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Atlassian Annual Report, Year Ended Jun 30, 2018

Filing Date
Filed August 30, 2018
Period End
June 30, 2018
Security
TEAM
In the record · 2016–202610-K1110-Q128-K121

TEAM filed 11 annual reports (10-K), 12 quarterly reports (10-Q) and 121 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Mar ’26Mar ’26

01—Abstract

Summary

Summary of the 20-F filed August 30, 2018. Cited figures are marked; the original filing is the authoritative source.

Atlassian Corporation Plc filed this Annual Report for the fiscal year ended June 30, 2018, prepared under IFRS and filed on Form 20-F-style foreign private issuer format.

Total revenues rose to $873.95 milliona in fiscal 2018 from $619.94 million in fiscal 2017, with subscription revenue growing to $403.2 million from $242.1 million and maintenance revenue to $325.9 million from $265.5 million. Gross profit was $701.3 million, but the company reported an IFRS operating loss of $53.7 million and a net loss of $119.3 million, which was driven in part by a $53.5 million income tax expense. Share-based payment expense was $162.9 million, and non-IFRS operating income was $166.4 million.

Management states it does not expect to achieve IFRS profitability in the near term. The company ended the year with cash and cash equivalents of $1.41 billionb and short-term investments of $323.1 million, following the issuance of $1.0 billion of 0.625% Exchangeable Senior Notes due 2023. Free cash flow was $281.2 million, up from $183.3 million, and operating cash flow was $311.5 million.

Customers totaled 125,796 at June 30, 2018, versus 89,237 a year earlier, and the company reported more than 300 of the Fortune 500 as customers. Investors should note the governance structure: Class B shares carry ten votes each and hold approximately 92%c of total voting power, with co-CEOs Michael Cannon-Brookes and Scott Farquhar together holding approximately 91%. The company also disclosed that it will exit real-time communications products (Stride and HipChat) following a partnership with Slack, and it plans to adopt IFRS 15 on a full retrospective basis beginning in fiscal 2019.

02—Key points

Key Highlights

  1. Total revenues increased to $873.95 million in fiscal 2018 from $619.94 million in fiscal 2017, with the company reporting a 41% increase.
  2. Subscription revenues increased 67% to $403.2 million, while maintenance revenues rose 23% to $325.9 million.
  3. IFRS net loss widened to $119.3 million from $42.5 million, including $53.5 million of income tax expense; non-IFRS operating income was $166.4 million.
  4. Share-based payment expense was $162.9 million in fiscal 2018, compared with $137.4 million in fiscal 2017.
  5. Cash and cash equivalents reached $1.41 billion at June 30, 2018, after the $1.0 billion exchangeable senior notes offering due May 1, 2023.
  6. Free cash flow was $281.2 million in fiscal 2018 versus $183.3 million in fiscal 2017, and operating cash flow was $311.5 million.
  7. Class B shares with ten votes each represent approximately 92% of voting power, concentrated in the co-CEOs, which limits minority shareholder influence over control matters.

03—Questions

Frequently Asked Questions

  1. Is Atlassian profitable on an IFRS basis, and does management expect that to change soon?

    No. The company reported an IFRS operating loss of $53.7 million and a net loss of $119.3 million for fiscal 2018. Management stated that it does not expect to achieve IFRS profitability in the near term and may not achieve it in future periods, citing continued investment in research and development, cloud infrastructure and global expansion, along with share-based compensation.

  2. How much cash does the company have, and what debt does it carry?

    At June 30, 2018, the company had cash and cash equivalents of $1.41 billion and short-term investments of $323.1 million. It issued $1.0 billion of 0.625% Exchangeable Senior Notes due May 1, 2023, and the notes are settled in cash upon exchange. The company used $87.7 million of the proceeds to purchase capped call transactions.

  3. Who controls voting power at Atlassian?

    Holders of Class B ordinary shares, which carry ten votes per share, hold approximately 92% of total voting power as of June 30, 2018. Co-CEOs Michael Cannon-Brookes and Scott Farquhar collectively hold approximately 91% of voting power. This concentration may delay or prevent a change in control of the company.

  4. What is driving revenue growth?

    The filing attributes growth primarily to increased demand from new and existing customers, with over 90% of fiscal 2018 revenue coming from customer accounts existing on or before June 30, 2017. Subscription revenue growth was primarily attributed to additional subscriptions from the existing customer base, and total customers rose to 125,796 from 89,237.

  5. What changes is the company making to its business and accounting?

    The company announced a strategic partnership with Slack in July 2018 and will exit the real-time communications space, discontinuing Stride and HipChat Cloud and HipChat Server and Data Center. It will also adopt IFRS 15 in the first quarter of fiscal 2019 using the full retrospective method, which primarily affects on-premises term-based licenses.

04—Continue

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