Atlassian (TEAM) 29 Apr 222022 Q3 Earnings call transcript

Company Profile

Participants

Martin Lam	Head, IR
Michael Cannon-Brookes	Co-Founder, Co-CEO & Director
Scott Farquhar	Co-Founder, Co-CEO & Director
James Beer	CFO
Cameron Deatsch	Chief Revenue Officer
Keith Weiss	Morgan Stanley
Arjun Bhatia	William Blair & Company
Keith Bachman	BMO Capital Markets
Robert Oliver	Robert W. Baird & Co.
Gregg Moskowitz	Mizuho Securities
Aleksandr Zukin	Wolfe Research
Frederick Havemeyer	Macquarie Research
Michael Turrin	Wells Fargo Securities
Luv Sodha	Jefferies
Fatima Boolani	Citigroup
Ari Terjanian	Cleveland Research Company
Quinton Gabrielli	Piper Sandler & Co.
Owen Haworth	SMBC Nikko Securities
Kasthuri Rangan	Goldman Sachs Group
Ittai Kidron	Oppenheimer

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. Thank you for joining Atlassian's Earnings Conference Call for the Third 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 Third Quarter Fiscal Year 2022 Earnings Call. us joining for you today. Thank

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

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

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

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

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

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

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

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

Michael Cannon-Brookes

Thanks, QX today. another Atlassian. us for was strong quarter for everyone, joining yet

momentum execute well and We business. see great continue in our to

amazing see of Las our partners. our in the billion hear more products across current have our customer current to line and been demand from the an markets, Vegas. excited has of conference and all 'XX us. sight annual $XX significant growing and powering continue and markets ambition, our had of We revenue a X was our about our we've for of never incredible on It in based we're all products. workflows track We that stories, to Team in record opportunities community to XX-year mission-critical front about of Atlassian customer the now all

We can work their to differently customers from together. teams continue learn help our about how Atlassian

If our you the missed of you We'd to and IR our all in catch understand our better Operator? Q&A. operator our strategic placing platform, With we're bets market future our and about of be website. love to sure Day learn the for and recording a Las pass massive at materials I'll Atlassian event more Vegas, us the to call that, opportunities, for on Investor the trajectory. the

Scott Farquhar

you have we the do moment Atlassian about a Mike, to while want of future long-term talk here.

Michael Cannon-Brookes

letter shareholder letter. shareholder -- questions maybe all answered perfect I was of thinking the a

Operator

[Operator Instructions].

Weiss from your Keith We first Stanley. with have question Morgan

Keith Weiss

software macro now, results. is And the durability sort on of very demand. and impressive really investor focus Right of

good much the look environment was results, is at talked sort XQ we're of environment things, the the much in demand Mike, in? guys the us when are flexing how you One the guys understand at you to side equation a of is this operating of good Atlassian demand How is that about and for past environment. is are defense. executing kind But of in kind just that good, help built of this you've Atlassian of the you of

Scott Farquhar

paying super the company with is happy way And the those were we these we Look, migrating time. it's and as cloud, off free years investments things many Keith, that long-term they they who are long-term a But to that's those we operate cloud have. see were ITSM, results we here. long-term really in customers all infrastructure and ago in whether or bets what our investments, bets here. made Scott And or I'm investments. are making over

like environment game. that regardless think is And of the I long-term what played so we've demand

So that's think thing to about. one

'XX, seen about into aspect world. I our second worries And products seen we've of the I The the seen we've been downturn know in downturn, well. think our for that, but times sort And that demand seeing some sell a that long side of through kind that even and came there's the on we to demand requires played we've great sell. stronger is geographies. the of and we about of as out we're we around that, great good through that through all that there products grew bad have 'XX that and enough other in we've times, is what that around we market

factors. of it's So those combination a

off coming fueling I will business off have pandemic been and realized that. Atlassian's of tailwinds, is sort there think people after come that pandemic might

haven't of happen. anything, anything We that's to the to change digital seen continuing indicate a transformation kind structural demand if is for that

Operator

We with have from question Bhatia Arjun your William next Blair.

Arjun Bhatia

how of you're Jira a in topic I was at a Vegas. wanted on large starting year, it the quick changed around market into maybe has Management 'XX I'd of to commentary and that good the product big that how you at amongst Service specifically. progress of ITSM Management, use with know we've be quarter some that here. something congrats to are Team size solution It's years. maybe in the more over enterprises. partners deal fit for running X.X And would great pulled on market about get and desk ITSM time? is hear touch customers But to past, the I'm Jira Service the over legal changed I your for core have for conversation and love talked that the help And use cases and last up curious the making cases.

Scott Farquhar

I'll talk there's any the there. Cameron can chime changes about to size about color long-term if stuff, add in and deal with anything

advantages industry. the that bring have come do Dev IT we there's companies the together. to is the said ITSM and One And can before, Dev market. huge IT As as we very company we're only that attractive that's some in entire together across and

then our is playing we We're to that for the time play one but the just the attractive. the really our That's running. up Fortune XXX, And the XXXX. can cost-effective that's value, XXXX. getting also of solution Fortune other both and nature So not just customers

the down fit, been view everyone think out, service you like with out becomes whether up I stand And health annual people laid those that sort weeks are recognized few to of mean, the longer a organized HR, when service global visions I team, every your finance, at the just organization ago, right, a organization. we your a we that IT, the obvious becomes that have that team a we and our legal. size term, being spectrum. stand at the of one, recognized who that sort Forrester conference customers customer and articulated of the things so kind by large frame recommending look product Look, the advantages are out And buy like they to those time got. Gartner, that's big entire market And we've what to vision.

So to customer Cameron, add do you on size? want the anything

Cameron Deatsch

fit, checked of studies that Service for for IT XX, of yesterday Service that really features and case years has And look that are running that's part from Jira management enterprise focus, of supported a perspective, actually we that departments I address really is operations need, off have the type we out the last I service did is is here and exactly and management now. see largely customer call robust in IT which that platform strong, much not Atlassian you the our say, set where Service us Jira an due product by after way. most Management volume of plenty to to of and quite the Management Management customers couple market. kind as a new Management enterprise to Jira is We market that that the of customers like starting increasingly the shows want to just over just first as would attract of small our over all what just to of I investment couple a over very in cloud the requirements XX,XXX companies go been variety platform. And years, it customers XX to they're Yes. IT that consider relatively spoke service today. product approach Service or large we

Operator

have your BMO We Keith from Bachman Capital Markets. question next with

Keith Bachman

Cameron, your of look relative JSM work of could is maturity, next as to opportunity where if if opportunity my out it into to years, the in could your and Jira of to see and work wanted the for some do you you I since good is? and put terms I context today growth. is where the your how about curve has perhaps that broke ask transition management just get the your a JSM wanted pieces, you Work contribution seems opportunity terms But maturity XX,XXX if And perspective for Management it has see in to think work what couple to compare like you that. just think management? you the management scale tremendous you the question. down on And customers over

Michael Cannon-Brookes

to look, that Keith, talk certainly I one. can

There's For in we general. also there's products Jira you and complemented echo shipped in tremendous -- and Management we which Management Work in at sure, mentioned have Obviously, the like opportunity a Team in comments, opportunities large a and confluence tremendous would long Work your we Jira a proud 'XX conference. our Atlassian in Work by history Trello, Management.

few work using Work management want different and to can different manage ways. Trello reflect really allows work. Because a in manage and different that among of think, ways. is the teams autonomy and to different think the differently really teams do Atlassian Management functions together, But their create it's that term Jira tools work. What's ways work work I types have We I of different started to manage across to types to really, because are the in alignment we look, teams use applicable various that that They work market. We in important different that organization. your you started to comments.

the bring we under together all your Software the the Jira work Jira that management you're can them If third-party create management if together work suppose, that with with you lots way journey. work visibility. tools I and similarly management Service Jira Trello now tie of Jira But other the runs early working family, Jira same and Management, that's Jira in Jira It's runs. or very team manner, work organization with to helps management your in that

we more probably years like X it's So Service ago, originally shipped out. Management Jira X, whenever

we're in Jira and of and quarter-on-quarter, make and about that the do something with its a needs time and to time, customers fit opportunities. it you've spending the lot that well, to space from we're investing to management that. work customers products investing at continue very and their as try going to sure and to But we're over So in listening do R&D is to moment seen run very we us by bullish continue

Operator

next question Mizuho Gregg your have Moskowitz We from Securities. with

Gregg Moskowitz

only to of recent cloud any that I And for the outage. this then Okay. had also, QX if know could ask and concerns were the going X.X% rate you your and/or But affected any affect credits of issued I just adoption it period? installed forward. base. pace And the about QX that customer wanted about

Michael Cannon-Brookes

that talk on ourselves. to understand clear, first services when how lens. it way our and customers products we and this see of unavailable. hold standards we There's we own are out, impact teams the to Look, it's no saying Cameron that, talk how I'll and met I'll for are mission-critical it's pretty our deeply about are from migration different impacted let the not massively customers high our

yourself, As XXX were but is math the many. too you customers pointed you said, And X impacted. as out, customer there you've done

any fully customer customers still many. although restored. unauthorized customers customer are yes, that So One types we emphasize And represents have, of to those any our data, of this different Important been at backups or the than result Cyber-attack, of it not maintain our of of listening, so is data X.X% events in too this case. stage, be any for that has we no things. against access obviously, less types all corruption resilient happened that And all base.

we with pretty our very long highly, familiar, is blameless hold open processing something incident we a be and and culture. values, [indiscernible] management great You'll run

continue can that on will such of reception publishing customers we by as from talk for be do we our and our detailed a the but We pretty resilient this. such, believe do that a week, learnings, pretty a with we've and company importantly, continually ultimately as our to builds blog, change as changed on As that. I helps we'll the to result end openness. and our of engineering post-incident website -- us more a believe, review as ever we've great emerge happened, And Cameron, had to I what processes the culture customer services stronger we share

Gregg Moskowitz

you. Got

Cameron Deatsch

Yes. impact. I the speak customer can to

-- have incident Cameron, that speaking many now during post to cloud directly both to to they were have are that and is been speaking that. looking incident customers customers I've as the well this around way. imagine, can questions has and been the you migrate impacted by -- the I as by and As the

small moving which and about collaborative it we incident happens, when through happen forward. calls it one to a too they're understand tough Getting the Mike very will we're this take a of exactly walk discussion Most extremely in customer as is said, we seriously. again. But conversations. what Now what well outage detail and as ensure on our subset review the into customers, provide while the many, on completely in these affected we with doesn't customers turns as it doing base,

talked last shows we with with had years, standardizing morning, SLAs caused years they who did the with I this them criticality concerns first a uptime, workarounds the more as spoke the mission us. they few credits? for the upgrading kind about to do premium version in But had and just applications started with moved the much were customers actually our on James, in talking as how talked them. interim is the products. to our actually have end customer have the their goodwill they incident incredible reality by this of you about fact products, was they the we of In impacted out. directly applications. big We that conversation, of forward, -- the us do which for And when many our tools incident and incredible was how we our of me was us want over to And about

James Beer

Yes, much your Gregg, were just that the part of want the for to address the question. impacted. Obviously, do we to thing customers compensation very right

to clear, would would not would to in statements. expect nothing I So in level there be so I to compensation but QX, be the material financial expect that be the QX,

Operator

your Turrin with have question Securities. Fargo We next from Michael Wells

Michael Turrin

is event-driven. a consistent Growth this as XX% remains the characterized growth carefully letter, at as and EMEA impressive touch always. The number lower

changes can And you're around mind not and tougher comp, As software add And for Is those far. useful. of you also informs a us watching across what fiscal signals and additional demand-driven. there citing thus there? you're observations top any of certainly context of the QX all result the no material

James Beer

but fiscal Yes, year very Mike, behind a But so changes. first, server associated tough then price year-over-year much framed year center. there, our XX% QX had you of life in you're were growth we very customers both European this Cameron, year-over-year. EMEA with the server event-driven add in comp I of those of that particularly at address it which perhaps growth we of you XX% ahead as can adept alluding and versus who increases with Recall the Michael, announced partners data result or the recently and And working ago, EMEA, as was then get and some as last having question, on to can significant had a of me. year, a also end to activity their of 'XX

reason total further would EMEA I in tough So represented just explains revenue. of that note the that QX, for really And comp. XX% the

So previous a sequentially up point that's the quarter. versus actually

pleased anything any world. growth anything Cameron, activity in our have unusual We're with do And seeing the there. it's we but parts yes, not rate material in extra change in EMEA So in as seeing of day-to-day. sales our other QX, are early, you there? not

Cameron Deatsch

had market and cloud financial migrations. BaFin as cloud weeks I enough Germany partners. of challenge variety satisfy they able 'XX quarter perspective, a that is addition up has is our for know, trying a kind to what very we couple met a want released located market. but agile for it I here -- is today our constant of home demand Atlassian story everyone's continue it with very responsive opened in And to capability pretty are in world, because to on of and story impact European no our support cloud that, to to as you for that present products, changing services Ukraine that large remote transformation, our short in short the from for direct the in what speak standards hire in teams new Yes. services as European from be and biggest being people Europe of that's conversations, work and Team just does, well of because that Their do. to with partners. has because the basically which demand the The more focused remains financial war this In is cloud digital in to And see the demand ago. opportunities heavily of firms the Atlassian's to applications provides last solution companies much variety a for

quarter. demand things looking to and other continue we see this that there good So

Operator

from your with We Oppenheimer. question Kidron next Ittai have

Ittai Kidron

you. a James, couple for

the believe customers well I side. in you. instances to perform Data data going the continues Investor How do center in in kind time? forward? to actually very about financial of Can rolling data more Is then little mentioned the get just actually framework cloud of think center Do over is to happening on side cloud. or were of growth Just migrating a few a starts for Day, and you the that center where that the transition the point see Russia, been, you the great. we turned there off regarding the any can the and customers be customer base? that annual sanctions a around help of impact what's pay. X,XXX revenue household question have And guess, bit that way tell I to another us us that diligently inability just equation will because a this you

James Beer

those center. you Ittai, data me in of cloud alluded that take fact question, as I business look context Okay. your are of the let the the was one, there. X/X with coming first in very of And growth data center. pleased rate volumes at when Yes, the from the migrations, our you to

customer. theme we've a Obviously, recent to server best a larger to the good is also I that So important years. to the to number I I data been be cloud, talking putting one customers a much of years. around where data investment center, number the server migrating disproportionate And the reflects going much to fact the stories over our out the our a been this That's amount experience this the play of that think products lot our very thesis, think, is for very think the in are obviously but is that of here we've for cloud about of migration a on journey. center continues generally cloud

to that expect would time. over continue I so And

So center for would discussed past. we've in a obviously But does, yes, as the represent it that headwind data as growth.

not this overall so able matter to For it's yet cloud. customer Oftentimes, in forth. their of to a some the they're and IT workflow migration fitting project move to that customers,

to And at delighted so our high-quality, products, and we're forth. look that so good center data customers continue value

I that play gradually so And are over the dynamics think out will those time.

business. and noted that we past of the out X% that quarter, the X,XXX our in Analyst about customers of Russia reside had customer of of Day, dropped terms count at Russia represented In this

customers So fraction a those that X,XXX point. of reflect

Operator

Boolani Fatima We with Citi. have your next question from

Fatima Boolani

oriented of know billings metric can pricing a do this you I'm if give And billings guardrails calculated the end changes in business one on the products? should contracts. and of in perspective billings metric. reminder you. us just to or doing on reported But metrics is love given we not some respect your calculated as on curious enterprise James, on neither and run put volatility how take were. the the with you the the points that focus around for some I larger life is enterprises preferring to transactions maybe you of on metric, the certain of to longer-term just generally it get or particularly I'd then more

James Beer

speak you here of revenue think in Sure. plus to deferred. it's billings, really calculated when I certainly deferred change revenue because

the server mentioning so in in revenue of earlier related first your year, very a point just to event-driven last that one QX to the part price around I was around life both to of back activity that center. increase that question my that increases well we that metric, had previously we substantial and as volatility to I referred data as And server saw think the we of in and answers, as end announced of

that level a very a increment time. us ago. year significant But so recall, had that point at a revenue in deferred drove you may preannouncing, also And drove revenue that it

we QX we revenue increment revenue which Now of seeing activity. data the selling somewhat QX, to on way revenue, ago. significantly this look increases rate the think at it, is year and were right for sequential the to deferred fast year center deferred level I see some the of past you'll to previous and deferred what price of again. growth forward this half deferred a percentage But but revenue then balance server the a in in growth year, basis, less and had was that the than upgrades server had finished activity, In we event-driven businesses past look this similar you and when a the also of at both similarly less

in of So thing to on really that's revenue. deferred the I think of focus primary volatility terms

quite of some commitments. in customers larger are In And impact you terms enterprise interested certainly, activity, see that effect. clearly deferred long-term the of those revenue line, the the in multiyear of

deferred we've the the grown here, actually in for Now year. at again, dollars year-over-year. revenue, absolute actually if last substantially they're they're you down obviously, look And long-term

So an business while that wouldn't large is how effect, I evolving. it a terms say it's terribly in our model is of effect

are yes, I for numbers, enterprises our relatively commit who So scheme longer, the have to us in overall some but modest. looking of to I'd say this is

Operator

from We next have your question Fred with Havemeyer Macquarie.

Frederick Havemeyer

And on Certainly, strong for I congratulations shareholder team letter. firstly, quarter. Atlassian another to we front outage And were globally. when important what were the developers, saying you right thank quite you're with the bringing that you're transparency think very table the in consumers think technical working also your online. And is tracking many importantly, whole to enterprises I addressing up and the really

pleasure question, higher-level with always it's a you to I see James, don't really work while you. go, to want Now

you in to date or CFO the wanted retirement is Atlassian this successor? Your horizon terms And check anticipated on is I of are And at where the here. how a transition considering point? finding in about potential just thinking

Scott Farquhar

earnings backgrounds you old call tell his celebrating Yes. liked out want this do XX how of XXth and Thanks changed, we've call celebrating, moment, numbers. the It's at [indiscernible] earnings it's Fred. James, with to us

see we with it's Atlassian. for exception excited retirement. to other how going working of so start he beyond that whoever -- going great to for himself work high he a that make to we even just [indiscernible] remote Soon, as want people James. been we he and keep enjoying Island, hike, And lot James a him so we had And snowfall, and job. who go the be interest he across he does to are come super industries flying soon, research sure will swim, We've bar great industry ongoing. and a into But had expect, from the to with he'll you'd sure enjoy will much -- plane [indiscernible] know I a be bought a

And candidate. so or a to any landed you'll this first know of that I'm kind we've names the about not any ready but suitable once share details stage, be to at

Operator

from Brent next have your We question Jefferies. with Thill

Luv Sodha

for we HIPAA Sodha I to Brent coming compliance Confluence expiration and it, achieved next ask question wanted up for This a Jira this Thill. about June as have is on think Luv Cloud we demand should how Software XX, the in cloud quarter. on and on and especially loyalty quarter migration discount you've a

So X how events? year Could when context what these give had some of last similar think maybe should you saw you discount as us we a historical expiration? to loyalty you

Cameron Deatsch

end back it the February along the XXXX. upgrades in elimination steps server Yes, of this And we on of the different much Yes, is server Migration Cameron loyalty off February or very very was of to way, continues here. be one. whether continue a in take life as multiyear the I'll discount It's planned. have coming in track or journey. July say we much to that this we

is center well planned end many the as this then journey a migrations it's on to we will a to doesn't end multiple once few component is life it And of and years important cloud At migrate. again over reason off that been have has to to once to come. event the will be this years where for server track, go But still time, and out. the that We say next customers customers that stages give multiyear migrating happens. to all data

them our well have a can level of cloud, this assessing be to discount, a understanding, but get better it's say empower those customers whether teams through at we better get gets those day. we later, get partners different go hey, we having it many this the we assessing will our for journey different solution if journey, and our day, we discount. as conversations, we every this If conversations have us. helping migration impact, every So financial I'd constant go earlier, as

that's to data, we what onboarding addition moving journey. a about happy convince about actually get cloud, to And we moving their their once their In move I'm the them is systems, that, to very users. getting customers the better cloud, to

we I with mentioned is Our and is of for on. products that that we say helping and continually as just HIPAA HIPAA solution constant many are different it's also every and are mission-critical. and I different you mentioned partners teams customer, want working moving one thing, [indiscernible] requirements transition to well there compliance out that. That have a many

have industry, those teams knocking We of opening and -- largely acronym name the cohorts dedicated whole a that you up the customers. off are in them compliance we're

the so care markets and FedRAMP, start So HIPAA, with organizations. on working which and health on and we yes, We're forth. can allow government so open to to up talking us

did So FSI last year financial services. we more

of think So for on of -- as this journey we'll as our financial couple continue of the continuous improvements side a that well over customers. next the set both product as on improvements the years it

Operator

We Zukin your with question from Wolfe have Research. next Alex

Aleksandr Zukin

for So the understand to driving data just center increased wanted and back data particularly data -- center spend super more us, just if of center kind key on I would helpful. coming there? from that out-year looked your of QX. think targets. the next business, revenues the seasonality, or that either in mostly how for the trajectory is about some in interest is obviously, the you're And QX margins around year QX, for remind in incremental I guidance and thinking And the outage like Where mid for be

Cameron Deatsch

spend. I'll Cameron is let I'll again. This data James speak to center demand. the address incremental the

is time It's it's going great their single innovation environments. control great for the stay now customers can in of they a side, The new this as on and cloud. looking okay, center a point this. full are cloud in on every launching to products a coming to stability, of customer. for hey, year product. that make that On a on or who will do to performance, scale, mentioned towards an from with applications have. data them. I foot, the the offering X we to day trade center the make or data cloud coming the their very Many of our customers, that focus of already offerings trade-off always that on new And is saying, about customers will want for we are James go data cloud we know be right And only a center That speak much running cloud our in center going natively not on data available customers sure the our many A of It's are They we're front customers they cloud. get said, call, are for knowing lot stay in the are option features, the all customers maybe being, customers continue that decision. to actually many be every for say,

with need to customers, high customers record track foremost. our cloud They we customers for good option a stay incentivizing are those on are is first satisfaction center, for whatever and very to for great them. for line. We that reason, that product have a But choose data and

James Beer

for significant in front will terms And of part in of we terms Day to thing of believe cash the forth. illustrative at have talking much right that theme opportunities be right of over free so there against of very flow margin looking we and we're and your shareholders, very Atlassian us that generation that that recently the invest time QX, question the at in operating the for and that is those Investor we were about

And that delighted acquisition people around world. talented one to noted significantly engine, the the effect able higher we of talent the you of from XXX total net is folks XXX. high, That is many than previous the was during that letter full Atlassian's, if will those in points we're all quarterly And a new will, see hired of Atlassians. QX. the we our that you is which net additional QX, Now that quarter new in attract

an to some side our team expensive is future. anywhere of that the have expenses element important particularly the to and strategy our sales the this. remember so QX the we've in an element of for -- terms as to I indeed would of think able marketing other we're just event, we equation, 'XX of in how had item do well positions One think us the current in very I And discussing, that QX quarter. added, Team and been

Operator

We from Fish with have question Piper your Sandler. next Jim

Quinton Gabrielli

is competitive most as you we much to with current would to Analyst greenfield opportunity. the course installed team goal? said the represent $XX how a as And as management management. on How management to for then billion there a that Day we of opportunity work Quinton much than back base the opportunity, of work work is revenue that solutions. $XX wanted hit have that reiterated at versus to for think about penetrating Jim replacing is of significant it to The today actually This greater circle Really, the and billion Fish.

Michael Cannon-Brookes

look, answer can a few I Yes, comments. And that.

model, I markets. can't X is we would all I billion across in and fill the there, we out feel $XX detail Firstly, number bullish really our confident of that reiterate on and and put the but sell

logically, work talking going millions number you X of millions about would professionals work IT I management of you have most and volume management about of think workers. after the active that target most monthly million -- IT of all think hundreds tens different then people finance has many which come HR the of right? The said It's If and marketing that most of are users, of management technology in start once XXX billion-plus departments There majority we've department users. obviously, it are companies. would the more broader knowledge logically the those right? that space, and developers, likely sorts in in working is and of the and connected working there from a work space,

per perspective. the revenues So dollars of quite that's of be from that's hard that, would Both me are are that X that obviously, both That and have Confluence the histories, said, we it in strongly products Trello, to scale. have grow higher. because going may to obviously, a over at continuing to are and be but multiple sort those. the that commentary directional and user logical reflected user generally in the we perspective, technical necessarily high-level work. sort There's invest years seems to of fantastic of way more the at in not tools ahead, very continue That scale

a work new organizations way. want management, compliance offering, for and mentioned of of series also history that advantage that work built structure Jira We would Atlassian excited the the both work Jira the products we've seen, work teams of our products IT that and all and the management and control we the that that work I lot platform and work family Jira's of developer What we say of Atlas, case, people spaces. be and have continue management a And in at to auditing often and management like controls that more I there. example, particular in fair launching well in think platform. at And and And it to terms of about But newest top things helps That's on 'XX. details the are differently together. finance this. our to this processes our products and teams, stress for of innovation obviously, space Team allows work it's very things with being taking looking

work together look to of non-technology spaces teams management. of and a have our although we Similarly, But in both earlier, we into those water, of markets, sit have early strength in in to you the can that. the IT lot continue on phases Scott and customers. a for very adoption you and One be the and helping you're seeing well both technology markets is -- or work the be visibility we IT our together grow, sides right? put snowflake across customer them advantages visibility increasingly where can to as work of your the that look mentioned advantage water ITSM continues in how come because across from Your are an book different that JSM and market. with connected that can under software X X developers management, your teams above work

I'd I So on incredibly space. we're the bullish just say guess

very are strong. We

to market. as I And customer we have look strategy Work incredibly Work Management at there. the is We Management reception of our tool explosion our solid think great

Operator

We have with Baird. your next question from Rob Oliver

Robert Oliver

it. a around some products. Mike, just of guys the in Appreciate Scott, A point question Great. for you

trial good a a is activity still interest And it's be a the seems also into is as for of to to equation confluence from get the around and partners, like the as sense seeing collab well. customers? free and Atlas you So, side, to just guys see partners starts fitting scale. on forward then and work sort just to and your lot buzz you wanted It what I are workflow do there? that which up just how demand what at of

Michael Cannon-Brookes

Good. Yes.

were there think there, I Rob. X questions in

that's if right. separately, it take all might I So

on Team take a and positive then of for together innovative second goals forward 'XX, was of different add helping both first point, the say. I'll maybe will I the then which It terms point in outing and to people miss on Look, from lot Atlas A, A On and I Compass incredibly similar Scott anything. first if areas reception very layer providing sort of slide can of point that way. work differently and have aggregation in and I'll a

both. the technology user positive broader cost very very, reception Atlas work level, And to team directory side. So help comes company the on both on

So customers, as put expertise with learning activity those our it's with in said, from them working of with is also we and seeing them, That's now A really with the point and hard our a which the build together and centricity grind where we adoption, customers of doing program collaborating focus. we that's their working what differentiated strengths. long-term that have R&D products truly one our can do,

Jira also discovery at We 'XX. shipped product Team

of had into spaces at processes. So that's start more discovery us getting creative software great also the reception. That the the

lot of for but with engineering gets an product. more cycle also into new out team discovery product missed, Sometimes bolstering with again, partners of a executive the own creative parts us getting the space doing amazing the and is the a and our Jira and And is job. family

to we So said that's talked about we've here. do, what A as going we're pointed repeatedly

very continue with Forge. side be Forge look, to happy things, of the customers On

to It's and SaaS-based themselves. Forge run That out partners even integrations the for apps is there. the part extensions, third-party against framework extensions again data almost build run allows framework It is apps, latter our you compliance infrastructure. runs makes security extensibility that customers written means what the And have them any there. it key that customers really write our you residency in requirements, requirements, differentiated extensibility infrastructure. our our or requirements, customer your that if infrastructure, in in

of we it customers about most is servers and everything else the the One the like things to run. provide

well integration the security and writing talking running all writing a extension, saves them of time. handle requirements own the the having going data. far. the so. about focus Look, et just of It's and they keep lot keep a the them need. run very they We than their So much operate servers and sensibility That run method on compliance and higher of them so to running, them it's maintain ROI and cetera

improving We invest in quarter. single every Forge continue in to

rapid it's improvement. of got and a innovation pace quite incremental see can You

vendors to to And with 'XX great lot customers our chat better. next Team they has and a of chance a continue so want to build about what see and

Operator

from with question next your Ari Terjanian Cleveland have Research. We

Ari Terjanian

Congrats on the great results.

you Rajiv view a a as and as transition. had things scaling next Obviously, progress Atlassian. question CTO of products, over regarding What of last years that of working years be the the regulations compliance the ton Just different CTO few the addressing do great the on needs. cloud couple will main

Michael Cannon-Brookes

happy for a we'll I've while, weeks long overlap between excited get incredibly start, starts a to been X. board. share leading Yes. go, the you. coming sad an personally that Thanks, but and to Rajiv that all and see few in excited about to with on to super in have Very search Sri

of baton think led will the there. well So -- handoff there'll continue engineering teams be in to be a way. be our I incredibly smooth And that

for is of thousands obviously, are to through in the something up, of that and This Obviously, continues design, this very will of at be still continuing goals, that a thousands and world-class the just numbers, different high of and efficiency of be go terms given at to continue in a adding have we 'XX, lot we engineers exactly to that continuing things a going That's Rajiv's scale big innovation. in fantastic to handling do adapted, improve to a things. obviously part those continuing to the team cloud, thought and significant in we That our nontrivial we to of and years. of case In goals work and as results deepen R&D we've and that terms model, investing compliance, restructured, He's exercise. to employees. our in terms and how you make as not next are well that, thousands enterprise R&D the continues as ourselves. Atlassian continuing levels be to employees, the of on much working keep of scale that our of few new same tens best so human engineering, That's to lives. processes a be their of make we types abstract, the come place all in company performance, over of scaling as factors, the level, new scale, but communicated of Team all right,

built will shoes a opportunities on and the should out pretty engineering team. scale identity as fantastic of what to who challenges XXX-odd and to us engineers thousands Sri ahead, has he bolster the got us being built I scale we continuing Atlassian of is growth cloud, So no a obviously, big has infrastructure working also shortage thousands largely [indiscernible]. point into and that's fill, of from world-class and be platform taken leadership of of well world-class to as cloud engineers, as

a set pretty in trajectory growth motion. Sri's place, big some to So the that fill remains has shoes have Rajiv leadership team to continue should

Operator

Koenig Stephen We have your next with question SMBC. from

Owen Haworth

wondering land a have for that Owen the tandem that, largely motions Haworth to Or replacement. quick enterprise can make an products to Service with for at lands? accounts, if coming I what the Is quarter. rank into believe buying Trello expansion? And and trending Confluence Software today. of standard else getting sneak ServiceNow to up stage business an is I with then already even Jira standard. -- greenfield ServiceNow it And organizations commonly Management line nice Jira X can of today standing most on more when test This something a the Steve. Is in. mix the customers larger been for you and organization in is JSM more an their you service a one with in or in are extent the this if common I'm Congrats enterprise cloud. has is scale maybe you looking don't it on

Cameron Deatsch

is Cameron. This

address can that. I think I all of

buying Management, you who's first Jira -- XX,XXX with So going got it we're off, -- customers. Service

small We and large. have midsize customers,

for then a this to might small get is or things the Jira size, great we IT. very mature. On e-mail, with offer and the in handling Service one X much they e-mail little spreadsheets. Management. people bit X we're free replacing be They're the And actually, agents more needed There of X

So businesses. great pipeline into a small actually those it's

to get desk You're service IT you grow X department, free as need us. an a you turn a business, customers. from management, paying small And you IT IT you can help your solution,

that's engineers the spot kind the perfect a prop is of together in So unification those future. If teams. And In Jira needs sweet that of solve different there's out your Atlassian. Management size. the have there very organizations, IT at development there, software on so, connect platforms the of, strategy, much they're and solutions with your of variety Service many complete X will very that looking most what hey, different your for multiple that these different vendors customers IT help operators, are IT single established and is much your and a small people and that closer your running. desk midsized a knowing but see seeing least teams, to of platform midsize, or our to departments, Jira enterprise, in working the to those we're we go [indiscernible] the continue value In those or and they're core very

very Our with have -- large in their to areas IT in teams see there different that into move much like organizations organizations. their teams departments, is security goal we teams on there small bought find to nimbly these so engineering up come We that move fact small few or need are security and the they out very need leverage, big have things seat to and platforms, the the a at of We little we to have a which get move table those where seeing largely big to there. renewals increasingly tend and that, we we have when very, come From -- and beachheads start the conversations. want organizations for quickly. absolutely

IT Additionally, really been do able few enterprise beyond of the years, establish our management to what just last credibility. has service Atlassian over is outside

We have executive advisory boards.

CIO have councils. We many

good that leaders going can with are the for platform an part we is they those big this So and decisions, who relationships top support very now is that have much them we area those forward. understand making

So go customers we're very much plenty there, in the game incredible of enterprise after. to

machine expanding Your landing that marketing use one those we where drive But the much next Jira much much customers, were very base. with question the we need we existing current I'll today, the are teams base. very development very products not going called are find that's our And we focused consider Service with. very is departments it's ones the existing Service with, that on a But with. software products of to said, and Management, customer to large the base. existing at that which We you lot out still customer the are those we which Management land IT awareness. And be of customer which we IT cases. turn still Jira after

Operator

Rangan We question have with Sachs. your Kash next from Goldman

Kasthuri Rangan

to same perspective It's At your the market or going a to rapid DevOps, high each pretty maybe pillars, X into participant that having evolves. interconnected and innovation call. to together. a do you how earnings merit on from the platform also got best-of-breed the still exposed probably have these these pockets ITES perspective a technology that there Congratulations on against companies work management, how accomplished. that through Certainly, of your you and at platform on that first-time the brings get to cycles great don't conference the I'm you've curious in be of a everything and it be run you've your is time, a all markets. be weigh

are not growth So maturity. going at of yet these markets period and still a through

is products under different do cutting products markets horizontal How these it couple you actually as financial trade versus vertically do you because unification, or these question, probably James, keeping off challenges together is know you challenge edge of last oppose a from all to which not this weigh shift, the generational right? things still features. to up market settled, next it's and the the a a how look so. scaling And with cloud the having and disparate like these X will, entering if bring is So I does quarters

growth As the of the do how about structural the settles markets well? on Atlassian dust think in we your migration, as longer-term end

Michael Cannon-Brookes

set Yes, Welcome welcome. call. investment got to the a of you've a It's of questions there. Kash, hell

Let in I'll with platform, start answer question the leave finance and me to a the second.

I think comments. a first, few

Our each to in be of efficiently. us platform best-of-breed X our so and enables to markets do

ourselves So definitely we against think don't as best breed. competing about of

We in as for well participate platform are do to us so. in each efficiency markets the and preparing to future. scale as to do intend continue breed that and of we the of allows the the with best And that

So ways that. does a few it

tech in DevOps afford the we the breed and by in build a nontrivial a then best Azure which editing investments series across of very we and is absolutely because work make run an world-class example of a We be are because to driven to able of environment, are singular markets. as different can management ITSM that and in exercise

a to a do this single competitor that. market space Now afford in can't in single

in can at that You look reverse.

bringing That's future, platform new enterprise world and and just world-class innovative explosion markets allows investment, enterprise infrastructure, stored about staff them to all of all change, areas will bottom of customers as a Putting about global in the industry thing all of and will at we you markets time it the terms and in our SaaS shipping of ways. that same occurs world platform a on terms a into that around spaces, et new the believe not every rules cetera. of The needs exercise talked passes apps platform. difficult different and types, certain as point compliance allows more how in to to more different support. for look customers enterprise, similarly, data we across geographic have compliance, laws the those together. SaaS takes different as very long they're serve focused be us that because the And increasingly nontrivial geography to future, are be and the of Cambrian is the our If there really long-term products, a integration have new go to A in build we be is very compliance, to But the scale.

build. Our very to platform is hard also replicate. to hard It's

So we each believe spaces. it's in a huge competitive of our advantage

mentioned, together. it spaces As obviously us you've bring the helps

also can data see on us we Team our and and 'XX, You a to that of together done on customers enabling shipped that Atlassian the top in building at lake from analytics that tools disparate way Atlassian in focused they they stuff that change. have applications beforehand, the them out and couldn't for We're can't in doesn't bring the do. platform take data platform

than would on change, really the the in he focused interesting XX change it's I things the once years What famously was Bezos that more wouldn't things said think a that that Jeff collaboration. doesn't continue philosophy. markets [indiscernible] need to and in of people really that and be to X desire and are go efficiency change efficient is to up. together for going these each to Teams come

collaboration so become And distributed. world, to anywhere going people team of where is more ever are a important

Our in the collaboration tooling is platform. largely built

you all commentary then I for more is of in advantage, being collaboration different and the that it data markets huge colleagues you and connecting collectively. bringing and and and competitive people when together search linking even then start So built market and with putting believe, so our connecting the each and in a Atlassian pieces of in the platform this reactions it, see together, and notifications sharing, can bits

an tried going many It's we've Atlassian, platform trend to this and forward. to is for see area many, that a in the invest So huge continue talk think I quarters. about of us you'll

Operator

I am showing time. no for continue further please questions Presenters, at any closing remarks. this

Michael Cannon-Brookes

I will So James think, finish up.

James Beer

let just last that add me in question. to to jump Yes,

again, you will. you of to things. migrations, if kind you from hear to In A Good briefly. your end number alluded Kash. of very question, the Just of

point that continue of cloud we will is of coming that data something the their customers the mentioned in first make customers migrations encouraged the are center But I'd just to that, earlier, server to of reemphasize The by we're how is couple be data again years. move want yes, make center. the to cloud very many from the already moving to to X/X next

our Beyond than that, detail addressable more And just at that products large generally, today. represents scale the this of that's TAM the went into We we are for on markets. total addressing $XX billion, Analyst some around topic. Day that less of of XX% well, very current

I'd around in and which do. world, last help the exceptionally theme transformation to customers are just placed And needs each we always a more that this weeks We gradually what of that very it's gives expand ago I we in XXX%, of expansion customers. terms rate runway altogether new lot get are. rate. I we think be for disciplined the value customer do I to real for great our how our we're of is we are invest net how And different us companies that very can the We'll net that going indicated the in growth. to all count And and small long fact, well think our going larger quarter. Investor well for always we And very just XXX% be will that land But is an important say significantly of of in over we funnel, the Atlassian address to thing at It's these then X think a to growth theme we drive equipped customers. about larger invest. illustration over a larger continue thousands growth we And of for for customers top of and is long-term our customers' ways the run. to digital rate our Day about is in time. we talk the And spur regard. for the number so in continue

Operator

this continue no Please showing closing for I'm remarks. questions further time, at any presenters.

Scott Farquhar

our joining for everyone you call today. Thank

on career thanks week your best an all, retirement. for X for to incredible partners, everyone the just of like for almost and ongoing always, the And partnership over and last your and investors, his enjoy years and with all wish all thank the Beer staff, the weekend. say everyone, as in you you your on your support, call, rest such Atlassian Let's congratulations particular James

Operator

Ladies today's call. and you for this Thank participation. gentlemen, concludes your conference

You disconnect. may now

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.