Atlassian (TEAM) 28 Jan 222022 Q2 Earnings call transcript

Company Profile

Participants

Martin Lam	Head of Investor Relations
Scott Farquhar	Co-founder and CEO
Mike Cannon-Brookes	Co-founder and CEO
Cameron Deatsch	Chief Revenue Officer
James Beer	Chief Financial Officer
Alex Zukin	Wolf Research
Nikolay Beliov	Goldman Sachs
Michael Turrin	Wells Fargo
Keith Weiss	Morgan Stanley
Fred Havemeyer	Macquarie
Steve Enders	KeyBanc
Keith Bachman	Bank of Montreal
Fatima Boolani	Citi
Arjun Bhatia	William Blair
Ittai Kidron	Oppenheimer
Rob Oliver	Baird
DJ Hynes	Canaccord
Brent Thill	Jefferies
Gregg Moskowitz	Mizuho
Steve Koenig	SMBC Nikko
Joey Marincek	JMP Securities

Call transcript

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Operator

Good afternoon. Thank you for joining Atlassian's Earnings Conference Call for the Second Quarter of Fiscal Year 2022.

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.

Martin Lam

Welcome to Atlassian's second quarter of fiscal year 2022 earnings call. us joining for you today. Thank

Revenue of today, On results shareholder Co-CEOs, James letter Atlassian's Earlier and Chief and and press our for have you Farquhar blog our on the the Beer; available also we and financial second a letter our Officer, commentary and Investor call Scott Financial other Mike including shareholder Co-Founders the is earnings-related Chief quarter Where Deatsch. investor of release with we the Cannon-Brookes, published Cameron The Officer, fiscal release sheet. our and Relations our today, our find earnings section Work will and year Life website. data XXXX. materials, Atlassian's supplemental press

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

call opening focus brief the during statements. remarks This will have we'll time our include today, then call forward-looking Q&A. on and So

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

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

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

Scott The are financial financial over investor a I'll and and or not to sheet [Operator substitute addition the release in IFRS. non-IFRS financial reconciliation or During call today's With financial call, our the to that, Instructions]. letter, opening available turn measures will we measures. remarks. in IR for on prepared in with measures is between to These superior accordance and shareholder for data non-IFRS IFRS performance non-IFRS discuss measures website. also earnings

Scott Farquhar

Happy for grow It's wave, area exciting an such apps is a at QX cloud our Atlassian Jura doubling Alaska. around to It's the in enterprise to everyone. for you long-term QX apps. in in at to another of now ecosystem lifetime $X our down on rapid receiving many The our investments to rate Marketplace, were see management management we joining quarter us all ago. are recognized our today. which possible to highest results. we Thank reflected the strong pace. recently And New continue be see own outpacing able the of make was was products. great surpassed past the marketplace years with started see adopting Cloud IT our momentum. XXXX service to three extremely as expand And Year us encouraging service ASM economy was in nearly we sales. half Forrester which leader billion a up committed for cloud strategy score. customers as Recently, apps to

also We frontline to virtual AI to capabilities. recently support technology powered Percept.AI bring agent added expand Jason's

Our results. great platform continued at investment are innovation and cloud driving

revenue XX,XXX in new all quarterly customers, added and clouds year-over-year. net than we quarter, we cloud This more landing XX% grew

path future. and in deeply As Hiring to focused laser and of massive investing We market in investing our front these in believe letter, seize is looking you've is read in priority. forward us our our people opportunities. already a we're top shareholder opportunity on the in

we can Lastly, for 'XX Team us you in join hope April.

With and you to host offer parties there. pass and able the the many well. thrilled customers around the of to that, Q&A. to person viewing We see back are partners. cautiously as be to call operator in I'll hope optimistic we're globe be our But also virtual to for with options We

Operator

Instructions]. you. Thank [Operator

line Sir question Research. from line from is Zukin comes first Alex Wolf of the Our open. your

Alex Zukin

results congratulations a And we outperformed were ago? this areas quarter. your on the should those guys, internal bottlenecks different expectations? to another your can Hey, just moment? at how wonderful biggest relative what if for the me, the And I two maybe plan? you than any year that about to think growth are guess, that maybe And how time

Scott Farquhar

plans thanks really, off Even businesses. If see one performance pick really product, by to would both in the saying was board. I against performance the the I I question. with you be very right data cloud Well, were start strong for pleased it out center across the and our JSM.

with hitting I the our XX think I given forward. That's thing migrations big really other subscription ago. with percent up that raise from course, guidance to mid-XXs to track would on XX%. That were a timeline. talking much is around us we confidence the about the has, for mark that's And going of full-year the I customers really opportunity feel very days our just us we're revenue highlight

that. please buy So

terms I In the there strong your see IT cloud of don't both to demand be continuing bottlenecks and the future. in of last the data question. for part center businesses.

are as obviously, One And cloud customers of It's we're quarter, increasing to our, the cloud. talk firewall making that things more move other is they the do that more capabilities increasingly, the the and continual go of clear quarter-by-quarter. currently able over in we we'll our the each that, progress direction. that I'm possible. have in behind we want And to this about sure more with to of

So about good we feel front us. the in opportunities of

Operator

line the question is from Sir, line next The Goldman you. Beliov Thank open. from Sachs. your of Nikolay comes

Nikolay Beliov

enterprise you, loyalty for talking question. in a from is really pricing from XX impact years cloud from your bucks business as compared the taking And to in changing. and maybe a oriented center probably pricing we data the price premium team for we for cloud, and now, the competitors. the model time. Jira year example, was And to low unwind that now. my the around will very to migration with to server when you two numbers. approaching a it James, one start years of the And the higher move company thanks And is now follow-up over competitors. Hi, probably ago Are started you seeing discounts the general, as XX plus

I size would that in think you. the of that's going strategy So in forward that a in the And how major is the shift company Thank light model context? reflecting and here. business of

Scott Farquhar

start the there. Well, Nikolay, me let answer

revenue migrations, of is growth single-digit for In impact to be terms the for would migrations year-over-year. our 'XX, expect mid-to-high so we're that what we fiscal the driving full-year, saying from in

was would type in terms that, contrast of to figure, out past course, of the just for there that our mid-to-high the quarter around 'XX. contribution expectation recorded we growth rate was in sort very what growth that I just can revenue pointing in And to QX, QX. of it in I add subscription you then single-digit similar fiscal of So XX% a

So that XX% single-digits migrations. QX, subscription mid-to-high from revenue of about coming growth a

other Just I things, would a add. couple of

referenced your loyalty their You question, discounts. in

from and end center, over receive today, would moving So server discount. cloud until XX% the a they of either somebody to data or June, the

XX%. into here that Now, July, time in to will months' few down have discount once a get we

important to that's remember. So

cloud. The to other customer migrates thing the when over I say that a is

that Obviously, of reasonably the the the in period very cloud Of revenue. a made terms that's our that course, businesses accounting. modest they on recognized in migration, impact

to mind. keep So three those in the are points

Scott Farquhar

on our XX claims that there's hasn't I'll change And about, talked the philosophy add pricing And Atlassian, really reaching philosophy to been the price we've around just the we've world. of and priced about years always we've back priced of sort no talked our volume. of XXX,XXX Fortune always running the have for. what millions that's we've and reaching people around the over

providing more and and a know, of customers And hardware we've of give in current cloud we've how our terms for made well customers. list prices at sort value the happy higher of it our for And responsibilities. captured from us also for customers by value end more we provides more cheaper consistently, the overhead manifested more the more free you've by so we it our value management are years, over that's customers, as what so time. where seen course, the to those take away over providing making lot largest are for you in of the And

and more time. optimization and And so any change our philosophy, high real pricing end see to the being to continue us low as see I'd there value I at we don't over to free more end more do deliver

Operator

you. Thank of from next the Michael line Wells The question Turrin Fargo. comes from

You're is your line open.

Michael Turrin

results well. as an and And of set impressive Thanks congrats here. for there. Hey me

the isn't of what maybe the showing there, Some I'm customer referenced where time shareholder model, the in materials, management, the Management speak Service at to makes service right out which driving you ITSM the Jira what's be impacting and stands and product easy. picking the out around that Maybe you could right Thank favorite, even in section. momentum up sure your Cameron the might you. as how the commentary that's

Scott Farquhar

is a has all as to Fortune about IT Yes, a can unique there but Scott we've end-user which are we've weekend here. handle Jira no sort add convergence a IT these themselves, their entire been multi innovation that handle together. the and decades in the And at market like taking three by developers our of there. we're and the comes island hand you to go handed they done seen seeing bringing they're say, that going uniquely in that experience, lot there's seen the one. deep some no most house second product consistent is to, people organizations. it's in is the set a delivered down. data of product of Management XXX when Service were moment across for And take days to in upgrading longer over and We'll and IT. the And range I'll on the of hand position company drumbeat it's that years focus transform of is on value that the over the things it's from range. us us and talked seen ago, to you've acquisitions that out IT feature IT have that allows positioned to to We've Fortune vendor that functionality, an invest to the our out a like CD ITSM, of in Developers bringing working aspect and that no other innovation. XXX,XXX, on we're longer across only way building has And

recognized we're excited been that's adopting analysts more our are importantly, who being it by so customers And is out super in there, it. which that by but recognized great,

this. able been the to ago we've great And move it plan And to pleasantly platform, quickly our customers. because value mean we've delivering to do years our was relatively surprised, all so three got a and I

continue to to ITSM expect grow into And the we so future.

Operator

next The question of line the you. Thank Morgan open. Weiss line Stanley. Sir, your with is Keith comes from

Keith Weiss

Excellent, thank XX%. center, about to to nature, on one-time me. in seeing the the a out acceleration nice full you aware wanted Anything congratulations One comp number. really, stood numbers in should a numbers, guys in I And growth there's two probably another kind in ask be questions. tough quarter for two of of really of taking another popping a lot that that I was eye data quarter. we to coming know QX. in really

some And acceleration. that for type material little strategy? But And us partner So year-on-year, if was was to caused needle particular it growth distribution that give anything revenue drove in a changing Atlassian channel about program of move think a that the sense we're starting more that channel the growth actually there that you growth. more I think two, what bit seeing accelerating, XXX% broader in about comment that that is become can acceleration.

Cameron Deatsch

the base Atlassian it look a the journey. further of center our question, them half Cameron cloud data towards highlights far is the our applications, migration multi-year on that data way ecosystem, And criticality also customer as demand, from at step is of center that the it's different best different just commitment that of the and say many a and Good for we journey, are to cloud. to the here to mission is as as the continue that's stages showing is into customers

our that they're are All at aware the of to came cloud look from last their maturity quarter, and cloud But future. of of at But that they're reality one cloud, in well different you our is end, cloud, levels to migrations investments customers. our center able move if all in them data over. is, strategy one-third on cloud

customer So we that can take proven cloud. data have the we the base center to

with that build when great critical my the absolutely Who partners marketing growth. are out first The customer you're working our teams, say sales success plan large In see go-to-market our there of for But migration critical the hand one with customers are in as we migration cloud them, I'm talking we move help a manage partners directly is, amplified to is self-serve with? overall this partnering second thing is tooling And solution with to to we and market. that their model to of want customers the the continue the in our around process. to cloud. hey, obviously, efficient in customers our to just is have general out for solution everything in to hand many partner do And show and to increasingly planning forward. channel, reality and can to and our of numbers, solution incredible for migration The I'd going our have which provide out hundreds been partners which that has partners you migration allowed we the us from with Atlassian. stuff variety

Scott Farquhar

And me Cameron's of there. the on just let add answer first part to

to nature. of In growth, to data of terms of Keith, one-time in something remember a a referred you like terms things couple also center

the of that we cloud fully that's on then time through. out, full flowing pointed upfront, reusable. customer accounting, this I other about prices, that just remember year, is a rec, data And rev around taken center, different our the the revenue of the would is thing now to with recall, activities effect the the last contract raised center portion think I data which is quite we

extra And little so referring to is the fuel both center. that Cameron for data those give inherent a things demand to

Operator

Sir, with comes next Macquarie. is Havemeyer Thank you, open. your line question line from Fred the your of

Fred Havemeyer

the very you evolving point? your practices. here. that differentiator tier that ask, another thank have letter, does on for top to your talent? hiring work throughout hybrid is perspective, I much, at how hiring strategic wanted been a landscape Hi, and from investor really You congratulations mentioned your How impressive policies your this for quarter

remote favoring options, compensation now In top any stock work of to comp is like seeing that are suggest weighing this Atlassian? differently addition to more just you either hybrid offering in packages packages volatile there potentially companies out or anything talent environment,

Scott Farquhar

It's Fred. Thanks, here. Scott

We team want people great, happy -- harder little although pandemic, to in that, and to we've through that wherever work we will wherever an a been employ a they to allow been go the our legal with that's have anyway really with the policy like office, right it's them.

employees, and employees So employees offices, we have seen working existing a lot of from seen existing new well. move and we've our as remote

companies really So don't to policies to that's the for that's Atlassian. difficult long-term great. for best that's a talent. to going differentiator I going and And We think that similar attract be be retain have think

they now off some thing of address terms many attrition that, to minor In sort compensation, we've to have of been the were really of seen across uptick an peers compensation, great up we're we before our but particularly around see with that with who in And that an North we have take talk anticipated ways ticks similar our with, also worked are haven't guess peer uptick we employees. there's that. on ahead seen early America, companies seen in I and resignation proud

is have markets out we the way that all for talked that and our on to the QA aggressive the that of functions the goals of like that, largely are into about out R&D three future back such see linked we think we have across Now, building about build opportunities hiring of to going all setting products. and the great we

these to large needed markets. go after I So

coming for you'll to really years. think quarter we we're and so our investment off -- pay uptick in over going well And us. that's, see the an And

Operator

Thank you.

line question next KeyBanc. of comes Your Steve from the the Enders with

your ask question. may You

Steve Enders

his to for forward plans that thinking to company bit Okay, about great. going how responsibility exiting manage the sense want taking question to the Thanks kind of are this about at get what just is a of as CTO. here. I Want ask for point? of three and the

Mike Cannon-Brookes

technology fantastic platform. Mike. the leader build an years. continue to the she's Yes, a us then can one. He's taken been last cloud class obviously in Look, I Steve absolutely world and cloud over it's into that take truly six

So building leadership performance what happier also said. couldn't his has a teams, we be with team. superpower I've been he building great high

-- good externally, in which an we're will we'll but we in we're talent find is his So more to on had forward lose the that culture he in no technology internally, I incredibly situation company. able incredibly sustainable phase moves Broadly, have of we where engineering of to in about terms in continuing to obviously, engineering. and in very an and good life, doubt, part sad understandable, I we'll be incredibly him philosophy be as on We've, is long-term feel a about a departments. confident leadership, to a our functions. all of clear transition our over And are And position. building move another and

Steve Enders

Thanks for question. the perfect. taking It's

Operator

question Bank of comes Sir with of open. line Bachman next line from Montreal. Your is Keith the your

Keith Bachman

I James, you to could. thanks. this put Many if one wanted I to

or effective changes, could You and Feb to impact for I pricing you will that And announced XX. been characterize you on wonder be the has the XXth data if be think would what prior server. center

changes, see data of posts of demand those center Thank characterization and/or in some and pricing any two of pull you. and those particular For server? areas

James Beer

the the the investment to Yes, they're last their of Keith. changes. it renew, price decision customer is makes sure that answer not to or these end as and going obviously at head of the was day, At the whether early year

you the So customers available had volume potentially predict given to really that offer we of can't -- them. this

price though mid-teens approximately think the which tier, of is server data they changes weeks by very product at back, look U.S. I those as growth normal themselves announced percent across vary few generally type user for So price in would center. that and a when by you we

that I in meaningful more begin the so, And quarter expect flowing way. in a would P&L our fourth to into

there end may last of the be of purchasing the those year. price saw the QX day, well at But ahead fiscal really So some as increases, driven in the event of we customer customer decides. again,

financial is this service a our been in go variability now from of And so for about talking some as amount our customers Cloud. on time journey why certain this we've model,

Operator

you. comes of the from Citi. Boolani Thank line question with next The Fatima

Your line is open.

Fatima Boolani

and you we questions in that acceleration meet afternoon, taking you. cloud thank telephonically with the to and and the seen Good respect you question business. Thank to concurrent data my for you get the for center again

into Now, put I can had you this a degree both of businesses mentioned that considering migration. third especially was data could of performance being hoping context about sort of the cloud how you center to those attributable concurrent enjoy acceleration,

performance So you center, can if Thank if also the that much and as how frame that context? through How cloud that just the the dynamics a there, for of have give driven by was some prior from we of of I'm to, us you. of just in curious you much migrations of reference quarters. frame walk can data

Scott Farquhar

one. to Sure, take use I'd that

Let's that earlier little impact what migrations. in our and we fact, growth was mid-to-high saw single-digit about a revenue on expect, would start in I a with subscription mentioned migrations. from QX we what

a activity coming think to from that about about Now, data is important that center. then when though note migrations, we third of cloud

picture. we're but important, data So of small migrations businesses cloud the in center, rate recording think of when both again, context, that and relatively the you the but growth overall are about part

back I've handful items really take think are migrations. what and a of And a the So cloud. beyond point for the to key step drivers really about let's

cloud importantly, our current accounts most continue of an I First expanding excellent of think job to we user customers. do our at all,

going about at XX,XXX also job data, they're clouds, they're the company, new all of user percentage. doing count. cloud, brought the to we effectively to we're You talked the very the once saw expanding a customers are And in nice we

pretty This impacts premium, then additions second with The much enterprise then I how we've And that on editions as broad portfolio also additions. our goes step overall seeing we're really across with for now, of to of right thing, think really of that ladder, a the several the got our strategy tremendously important spoken premium had value those our driver, quarters will I've making get standard, customers really editions. And really now free pleased growing about type And incremental four that's highlight then that royalty that starts customers activity. and enterprise. portfolio, we've we're we've if up they that been products. you

pricing so increase. So that's a nicely. think our when and you ago that saw customers you us layers monthly the P&L into majority of on A course, And rollout few months are relatively working single-digit of quickly, that a now the subscription. mid

So drivers those important are in context. really that the that

Operator

Sandler. from line the you. The Fish with Sir, Piper of line next is Thank James comes question your open.

Unidentified Analyst

is taking Jim, questions. our Hey, Quinton this for guys, on for thanks

we say at one the two products? that You strong fiscal additions of quarter of forward? with follow-up, quick Are as at is more to the kind what And cloud significant back the 'XX, adds customer education partners Thank levels? Or channel? of would level is know, ninth this then the there you. go XX,XXX moving do partners just legacy right to that within this education or again, a you inning or the really with left were bottom is we the channel fiscal selling 'XX

Scott Farquhar

you want one? with do off that to Cameron, start

Cameron Deatsch

far as as Difficulty] about names the new the as of channel as numbers -- speak Yes, the partners. Sure. to customer can the I well [Technical

the go-to-market like, to maintaining model. can got we machine As efficient I free go-to-market addition and But have call a two that that, customers, we XX,XXX our get far incredible business, as made new plus years in that change that to the customers call ago, net this in built while how I to routinely new we span. out just

customers and and in us people free. companies than that teams us. to paying of with us also choosing in why So using how like two shows in for just and We've more is, users. market XXXXs $XX,XXX And there choosing are demand have and coming addition more much

a variety the in of quarter-to-quarter, it. number seasonality, itself, the you Sort funnel, reasons like for it fluctuates name changes of

longer-term XX this focused the I trend. when individual fraction look be numbers We've overall of ago, of let's and customer the was at many which quarter customers XX,XXX over like last that years So a over company, it months, added the our base. on started with

continue able been just efficient, we evolve that and So to to model go-to-market work. make

As understand friends far of engage of Aussie what The the and mean don't our most partner which company, our as continue any means. it train migrations, hate it's Australian an to in. being in to partners I'd is say, there reality these we certify with means I multi-year journey.

Some of the leaving immigrations, trainings partners of these are through bringing and in. are well many going and ahead people partners all other the

So there. you tell plenty critical more there. execution and story to that our to I'll do But James? they are our migration

James Beer

I it. think you. you No, covered Thank

Operator

the question next The Bhatia Blair. Sir, your Arjun William with of you. line Thank open. is comes from line

Arjun Bhatia

on if product as any you priority Mike you maybe you not a it you be the talent. R&D like in it out the area seems of from scale share have or shareholder in can that, the by hiring When products particular scale. product Mike is focus. new portfolio certainly, again quarter. today? a the building Thank would that curious, addressed market stated perspective, was in that a I your you. key the think congrats letter, developer I'm And focus of you areas

Scott Farquhar

and level. a can market take maturity I Arjun it's model that

to And have our the building maturity spent we with you each underpinning, those in, levels markets. markets the of are to different very at a decade Let's ability large. look were that go lucky after operate platform like that in out. of And over we we've Atlassian that we're operating very, these is markets in markets three

years through, they're with to about to of help the the also three continue ability And so but required you'd you've when like I can the at pretty have point products, obviously, that markets, the build the say areas And A, got market that seen we benefits investments products our investments we've out. seeing as launch and different in talked across customers built new migrations to were our benefits those those we continued the you've over out they're we're come look bring and quickly. migration the in platform and launch to new that to investments in make those making, numbers, you're cloud

so to built so we huge ability chips mature as continues that on have work great that's see and, And course, organization. across to. to that guess like I guacamole all a so. platform think across across in wouldn't changes like, Mike of [Technical like IT their unique I I platform we're work given that, positioned the do being, that. and it'll for to work Difficulty] really Difficulty] you for the can And that do ability uniquely entire management anything add a to [Technical unifies work Again, be

Mike Cannon-Brookes

guess mean, wanted I just markets. in question I the started I Yes, in ended hiring, and

trying So to angle you're on. I'm not sure, go which

platform I point think Scott's about the is really key.

large all around team the that platform that Building world engineering the and takes we we Latin Our a class scale. economy. platform, against and markets the and large in world in believe we class in our is believe one team of engineering strengths executing have very of our a opportunities business at

opportunities. long-term are culture a anywhere core and continued platform pressing going against as and clear our business, So you see our and invest of thinking is At we than engineering we came believe those that the that executing things organization. truly a us opportunities. world-class also Rather improvements like in and making to in those being

doesn't steal we hiring? guacamole are to a analogies without the where we of world-class building huge opportunities putting core deep technology belief have R&D, R&D that Scott's and making the other is see like the about belief a just in it And it's ethical, skills that that you'll we at Look, if core that have engineering engineering company us. at without and So some long-term companies. of avocados from a executing deep work. But have we in into front

try And those I two in question. why so that's tie together and

Operator

of line question. Ittai the with from Kidron comes your ask Please question next Your Oppenheimer.

Ittai Kidron

customers great, One maybe color work great there. and second bit you activity the so management? expansion have our have of on transitioned remain that maybe the about regarding you little of management, that us of questions. can who you on is premise? to a on then more Maybe much numbers, the general the guys to you a how a give migrate progress there customers more couple management, cloud talk Thanks, service I And number about that Then of the on Can that can work talked activity the that mentioned too you cloud. the question different? customers one, mentioned expansion haven't customers of

Scott Farquhar

Look, Hi, take can those. of I both Ittai.

Firstly on flow. work management

we opportunities talked would our And huge get thing in say that this about into call. the fact is IT. we I The first deep the

teams We DevOps power at a on talking same Central about that's part but would project point whilst of And of a to Trello. spend time. hour say work continue on on A and to of innovation, job other management as and offerings, doing set our management just Do example good things it. continuing like the the of plus I flavor we our flavor that standalone there. of management. well software haven't out We're an at be it's make A to an incredibly XX things very program along different And to any about platform, your incredibly bullish work continues incredibly adding or having I we think with bullish work space. new mentioned Agile part an management, point coming

the very all. problem. that's management of comfortable So be we of attacking lots we stand, believe there'll different work feel ways I broad And with where

confluence. something like mentioned Before we even

the So continues that work transformation, IT the about how transformation will we how cultural software teams. changing that that the IT is of digital software teams rest about a and I business. lot say, a with how talk part teams of really A big excited also and evolve. to and and happens,

So the core are very have a software markets, all agile. at They but more more in is deeply. how base, different believe yes, we're also company be dynamic tied we we of those three and And to markets. together them in three changing of culturally why that's every technology changing as

or it more customers you you easier. single install, just pretty is to team and adopting it's them, it's your should lot free, of started. product in simple a quickly actually. a on we try nothing people nothing using, ability cloud, board, in try. can understand second do recommend cloud users cloud, of get But what get click for other either, you terms our the faster In can the a ease other this a With alternatives story, product to in XX to are and hence, should expansion, The

ability our So and just much in And to expand is in the greater numbers see you quicker customers. help that of customers expansion higher cloud.

product customers deliver We But help just ability have guide have the them to value. the friction our less in that and high. cloud is to to

Operator

line of the Please your next comes Oliver with Our Rob ask from Baird. question. question

Rob Oliver

your question. But that Great. to earlier knock the Good are for hear continue Cameron guys. really evening, wholesale Thank guys your view. alluded are Thanks lot you many my love Scott, and into standards compliance to And global you. there taking really in you remarks. are that cloud. down I a large enterprises I'd assume out of the Mike, inhibitors to to going governments this

little more thank maybe a in the letter that global then there's hinted you've standards of hear bit some excited has Appreciate out you're other imminently? and terms there about those converting to been much. that how seen you that I'd in as some come it, of So about the you to guys love very down, backlog of knock you what that

Scott Farquhar

right compliance and And do. we'll we've of sort the now. conditions. that We and just do season's last world. every it quarter. will Look going our are to bolts believe that continue The challenge for incremental of of done forward SaaS different comes with It's XX companies, improvement, the of equity just seen and terms in is about single that and the there shy you've asked for years company one continue sure, for geography suite be every to continued cloud overtime more every part improvement continued area momentum momentum, a in governance that of that geographies, legal in whole more more standards as something

underneath the Germany, to changes. do a do platform every Australia add in our products to time add the standards increases of to the to that sure, world to we our continue or move seen cloud. customers us work us that support We've whether a And data that standard, unlock. And of allows us that. we'll quarter, continue in over the singular that engineering cloud. customers and cloud the performance whether a a you that. for residency examples that ingredients, to to And BaFin financial it's or to improving base time, build We've just on momentum but every so It's customers done continue for support. to to geography of need we larger as that cloud. whole we it have portion class continue to we've of it also single it's lot It's in companies, a different overall changes market adapt and areas for and for unlock quickly that and see we to But customer scale of continued series a ask a the not organization,

is on that continue important. I the forward, of adoption a it's our extensibility, the going for seeing of to I work long customers we're incredibly is compliance hallmark in via regulations and and been cloud, regulatory standards things one to in for and these core, builds Forge standard last it the we handles standards. which like on going standards framework extensibility which And Atlassian difficult future do. that's in believe continue in compliance But compliance and extensibility, at The incredibly regulatory And equally in where the We sort the work mentioned technical to reason enterprise Forge cloud. be that also we higher and customers of is forward think going them. environment, important those to for us a

Operator

Hynes of question ask The you. the Thank DJ next your line with from question. Please Canaccord. comes

DJ Hynes

Scott, continued congrats I question on or for Mike guys, Hey, I here. a the product have success presume.

So visual versus why Like it there or market you growth. invest replicate? your hard you own? doing on it the really is to are I makes partner strong that a Miro, in what of are recently guys in invested collaboration know collaboration for about handful space it tools seeing visual that in that

Scott Farquhar

sure a and quality Atlassian. that SaaS investing can in Atlassian DJ. Look, that high that Yes, we're are we that, with I spectrum we companies make are enterprise of in in partnering to believe Ventures, partners having broad trying of opportunities take

It's series a and us it's a whole Miro Slack and that across that names. as others, different say you broad but Visual be whole option. as You've and do to look, bit it's of to seen a recently there. management. I it's not things as whiteboards, the one with used and It because our way more called project do really host a in a with a in whiteboard. well saying would category, It's markets, such can coming busy Zoom collaboration very like past of do up general smaller

person bridge. If than you're marketing a if utterly five XXXX. management do you're differently building project you team, Engineers a

visual is I term, a broad thing project the broad It's very So management term. would a say same for collaboration.

and the our making product there think a there, all with connected believe breed invested use any products just of all data is we best sure have that integrated the to all ones being ones customer obviously, in that And customers that in is our Atlassian philosophy partnered the products they fantastic any product. are other general, in out integrated I make the in we've and in. easily and those SaaS and the choices they are lot there. we data and have allowing in But of of with that

Operator

Jefferies. go the of from line Thill comes question ahead. Next with Please Brent

Brent Thill

the think the walk And I you've On on not. low. but Americas least is maybe Can expect in haven't over been quarters? seen still you in for stand there that out pretty then at through, like model the James, in know the to that that look you Trello, past in how quarters, over easier potentially Thanks. you platform the or yet million comp monetization and our Americas perhaps quarter change Thanks. clear year I next best $XX XX was little

Mike Cannon-Brookes

Brent, on monetization. first part Trello I can take the

mean, I focus first so things here. of have after that of knowledge And large you. billion sorts is repeat all our size the on very, there for grow, I can very demonstrate And that workers don't the there's of Trello scale. news I going much out stance But continuing we different we to new XXX,XXX Trello Fortune for. very, very think trying to useful do Trello, a

before us to we've improve to better we of say data, seen monetizing about, do continue had usage we almost whole product smartcards third-party I Trello improvements. every views, gotten the year monetization, Trello. it will so. with said, to and a integrate as to continued series on we've at product But that just talked the comes when it continue You've and That that put platform

it the and different account see sorts all the platform Atlassian terms in of and things. You of Atlassian ways in closer getting to identity various different

we it's a So doing product we make are will nice those in very and pretty things put And But that's by there. leave beloved that patient us you I correctly. first. Trello James, to continue continue for investment. And its huge users. business

James Beer

on Yes, just that. follow-up

an the Trello in this at again, around example And position. done standard of has different on points things recently been price call. One this is pricing we've bring we increases a talked about

we demand lower. example is sort indication actually the to where referring are many of good Mike Again that a So of whether stimulate to.

the the in number the customer to rev terms customers. course, of of for the we quarter quarter. Americas in largest Americas. upfront, of rate obviously to rec very just U.S. with result, growth data it had about do is comments home a U.S., in one point back is commitment that the taken the of year-over-year our the yes, good And portion have of strong strong terms my the signs was us. center of earlier the In Americas, a growth this And customer I in which particularly

makes of effect amount year-over-year a certain for the So growth very rate. there that Americas strong timing

Operator

And you. from comes Thank question of the line of next the Moskowitz Mizuho. Gregg

open. Your line is

Gregg Moskowitz

really we space be in app accelerate? here take are billion development usage that and half rates launched we sort an less than here sales. discounted the of and Okay, the My to with app other Marketplace a Marketplace incentive, decade in It's lifetime a a with point, at of as at I cloud is when where nearly was are $X apps seeing comprising Atlassian remember you you're we and words, now continuing question thank you. tipping additional ago, are a incredible.

Scott Farquhar

of us of is marketplace, billion the got off into went there more the billion people going Atlassian code long the we've decade the it, proud goals around $X itself, and the a on for Yes, plane for here. strong got I importantly, the us right, the the there. revenue around of such than the we've And that's got to Mike ecosystem where get to really Scott both over of of terms ground. larger back that's number wrote ecosystem, $X.X working outside sales amazing. Atlassian and remember, Look lifetime and the ecosystem we're into to in And Atlassian. original a And and powerful marketplace way that from had money the

we And of really, around all jobs so, and benefit how everything from us and proud that. kind we've the really benefit, Atlassian about of created we're been

to developers functionality to starting them more or those are technologies leads unique Forge extra things flow automate oftentimes to partners out are that their to care processes own of applications, terms using lower have app that for of servers. that functionality to such particular And with themselves, is the people existing lot own all used the integrate entry In things people barrier care things like their to development tipping internally based building obviously, build, cloud company. our And new these of people of Forge the companies that, our our a the server cloud and on in that as generic capabilities. And that takes as of points, business and things do platform and to seen different we've of in to of to inside who making marketplace new our applications. adopters is of early take build kind we full to now themselves using use writing inside

in larger to say of, have rates will has been play marketplace but that's partners, particularly So, focus rate, ecosystem be not and out experimenting how and our I of Ventures, of traditional we think is like pressure nice, parties, take Atlassian GMV longer-term, overall we going been through marketplace, to I pressure number internally also on and on is we kind long-term, take -- build side the that's to with on the is much, third but that pressure things the much investments lead so on to rates we that effectively how our on consumer around or beyond like internally. into the can people, that downward more we've you've would we rate get a seen the like historically, really our across over number like much, that's take seeing it, that, number take will our sort money We're running focus work like our much the that made and we partner the Atlassian.

Operator

comes Thank the Koenig from you. question And line our last of Steve SMBC with Nikko.

Your line is open.

Steven Koenig

of weeds. about quarter behavior, we're But let that, turnover here. a over about the center, know those if I'll cloud on respect about trajectories How increases talked question kind we be quarters but of we even And incentive kind that? do continue next guess on congratulate subsequent what the think guess from price the in the we cloud? low looking appreciate think the seeing that and to metrics is in how And have that also kind And the they that But of here, just about about in really impact bit maybe quarters? it's do little customer to to could ask take to early we're renewed within talked locking I four cloud. your XX, four expect in sales. there, the Most Would be especially you we convert puzzle data the qualitative. cloud remarkable. What talked qualitatively it. bit bit in coming we've I then, there here that quarter? happening drivers the convert you it's to would have February could of think the on accelerate drivers customers larger like the of been very about employee advantage to and a we've the have you price? with to questions actually, a seeing asked, little I my on I me LinkedIn, also a just greater

and all and again, that's thanks So congratulations.

Cameron Deatsch

here. for thanks question. is This the Cameron so Yes,

So this. two pieces on

every center your going executive we to So forward, cloud. time about you week, we option have just very I price some that's data a to is for choice. largely licenses company, can plan with a as an just continue an actually which a obviously, that's We'll call do make pharmaceutical was on forward, the his customers of talking options large fine. going just, one, ability changes, this And renew, renew

can with is and for projects, let's this how can fine, and we teams, that's what's we now. not forcing for a that's done customers, that that mandate, we it is out small second it all readiness. minute value give optionality to reality or path, the maybe what them is, it XX cloud company's like cloud cloud and he After start cloud prefer The in prioritization a we is, all option, get basically the a we're and few get their planning conversation, deliver. work have them for we the our some me go need can prioritize we done projects, all to any to going in The work, down just your what's your all down comes on on that

in place if or want absolutely to from practices they programs two now, now from months have The will licensing months today, them to we from or perspective. if a even make right of one four that we is and they from six now, move cloud, second big renew months plenty

XX do on these decisions based and means no toe them hold we dip by in cloud the for them cycles licenses, month cloud. So a their get to efforts,

of to project is than the lot down the IT comes take customers this migration, that in appetite anything. a more on So largely to

IT they more to the them to than For cloud our budgets, most all cloud. comes ready of go down customers, timing have projects. mandates, just and Almost are of of prioritization and

Operator

next from JMP Securities. comes the And question with Pat you. the Walravens Thank line of

Your line is open.

Joey Marincek

and give of then the how much. then color you're acquisition question. the what your you separately, us very Pat, Joey for EPS? And sort looking Can Marincek appreciate going Thanks Percept.AI on going more next some are so M&A about for you is forward? Thank just It on much. you in

Mike Cannon-Brookes

Great, in me Again, impact moment. is in relatively and end. look make Well take huge team to focused customer specific service AI a AI at squeezing done, smarts three specifically Percept.AI and the with management a let service and at manner. first. Fantastic smarts questions the on domain

Scott And part space, in the around. in machine organic see And an and as putting can would is say core always customers also it and as pass sure any we so a and smarts, keep continuing and to this about area have learning I to set investment philosophy, this I we our in teams but enterprise service the the that we our the ITSM shouldn't And smarts IT there. in at our that both know into platform. I continual M&A AI inorganic, service and improvement platform. improve of care of make ITSM need bake we the for machine of if deeply that driven out to learning management on best tools about to that that. of

Scott Farquhar

track call, which new a Mark track brought great, about long record the successful really record products we're of and don't extension of M&A, our so an as talked medium tuck-ins Trello, all Sounds we three. track I and our both dwell on we like partnering companies that record like company, which the small have is of on lucky ecosystem, building in we sized

well with will life is is to where miss they horizon, the potential we'll one as to often most a where technology build technology look Now time and long important the most culturally other for Atlassian And get after small that, everything important acquire there what's decade that the acquire to over we'll else M&A rolling been And market the so so be alongside Difficulty] kind they with out to change everything two, get number of and go as got to thing ourselves. do that mission. you then of it they [Technical time our thing things kind acquisitions our is that's on philosophy then we then the align and fit of we'll thing well are something you us be there's like machine no quicker fit evaluate over the help that alignment, Atlassian. tuck-in assets continue really

Operator

line [Technical is Sir, your Difficulty] open. of Cowen.

Unidentified Analyst

thanks margins. you James. Great, operating Question on for

you from where to You are XX% guys in the what's QX XX% could that see That's margin XX% down you looking to half, first low that to starting just targeting up in the watermark margin and driving are step and step of about that Thanks. rebound? you investments it's down hitting XX% to where talk kind guys

James Beer

Yes, sure, excellent a for as that build Derek, we markets are the that in seeing, really want very across much hiring, though been to talent saying around the we're this to push we've the while, they world. feel the company on continue three to we bringing wherever momentum

very differentiating team folks I opportunities it's our approach really those to in to a terms additional obviously, in front And of of able get after the lie be talent, competitive have we'll ability is that in think attract with the these us. right we anywhere best very that significant important field.

company talked about about an we're costs do help all was have Cameron with was very work cloud, of the that years, for talking the the opportunity that as with take migration he to you we're enthusiastic migrations gross that tactically, just is lines think make of margins. impact really of a this week, the about that along cloud what on positive journey And work. large that, customer number much more if that we talking so a customers our about quarter-by-quarter, that becoming increasingly XX% and we're resources on now about We've revenue fact the

in operating to our really businesses, and would significant In the having investment terms bulk the of down comes be of Atlassian. that margin, additional

priority. as that's really it's the it letter in we so And our describe why top

that that's we'll on a across just three be the platform important I accelerant of focusing our what is So business. think markets, really the opportunities

about we've showing get A, products You've new new will ability up be those to products, point seen program developed to important. that quickly continue in that talked our under

on Atlassian the and that So continue all focused be investing you very will will the returns for to our quality be strong. of

Operator

will Scott. I the turn you. call Thank please go Sir, back to now ahead.

Scott Farquhar

Have you thank in will coming these times. and appreciate I of good some in joining Team to to our the a I in you safe everyone up 'XX healthy see and all of ongoing day. fantastic Atlassian to for and the I just wanted and the of tune support virtually April. person thank And you representatives. today. call rest for your customers We remain

Operator

concludes today's Thank you. Thank participating. for call. our you This conference

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