open to one that we for our organization. you for to people tool just that the of we also what because insights does about an one a chain span breadth spans entire one AI data that provide second And can organization. have terms decisions use very that And span We've our unique entire open tool time. you're organization, across can thing. everything your information if thing, and third-party

And basis. We're then we're really a on what them so there and little are vendors a delivering coming bit got of just out on a our deliver on And we while features. customers to platform, things about regular I work excited regular our we interesting. think all their a about those those cadence AI super out the on And basis.

value to so delivering And we're down the our head customers.

from from question Mizuho. Gregg Moskowitz next Your comes

had migrations. follow-up I on a cloud

was has growth high And You think couple but it's past nearly the the of certainly, a migrations quarters risen the over like letter more Xx by mentioned shareholder year XX%. rate, of that the in user increase ago. a number I

also the just is set a of wondering, to much tougher reflective migrate in of of is opportunity numbers larger in to a or of smaller customers I'm appetite function the cloud? change growth law and it compares? So slowdown Or even this a

or now if little the The half this is little end Cameron. a first more had off saw the migrated Yes. across come we fit. we've of anything quarter-on-quarter, add times along server was that different had price loyalty some I'll we our of either jumps of announced programs and is This discount life, on But way. reality journey we huge number he Joe X our changes along raised we've than ever have since that based seats seems of of years take course, the the increasingly that have ago. which depending board. a

years, over remember, in these few the As events. last we've built you compelling

of that is partners, wait that migrate be the data do customer-facing already We and migration as cloud. than waited our life, few we continue a the the choice lot handling that. The years. earlier, will business the the influx with quarter-on-quarter. get migrated our we last whether of to there capable will we And to in in to few move customers we data into now have and significantly the on migrations next will dealing as get all coming any customers are to go [indiscernible] for their believe or of quite part as center And decisions we're part experts, center our until February, cloud, and good customers more data next years a moment are go Joe? as customers the of months to customers of cloud to grow center reasons be our I months the continue of I've throughout be large server are to making make teams, they so. incentivized mentioned, have to continue to post minute end financially we the Faster with many large these last the energy around to numbers who've

be do points growth Yes, a Cam. full year. to We've for very thing from other is migrations migrations. XX the only of The revenue big Greg, to FY coming we cloud expect I'd for 'XX year add, guided cloud

unblocking more by Cam terrific what to in the and enabling to more that's said, really reiterate and customers continue to factors. driven X make cloud. invest We progress and do Just

capabilities February to have reiterate growth. also said, support what support, to contribute is better in migrations the second will And every our end cloud tooling, day. the server do our we Cam then moment get and Our XXXX, point of that

Fargo. Your from Michael next Turrin comes from Wells question

one maybe on Joe, margin.

XX% last the be The if And an you That's outlook is close result. see from you where end level useful. help you meaningfully. where are raised side. Can much on the to also free maybe and just management up fairly focused some investment migration implied a priority cost for how year. us approaches, areas do on ended resources set to there server opportunity as perspective, as You margin are you the now

Thanks, Michael.

stronger-than-expected The performance right. operating You're by QX margin guide and QX in leverage. in operating greater driven our was

we so primarily the seeing And are that side. on expense operating

of In on disciplined we principles. team-wide would I a terms prioritization operating and core focused scale. been dollar on We're expenses, driving effort few as resource focused it's a calls making say return and we on maximizing operational every allocation the efficiencies spend. gain

As and a across G&A in productivity optimization from cloud savings all broad-based and result, the COGS between. to developer are groups everything really

it's do important drive in while durable customers. core we I across make teams, the to And it's markets enterprise to made to migrations to all think serve do our in and progress disciplined growth this, long-term and happening AI strategic we've areas and good note continue cloud So like and date. we investments

trends, the in capabilities. We of progress we year We've next over make you're to expect our and platform building building absolutely investments that or cloud growth enterprise-grade X. our terms against right. out In do moderate those multiyear and as investments those that long-term tremendous out rates made the significant

the we X see model of So leverage that's should in over years. definitely an coming area the that additional

from from Bernstein. Your next Peter question Weed comes

JSM some change for enterprise like strength premium functionality I cross-sells things interest Do had growth strong some and such I cross-sells, any with particularly would new that optimism kind Or adopt the didn't calendar about strength the for of in things at in progressing? hearing been Note, job say. a mentioning a cross-sell, are companies, I strength propensity new recently. upsells. see I think product, But or powerful been year? Any edition engine has some and increasing How to you you we're with conversation the did from hear JSM, notice great pipeline. other of end-of-year going here end how think of

We chime products Scott lot cross-sell that driver take to question, rate of first into part opportunity key I'll to fact to revenue continues our of earlier thanks. will that's absolutely customers. cloud the a been existing our in. then additional sell, model. the the areas and is environment that of been That that Cross-sell up the Yes, about in well growth has a macroeconomic business and be we've I that really talked one experienced. resilient cloud healthy. of held very through see

in additions In premium that's and terms the just date. QX to that's upsell It's about a say, well ability our customers that and I our it's up very pipeline, strong, our the of migrations, pipeline general, cross-sell. is to would function held talked products. It's of of the to everything we've enterprise

So we're great excited about Scott? forward that, and we're QX. looking to a

includes I'll you, Management. enterprise Yes, Cameron. This strength in the the is also the our reiterate Scott. take that pipeline, Service for see healthy today it not Jira on i we well pipeline is just but migrations,

within base. in well competitive are sizes, large Service Management expansion larger to the customers Nearly some that's deliver to small whether as is spoke Service continue replacements seen today we're continue continue across today innovations customer see going our XX,XXX to we as of Management's enterprise increasingly on legacy tooling. I be with in innovate our new We wins the all as Jira agents. acquisitions to Jira customers ITSM with merchant earlier to like continue about virtual strong only space. we believe customers to this And

also customer highlight migrate one of also within capabilities, launched in that customer is products, in lot exciting lot but Discovery, new we've products whether talking capabilities, of customers actually attention automation us. getting getting is to adoption of that's seen a a year. Jira getting is boarding new things I rapid of focus about kind customers, an our the this a most the over that we've the capabilities enterprise and early to about adopters white base, Confluence, analytics major and about for them we've base. within want of launched new that Product do our many So existing our our

have very developer hard So a new help launched and called Compass. platforms. just last new services complex on to couple of over really Focused weeks, we And product core user that. the manage about experience developers really a innovative their excited base

cloud, really Strength other the excited can't the of just is can I'm we them Service Management, excited their Jira them. but of environment adopt many are for out of board. in they So just to our on, those that them sight about. the and get reality add very many in customers products one, value to across turn easier them products. lose And simply way it's

to the the a them around come understanding of and have by providing many conversation, So value already we are them. time that sales are products these

from from comes Cleveland Ari question Terjanian next Research. Your

We speak to on the And cloud. speak, quarter dilutive around impact maybe noticed step-up any revenue? of potential lift some some to for incremental credit, licensing, also efforts? providing [indiscernible], the they're trial those X-month free during you Could if or dual so

ago, to the to run using start that and course, had when is to extended purchase of past continue broadly with during set time. to This just it, pricing could to migrate discounts migrations cloud was cloud different customers knowing ensure to as we This again. customers of at functionality. Or, when I'll extended periods cloud the a understanding say incentives is, that in done to the environments,environments on-premise the I like center announced migrate of than carefully take can continue we we've experience, that to a, they later. Yes. customers years migration to X with to the data incentivize And sooner few a their incentivize new everything Cameron get of combination speak years. server trials customers end of life engineered programs comfortable so no used it's cost loyalty

them from years. forecasts the So hard of these have day migrations engineered all were well last and few our ride, part planned, for X

all the way The make those roll quickly get really life server up being customers as to to it to get as as as to end for of continue we out in goal to cloud the February. who So to easy want the possible. cloud possible

Your William Jacob next from comes question from Blair. Roberge

And that with like bat, Loom to product work it that could the Gap] off ever and Atlassian stand-alone together? but see over offer you that management. as the integrated gets [Audio combine you're suite a planning seems do into potential It work time. to

start the missed the I of Jack, question. I think

if So question me wrong the answering tell I'm here.

is of half bundle like integrated The management together. Work through. Jira Management, think or and done some suite as, Could I get the time, Confluence didn't LUM with into interpreted work question first we've a over Atlassian sort come

question. That answering is So I'm I distinct certainly right possibility. hope a the

a number to that of I and the to of there's ways as monetize grow looking continue we're on As mentioned, a result acquisition.

of One product. to by audience think good growth that really It can properties stand-alone as we a is we loom has and movement already. It factors it. some viral those significant certainly just and forward. help continue has a itself

customer you improving, and as audiences competitive But our bundles our across a features, think about video video looking monetizing a Confluence, opportunities of might in right? different at certainly base. you're it it's position better Second, and certainly thirdly,

or agent think we to customer helping at to either management or customer. a component back you looking to don't sure and potential the from we be video the to significant things share that work when bases that can ITSM. and quick the come I the I do employees will from in thoughtfully agent there's to knowledge forget

will product, our possibilities to continuing growth bundling as stand-alone Atlassian will firstly, upfront fantastic it look business. of a we focus and the things be yes. together, Loom So a But continue rate like great and to which of at is on goal into integration putting

from from next Your comes Keith BMO. Bachman question

Many question, thanks for the Cameron.

going we about And this was the much How if what conversion help of commentary how some to cloud is you the XX? then conversion is if center? the help wondering metric? commentary February around what is each conversion XX that the I offer Feb you, When I XX points could customers will on talk of deadline. think after XX? should you same data for Any guidepost help for of how be I Any post kind thinking the about that may those, for help ongoing that be much past on of happens could. kind

Yes.

coming. is So [indiscernible] of points our growth cloud the we just for to That's the so is on business. growth clarity and came being where XX what clarity, mentioned that migrations

conversions. as of large center server mentioned, data already Joe is today the and growth to portion data a So, course, of center simply

of our pricing available on that website. actually All is

across see can tiers. You all

see going server and existing center can prices what the You what forward. are list existing are renewals data

Now that's the.

metric that is much, center. what's My wasn't same for the question. how my data Sorry, question Cameron,

growth, the So contribution conversions? much are you getting how of from

you address to that? Joe, want

points. XX to XX about it's Yes,

happens to you directional what of end those then to think? you after would And kind of metrics just Any barometers want server, provide? the X of do life

I post in would why year. half is, in deceleration of to center data obviously, expect server should a start of be see to the support will second to migrations expect big we you the the what say, of in going general, end server the data center decline. driver That's to

is of that of move timing depend quantified looks customer a and to many We lot And cloud haven't that what will what how those to of of support the How on seats seats on those the behavior purchasing data around that. end many specifically server like. curve moment. move center, it

Your comes from from Fatima Citi. next question Boolani

I it up increases and products cloud seems [indiscernible] suite wanted like in SKUs every the by October, cloud X%. about talk that the the that and pricing pricing undertaken in goes to solutions, addition, you've of

And will, who the in for guidance So as what And to being if of to the the how cadence discounts please. in MSRP, in migrated speak that is follow-up, are past, up cloud cloud to you past, an who you getting Joe, your on considered loyalty loyalty if maybe added customers the a question is in you. I that's discounts? year. And on contemplated guidance? then perhaps quick may, being these that customers How layer, for recent your can

This is Cameron.

directly pricing address just me cloud. the Let on

with this cloud you line As filed out previous in the price did rolled October. price we increases increases out very that have much go October, in we mentioned,

largely these it of regular relatively like customer this granted comes the, going understand that roughly, from minimal increases, for from mentioned, a X% and mentioned, that customers is are, increase price but price are our all is you nonevent. at rate forward. the Atlassian no purposes As Customers you base, as

we many customers. Of have course,

here cloud. to goal of on-premises many customers. continue existing migrate primary to over is Our our to

you've customers. compared on-premises prices it's our to on So cloud been list that always considerate whether us, dynamic very pricing about allowed always

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question The Cam. in guidance. thanks, then of the terms And

price multiyear Cam while rule changes, to make annual the As simply X% you keep these when effective guidance. the takes is because are happens layer impact that that for is good do the blended. time price agreements. think into in increase into use course it over they're a signed is model to of the And we roughly thumb our the a it agreements about of mentioned, for as effective and the mind, That's whenever built

from from comes Derrick question Cowen. next Your Wood

XX%, your your been causing go-to-market in sales call In shareholder of And was your strategy that's you to shift of softer. generating partners your letter, bit when are a growth that nearly total amount are growth and year-over-year. a cloud tremendous that at coming from own that channels cloud a really from mix guys perhaps channel up a the higher suggests of there Has your look partners? I out cloud Xx channel growth mentioned your

Yes, I'll one. is take that This Cameron.

a we off, first very, news. see that as very So good

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We needs. large have, enterprise many customers our have of enterprise migration

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Your next Raymond from James. question comes from Cash Mark

circle This of together. now quarters after and on offering. consolidation a the to the I Adam. trend Atlassian back is We're Mark announcing to couple wanted for

it's seats expand organizations helping out far. drive the so buying playing centers first on adoption? across could So Thank if actually the adoption you comment seeing cloud of And is plan if you.

just suite To like use cases versus Confluence, having, new broad of supported by a vendor those the the the migrating with a to allow of our set broad last the had many project of cost. We Solutions. consolidate are looking single in from when see variety Federated went to Jira Cameron not them a customers strategy many those Management customers tools looked very competitive address there come have customers, looking key Atlassian And manage what including different Management, many to significantly a is teamwork we the the And and of of over to have a massive our are lower happy decisions off out advantage the Listen, at of of year made and Work a what Atlassian and to single and offerings Atlassian of together tools needs. we realized other their for are This sets of Work by customers Apologies different products for variety we to on Atlas. to out a here. products, market vendor with standardize and confusion tools Yes. the meet across for, we try used of and there. is management a teams out departments board. we

consolidating quarters still the this. tools. overall days are into Atlassian it, a relatively going for It's we we're teamwork you in at that's but mentioned, and resonating massive Now offering, a advantage there. platforms still, demand definitely few on with early and as been has that

comes Keith Your next question from Morgan Stanley. from Weiss

the two, another I One quarter. ad can. in I different seems smaller customer you wanted if relatively historically, like topics. overall a seen it than talk Can squeeze On just count, you've customer to you're on of number accounts and took what bit actually of little like disclosure the point the But the you customer seeing of with customers. of into also away trends migration. free-to-pay a that about kind number

of add Just Atlassian those times you make and time. price then over has like been customers lot customers a quantity you like a bigger of

wondering take like to Just why away about that disclosure.

basis? only You're not give goal. Why go-forward on a halfway your customer to XXX,XXX specificity the

hand then I'll off Joe. first that the half address Cameron, is This of and to

as over free or customer slow rates mentioned, conversion as paid last year saw saw we So the saw new as the largely you to we number declining, we so, down.

to conversion mentioned our we purchase our impact. overall saw our experience, funnel, have actually, plenty see and customers largely free stabilization just grow up making to in their saw free to many already get instances them to are mark out free news, had paid the get these our cohort. Good that easier products, that of years signing products. using card coming or to user versions around QX new we that into to Joe for for continues specifically we simply improvements and and website, credit as QX number. net XX it only hit we in customers year-on-year, from earlier, are customer And their due continue still starting we made that being of commerce said, that slower but just in Now increase in that to to

do the in said, QX. to as more uncertainty seeing largely in that but speak positive numbers we stabilization Now of you there still want there's improvement of out Joe, see and to the those? slight plenty market, quarter-on-quarter, that

number the Yes. total continue to Thanks, will provide customer we Cam. basis. on Keith, a directional

continue be that provided. to will So,

believe we against a are our track new investors adding also that KPI will strategy. that really progress strategy, to this We goes help and

the We to that in breadth moving cloud are our focused goes letter, massive that number. increasingly hand-in-hand and total base, with driving customers, pointed customers this as within driving and shareholder out the expansion strategy we and of customer existing on

of over will So number to report And we progress that for the the KPI regular with we of are this. introducing an $XX,XXX basis investors end specifically and a cloud customer on additional our that's track customers ARR. against in is over At that shareholder profile QX, reason as valuable of represents met this think in that is XX% over a our had customers we the because letter, XX,XXX cloud read growing this you we metric the XX%. revenue. And

gives cloud execution our around we and So it. against giving and investors metric a both holistically the picture and of our expansion, great secondary them to strategy shift think, the breadth

from from Turits comes question next KeyBanc. Your Michael

Maybe we about can talk JSM.

One take movement of the non-IT can as JSM? Team a there things enterprise. Perhaps you're IT 'XX the beyond other you JSM with templates success rate thought about areas much talk was starting at that way department how to that of bit in taking was get to just interesting the and a the little of I

and often there, and get the result teams so not done. And making the a customers price where from this of health get that is be a a experience This features how have help the mentioned, think frustrating you better a the thinking sort is you something I something happens of excited in JSM another getting the are go to why and legal as other saying, outside of It's contract sort our experience. we're by excited and HR Scott quite in IT. case building team any typically see is sit see we That's while more with we organization, XX% can The here. better IT across particularly a we customers vendors very e-mails now about that an a of a experience. our fact slack that at as get also JSM not information reviewed? excited than that. the really actually And mediated that department space forward for usability, of Why of because want IT being beyond frustrating organization. to in temples, is my It's department? And, more matter something to for of you that I forefront to and that have desk. the you with can I for case We're our think or use to more opportunity of our point help a traditional search

you've really excited it. And about so and I'm that, we're yes, recognized glad

question from Ittai Kidron comes Oppenheimer. next from Your

questions of me. couple A for

to paid support? the give more of migrate you a you not at Will all on the that, expect from some give leave cohort? heard wrong, an migration. of question seemed the progress more us color I that business you work prepared more customers they to conversions. And on got not the whether to maybe by that color to slower affected update your in management relates and Can that If of migrate? magnitude It field? on part And greatly can already you just us or you freight part can appreciated. give be the your First, remarks, have little without intend you that move customers bit there elsewhere second like and this as is suggested

piece, the of hand to then This management migration side Joe. off speak I'll slightly is the and Cameron. work to to this

Jira been part enterprise new put as across and remember, whether there has Confluence, our from functionalities Confluence, key massive a products is capabilities, into that's management we've to our business of technical migrations usage well development great significant cases these way Management as seen to our drivers Work projects, usage which key in offerings you project extend adoption templates. the other part is And those themselves. Adding base, and of work listen, adoption our tied a and those Work we IT other teams we offerings. And business. that a and the projects product, it, massive and in of our use for Yes, been largest simpler SMB and name the Management, of customer business-friendly have our key Jira many your capabilities, So drive second compelling allows much for overall our we whiteboarding just have automation like Jira

all is we happening. And ATLAS price, the tools Atlassian new associated looking with on together customers single of as a allowing where projects together, who working to offering We a is those status already those are goals products communicate work bringing at work the a on single and and you onto have who the the of regardless status allowing their to competitive in called and for projects and platform updates mentioned, consolidate a OTRs product Atlassian. management basically them,

critical our forward overall financial going a of of year. part go-to-market the picture absolutely and over part last our So

cloud as a to have portion far customers server significant the yet themselves, we to to them we cloud. is a you move As data migrations post of server are to we every is guide this with, single right the February decide And customers, that either who data one, center or date. And I'll hopefully now aware there will tell definitely of center or February. working ensure decision

going be our with those migrations very really, have as on, conversations far anything process do to spike. much of As you and to The so in had many or any alternatives haven't continues has or been line plans see Joe, add? to month-on-month. we Mike,

Thanks, Cam. Yes.

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that. So for we have accounted

that the We have to account a in itself. for prudent that, and guidance assumption is

just Ittai. on can or I points more work management. one add two

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Your comes Canaccord DJ Genuity. from from next question Hynes

Luke is DJ. on for This

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customer we're customers the are perpetual licenses will Cameron years different server that. first to decision, basically question. X.X a you life? server Those dynamics definitely to extend server just that This the customers and is But answer support And of if this off, is here. will of licenses. couple No. That said, server make customers by comes of post customers, heads there those A by, up end that know gave the so holding we

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about. investments more like will, we've time, get the I the and investments at we'll bring some really innovation our customers there, age start about these say that are where and are in plateau of what also because getting got peak that we that's the cloud cloud. And start will decreasing, think over and more So our migration in we if of you excited platform can

track and Work customers their cross-sell Management nose to department bring into Compass, that with Service way, to to way, Jira HR and the user give the and to our in work. It's seen in products for product with seen Management that which you've market Jira Software marketing to Atlas to Our migrate us discovery, to ability customers these study that Jira is with Work Jira put easy get in with is you've from or cloud, our there. the way Management, in new faster easy department

that is can our of cloud both to cloud innovation about this all we we this and way we've new platform. And quickly build So seen investments we've the ability all reason platform built for so in because cloud of AI our particularly bring talked the you've customers us made and the and in is course, out higher, got is to products, we to to fact introduce new acquisitions this And as asset a hit in Loom be well. that worked as for in platform. like peak clouds well behind-the-firewall customers way behind we'll them there. bit a new than really more easier things it of and The these customer migration, out we've more building is the

lot I a inside I'm about more cloud, the how the know the for we on about so migration inside of historically, it's they customers easier products users to our to of And it and people know I a drives focused and can we've wall excited. spreadsheets super the incremental lot wall. then we think more better really important business. But us kind our have in the cross-sell it innovation we get can is customers, go deliver, of more

and get opportunities no organization. us of "Hey, this my can. And, talking there and have. far on conversations one the entire migration a else come when customers have benefits for to we think I in saying, side how are great to but consolidation that I do out to allows worthwhile really me that's migrations. so mission show of to And rid great, you And plenty pointing got up because real the excited going They and about vendors moves more you've I are the you're is those lot other work across out. things analytics that they're of And around looked moment got critical to particularly coming "and of I'm are

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

the thanks, today. Look, Yes. joining everyone, for call

a not thoughtful thank jointly else, few As be last It'd me of bit to XX everything Revenue ending support. the years questions your continued Cameron over always, I Officer of and friendship and amazing appreciate Chief for his remiss our support as dedicated years.

hope chair So before to that. and his and really rocking just retirement, off he enjoys all you team, we thank me heads the of from fortune Cameron he his and to from in

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