**Atlassian Announces Third Quarter Fiscal Year 2024 Results and CEO Transition**

_Quarterly revenue of $1,189 million, up 30% year-over-year_

_Quarterly subscription revenue of $1,071 million, up 41% year-over-year_

_Quarterly GAAP operating margin of 1% and non-GAAP operating margin of 27%_

_Quarterly cash flow from operations of $565 million and free cash flow of $555 million_

**Team Anywhere/San Francisco (April 25, 2024) — Atlassian Corporation (NASDAQ: TEAM), a leading provider of**
team collaboration and productivity software, today announced financial results for its third quarter ended March 31,
2024. Atlassian also announced co-founder Scott Farquhar will step down as co-CEO effective August 31, 2024, with
co-founder Mike Cannon Brookes continuing to lead Atlassian as CEO. A shareholder letter was posted on Atlassian’s
Work Life blog at http://atlassian.com/blog/announcements/shareholder-letter-q3fy24 and in the Investor Relations
section of Atlassian’s website at https://investors.atlassian.com.

**Third Quarter Fiscal Year 2024 Earnings Results**

“It’s been a milestone quarter for Atlassian,” said Mike Cannon-Brookes, co-founder and co-CEO.

“We’ve delivered $1.2 billion in revenue in Q3, up 30% year-over-year, driven by subscription revenue growth of 41%
year-over-year. We drove record free cash flow of $555 million, up 59% year-over-year.

“Today, Atlassian is a cloud-majority company. We have over 300,000 customers using our Cloud products and have
seen a 3x increase in paid seats in Cloud since we announced end-of-support for Server three and a half years ago.
We have a significant opportunity to drive durable, long-term growth as we continue to execute against our cloud
roadmap and deliver innovation across our cloud platform. We’re excited to share more at our flagship customer event
next week, Team ’24,” concluded Cannon-Brookes.

**CEO Transition**

After an incredible 23 years, Scott Farquhar has made the decision to step down as co-CEO to spend more time with
his young family, improve the world via philanthropy, and help further the technology industry globally.

“While it's a difficult decision to step away, I do so knowing Atlassian is exceptionally positioned to take hold of the
massive opportunities at its feet. We have a strong leadership team, and great momentum around cloud, enterprise,
and now, AI,” said Farquhar.

Cannon-Brookes added, “The contribution Scott has made at Atlassian is impossible to quantify. Starting with just the
two of us in 2001, to a global company of over 11,000 employees and over USD $4 billion in annual revenue, Atlassian
would not be the company it is today without Scott. I am truly grateful to have had him by my side every day for the last
23 years.”

Scott’s last day as co-CEO will be August 31, 2024. He will continue as an active Board member and assume a special
advisor role.

Mike will continue to lead as CEO as Atlassian pursues its mission to unleash the potential of every team and capitalize
on its strengths in the AI era. To read Scott’s blog post, visit: https://www.atlassian.com/blog/announcements/scottfarquhar-ceo-transition.

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

On a GAAP basis, Atlassian reported:

**_•_** **Revenue: Total revenue was $1,189.1 million for the third quarter of fiscal year 2024, up 30% from $915.5**
million for the third quarter of fiscal year 2023.

-  **Operating Income (Loss) and Operating Margin: Operating income was $17.8 million for the third quarter of**
fiscal year 2024, compared with operating loss of $161.6 million for the third quarter of fiscal year 2023.
Operating margin was 1% for the third quarter of fiscal year 2024, compared with (18%) for the third quarter of
fiscal year 2023.

**Net Income (Loss) and Net Income (Loss) Per Dil ted Share N t i** $12 8 illi f th thi d


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**•** **Balance Sheet: Cash and cash equivalents plus marketable securities at the end of the third quarter of fiscal**
year 2024 totaled $2.1 billion.

On a non-GAAP basis, Atlassian reported:

**_•_** **Operating Income and Operating Margin: Operating income was $316.5 million for the third quarter of fiscal**
year 2024, compared with operating income of $197.1 million for the third quarter of fiscal year 2023. Operating
margin was 27% for the third quarter of fiscal year 2024, compared with 22% for the third quarter of fiscal year
2023.

**_•_** **Net Income and Net Income Per Diluted Share: Net income was $232.5 million for the third quarter of fiscal**
year 2024, compared with net income of $138.0 million for the third quarter of fiscal year 2023. Net income per
diluted share was $0.89 for the third quarter of fiscal year 2024, compared with net income per diluted share of
$0.54 for the third quarter of fiscal year 2023.

**_•_** **Free Cash Flow: Cash flow from operations was $565.4 million and free cash flow was $554.9 million for**
the third quarter of fiscal year 2024. Free cash flow margin for the third quarter of fiscal year 2024 was 47%.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included
in this press release. An explanation of these measures is also included below, under the heading “About Non-GAAP
Financial Measures.”

**Recent Business Highlights:**

-  **Atlassian Marketplace Surpasses $4 Billion in Lifetime Sales: The Atlassian Marketplace surpassed $4**
billion in lifetime sales since its inception in 2012. More than 1,800 Marketplace partners have created more
than 5,700 apps and integrations, delivering additional value and innovation to customers.

-  **Loom Named to Fast Company’s List of World’s Most Innovative Companies 2024: Loom was named to**
Fast Company’s List of World’s Most Innovative Companies of 2024. In addition to delivering a seamless
asynchronous video communication experience, the launch of advanced AI capabilities makes video creation
easy with the ability to edit the transcript to say what you want, automatically share your message, and identify
calls to action. This recognition is a testament to the dedication of our new Loom teammates, who continue to
push the boundaries of the future of work.

-  **Optic Acquisition: Atlassian announced the acquisition of Optic, an Application Programming Interface (API)**
documentation and management company. Optic provides engineering organizations with native API
documentation making it easier for developers to publish accurate API docs, avoid breaking changes, and
improve the design of their APIs. Together with Compass, Optic will accelerate our ability to empower
engineering teams and improve productivity by helping developers find the documentation they need and ship
faster.

-  **Confluence Whiteboards: Atlassian released Confluence whiteboards into general availability. Confluence**
whiteboards are a freeform way for teams to collaborate, brainstorm, draw, and visualize in a simple, integrated
way. Whiteboards allows teams to seamlessly connect individual thoughts and ideas to workflows, by moving
from a whiteboard into Jira without even having to change screens.

-  **New Data Residency Regions Unlocked in the Cloud: Atlassian announced multiple new data residency**
regions available to customers: India, Japan, South Korea, Switzerland, and the United Kingdom. The
expansion of data residency availability, now offered in 12 geographies, provides customers with control and
flexibility on where they store their cloud data.

-  **Customers with >$10,000 in Cloud ARR:** Atlassian ended its third quarter of fiscal year 2024 with 44,336
customers with greater than $10,000 in Cloud annualized recurring revenue (Cloud ARR), an increase of 19%
year-over-year.

-  **Achieved Recognition on Fortune’s List of 100 Best Companies to Work For™ 2024: Atlassian was**
recognized, for the sixth consecutive year, on Fortune’s list of 100 Best Companies to Work For™. This
remarkable accomplishment is a testament to the dedication, innovative spirit, and collective effort of all
Atlassians who build upon our exceptional culture.

-  **Atlassian Team ’24: Atlassian will hold its flagship Team ’24 conference in Las Vegas from April 30, 2024**
through May 2, 2024. Thousands of customers, partners, and Atlassians will come together to talk about
teamwork innovation, and hear exciting announcements that advance the way teammates work together
th h d h i i ht d b kth h t h l i M i f ti T ’24 b f d t


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Atlassian is providing its financial targets as follows:

**Fourth Quarter Fiscal Year 2024:**

-  Total revenue is expected to be in the range of $1,120 million to $1,135 million.

-  Cloud revenue growth year-over-year is expected to be approximately 32%.

-  Data Center revenue growth year-over-year is expected to be in the range of 40% to 42%.

-  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 (7.0%) on a GAAP basis and approximately 18.5% on a nonGAAP basis.

For additional commentary regarding financial targets, please see Atlassian’s third quarter fiscal year 2024 shareholder
letter dated April 25, 2024.

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-q3fy24, 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, April 25, 2024 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 300,000
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 capabilities,
customers, cloud migrations, macroeconomic environment, anticipated growth, outlook, potential benefits and
synergies from Loom and other acquisitions, 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


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incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we
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 condensed consolidated financial statements, we regularly review other
measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”), defined
as non-GAAP 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
and non-GAAP gross margin, non-GAAP 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 and non-GAAP gross margin. Excludes expenses related to stock-based_
compensation, amortization of acquired intangible assets, and restructuring charges.

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

-  _Non-GAAP net income and non-GAAP net income per diluted share. Excludes expenses related to stock-_
based compensation, amortization of acquired intangible assets, restructuring charges, 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 for two or more seats 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.


-----

**Condensed Consolidated Statements of Operations**

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

**(unaudited)**

**Three Months Ended March 31,** **Nine Months Ended March 31,**

**2024** **2023** **2024** **2023**

Revenues:

Subscription $ 1,071,355 $ 760,680 $ 2,855,518 $ 2,122,863

Maintenance 29,530 94,225 177,230 313,813

Other 88,243 60,548 194,265 158,873

Total revenues 1,189,128 915,453 3,227,013 2,595,549

Cost of revenues (1) (2) 213,425 168,652 585,990 463,989

Gross profit 975,703 746,801 2,641,023 2,131,560

Operating expenses:

Research and development (1) (2) 576,490 522,344 1,595,007 1,395,026

Marketing and sales (1) (2) 223,814 220,921 637,894 567,240

General and administrative (1) 157,595 165,103 458,249 464,127

Total operating expenses 957,899 908,368 2,691,150 2,426,393

Operating income (loss) 17,804 (161,567) (50,127) (294,833)

Other income (expense), net (10,990) (943) (23,964) 21,597

Interest income 21,414 15,047 69,233 29,153

Interest expense (8,453) (7,978) (26,430) (21,607)

Income (loss) before provision for income taxes 19,775 (155,441) (31,288) (265,690)

Provision for income taxes (7,023) (53,596) (72,312) (162,119)

Net income (loss) $ 12,752 $ (209,037) $ (103,600) $ (427,809)

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

Basic $ 0.05 $ (0.81) $ (0.40) $ (1.67)

Diluted $ 0.05 $ (0.81) $ (0.40) $ (1.67)

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

Basic 259,717 256,825 258,738 255,949

Diluted 261,778 256,825 258,738 255,949


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

**Three Months Ended March 31,** **Nine Months Ended March 31,**

**2024** **2023** **2024** **2023**

Cost of revenues $ 17,840 $ 17,581 $ 53,874 $ 46,747

Research and development 190,322 167,994 528,587 447,465

Marketing and sales 33,383 36,571 103,832 97,922

General and administrative 40,974 41,281 121,652 110,709


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

**Three Months Ended March 31,** **Nine Months Ended March 31,**

**2024** **2023** **2024** **2023**

Cost of revenues $ 12,454 $ 5,696 $ 25,282 $ 17,090

Research and development 94 94 281 281

Marketing and sales 3,646 2,365 8,723 7,376


-----

**Condensed Consolidated Balance Sheets**

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

**(unaudited)**

**March 31, 2024** **June 30, 2023**


**Assets**

Current assets:

Cash and cash equivalents $ 1,948,978 $ 2,102,550

Marketable securities 163,318 10,000

Accounts receivable, net 646,082 477,678

Prepaid expenses and other current assets 155,551 146,136

Total current assets 2,913,929 2,736,364

Non-current assets:

Property and equipment, net 80,961 81,402

Operating lease right-of-use assets 180,967 184,195

Strategic investments 220,125 225,538

Intangible assets, net 312,816 69,072

Goodwill 1,285,745 727,211

Deferred tax assets 2,780 9,945

Other non-current assets 65,942 73,052

**Total assets** $ 5,063,265 $ 4,106,779

**Liabilities and Stockholders’ Equity**

Current liabilities:

Accounts payable $ 188,241 $ 159,293

Accrued expenses and other current liabilities 484,896 423,131

Deferred revenue, current portion 1,698,639 1,362,736

Operating lease liabilities, current portion 46,437 44,930

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

Total current liabilities 2,468,213 2,027,590

Non-current liabilities:

Deferred revenue, net of current portion 256,926 182,743

Operating lease liabilities, net of current portion 225,208 237,835

Term loan facility, net of current portion 924,724 962,093

Deferred tax liabilities 19,036 10,669

Other non-current liabilities 34,987 31,177

**Total liabilities** 3,929,094 3,452,107

**Stockholders’ equity**

Common stock 3 3

Additional paid-in capital 3,938,577 3,130,631

Accumulated other comprehensive income 13,767 34,002

Accumulated deficit (2,818,176) (2,509,964)

**Total stockholders’ equity** 1,134,171 654,672

**Total liabilities and stockholders’ equity** $ 5,063,265 $ 4,106,779


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**Three Months Ended March 31,** **Nine Months Ended March 31,**

**2024** **2023** **2024** **2023**


**Cash flows from operating activities:**

Net income (loss) $ 12,752 $ (209,037) $ (103,600) $ (427,809)

Adjustments to reconcile net income (loss) to net
cash provided by operating activities:

Depreciation and amortization 23,464 15,523 55,560 45,619

Stock-based compensation 282,519 263,427 807,945 702,843

Impairment charges for leases and leasehold
improvements — 61,098 — 61,098

Deferred income taxes 3,207 1,495 (98) 6,308

Gain on a non-cash sale of a controlling interest of
a subsidiary — — (1,378) (45,158)

Net loss (income) on strategic investments 4,060 (1,812) 11,750 17,264

Net foreign currency loss (gain) (2,276) (177) 142 (6,005)

Other 412 1,381 698 1,611

Changes in operating assets and liabilities, net of
business combinations:

Accounts receivable, net (119,819) 8,460 (166,494) (38,031)

Prepaid expenses and other assets (35,986) (15,163) (59,528) (40,530)

Accounts payable 28,227 (27,700) 28,850 22,034

Accrued expenses and other liabilities 67,149 131,238 54,958 81,055

Deferred revenue 301,681 123,636 393,135 215,037

**Net cash provided by operating activities** 565,390 352,369 1,021,940 595,336

**Cash flows from investing activities:**

Business combinations, net of cash acquired — — (844,727) (600)

Purchases of property and equipment (10,520) (2,691) (19,522) (23,227)

Purchases of strategic investments (4,250) (9,000) (8,250) (18,450)

Purchases of marketable securities (74,544) — (213,690) (10,000)

Proceeds from maturities of marketable securities 63,000 26,250 79,150 73,950

Proceeds from sales of marketable securities and
strategic investments — 8 61,392 629

**Net cash provided by (used in) investing**
**activities** (26,314) 14,567 (945,647) 22,302

**Cash flows from financing activities:**

Principal payments of term loan facility (12,500) — (25,000) —

Repurchases of Class A Common Stock (35,377) (31,748) (203,029) (31,748)

Proceeds from other financing arrangements — 2 — 1,398

**Net cash used in financing activities** (47,877) (31,746) (228,029) (30,350)

Effect of foreign exchange rate changes on cash,
cash equivalents and restricted cash (2,769) 421 (1,986) (996)

Net increase (decrease) in cash, cash equivalents,
and restricted cash 488,430 335,611 (153,722) 586,292

**Cash, cash equivalents, and restricted cash at**
**beginning of period** 1,461,763 1,637,969 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** $ 1,950,193 $ 1,973,580 $ 1,950,193 $ 1,973,580


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**Revenues by Deployment Options**

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

**(unaudited)**

**Three Months Ended March 31,** **Nine Months Ended March 31,**

**2024** **2023** **2024** **2023**

Cloud $ 703,036 $ 534,891 $ 1,960,893 $ 1,522,269

Data Center 364,134 221,551 881,835 587,043

Server 29,720 94,389 177,645 314,370

Marketplace and other (1) 92,238 64,622 206,640 171,867

Total revenues $ 1,189,128 $ 915,453 $ 3,227,013 $ 2,595,549


(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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**(** **$** **,** **p p** **g** **p** **)**

**(unaudited)**

**Three Months Ended March 31,** **Nine Months Ended March 31,**

**2024** **2023** **2024** **2023**


**Gross profit**
GAAP gross profit $ 975,703 $ 746,801 $ 2,641,023 $ 2,131,560

Plus: Stock-based compensation 17,840 17,293 53,874 46,459

Plus: Amortization of acquired intangible assets 12,454 5,696 25,282 17,090

Plus: Restructuring charges (1) — 9,247 — 9,247

Non-GAAP gross profit $ 1,005,997 $ 779,037 $ 2,720,179 $ 2,204,356

**Gross margin**
GAAP gross margin 82 % 82 % 82 % 82 %

Plus: Stock-based compensation 2 2 1 2

Plus: Amortization of acquired intangible assets 1 — 1 1

Plus: Restructuring charges (1) — % 1 % — % — %

Non-GAAP gross margin 85 % 85 % 84 % 85 %

**Operating income**
GAAP operating income (loss) $ 17,804 $ (161,567) $ (50,127) $ (294,833)

Plus: Stock-based compensation 282,519 252,678 807,945 692,094

Plus: Amortization of acquired intangible assets 16,194 8,155 34,286 24,747

Plus: Restructuring charges (1) — 97,848 — 97,848

Non-GAAP operating income $ 316,517 $ 197,114 $ 792,104 $ 519,856

**Operating margin**
GAAP operating margin 1% (18%) (2%) (11%)

Plus: Stock-based compensation 25 28 26 26

Plus: Amortization of acquired intangible assets 1 1 1 1

Plus: Restructuring charges (1) — 11 — 4

Non-GAAP operating margin 27 % 22 % 25 % 20 %

**Net income**
GAAP net income (loss) $ 12,752 $ (209,037) $ (103,600) $ (427,809)

Plus: Stock-based compensation 282,519 252,678 807,945 692,094

Plus: Amortization of acquired intangible assets 16,194 8,155 34,286 24,747

Plus: Restructuring charges (1) — 97,848 — 97,848

Less: Gain on a non-cash sale of a controlling
interest of a subsidiary — — (1,378) (45,158)

Less: Income tax adjustments (2) (78,969) (11,689) (146,271) 3,513

Non-GAAP net income $ 232,496 $ 137,955 $ 590,982 $ 345,235

**Net income per share**
GAAP net income (loss) per share - diluted $ 0.05 $ (0.81) $ (0.40) $ (1.67)

Plus: Stock-based compensation 1.08 0.98 3.11 2.70

Plus: Amortization of acquired intangible assets 0.06 0.03 0.13 0.10

Plus: Restructuring charges (1) — 0.39 — 0.39

Less: Gain on a non-cash sale of a controlling
interest of a subsidiary — — (0.01) (0.18)

Less: Income tax adjustments (2) (0.30) (0.05) (0.56) 0.01

Non-GAAP net income per share - diluted $ 0.89 $ 0.54 $ 2.27 $ 1.35

**Weighted-average diluted shares outstanding**
Weighted-average shares used in computing diluted
GAAP net income (loss) per share 261,778 256,825 258,738 255,949

Plus: Dilution from dilutive securities (3) — 425 1,273 590

Weighted-average shares used in computing diluted
non-GAAP net income per share 261,778 257,250 260,011 256,539

**Free cash flow**
GAAP net cash provided by operating activities $ 565,390 $ 352,369 $ 1,021,940 $ 595,336

Less: Capital expenditures (10,520) (2,691) (19,522) (23,227)

Free cash flow $ 554,870 $ 349,678 $ 1,002,418 $ 572,109


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(2) In 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 non-GAAP 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.

(3) The effects of these dilutive securities were not included in the GAAP calculation of diluted net loss per share for the nine months ended
March 31, 2024 and three and nine months ended March 31, 2023, respectively, because the effect would have been anti-dilutive.


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

**Three Months Ending**

**June 30, 2024**


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

Plus: Stock-based compensation 1.5

Plus: Amortization of acquired intangible assets 1.0

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

**GAAP operating margin** **(7.0%)**

Plus: Stock-based compensation 24.0

Plus: Amortization of acquired intangible assets 1.5

**Non-GAAP operating margin** **18.5%**


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