01—Abstract
Summary
Summary of the 20-F filed September 1, 2017. Cited figures are marked; the original filing is the authoritative source.
Atlassian Corporation Plc's annual report for the fiscal year ended June 30, 2017 shows total revenues of $619.9 milliona, up 36% from $457.1 million in fiscal 2016.
Subscription revenue rose 65% to $242.1 millionb and maintenance revenue rose 21% to $265.5 million. The company reported an IFRS operating loss of $63.1 million and a net loss of $42.5 million, or $0.19 per share, compared with net income of $4.4 million in fiscal 2016. Management attributes the swing largely to higher share-based payment expense of $137.4 million, up from $75.5 million, and amortization of acquired intangibles of $29.9 million.
On a non-IFRS basis, operating income was $104.2 millionc and free cash flow was $183.3 million, compared with $95.3 million a year earlier. The balance sheet remained strong, with cash and cash equivalents of $244.4 million and short-term investments of $305.5 million at June 30, 2017. The increase in total assets to $1.28 billion reflects the acquisition of Trello for approximately $384.0 million, of which $363.8 million was paid in cash.
Deferred revenue increased to $256.0 milliond. Management expects research and development, marketing and sales, and general and administrative expenses to rise in absolute dollars and does not expect to reach IFRS profitability in the near term. The filing also highlights governance and structural considerations for investors.
Class B ordinary shares carry ten votes per share and represented approximately 94% of voting power at June 30, 2017, with co-CEOs Michael Cannon-Brookes and Scott Farquhar holding about 93%. The company reports under IFRS as a foreign private issuer, is incorporated in England and Wales, and reported 89,237 customers as of June 30, 2017, with JIRA and Confluence generating over two-thirds of total revenues in each of the prior three fiscal years.
02—Key points
Key Highlights
- Total revenues were $619.9 million in fiscal 2017, up 36% from $457.1 million in fiscal 2016.
- Subscription revenues increased 65% to $242.1 million, while maintenance revenues grew 21% to $265.5 million.
- IFRS operating loss was $63.1 million and net loss was $42.5 million ($0.19 per share), versus net income of $4.4 million in fiscal 2016, driven by share-based payment expense of $137.4 million.
- Non-IFRS operating income was $104.2 million and free cash flow was $183.3 million, up from $95.3 million in fiscal 2016.
- Cash and cash equivalents of $244.4 million plus short-term investments of $305.5 million at June 30, 2017; the company acquired Trello in February 2017 for approximately $384.0 million.
- Class B shares carry ten votes each and held about 94% of voting power at June 30, 2017, with co-CEOs holding about 93%.
- Customers reached 89,237 at June 30, 2017, including 12,789 added through the Trello acquisition; JIRA and Confluence produced over two-thirds of revenues in each of the prior three fiscal years.
03—Questions
Frequently Asked Questions
How fast did Atlassian's revenue grow in fiscal 2017?
Total revenues increased $162.9 million, or 36%, to $619.9 million. Subscription revenues grew 65% and maintenance revenues grew 21%, while perpetual license revenues increased 14% and other revenues increased 45%.
Why did Atlassian report a net loss in fiscal 2017?
The company reported a net loss of $42.5 million, compared with net income of $4.4 million in fiscal 2016. The filing attributes the change mainly to higher share-based payment expense of $137.4 million (up from $75.5 million), increased research and development investment, and amortization of acquired intangibles of $29.9 million. Income tax benefit of $17.1 million partially offset these costs.
What is the company's liquidity position?
At June 30, 2017, cash and cash equivalents totaled $244.4 million and short-term investments totaled $305.5 million. Net cash provided by operating activities was $199.4 million, and management believes existing cash and cash-generated operations will be sufficient for at least the next 12 months.
What control do the co-founders have over shareholder votes?
Class B ordinary shares have ten votes per share. As of June 30, 2017, holders of Class B shares held about 94% of total voting power, and co-CEOs Michael Cannon-Brookes and Scott Farquhar together held about 93%. The filing notes this concentrated control may delay or prevent a change in control of the company.
What acquisition did Atlassian complete in fiscal 2017?
In February 2017 Atlassian acquired Trello, Inc. for a total purchase price of approximately $384.0 million, consisting of about $363.8 million in cash and $20.2 million for the fair value of exchanged unvested equity awards. The filing says the acquisition expands the company's teamwork platform with a complementary collaboration service.
04—Continue