01—Abstract
Summary
Summary of the 10-Q filed May 2, 2025. Cited figures are marked; the original filing is the authoritative source.
Atlassian Corporation's Form 10-Q for the quarter ended March 31, 2025 shows total revenues of $1.36 billiona for the three months, up 14% from $1.19 billion a year earlier, with subscription revenue rising 19% to $1.27 billion.
Cloud revenue grew to $880.4 millionb from $703.0 million, while Data Center revenue rose to $388.5 million from $364.1 million and Server revenue fell to zero after Server maintenance ended. Other revenue declined 29%, mainly due to a $27.8 million drop in Server maintenance revenue. Profitability was weaker.
The company reported a GAAP operating loss of $12.5 millionc for the quarter, compared with operating income of $17.8 million a year earlier, and a net loss of $70.8 million, or $0.27 per share, versus net income of $12.8 million. Research and development expense rose 19% to $685.3 million and marketing and sales expense rose 32% to $295.8 million. Stock-based compensation was $346.8 million for the quarter.
Non-GAAP operating income was $348.3 milliond, and free cash flow was $638.3 million for the quarter, up from $554.9 million. The provision for income taxes was $63.5 million for the quarter. The balance sheet and liquidity remained solid.
Cash and cash equivalents totaled $2.66 billion and marketable securities $313.6 million at March 31, 2025. Deferred revenue was $2.37 billion, and remaining performance obligations were approximately $2.9 billion, with about 78% expected to be recognized over the next 12 months. Long-term debt was $987.2 million, consisting of $500.0 million of 5.250% notes due 2029 and $500.0 million of 5.500% notes due 2034.
During the nine months, the company repurchased about 2.1 million Class A shares for $391.2 million. As of March 31, 2025, $1.5 billion remained under the 2024 Repurchase Program, and the company had 50,715 customers with more than $10,000 in Cloud ARR.
02—Key points
Key Highlights
- Total revenues of $1,356.7 million for the three months ended March 31, 2025, up 14% from $1,189.1 million a year earlier, with subscription revenue up 19%.
- Cloud revenue rose 25% to $880.4 million; Server revenue declined to zero after Server maintenance ended, and Other revenue fell 29%.
- GAAP operating loss of $12.5 million for the quarter versus operating income of $17.8 million in the prior-year quarter; net loss of $70.8 million, or $(0.27) per share.
- Research and development expense rose 19% to $685.3 million and marketing and sales expense rose 32% to $295.8 million; stock-based compensation was $346.8 million for the quarter.
- Non-GAAP operating income of $348.3 million and free cash flow of $638.3 million for the quarter, compared with $316.5 million and $554.9 million a year earlier.
- Cash and cash equivalents of $2.66 billion, $1.0 billion of senior notes outstanding, and $1.5 billion remaining under the 2024 Share Repurchase Program as of March 31, 2025.
- Remaining performance obligations of approximately $2.9 billion, with about 78% expected to be recognized over the next 12 months.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2025, Atlassian lost $0.05.
- Revenue$1.36B100.0%
- Cost of revenue−$219.7M16.2%
- Gross profit$1.14B83.8%
- Operating costs−$1.15B84.7%
- Operating income−$12.5M0.9%
- Interest, other & tax−$58.4M4.3%
- Net income−$70.8M5.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed May 2, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $1.36B$1.19B | +14.1% |
| Cost of Revenue | $219.68M$213.43M | +2.9% |
| Gross Profit | $1.14B$975.70M | +16.5% |
| R&D Expenses | $685.32M$576.49M | +18.9% |
| Operating Expenses | $1.15B$957.90M | +20.0% |
| Operating Income | -$12.46M$17.80M | −170.0% |
| Net Income | -$70.81M$12.75M | −655.3% |
| EPS (Basic) | $-0.27$0.05 | −640.0% |
| EPS (Diluted) | $-0.27$0.05 | −640.0% |
| Shares Outstanding (Basic) | 262.67M259.72M | +1.1% |
| Shares Outstanding (Diluted) | 262.67M261.78M | +0.3% |
05—Questions
Frequently Asked Questions
Why did Atlassian report a GAAP net loss this quarter after a profit a year earlier?
Operating expenses grew faster than revenue. Total operating expenses rose to $1,149.5 million from $957.9 million, driven mainly by higher research and development and marketing and sales costs, including stock-based compensation of $346.8 million. The provision for income taxes was $63.5 million, compared with $7.0 million a year earlier, which also weighed on results.
How is the shift from Server and Data Center to Cloud affecting revenue?
Cloud revenue grew 25% to $880.4 million for the quarter, while Server revenue dropped to zero from $29.7 million after Server maintenance ended. Data Center revenue increased 7% to $388.5 million. The filing notes that Cloud revenue is typically lower in the initial year than Data Center revenue, and that hosting costs will pressure margins, with gross margin expected to modestly decrease as the mix shifts to Cloud.
How strong is Atlassian's cash position and cash generation?
Cash and cash equivalents were $2.66 billion at March 31, 2025, and net cash provided by operating activities was $652.7 million for the quarter, compared with $565.4 million a year earlier. Free cash flow was $638.3 million for the quarter. The company also repurchased $134.3 million of Class A stock in cash during the quarter.
What debt and capital return commitments does Atlassian have?
Long-term debt was $987.2 million, consisting of $500.0 million of 5.250% senior notes due 2029 and $500.0 million of 5.500% senior notes due 2034. The company has a $750 million unsecured revolving credit facility maturing in August 2029, which had no outstanding borrowings. During the nine months ended March 31, 2025, the company repurchased about 2.1 million shares for $391.2 million, and $1.5 billion remained authorized under the 2024 Share Repurchase Program.
06—Continue