01—Abstract
Summary
Summary of the 10-K filed August 16, 2024. Cited figures are marked; the original filing is the authoritative source.
Atlassian Corporation (TEAM) reported fiscal year 2024 (ended June 30, 2024) total revenues of $4.36 billiona, up 23% from $3.53 billion in fiscal 2023, with subscription revenue rising 34% to $3.92 billion and Cloud revenue rising 29% to $2.70 billion.
Gross margin held at 82%, but operating expenses grew to $3.67 billionb, leaving a GAAP operating loss of $117.1 million (compared with a $345.2 million loss in fiscal 2023) and a GAAP net loss of $300.5 million. Non-GAAP operating income was $1.01 billion, a 23% non-GAAP operating margin. Net cash provided by operating activities was $1.45 billion, and free cash flow was $1.42 billion.
Stock-based compensation of $1.08 billionc was the largest driver of the gap between GAAP and non-GAAP results. The balance sheet shows cash and cash equivalents of $2.18 billion and marketable securities of $162.0 million against $985.9 million of long-term debt. In May 2024 the company issued $500 million of 5.250% senior notes due 2029 and $500 million of 5.500% senior notes due 2034, and it repaid its $1.0 billion term loan.
In August 2024 it replaced its prior credit facility with a $750 milliond senior unsecured revolving credit facility. The company repurchased about 2.2 million Class A shares for approximately $394.0 million during the year and had $451.8 million remaining under its $1.0 billion authorization. It also acquired Loom, Inc. in November 2023 for approximately $885.6 million in cash.
Investors should weigh several risks noted in the filing. Class B shares carry ten votes each, and entities affiliated with the Co-Founders hold approximately 86% of the voting power. The company is shifting from Data Center and Server offerings to Cloud, which the filing says will modestly reduce gross margin.
Server revenue fell 56% as maintenance support ended in February 2024. Securities class action and derivative litigation related to the August 2022 to November 2022 class period is ongoing, with the court dismissing the second amended complaint on August 13, 2024 and granting leave to file a third.
02—Key points
Key Highlights
- Total revenues rose 23% to $4.36 billion in fiscal 2024, driven by subscription revenue growth of 34% to $3.92 billion.
- Cloud revenue grew 29% to $2.70 billion, while Server revenue fell 56% to $177.6 million after support ended in February 2024.
- GAAP operating loss narrowed to $117.1 million from $345.2 million, and non-GAAP operating income reached $1.01 billion, a 23% non-GAAP operating margin.
- Free cash flow was $1.42 billion, up from $842.5 million, on operating cash flow of $1.45 billion.
- Stock-based compensation was $1.08 billion in fiscal 2024, a key reconciling item between GAAP and non-GAAP results.
- The company issued $1.0 billion of senior notes in May 2024 and repaid its $1.0 billion term loan. Cash and cash equivalents were $2.18 billion at June 30, 2024.
- Class B shares held by affiliates of the Co-Founders carry about 86% of voting power, and the company's shares are subject to ongoing securities class action litigation.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2024, Atlassian lost $0.07.
- Revenue$4.36B100.0%
- Cost of revenue−$803.5M18.4%
- Gross profit$3.56B81.6%
- Operating costs−$3.67B84.3%
- Operating income−$117.1M2.7%
- Interest, other & tax−$183.4M4.2%
- Net income−$300.5M6.9%
04—Financials
Financial Highlights
Figures from 10-KFY2024filed August 16, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $4.36B$3.53B | +23.3% |
| Cost of Revenue | $803.50M$633.76M | +26.8% |
| Gross Profit | $3.56B$2.90B | +22.6% |
| R&D Expenses | $2.18B$1.87B | +16.8% |
| Operating Expenses | $3.67B$3.25B | +13.1% |
| Operating Income | -$117.08M-$345.22M | +66.1% |
| Net Income | -$300.50M-$486.80M | +38.3% |
| EPS (Basic) | $-1.16$-1.90 | +38.9% |
| EPS (Diluted) | $-1.16$-1.90 | +38.9% |
| Shares Outstanding (Basic) | 259.13M256.31M | +1.1% |
| Shares Outstanding (Diluted) | 259.13M256.31M | +1.1% |
05—Questions
Frequently Asked Questions
How did Atlassian's revenue and profitability trend in fiscal 2024?
Total revenues increased 23% to $4.36 billion. Gross margin was 82%, unchanged from fiscal 2023. The GAAP operating loss narrowed to $117.1 million from $345.2 million, and the GAAP net loss was $300.5 million, compared with $486.8 million in fiscal 2023. Non-GAAP operating income was $1.01 billion.
What is driving the shift in revenue mix?
The filing says customers are migrating from Server and Data Center offerings to Cloud. Cloud revenue rose 29% to $2.70 billion, while Server revenue fell 56% to $177.6 million after maintenance and support for Server products ended in February 2024. The company expects gross margin to modestly decrease because of this mix shift, due to higher hosting and personnel costs.
How strong is Atlassian's liquidity and debt position?
Cash and cash equivalents were $2.18 billion and marketable securities were $162.0 million at June 30, 2024. Long-term debt, net of current portion, was $985.9 million, consisting of the 2029 and 2034 senior notes. In August 2024 the company entered a $750 million unsecured revolving credit facility, with no outstanding loans as of August 14, 2024.
What governance and legal risks should investors consider?
Class B shares carry ten votes per share, and affiliates of Co-Founders Michael Cannon-Brookes and Scott Farquhar hold about 86% of the voting power, which limits other stockholders' influence over change-of-control decisions. A securities class action and related stockholder derivative lawsuits are pending. The filing states that the defendants deny the allegations and vigorously defend against the claims, and the company has not recorded any liabilities for the litigation.
06—Continue