01—Abstract
Summary
Summary of the 10-Q filed November 1, 2024. Cited figures are marked; the original filing is the authoritative source.
Atlassian Corporation reported total revenues of $1,187,781 thousanda ($1.19 billion) for the three months ended September 30, 2024, up from $977,775 thousand, with subscription revenues of $1,131,948 thousand, up from $851,982 thousand.
Other revenues declined to $55,833 thousandb from $125,793 thousand, driven by a $75.5 million decrease in maintenance revenue after support for Server offerings ended. Gross profit was $970,157 thousand. Operating loss widened to $(31,978) thousand from $(18,869) thousand as research and development expense rose to $603,101 thousand and marketing and sales expense rose to $252,393 thousand.
Net loss was $(123,769) thousand, or $(0.48) per share, compared with a net loss of $(31,883) thousand, or $(0.12) per share, in the prior-year quarter. The provision for income taxes increased to $93,605 thousandc from $20,929 thousand, primarily attributable to the change in the mix of earnings and losses in foreign jurisdictions. Cash flow and capital return were notable in the quarter.
Net cash provided by operating activities was $80,492 thousandd, down from $166,956 thousand, and free cash flow was $74,341 thousand, compared with $163,287 thousand. The company repurchased approximately 1.1 million Class A shares for approximately $183.9 million, and cash and cash equivalents totaled $2.1 billion at quarter end. In September 2024 the Board authorized an additional $1.5 billion repurchase program, which will commence after the 2023 program is completed, with $267.9 million remaining under the 2023 program at quarter end.
The balance sheet shows total assets of $4,993,293 thousand and long-term debt of $986,345 thousand, which consists of $500.0 million of 5.250% senior notes due 2029 and $500.0 million of 5.500% senior notes due 2034. In August 2024 the company replaced its prior credit agreement with a $750 million senior unsecured revolving credit facility maturing in August 2029, with no revolving loans outstanding at quarter end. The filing also discloses a putative securities class action and related stockholder derivative suits that were dismissed, and Class B shares held by the Co-Founders' affiliates represent approximately 86% of voting power.
02—Key points
Key Highlights
- Total revenues rose to $1,187,781 thousand from $977,775 thousand, with subscription revenues increasing to $1,131,948 thousand from $851,982 thousand, attributed mainly to paid seat expansion, migrations and price increases.
- Cloud revenues were $792,306 thousand versus $604,647 thousand, while Server revenues fell to zero from $78,752 thousand after support for Server offerings ended.
- Operating loss was $(31,978) thousand compared with $(18,869) thousand, as research and development expenses grew to $603,101 thousand from $481,738 thousand.
- Net loss was $(123,769) thousand, or $(0.48) per share, versus a net loss of $(31,883) thousand, or $(0.12) per share, with the income tax provision rising to $93,605 thousand.
- Operating cash flow fell to $80,492 thousand from $166,956 thousand, and free cash flow declined to $74,341 thousand from $163,287 thousand.
- The company repurchased approximately 1.1 million Class A shares for about $183.9 million and authorized an additional $1.5 billion repurchase program in September 2024.
- Deferred revenue balance at quarter end was $2,012,820 thousand, versus $1,501,081 thousand a year earlier, and remaining performance obligations were approximately $2.3 billion, with about 81% expected to be recognized over the next 12 months.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2025, Atlassian lost $0.10.
- Revenue$1.19B100.0%
- Cost of revenue−$217.6M18.3%
- Gross profit$970.2M81.7%
- Operating costs−$1.00B84.4%
- Operating income−$32.0M2.7%
- Interest, other & tax−$91.8M7.7%
- Net income−$123.8M10.4%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed November 1, 2024Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $1.19B$977.77M | +21.5% |
| Cost of Revenue | $217.62M$178.03M | +22.2% |
| Gross Profit | $970.16M$799.75M | +21.3% |
| R&D Expenses | $603.10M$481.74M | +25.2% |
| Operating Expenses | $1.00B$818.62M | +22.4% |
| Operating Income | -$31.98M-$18.87M | −69.5% |
| Interest Expense | $7.32M$8.98M | −18.5% |
| Net Income | -$123.77M-$31.88M | −288.2% |
| EPS (Basic) | $-0.48$-0.12 | −300.0% |
| EPS (Diluted) | $-0.48$-0.12 | −300.0% |
| Shares Outstanding (Basic) | 260.48M257.91M | +1.0% |
| Shares Outstanding (Diluted) | 260.48M257.91M | +1.0% |
05—Questions
Frequently Asked Questions
Why did the net loss widen compared with the prior-year quarter?
The operating loss increased to $(31,978) thousand from $(18,869) thousand as operating expenses grew faster than gross profit, led by research and development and marketing and sales. The provision for income taxes also rose to $93,605 thousand from $20,929 thousand, which the filing attributes primarily to the change in the mix of earnings and losses in foreign jurisdictions.
What drove the change in revenue mix?
Subscription revenue increased by $279,966 thousand, primarily due to paid seat expansion from existing customers, migrations and price increases. Other revenue decreased by $69,960 thousand, mainly because maintenance revenue for Server offerings declined by $75.5 million after support for those offerings ended.
How is the company's debt structure described?
Long-term debt was $986,345 thousand at September 30, 2024, consisting of $500.0 million of 5.250% senior notes due 2029 and $500.0 million of 5.500% senior notes due 2034. In August 2024 the company entered a $750 million senior unsecured revolving credit facility maturing in August 2029, under which no revolving loans were outstanding at quarter end.
How much capital was returned to shareholders and what remains authorized?
The company repurchased approximately 1.1 million Class A shares for approximately $183.9 million at an average price of $162.57 during the quarter. At quarter end, $267.9 million remained under the 2023 program and $1.5 billion was authorized under the 2024 program, which will commence after the 2023 program is completed.
What legal matters were resolved in the quarter?
The putative securities class action filed in February 2023 was dismissed after the court granted the defendants' motion to dismiss the second amended complaint on August 13, 2024, and plaintiffs did not file a third amended complaint or appeal. The related stockholder derivative lawsuits were voluntarily dismissed without prejudice in October 2024, and the company has not recorded any liabilities for the litigation.
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