How did Atlassian's revenue and profitability perform in the fourth quarter of fiscal 2024?

Total revenue was $1,131.6 million, up 20% year-over-year. GAAP operating loss was $67.0 million, with a GAAP operating margin of (6%). Non-GAAP operating income was $222.0 million, with a non-GAAP operating margin of 20%, compared with 22% a year earlier. GAAP net loss was $196.9 million, or $(0.76) per diluted share.

What is Atlassian's outlook for fiscal 2025?

Management expects total revenue growth of approximately 16%, Cloud revenue growth of approximately 23%, and Data Center revenue growth of approximately 20%. It expects a GAAP operating margin of approximately (6.0%) and a non-GAAP operating margin of approximately 21.5%, with gross margin of approximately 81.0% on a GAAP basis and 83.5% on a non-GAAP basis.

What leadership changes were announced?

Co-founder Scott Farquhar is leaving the co-CEO role and will remain a board member and special advisor. Chief Sales Officer Kevin Egan is leaving the company and will remain in his role through the end of August. Atlassian is searching for a Chief Revenue Officer with a track record of leading enterprise sales transformations.

What are the company's main strategic priorities?

The shareholder letter identifies three priorities: enterprise cloud, AI, and the System of Work. Key initiatives include Atlassian Rovo, a unified Jira combining Jira Software and Jira Work Management, Atlassian Guard, and FedRAMP "In Process" status for Atlassian Government Cloud.

TEAM 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 1, 2024. Cited figures are marked; the original filing is the authoritative source.

Atlassian Corporation (NASDAQ: TEAM) reported results for the fourth quarter and fiscal year ended June 30, 2024 in a press release (Exhibit 99.1) and a shareholder letter (Exhibit 99.2), both dated August 1, 2024.

Quarterly revenue was $1,131.6 million^a, up 20% year-over-year, with subscription revenue of $1,068.9 million, up 34%. GAAP operating loss was $67.0 million (operating margin of (6%)), while non-GAAP operating income was $222.0 million (20% margin). Fiscal 2024 revenue was $4.36 billion, up 23%, with fiscal 2024 free cash flow of $1,415.6 million, or a 32% margin as stated in the filing.

Management highlighted enterprise cloud, AI (Atlassian Rovo and Atlassian Intelligence), and the System of Work as top strategic priorities. The company achieved FedRAMP "In Process" status and reported 45,842 customers with greater than $10,000^b in Cloud ARR, up 18%. Customers spending over $1 million annually grew 48% year-over-year.

Leadership changes were announced: co-founder Scott Farquhar is leaving the co-CEO role, Chief Sales Officer Kevin Egan is leaving after August, and a search is underway for a Chief Revenue Officer. For fiscal 2025, management guided total revenue growth of approximately 16%^c, Cloud revenue growth of approximately 23%, and Data Center revenue growth of approximately 20%.

The GAAP operating margin outlook is approximately (6.0%^d) and the non-GAAP operating margin outlook is approximately 21.5%. Management also expects non-GAAP operating margin above 25% by FY27.

02—Key points

Key Highlights

Q4 FY24 revenue of $1,131.6 million, up 20% year-over-year; subscription revenue of $1,068.9 million, up 34%.
GAAP operating loss of $67.0 million (margin of (6%)); non-GAAP operating income of $222.0 million (margin of 20%).
Q4 cash flow from operations of $426.2 million and free cash flow of $413.2 million; FY24 free cash flow of $1,415.6 million.
Fiscal 2024 total revenue of $4.36 billion, up 23%; GAAP net loss of $300.5 million, or $(1.16) per diluted share.
Customers with over $10,000 in Cloud ARR reached 45,842, up 18%; customers spending over $1 million annually grew 48%.
FY25 guidance: total revenue growth of approximately 16%, Cloud growth of approximately 23%, and non-GAAP operating margin of approximately 21.5%.
Leadership transition: co-founder Scott Farquhar is stepping down as co-CEO, Chief Sales Officer Kevin Egan is leaving, and a Chief Revenue Officer search is underway.

03—Questions

Frequently Asked Questions

How did Atlassian's revenue and profitability perform in the fourth quarter of fiscal 2024?
Total revenue was $1,131.6 million, up 20% year-over-year. GAAP operating loss was $67.0 million, with a GAAP operating margin of (6%). Non-GAAP operating income was $222.0 million, with a non-GAAP operating margin of 20%, compared with 22% a year earlier. GAAP net loss was $196.9 million, or $(0.76) per diluted share.
What is Atlassian's outlook for fiscal 2025?
Management expects total revenue growth of approximately 16%, Cloud revenue growth of approximately 23%, and Data Center revenue growth of approximately 20%. It expects a GAAP operating margin of approximately (6.0%) and a non-GAAP operating margin of approximately 21.5%, with gross margin of approximately 81.0% on a GAAP basis and 83.5% on a non-GAAP basis.
What leadership changes were announced?
Co-founder Scott Farquhar is leaving the co-CEO role and will remain a board member and special advisor. Chief Sales Officer Kevin Egan is leaving the company and will remain in his role through the end of August. Atlassian is searching for a Chief Revenue Officer with a track record of leading enterprise sales transformations.
What are the company's main strategic priorities?
The shareholder letter identifies three priorities: enterprise cloud, AI, and the System of Work. Key initiatives include Atlassian Rovo, a unified Jira combining Jira Software and Jira Work Management, Atlassian Guard, and FedRAMP "In Process" status for Atlassian Government Cloud.

04—Continue

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