**Atlassian Announces First Quarter Fiscal Year 2024 Results**

_Quarterly revenue of $978 million, up 21% year-over-year_

_Quarterly subscription revenue of $852 million, up 31% year-over-year_

_Quarterly GAAP operating margin of (2)% and non-GAAP operating margin of 23%_

_Quarterly cash flow from operations of $167 million and free cash flow of $163 million_

**Team Anywhere/San Francisco (November 2, 2023) — Atlassian Corporation (NASDAQ: TEAM), a leading provider**
of team collaboration and productivity software, today announced financial results for its first quarter ended
September 30, 2023 and released a shareholder letter available on Atlassian’s Work Life blog at http://atlassian.com/
blog/announcements/shareholder-letter-q1fy24. The shareholder letter was also posted to the Investor Relations
section of Atlassian’s website at https://investors.atlassian.com.

“Our R&D engine continues to deliver incredible innovation and value to customers. We launched Compass, our new
developer experience platform that helps increase developer productivity, and AI-powered virtual agent capabilities in
Jira Service Management to help support teams provide lightning-fast service at scale, along with a host of other
features powered by Atlassian Intelligence,” said Mike Cannon-Brookes, Atlassian’s co-founder and co-CEO. “We are
also extremely excited for Loom, a leading asynchronous video messaging platform, to join the Atlassian team. By
integrating Loom into the Atlassian Platform, distributed teams will be able to collaborate in deeply human ways across
our entire suite of products.”

“We started off the year with solid execution delivering quarterly revenue of $978 million, up 21% year-over-year, driven
by subscription revenue growth of 31% year-over-year,” said Scott Farquhar, Atlassian’s co-founder and co-CEO.
“Atlassians are the cornerstone of our success, and we continue to attract amazing talent across the company,
including senior leaders, putting us in a great position to build an enduring 100-year company.”

**First Quarter Fiscal Year 2024 Financial Highlights:**

On a GAAP basis, Atlassian reported:

**_•_** **Revenue: Total revenue was $977.8 million for the first quarter of fiscal year 2024, up 21% from $807.4 million**
for the first quarter of fiscal year 2023.

**_•_** **Operating Loss and Operating Margin:** Operating loss was $18.9 million for the first quarter of fiscal year
2024, compared with operating loss of $34.0 million for the first quarter of fiscal year 2023. Operating
margin was (2)% for the first quarter of fiscal year 2024, compared with (4)% for the first quarter of fiscal year
2023.

**_•_** **Net Loss and Net Loss Per Diluted Share: Net loss was $31.9 million for the first quarter of fiscal year 2024,**
compared with net loss of $13.7 million for the first quarter of fiscal year 2023. Net loss per diluted share
was $0.12 for the first quarter of fiscal year 2024, compared with net loss per diluted share of $0.05 for the first
quarter of fiscal year 2023.

**•** **Balance Sheet: Cash and cash equivalents plus marketable securities at the end of the first quarter of fiscal**
year 2024 totaled $2.2 billion.

On a non-GAAP basis, Atlassian reported:

**_•_** **Operating Income and Operating Margin: Operating income was $224.9 million for the first quarter of fiscal**
year 2024, compared with operating income of $147.9 million for the first quarter of fiscal year 2023. Operating
margin was 23% for the first quarter of fiscal year 2024, compared with 18% for the first quarter of fiscal year
2023.

**_•_** **Net Income and Net Income Per Diluted Share: Net income was $169.0 million for the first quarter of fiscal**
year 2024, compared with net income of $92.5 million for the first quarter of fiscal year 2023. Net income per
diluted share was $0.65 for the first quarter of fiscal year 2024, compared with net income per diluted share of
$0.36 for the first quarter of fiscal year 2023.

-  **Free Cash Flow: Cash flow from operations was $167.0 million and free cash flow was $163.3 million for**


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in this press release. An explanation of these measures is also included below, under the heading About Non GAAP
Financial Measures.”

**Recent Business Highlights:**

**•** **Loom Acquisition: Atlassian entered into a definitive agreement to acquire Loom, a video messaging platform**
with over 25 million users that will elevate the collaboration experience and accelerate Atlassian’s mission to
unleash the potential of every team. The rise of distributed work has fueled a need for new ways for teams to
collaborate and Loom’s leadership in asynchronous video combined with Atlassian’s deep understanding of
team collaboration will bring innovative ways of working to the market and empower teams to collaborate in
richer, more human ways.

-  **AirTrack Acquisition: Atlassian announced the acquisition of AirTrack, a leading IT data quality management**
technology provider. The acquisition builds upon Atlassian’s previous investments to help customers take a
comprehensive approach to asset and configuration management. With AirTrack, Jira Service Management will
enable enterprises to better account for and track all critical assets within their organization, minimizing
operational risks, costs, and attack surfaces.

**•** **AI for Jira Service Management: Atlassian announced the general availability of virtual agent capabilities in**
Jira Service Management, and the debut of expanded AI capabilities for ITSM. Virtual agent technology in Jira
Service Management enables support teams to deliver exceptional service to employees and customers even
faster, and at scale. Teams are now able to automate support interactions and deliver rapid, always-on,
conversational support via their preferred collaboration tools. Atlassian also announced a host of other
Atlassian Intelligence-powered features available for early access customers including issue summary,
response generation, and intelligent assignment and routing.

-  **Compass: Atlassian announced the general availability of Compass, its new developer experience platform to**
empower engineering organizations to bring all of their teams and technology together to promote a healthy
engineering culture, improve risk management and reliability, and increase developer velocity. Compass
provides a single interface for software teams to work across all their distributed components and helps
improve how they build, collaborate, and operate them over time.

-  **Sustainability Report and ESG Forum: Atlassian released its Fiscal Year 2023 Sustainability Report,**
featuring notable milestones including its first virtual power purchase agreement which aims to offset both inoffice electricity and work-from-home energy use in the United States. The report includes updates on
Atlassian’s strategy and progress related to Climate, Human Rights, DEI, and the Atlassian Foundation, as well
as a Sustainability Accounting Standards Board (SASB) index and third-party assurance on its Scope 1-2
emissions data.

Atlassian will also hold its first ESG forum on Tuesday, November 14, 2023 at 8:30 a.m. Pacific Time (11:30
a.m. Eastern Time). This open forum will offer insight into Atlassian’s sustainability strategy and efforts and will
feature a moderated Q&A session with Atlassian’s leaders focused on ESG. Join us for this open forum by
registering at https://webinars.atlassian.com/atlassian/Atlassian-ESG-Forum.

-  **Customers with >$10,000 in Cloud ARR: Atlassian ended its first quarter of fiscal year 2024 with 40,103**
customers with greater than $10,000 in Cloud annualized recurring revenue (Cloud ARR), an increase of 18%
year-over-year.

**Financial Targets:**

Atlassian is providing the following financial targets that do not include any impact from the Loom acquisition, which is
expected to close in the third quarter of its fiscal year 2024, subject to customary closing conditions and required
regulatory approval:

**Second Quarter Fiscal Year 2024:**

-  Total revenue is expected to be in the range of $1,010 million to $1,030 million.

-  Cloud revenue growth year-over-year is expected to be in the range of 25.5% to 27.5%.

-  Data Center revenue growth year-over-year is expected to be approximately 33%.

-  Gross margin is expected to be approximately 81.0% on a GAAP basis and approximately 83.5% on a nonGAAP basis.

-  Operating margin is expected to be approximately (7.5%) on a GAAP basis and approximately 21.0% on a non

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-  Cloud revenue growth year-over-year is expected to be in the range of 25% to 30%.

-  Data Center revenue growth year-over-year is expected to be approximately 31%.

-  Gross margin is expected to be approximately 81.0% on a GAAP basis and approximately 83.5% on a nonGAAP basis.

-  Operating margin is expected to be approximately (5.5%) on a GAAP basis and approximately 20.0% on a nonGAAP basis

For additional commentary regarding financial targets, please see Atlassian’s first quarter fiscal year 2024 shareholder
letter dated November 2, 2023.

With respect to Atlassian’s expectations under “Financial Targets” above, a reconciliation of GAAP to non-GAAP gross
margin and operating margin has been provided in the financial statement tables included in this press release.

**Shareholder Letter and Webcast Details:**
A detailed shareholder letter is available on Atlassian’s Work Life blog at https://atlassian.com/blog/announcements/
shareholder-letter-q1fy24, and the Investor Relations section of Atlassian’s website at https://

investors.atlassian.com. Atlassian will host a webcast to answer questions today:

-  **When: Thursday, November 2, 2023 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).**

-  **Webcast: A live webcast of the call can be accessed from the Investor Relations section of Atlassian’s website**
at https://investors.atlassian.com. Following the call, a replay will be available on the same website.

Atlassian has used, and will continue to use, its Investor Relations website at https://investors.atlassian.com as a
means of making material information public and for complying with its disclosure obligations.

**About Atlassian**
Atlassian unleashes the potential of every team. Our agile & DevOps, IT service management and work management
software helps teams organize, discuss, and complete shared work. The majority of the Fortune 500 and over 265,000
companies of all sizes worldwide - including NASA, Audi, Kiva, Deutsche Bank and Dropbox - rely on our solutions to
help their teams work better together and deliver quality results on time. Learn more about our products, including Jira
Software, Confluence and Jira Service Management at https://atlassian.com.

**Investor Relations Contact**
Martin Lam
IR@atlassian.com

**Media Contact**
Marie-Claire Maple
press@atlassian.com

**Forward-Looking Statements**

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation
Reform Act of 1995, which statements involve substantial risks and uncertainties. In some cases, you can identify these
statements by forward-looking words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “should,”
“estimate,” or “continue,” and similar expressions or variations, but these words are not the exclusive means for
identifying such statements. All statements other than statements of historical fact could be deemed forward looking,
including risks and uncertainties related to statements about our products, product features, including AI and large
language models, customers, cloud migration, macroeconomic environment, anticipated growth, outlook, potential
benefits and synergies from acquisitions, sustainability strategy and progress, technology, and other key strategic
areas, and our financial targets such as total revenue, Cloud and Data Center revenue, and GAAP and non-GAAP
financial measures including gross margin and operating margin.

We undertake no obligation to update any forward-looking statements made in this press release to reflect events or
circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated
events, except as required by law.

The achievement or success of the matters covered by such forward-looking statements involves known and unknown
risks ncertainties and ass mptions If an s ch risks or ncertainties materiali e or if an of the ass mptions pro e


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make. You should not rely upon forward looking statements as predictions of future events. Forward looking
statements represent our management’s beliefs and assumptions only as of the date such statements are made.

Further information on these and other factors that could affect our financial results is included in filings we make with
the Securities and Exchange Commission (the “SEC”) from time to time, including the section titled “Risk Factors” in
our most recently filed Forms 10-K and 10-Q. These documents are available on the SEC Filings section of the Investor
Relations section of our website at https://investors.atlassian.com.

**About Non-GAAP Financial Measures**

In addition to the measures presented in our consolidated financial statements, we regularly review other measures
that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”), defined as nonGAAP financial measures by the SEC, to evaluate our business, measure our performance, identify trends, prepare
financial forecasts and make strategic decisions. The key measures we consider are non-GAAP gross profit, nonGAAP operating income and non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted
share and free cash flow (collectively, the “Non-GAAP Financial Measures”). These Non-GAAP Financial Measures,
which may be different from similarly titled non-GAAP measures used by other companies, provide supplemental
information regarding our operating performance on a non-GAAP basis that excludes certain gains, losses and charges
of a non-cash nature or that occur relatively infrequently and/or that management considers to be unrelated to our core
operations. Management believes that tracking and presenting these Non-GAAP Financial Measures provides
management, our board of directors, investors and the analyst community with the ability to better evaluate matters
such as: our ongoing core operations, including comparisons between periods and against other companies in our
industry; our ability to generate cash to service our debt and fund our operations; and the underlying business trends
that are affecting our performance.

Our Non-GAAP Financial Measures include:

-  _Non-GAAP gross profit. Excludes expenses related to stock-based compensation and amortization of acquired_
intangible assets.

-  _Non-GAAP operating income and non-GAAP operating margin. Excludes expenses related to stock-based_
compensation and amortization of acquired intangible assets.

-  _Non-GAAP net income and non-GAAP net income per diluted share. Excludes expenses related to stock-_
based compensation, amortization of acquired intangible assets, gain on a non-cash sale of a controlling
interest of a subsidiary, and the related income tax adjustments.

-  _Free cash flow. Free cash flow is defined as net cash provided by operating activities less capital expenditures,_
which consists of purchases of property and equipment.

We understand that although these Non-GAAP Financial Measures are frequently used by investors and the analyst
community in their evaluation of our financial performance, these measures have limitations as analytical tools, and you
should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. We
compensate for such limitations by reconciling these Non-GAAP Financial Measures to the most comparable GAAP
financial measures. We encourage you to review the tables in this press release titled “Reconciliation of GAAP to NonGAAP Results” and “Reconciliation of GAAP to Non-GAAP Financial Targets” that present such reconciliations.

**Customers with >$10,000 in Cloud ARR**

We define the number of customers with Cloud ARR greater than $10,000 at the end of any particular period as the
number of organizations with unique domains with an active Cloud subscription and greater than $10,000 in Cloud
ARR.

We define Cloud ARR as the annualized recurring revenue run-rate of Cloud subscription agreements at a point in
time. We calculate Cloud ARR by taking the Cloud monthly recurring revenue (“Cloud MRR”) run-rate and multiplying it
by 12. Cloud MRR for each month is calculated by aggregating monthly recurring revenue from committed contractual
amounts at a point in time. Cloud ARR and Cloud MRR should be viewed independently of revenue and do not
represent our revenue under GAAP, as they are operational metrics that can be affected by contract start and end
dates and renewal rates.


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**Condensed Consolidated Statements of Operations**

**(U.S. $ and shares in thousands, except per share data)**

**(unaudited)**

**Three Months Ended September 30,**

**2023** **2022**

Revenues:

Subscription $ 851,982 $ 650,984

Maintenance 78,598 113,565

Other 47,195 42,843

Total revenues 977,775 807,392

Cost of revenues (1) (2) 178,029 139,392

Gross profit 799,746 668,000

Operating expenses:

Research and development (1) (2) 481,738 399,006

Marketing and sales (1) (2) 193,567 160,128

General and administrative (1) 143,310 142,893

Total operating expenses 818,615 702,027

Operating loss (18,869) (34,027)

Other income (expense), net (8,335) 29,289

Interest income 25,226 5,143

Interest expense (8,976) (6,121)

Loss before provision for income taxes (10,954) (5,716)

Provision for income taxes (20,929) (8,025)

Net loss $ (31,883) $ (13,741)

Net loss per share attributable to Class A and Class B common
stockholders:

Basic $ (0.12) $ (0.05)

Diluted $ (0.12) $ (0.05)

Weighted-average shares used in computing net loss per share
attributable to Class A and Class B common stockholders:

Basic 257,907 255,167

Diluted 257,907 255,167


(1) Amounts include stock-based compensation as follows:

**Three Months Ended September 30,**

**2023** **2022**

Cost of revenues $ 16,821 $ 10,613

Research and development 150,446 110,129

Marketing and sales 32,281 23,195

General and administrative 36,033 29,694

(2) Amounts include amortization of acquired intangible assets, as follows:

**Three Months Ended September 30,**

**2023** **2022**

Cost of revenues $ 5,772 $ 5,697

Research and development 94 94

Marketing and sales 2,365 2,505


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**Condensed Consolidated Balance Sheets**

**(U.S. $ in thousands)**

**(unaudited)**

**September 30, 2023** **June 30, 2023**


**Assets**
Current assets:

Cash and cash equivalents $ 2,143,530 $ 2,102,550

Marketable securities 94,298 10,000

Accounts receivable, net 368,260 477,678

Prepaid expenses and other current assets 129,617 146,136

Total current assets 2,735,705 2,736,364

Non-current assets:

Property and equipment, net 79,631 81,402

Operating lease right-of-use assets 181,435 184,195

Strategic investments 220,133 225,538

Intangible assets, net 60,842 69,072

Goodwill 726,519 727,211

Deferred tax assets 6,141 9,945

Other non-current assets 69,233 73,052

**Total assets** $ 4,079,639 $ 4,106,779

**Liabilities and Stockholders’ Equity**
Current liabilities:

Accounts payable $ 126,201 $ 159,293

Accrued expenses and other current liabilities 362,337 423,131

Deferred revenue, current portion 1,326,108 1,362,736

Operating lease liabilities, current portion 42,737 44,930

Term loan facility, current portion 50,000 37,500

Total current liabilities 1,907,383 2,027,590

Non-current liabilities:

Deferred revenue, net of current portion 174,973 182,743

Operating lease liabilities, net of current portion 231,797 237,835

Term loan facility, net of current portion 949,637 962,093

Deferred tax liabilities 12,110 10,669

Other non-current liabilities 29,114 31,177

**Total liabilities** 3,305,014 3,452,107

**Stockholders’ equity**

Common stock 3 3

Additional paid-in capital 3,366,212 3,130,631

Accumulated other comprehensive income 15,598 34,002

Accumulated deficit (2,607,188) (2,509,964)

**Total stockholders’ equity** 774,625 654,672

**Total liabilities and stockholders’ equity** $ 4,079,639 $ 4,106,779


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**Three Months Ended September 30,**

**2023** **2022**


**Cash flows from operating activities:**

Net loss $ (31,883) $ (13,741)

Adjustments to reconcile net loss to net cash provided by operating
activities:

Depreciation and amortization 15,084 14,620

Stock-based compensation 235,581 173,631

Deferred income taxes 5,313 1,522

Gain on a non-cash sale of a controlling interest of a subsidiary (1,378) (43,092)

Net loss on strategic investments 6,248 11,513

Net foreign currency loss (gain) 181 (3,625)

Other 132 118

Changes in operating assets and liabilities:

Accounts receivable, net 109,488 61,314

Prepaid expenses and other assets (23,056) (22,677)

Accounts payable (33,025) 31,147

Accrued expenses and other liabilities (71,331) (108,443)

Deferred revenue (44,398) (9,845)

**Net cash provided by operating activities** 166,956 92,442

**Cash flows from investing activities:**

Business combinations, net of cash acquired — (600)

Purchases of property and equipment (3,669) (16,496)

Purchases of strategic investments (3,750) (8,350)

Purchases of marketable securities and other investments (69,363) (10,000)

Proceeds from maturities of marketable securities — 28,950

Proceeds from sales of marketable securities and strategic investments 19,879 258

**Net cash used in investing activities** (56,903) (6,238)

**Cash flows from financing activities:**

Repurchases of Class A Common Stock (65,879) —

Proceeds from other financing arrangements — 1,396

**Net cash provided by (used in) financing activities** (65,879) 1,396

Effect of foreign exchange rate changes on cash, cash equivalents and
restricted cash (3,280) (4,939)

**Net increase in cash, cash equivalents, and restricted cash** 40,894 82,661

**Cash, cash equivalents, and restricted cash at beginning of period** 2,103,915 1,386,686

Net decrease in cash and cash equivalents included in assets held for sale
— 602

**Cash, cash equivalents, and restricted cash at end of period** $ 2,144,809 $ 1,469,949


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**Revenues by Deployment Options**

**(U.S. $ in thousands)**

**(unaudited)**

**Three Months Ended September 30,**

**2023** **2022**

Cloud $ 604,647 $ 475,043

Data Center 242,943 171,228

Server 78,752 113,813

Marketplace and other (1) 51,433 47,308

Total revenues $ 977,775 $ 807,392


(1) Included in Marketplace and other is premier support revenue. Premier support is a subscription-based arrangement for a
higher level of support across different deployment options. Premier support is recognized as subscription revenue on the
Condensed Consolidated Statements of Operations as the services are delivered over the term of the arrangement.


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**(unaudited)**

**Three Months Ended September 30,**

**2023** **2022**

**Gross profit**
GAAP gross profit $ 799,746 $ 668,000

Plus: Stock-based compensation 16,821 10,613

Plus: Amortization of acquired intangible assets 5,772 5,697

Non-GAAP gross profit $ 822,339 $ 684,310

**Operating income**
GAAP operating loss $ (18,869) $ (34,027)

Plus: Stock-based compensation 235,581 173,631

Plus: Amortization of acquired intangible assets 8,231 8,296

Non-GAAP operating income $ 224,943 $ 147,900

**Operating margin**
GAAP operating margin (2) % (4) %

Plus: Stock-based compensation 24 21

Plus: Amortization of acquired intangible assets 1 1

Non-GAAP operating margin 23 % 18 %

**Net income**
GAAP net loss $ (31,883) $ (13,741)

Plus: Stock-based compensation 235,581 173,631

Plus: Amortization of acquired intangible assets 8,231 8,296

Less: Gain on a non-cash sale of a controlling interest of a subsidiary (1,378) (43,091)

Less: Income tax adjustments (1) (41,571) (32,548)

Non-GAAP net income $ 168,980 $ 92,547

**Net income per share**
GAAP net loss per share - diluted $ (0.12) $ (0.05)

Plus: Stock-based compensation 0.91 0.68

Plus: Amortization of acquired intangible assets 0.03 0.03

Less: Gain on a non-cash sale of a controlling interest of a subsidiary (0.01) (0.17)

Less: Income tax adjustments (1) (0.16) (0.13)

Non-GAAP net income per share - diluted $ 0.65 $ 0.36

**Weighted-average diluted shares outstanding**
Weighted-average shares used in computing diluted GAAP net loss per
share 257,907 255,167

Plus: Dilution from dilutive securities (2) 1,008 1,041

Weighted-average shares used in computing diluted non-GAAP net income
per share 258,915 256,208

**Free cash flow**
GAAP net cash provided by operating activities $ 166,956 $ 92,442

Less: Capital expenditures (3,669) (16,496)

Free cash flow $ 163,287 $ 75,946


(1) In the first quarter of fiscal year 2024, we began to utilize a fixed long-term projected non-GAAP tax rate in our computation of the
non-GAAP income tax adjustments in order to provide better consistency across interim reporting periods. In projecting this long-term
non-GAAP tax rate, we utilized a three-year financial projection that excludes the direct and indirect income tax effects of the other nonGAAP adjustments reflected above. Additionally, we considered our current operating structure and other factors such as our existing tax
positions in various jurisdictions and key legislation in major jurisdictions where we operate. For fiscal year 2024, we determined the
projected non-GAAP tax rate to be 27%. This fixed long-term projected non-GAAP tax rate eliminates the effects of non-recurring and
period specific items which can vary in size and frequency. Examples of the non-recurring and period specific items include but are not
limited to changes in the valuation allowance related to deferred tax assets, effects resulting from acquisitions, and unusual or
infrequently occurring items. We will periodically re-evaluate this long-term rate, as necessary, for significant events. The rate could be
subject to change for a variety of reasons, for example, significant changes in the geographic earnings mix or fundamental tax law
changes in major jurisdictions where the company operates.

(2) The effects of these dilutive securities were not included in the GAAP calculation of diluted net loss per share for the three months
ended September 30, 2023 and 2022 because the effect would have been anti-dilutive.


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**Reconciliation of GAAP to Non-GAAP Financial Targets**

**Three Months Ending**

**December 31, 2023**


**Fiscal Year Ending**

**June 30, 2024**


**GAAP gross margin** **81.0%** **81.0%**

Plus: Stock-based compensation 2.0 2.0

Plus: Amortization of acquired intangible assets 0.5 0.5

**Non-GAAP gross margin** **83.5%** **83.5%**

**GAAP operating margin** **(7.5%)** **(5.5%)**

Plus: Stock-based compensation 28.0 25.0

Plus: Amortization of acquired intangible assets 0.5 0.5

**Non-GAAP operating margin** **21.0%** **20.0%**


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