Form 6-K Atlassian Corp Plc For: Mar 31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

 

April 28, 2022

 

Commission File Number 001-37651

Atlassian Corporation Plc

(Exact name of Registrant as specified in its charter)

 

Not Applicable

(Translation of registrant’s name into English)

 

Exchange House

Primrose Street

London EC2A 2EG

c/o Herbert Smith Freehills LLP

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

Form 20-F x Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

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Results of Operations and Financial Condition.

On April 28, 2022, Atlassian Corporation Plc (the “Company”) issued a press release announcing its results for the quarter ended March 31, 2022. A copy of the press release is attached as Exhibit 99.1 to this report on Form 6-K and is incorporated by reference herein. The Company also published a letter to its shareholders announcing its financial results for the quarter ended March 31, 2022 (the “Shareholder Letter”). The full text of the Shareholder Letter is attached as Exhibit 99.2 to this report on Form 6-K and is incorporated by reference herein.

Appointment of Certain Officers.

On April 28, 2022, the Company announced the appointment of Rajeev Rajan as its Chief Technology Officer, effective May 19, 2022. Mr. Rajan is currently Vice President, Head of Engineering for Facebook at Meta Platforms, Inc., a social networking company, and has served in this role since September 2021. He is also Head of Office in the Pacific Northwest Region and has served in this role since March 2021. From July 2017 to March 2021, Mr. Rajan served as an Engineering Director at Meta Platforms, Inc. From September 1994 to July 2017, Mr. Rajan served in various roles at Microsoft Corporation. Mr. Rajan holds a Bachelor of Engineering (Hons.) in Computer Science from Birla Institute of Technology and Science, Pilani, and a Master of Science in Computer Science from The Ohio State University.

As previously announced last quarter, Sri Viswanath, the Company's current Chief Technology Officer will be leaving the Company at the end of fiscal year 2022.

The information in this report on Form 6-K under the sections titled “Results of Operations and Financial Condition” and “Appointment of Certain Officers” and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date:			April 28, 2022						Atlassian Corporation Plc
									/s/  James Beer
									James Beer Chief Financial Officer

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Exhibit Index

 

Exhibit Number			Exhibit Title
99.1			Press Release dated April 28, 2022.
99.2			Shareholder Letter dated April 28, 2022.

Atlassian Announces Third Quarter Fiscal Year 2022 Results

Quarterly revenue of $740 million, up 30% year-over-year

Quarterly subscription revenue of $555 million, up 59% year-over-year

Quarterly IFRS operating margin of (2)% and non-IFRS operating margin of 24%

Quarterly cash flow from operations of $353 million and free cash flow of $312 million

TEAM, Anywhere/SAN FRANCISCO (April 28, 2022) — Atlassian Corporation Plc (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its third quarter of fiscal year 2022 ended March 31, 2022 and released a shareholder letter available on Atlassian’s Work Life blog at http://atlassian.com/blog/announcements/shareholder-letter-q3fy22. The shareholder letter was also posted to the Investor Relations section of Atlassian’s website at https://investors.atlassian.com.

“It was amazing to experience the enthusiasm of the Atlassian community in-person at Team ’22,” said Scott Farquhar, Atlassian’s co-founder and co-CEO. “It’s such an honor to hear from our passionate users and partners about the mission-critical work we power. We are incredibly motivated by the role we play in transforming how teams collaborate, power digital transformation, and drive cultural change.”

“We now have line of sight to $10 billion in annual revenue based on our current markets and products,” said Mike Cannon-Brookes, Atlassian’s co-founder and co-CEO. “Atlassian has a 20-year track record of growing our ambition and we’ve never been more excited about the opportunities in front of us.”

Third Quarter Fiscal Year 2022 Financial Highlights:

On an IFRS basis, Atlassian reported: 

•Revenue: Total revenue was $740.5 million for the third quarter of fiscal year 2022, up 30% from $568.7 million for the third quarter of fiscal year 2021.

•Operating Income (Loss) and Operating Margin: Operating loss was $16.1 million for the third quarter of fiscal year 2022, compared with operating income of $69.5 million for the third quarter of fiscal year 2021. Operating margin was (2)% for the third quarter of fiscal year 2022, compared with 12% for the third quarter of fiscal year 2021.

•Net Income (Loss) and Net Income (Loss) Per Diluted Share: Net loss was $31.1 million for the third quarter of fiscal year 2022, compared with net income of $159.8 million for the third quarter of fiscal year 2021. Net loss per diluted share was $0.12 for the third quarter of fiscal year 2022, compared with net income per diluted share of $0.63 for the third quarter of fiscal year 2021.

•Balance Sheet: Cash and cash equivalents plus short-term investments at the end of the third quarter of fiscal year 2022 totaled $1.3 billion.

On a non-IFRS basis, Atlassian reported: 

•Operating Income and Operating Margin: Operating income was $179.2 million for the third quarter of fiscal year 2022, compared with operating income of $175.7 million for the third quarter of fiscal year 2021. Operating margin was 24% for the third quarter of fiscal year 2022, compared with 31% for the third quarter of fiscal year 2021.

•Net Income and Net Income Per Diluted Share: Net income was $120.6 million for the third quarter of fiscal year 2022, compared with net income of $123.3 million for the third quarter of fiscal year 2021. Net income per diluted share was $0.47 for the third quarter of fiscal year 2022, compared with $0.48 for the third quarter of fiscal year 2021.

•Free Cash Flow: Cash flow from operations was $353.0 million and free cash flow was $312.3 million for the third quarter of fiscal year 2022. Free cash flow margin for the third quarter of fiscal year 2022 was 42%.

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A reconciliation of IFRS to non-IFRS financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below, under the heading “About Non-IFRS Financial Measures.”

Recent Business Highlights:

•Atlassian Team ’22: Atlassian held its flagship Team ’22 conference on April 5th through April 7th both in-person and virtually. Thousands of customers, partners, and Atlassians gathered in-person in Las Vegas, and an additional 12,000+ people joined virtually from around the world. On-demand streaming content and recorded sessions for Team ’22 can be found at https://events.atlassian.com/team22.

•Atlassian Analytics: At Team ’22, Atlassian introduced Atlassian Analytics to enable customers to build customized, interactive dashboards that offer cross-project and cross-product overviews of workflows. Atlassian Analytics is powered by the Atlassian Data Lake that will initially have data from Jira Software and Jira Service Management and will expand across other products in our portfolio over time. Now teams can bring in data around stories and bugs assigned to them from Jira Software and visualize this alongside any change requests or incidents from Jira Service Management to assess what they should prioritize first. No-code visualization with Visual SQL provides a no-code way to explore data and create charts for teams and users who want to build reports fast without using SQL. Atlassian Analytics will also allow users to incorporate data from other business intelligence systems to provide an even more comprehensive view of their organization.

•Atlas: Atlassian’s latest offering in work management, Atlas, serves as a teamwork directory, connecting the dots between teams, their tools, and their work so that everyone in the company can find the information they need to keep their projects moving. Atlas surfaces project summaries alongside goals and progress, dependencies with other projects, and a rundown of who’s working on what.

•Compass: Atlassian has developed Compass to provide an answer to the changing nature of software development and the growing number of tools that developers use, offering them a unified view of their components and the teams that collaborate on them. Its component catalog visualizes dependencies and puts information like ownership, documentation, and metrics right next to each component so everything developers need are in one place. Compass also surfaces a health scorecard for each component to ensure resiliency, performance, security, and compliance in real time.

•Customer Growth: Atlassian ended its third quarter of fiscal year 2022 with a total customer count, on an active subscription or maintenance agreement basis, of 234,575 customers, adding 8,054 net new customers during the quarter. During the quarter, customer count was reduced by approximately 1,800 due primarily to Russia-based customers that were unable to pay, as a consequence of sanctions levied on their payment networks. Our public statement on Russia’s invasion of Ukraine can be found at: https://www.atlassian.com/blog/announcements/atlassian-stands-with-ukraine.

New Chief Technology Officer:

Atlassian announced that Rajeev Rajan will join the company as its new Chief Technology Officer (CTO) in May 2022. Rajeev brings a wealth of knowledge and experience in scaling global technology companies, having spent nearly five years at Meta, most recently as Vice President and Head of Engineering for Facebook and Head of Office for Meta in the Pacific Northwest Region. Prior to that, Rajeev spent over two decades at Microsoft across multiple products from Exchange to SQL Server to Active Directory, culminating in Office 365.

As previously announced last quarter, Sri Viswanath, Atlassian’s current CTO, will be leaving the company at the end of fiscal year 2022.

Financial Targets:

Atlassian is providing its financial targets for the fourth quarter of fiscal year 2022 as follows:

Fourth Quarter Fiscal Year 2022: 

•Total revenue is expected to be in the range of $710 million to $725 million.

•Gross margin is expected to be in the range of 81% to 82% on an IFRS basis and in the range of 84% to 85% on a non-IFRS basis. 

•Operating margin is expected to be approximately (11%) on an IFRS basis and approximately 15% on a non-IFRS basis. 

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•Net loss per diluted share is expected to be approximately ($0.40) on an IFRS basis, and net income per diluted share is expected to be approximately $0.24 on a non-IFRS basis.

•Weighted average share count is expected to be in the range of 254 million to 255 million shares when calculating diluted IFRS net loss per share and in the range of 257 million to 258 million shares when calculating diluted non-IFRS net income per share. 

For additional commentary regarding financial targets, please see Atlassian’s third quarter fiscal year 2022 shareholder letter dated April 28, 2022.

With respect to Atlassian’s expectations under “Financial Targets” above, a reconciliation of IFRS to non-IFRS gross margin, operating margin, and net income (loss) per diluted share, has been provided in the financial statement tables included in this press release.

Shareholder Letter and Webcast Details:

A detailed shareholder letter is available on Atlassian’s Work Life blog at https://atlassian.com/blog/announcements/shareholder-letter-q3fy22, and the Investor Relations section of Atlassian’s website at: https://investors.atlassian.com. Atlassian will host a webcast to answer questions today:

•When: Thursday, April 28, 2022 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).

•Webcast: A live webcast of the call can be accessed from the Investor Relations section of Atlassian’s website at: https://investors.atlassian.com. Following the call, a replay will be available on the same website.

Atlassian has used, and will continue to use, its Investor Relations website at https://investors.atlassian.com as a means of making material information public and for complying with its disclosure obligations.

About Atlassian

Atlassian unleashes the potential of every team. Our team collaboration and productivity software helps teams organize, discuss, and complete shared work. Teams at more than 225,000 customers, across large and small organizations - including Bank of America, Redfin, NASA, Verizon, and Dropbox - use Atlassian’s project tracking, content creation and sharing, and service management products to work better together and deliver quality results on time. Learn more about our products, including Jira Software, Confluence, Jira Service Management, Trello, Bitbucket, and Jira Align at https://atlassian.com/.

Investor Relations Contact

Martin Lam

IR@atlassian.com

Media Contact

Marie-Claire Maple

press@atlassian.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward looking, including risks and uncertainties related to statements about our products, customers, anticipated growth, outlook, technology and other key strategic areas, and our financial targets such as revenue, share count, and IFRS and non-IFRS financial measures including gross margin, operating margin, and net income (loss) per diluted share.

We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. You should not rely upon forward-looking statements as predictions of future events.

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Forward-looking statements represent our management’s beliefs and assumptions only as of the date such statements are made.

Further information on these and other factors that could affect our financial results is included in filings we make with the Securities and Exchange Commission from time to time, including the section titled “Risk Factors” in our most recent Forms 20-F and 6-K (reporting our quarterly results). These documents are available on the SEC Filings section of the Investor Relations section of our website at: https://investors.atlassian.com/.

About Non-IFRS Financial Measures

Our reported results and financial targets include certain non-IFRS financial measures, including non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow. Management believes that the use of these non-IFRS financial measures provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our results of operations, and also facilitates comparisons with peer companies, many of which use similar non-IFRS or non-GAAP financial measures to supplement their IFRS or GAAP results. Non-IFRS results are presented for supplemental informational purposes only to aid in understanding our results of operations. The non-IFRS results should not be considered a substitute for financial information presented in accordance with IFRS, and may be different from non-IFRS or non-GAAP measures used by other companies.

Our non-IFRS financial measures include:

•Non-IFRS gross profit. Excludes expenses related to share-based compensation and amortization of acquired intangible assets.

•Non-IFRS operating income. Excludes expenses related to share-based compensation and amortization of acquired intangible assets.

•Non-IFRS net income and non-IFRS net income per diluted share. Excludes expenses related to share- based compensation, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and discrete tax impact resulting from a non-recurring transaction.

•Free cash flow. Free cash flow is defined as net cash provided by operating activities less capital expenditures, which consists of purchases of property and equipment, and payments of lease obligations.

Our non-IFRS financial measures reflect adjustments based on the items below:

•Share-based compensation.

•Amortization of acquired intangible assets.

•Non-coupon impact related to exchangeable senior notes and capped calls:

◦Amortization of notes discount and issuance costs.

◦Mark to fair value of the exchangeable senior notes exchange feature.

◦Mark to fair value of the related capped call transactions.

◦Net loss on settlements of exchangeable senior notes and capped call transactions.

•The related income tax effects on these items and discrete tax impact resulting from a non-recurring transaction.

•Purchases of property and equipment and payments of lease obligations.

We exclude expenses related to share-based compensation, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and discrete tax impact resulting from a non-recurring transaction from certain of our non-IFRS financial measures as we believe this helps investors understand our operational performance. In addition, share-based compensation expense can be difficult to predict and varies from period to period and company to company due to differing valuation methodologies, subjective assumptions, and the variety of equity instruments, as well as changes in stock price. Management believes that providing non-IFRS financial measures that exclude share-based compensation expense, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and discrete tax impact resulting from a non-recurring transaction allow for more meaningful comparisons between our results of operations from period to period.

Management considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by our business that can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening our statement of financial position.

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Management uses non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow:

•As measures of operating performance, because these financial measures do not include the impact of items not directly resulting from our core operations.

•For planning purposes, including the preparation of our annual operating budget.

•To allocate resources to enhance the financial performance of our business.

•To evaluate the effectiveness of our business strategies.

•In communications with our Board of Directors and investors concerning our financial performance.

The tables in this press release titled “Reconciliation of IFRS to Non-IFRS Results” and “Reconciliation of IFRS to Non-IFRS Financial Targets” provide reconciliations of non-IFRS financial measures to the most recent directly comparable financial measures calculated and presented in accordance with IFRS.

We understand that although non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow are frequently used by investors and securities analysts in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations as reported under IFRS.

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Atlassian Corporation Plc

Consolidated Statements of Operations

(U.S. $ and shares in thousands, except per share data)

(unaudited)

			Three Months Ended March 31,												Nine Months Ended March 31,
			2022						2021						2022						2021
Revenues:
Subscription			$	555,126					$	349,915					$	1,499,409					$	938,554
Maintenance			120,333						132,921						377,982						391,891
Other			65,032						85,892						165,650						199,148
Total revenues			740,491						568,728						2,043,041						1,529,593
Cost of revenues (1) (2)			119,374						84,888						332,553						238,054
Gross profit			621,117						483,840						1,710,488						1,291,539
Operating expenses:
Research and development (1) (2)			363,746						244,098						1,018,568						717,397
Marketing and sales (1) (2)			150,796						92,043						388,383						239,480
General and administrative (1)			122,707						78,184						346,741						225,502
Total operating expenses			637,249						414,325						1,753,692						1,182,379
Operating income (loss)			(16,132)						69,515						(43,204)						109,160
Other non-operating income (expense), net			(9,009)						150,662						(434,261)						(421,358)
Finance income			608						1,464						965						6,166
Finance costs			(6,024)						(10,591)						(19,213)						(114,614)
Income (loss) before income tax expense			(30,557)						211,050						(495,713)						(420,646)
Income tax expense			(530)						(51,210)						(12,948)						(62,596)
Net income (loss)			$	(31,087)					$	159,840					$	(508,661)					$	(483,242)
Net income (loss) per share attributable to ordinary shareholders:
Basic			$	(0.12)					$	0.64					$	(2.01)					$	(1.94)
Diluted			$	(0.12)					$	0.63					$	(2.01)					$	(1.94)
Weighted-average shares outstanding used to compute net loss per share attributable to ordinary shareholders:
Basic			253,723						250,279						252,924						249,152
Diluted			253,723						255,128						252,924						249,152

(1)Amounts include share-based payment expense, as follows:

			Three Months Ended March 31,												Nine Months Ended March 31,
			2022						2021						2022						2021
Cost of revenues			$	11,731					$	6,495					$	33,207					$	18,552
Research and development			115,397						63,699						335,232						198,235
Marketing and sales			28,794						11,774						82,982						30,224
General and administrative			31,289						16,296						91,775						44,676

(2)Amounts include amortization of acquired intangible assets, as follows:

			Three Months Ended March 31,												Nine Months Ended March 31,
			2022						2021						2022						2021
Cost of revenues			$	5,709					$	5,554					$	16,997					$	16,386
Research and development			94						41						281						124
Marketing and sales			2,302						2,278						6,839						6,894

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Atlassian Corporation Plc

Consolidated Statements of Financial Position

(U.S. $ in thousands)

			March 31, 2022						June 30, 2021
			(unaudited)
Assets
Current assets:
Cash and cash equivalents			$	1,194,803					$	919,227
Short-term investments			86,215						313,001
Trade receivables			256,570						173,473
Tax receivables			7,666						2,332
Derivative assets			15,406						127,486
Prepaid expenses and other current assets			64,987						48,322
			1,625,647						1,583,841
Assets held for sale			58,964						43,665
Total current assets			1,684,611						1,627,506
Non-current assets:
Property and equipment, net			83,687						66,221
Deferred tax assets			37,153						36,174
Goodwill			733,799						725,758
Intangible assets, net			105,103						124,590
Right-of-use assets, net			265,092						205,300
Strategic investments			150,756						122,159
Other non-current assets			64,377						37,636
Total non-current assets			1,439,967						1,317,838
Total assets			$	3,124,578					$	2,945,344
Liabilities
Current liabilities:
Trade and other payables			$	333,490					$	266,497
Tax liabilities			3,617						42,051
Provisions			34,817						25,148
Deferred revenue			1,002,791						812,943
Lease obligations			39,558						42,446
Derivative liabilities			3,017						772,127
Exchangeable senior notes, net			—						348,799
Total current liabilities			1,417,290						2,310,011
Non-current liabilities:
Deferred tax liabilities			23,844						26,625
Provisions			14,441						12,435
Deferred revenue			89,294						84,652
Term loan facility, net			999,375						—
Lease obligations			276,287						214,103
Other non-current liabilities			1,087						2,604
Total non-current liabilities			1,404,328						340,419
Total liabilities			2,821,618						2,650,430
Equity
Share capital			25,412						25,164
Share premium			461,029						461,016
Other capital reserves			2,059,852						1,516,609
Other components of equity			79,875						104,832
Accumulated deficit			(2,323,208)						(1,812,707)
Total equity			302,960						294,914
Total liabilities and equity			$	3,124,578					$	2,945,344

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Atlassian Corporation Plc

Consolidated Statements of Cash Flows

(U.S. $ in thousands)

(unaudited)

			Three Months Ended March 31,												Nine Months Ended March 31,
			2022						2021						2022						2021
Operating activities
Income (loss) before income tax expense			$	(30,557)					$	211,050					$	(495,713)					$	(420,646)
Adjustments to reconcile income (loss) before income tax expense to net cash provided by operating activities:
Depreciation and amortization			12,093						13,906						37,410						41,124
Depreciation of right-of-use assets			10,806						9,418						31,938						28,010
Share-based payment expense			187,211						98,264						543,196						291,687
Net loss (gain) on exchange derivative and capped call transactions			—						(150,665)						424,482						415,933
Amortization of debt discount and issuance cost			117						7,275						3,957						104,302
Interest income			(608)						(1,464)						(965)						(6,166)
Interest expense			5,907						3,316						15,256						10,312
Net foreign currency loss (gain)			3,623						(266)						(8,033)						10,175
Net unrealized loss on investments			1,600						1,250						2,100						2,000
Net loss on sale of investments, disposal of assets and other			2,485						836						2,168						1,135
Changes in assets and liabilities:
Trade receivables			(14,980)						(35,420)						(83,183)						(80,943)
Prepaid expenses and other assets			(9,109)						(3,691)						(24,822)						(11,052)
Trade and other payables, provisions and other non-current liabilities			72,658						47,784						68,496						33,223
Deferred revenue			116,459						186,880						194,343						270,813
Interest received			633						3,018						1,719						10,472
Income tax paid, net			(5,309)						(14,455)						(59,250)						(43,416)
Net cash provided by operating activities			353,029						377,036						653,099						656,963
Investing activities
Business combinations, net of cash acquired			(12,377)						(41,460)						(12,377)						(83,624)
Purchases of intangible assets			(4,018)						—						(4,018)						—
Purchases of property and equipment			(26,473)						(5,365)						(45,935)						(22,730)
Purchases of investments			(7,918)						(24,254)						(123,921)						(93,519)
Proceeds from maturities of investments			2,600						135,245						64,087						330,549
Proceeds from sales of investments			—						1,092						186,262						48,786
Change in restricted cash			—						—						11,119						(2,162)
Payment of deferred consideration			(645)						—						(4,484)						(185)
Net cash provided by (used in) investing activities			(48,831)						65,258						70,733						177,115
Financing activities
Proceeds from exercise of share options			10						11						15						1,158
Payments of lease obligations			(14,278)						(11,303)						(38,090)						(33,538)
Payment of issuance costs for debt			—						—						—						(4,445)
Interest paid			(4,042)						(922)						(8,844)						(4,216)
Repayment of exchangeable senior notes			—						(591,550)						(1,548,686)						(1,263,047)
Proceeds from settlement of capped call transactions			—						63,305						135,497						136,081
Proceeds from term loan facility			—						—						1,000,000						—
Proceeds from other financing arrangements			9,515						—						9,515						—
Net cash used in financing activities			(8,795)						(540,459)						(450,593)						(1,168,007)
Effect of exchange rate changes on cash and cash equivalents			(270)						(2,100)						(2,623)						5,410
Net increase (decrease) in cash and cash equivalents			295,133						(100,265)						270,616						(328,519)
Cash and cash equivalents at beginning of period			899,394						1,251,715						919,227						1,479,969
Net decrease in cash and cash equivalents included in assets held for sale			276						—						4,960						—
Cash and cash equivalents at end of period			$	1,194,803					$	1,151,450					$	1,194,803					$	1,151,450

                                        

8

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Atlassian Corporation Plc

Revenues by Deployment Options

(U.S. $ in thousands)

(unaudited)

			Three Months Ended March 31,												Nine Months Ended March 31,
			2022						2021						2022						2021
Cloud			$	399,453					$	249,879					$	1,081,455					$	687,611
Data Center			151,095						94,739						401,398						237,149
Server (1)			132,333						164,229						407,399						467,460
Marketplace and services (2)			57,610						59,881						152,789						137,373
Total revenues			$	740,491					$	568,728					$	2,043,041					$	1,529,593

(1) Included in Server is perpetual license revenue. Perpetual license revenue is captured as other revenue on the Consolidated Statements of Operations.

(2) Included in Marketplace and services is premier support revenue. Premier support is a subscription-based arrangement for a higher level of support across different deployment options. Premier support is recognized as subscription revenue on the Consolidated Statements of Operations as the services are delivered over the term of the arrangement.            

9

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Atlassian Corporation Plc

Reconciliation of IFRS to Non-IFRS Results

(U.S. $ and shares in thousands, except per share data)

(unaudited)

			Three Months Ended March 31,												Nine Months Ended March 31,
			2022						2021						2022						2021
Gross profit
IFRS gross profit			$	621,117					$	483,840					$	1,710,488					$	1,291,539
Plus: Share-based payment expense			11,731						6,495						33,207						18,552
Plus: Amortization of acquired intangible assets			5,709						5,554						16,997						16,386
Non-IFRS gross profit			$	638,557					$	495,889					$	1,760,692					$	1,326,477
Operating income
IFRS operating income (loss)			$	(16,132)					$	69,515					$	(43,204)					$	109,160
Plus: Share-based payment expense			187,211						98,264						543,196						291,687
Plus: Amortization of acquired intangible assets			8,105						7,873						24,117						23,404
Non-IFRS operating income			$	179,184					$	175,652					$	524,109					$	424,251
Net income
IFRS net income (loss)			$	(31,087)					$	159,840					$	(508,661)					$	(483,242)
Plus: Share-based payment expense			187,211						98,264						543,196						291,687
Plus: Amortization of acquired intangible assets			8,105						7,873						24,117						23,404
Plus: Non-coupon impact related to exchangeable senior notes and capped calls			—						(143,390)						427,853						520,235
Less: Income tax effects and adjustments			(43,646)						670						(120,285)						(56,745)
Non-IFRS net income			$	120,583					$	123,257					$	366,220					$	295,339
Net income per share
IFRS net income (loss) per share - diluted			$	(0.12)					$	0.63					$	(2.01)					$	(1.94)
Plus: Share-based payment expense			0.73						0.39						2.13						1.16
Plus: Amortization of acquired intangible assets			0.03						0.03						0.09						0.09
Plus: Non-coupon impact related to exchangeable senior notes and capped calls			—						(0.57)						1.69						2.06
Less: Income tax effects and adjustments			(0.17)						—						(0.47)						(0.21)
Non-IFRS net income per share - diluted			$	0.47					$	0.48					$	1.43					$	1.16
Weighted-average diluted shares outstanding
Weighted-average shares used in computing diluted IFRS net loss per share			253,723						255,128						252,924						249,152
Plus: Dilution from share options and RSUs (1)			3,007						—						3,729						5,301
Weighted-average shares used in computing diluted non-IFRS net income per share			256,730						255,128						256,653						254,453
Free cash flow
IFRS net cash provided by operating activities			$	353,029					$	377,036					$	653,099					$	656,963
Less: Capital expenditures			(26,473)						(5,365)						(45,935)						(22,730)
Less: Payments of lease obligations			(14,278)						(11,303)						(38,090)						(33,538)
Free cash flow			$	312,278					$	360,368					$	569,074					$	600,695

(1) The effects of these dilutive securities were not included in the IFRS calculation of diluted net loss per share for the three and nine months ended March 31, 2022 and nine months ended March 31, 2021 because the effect would have been anti-dilutive.

10

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Atlassian Corporation Plc

Reconciliation of IFRS to Non-IFRS Financial Targets

(U.S. $)

			Three Months Ending   June 30, 2022
Revenue			$710 million to $725 million
IFRS gross margin			81% to 82%
Plus: Share-based payment expense			2
Plus: Amortization of acquired intangible assets			1
Non-IFRS gross margin			84% to 85%
IFRS operating margin			(11%)
Plus: Share-based payment expense			25
Plus: Amortization of acquired intangible assets			1
Non-IFRS operating margin			15%
IFRS net loss per share - diluted			($0.40)
Plus: Share-based payment expense			0.68
Plus: Amortization of acquired intangible assets			0.03
Less: Income tax effects and adjustments			(0.07)
Non-IFRS net income per share - diluted			0.24
Weighted-average shares used in computing diluted IFRS net loss per share			254 million to 255 million
Dilution from share options and RSUs (1)			3 million
Weighted-average shares used in computing diluted non-IFRS net income per share			257 million to 258 million

(1) The effects of these dilutive securities are not included in the IFRS calculation of diluted net loss per share for the three months ending June 30, 2022 because the effect would be anti-dilutive.

11

Q3 FY22 | April 28, 2022 Shareholder Letter

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Q3 FY22 Fellow sh!reholders, Atl!ssi!n delivered ! strong qu!rter once !g!in. Subscription revenue grew 59% ye!r-over-ye!r, with Cloud revenue growing 60% ye!r-over-ye!r. We continue to see ! high level of dem!nd for our products !cross !ll of our three m!rkets, which highlights the signific!nt opportunities in front of us. We’re fresh off !n !m!zing Te!m ‘22 in L!s Veg!s !nd !re more energized th!n ever. We spoke with customers !t every opportunity !nd le!rned more !bout how Atl!ssi!n c!n meet their needs, which we’ll sh!re throughout this letter. If you missed us !t our Investor D!y event held !t Te!m ‘22, you c!n view !ll the m!teri!ls !nd w!tch ! recording on our investor relations site. We’d love for you to le!rn more !bout our m!ssive m!rket opportunities, pl!tform, str!tegic bets, !nd future tr!jectory. Before !nything else, however, we w!nt to !cknowledge th!t we let our customers down when !n out!ge disrupted service for 775 customers e!rlier this month. This w!s not ! result of ! cyber-!tt!ck !nd there w!s no un!uthorized !ccess to customer d!t!. Although the incident !ffected ! tiny fr!ction of our 200,000+ cloud customer b!se, even one disrupted customer is one too m!ny. All !ffected customers were fully restored, !nd in the spirit of our “open comp!ny, no bullshit” v!lue , we will publish ! full post-incident review !t the end of this week. Oper!tion!l excellence is !ll !bout continuous le!rning !nd improvement. Ultim!tely, we’ll be stronger bec!use of this experience. We fully underst!nd wh!t c!used the problem from ! technic!l !nd oper!tion!l st!ndpoint, !nd how to prevent simil!r incidents in the future. We now h!ve more robust incident response !nd communic!tions processes in pl!ce. And we’re open to le!rning more !s we spe!k with !ffected customers individu!lly !bout how we c!n rebuild trust. From the CEOs 2 Investor Day 2022 at a glance
Section 1 – Our three markets (PDF)
Section 2 – The Atlassian platform (PDF)
Section 3 – Building an iconic 100+ year company (PDF)
Recording of Q&A segments

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Q3 FY22 3 Cloud-first things first
Atl!ssi!n’s world-cl!ss pl!tform !llows us to meet the diverse needs of customers !cross the glob!l !gile/DevOps, IT service m!n!gement (ITSM), !nd work m!n!gement m!rkets. For ex!mple, we !chieved HIPAA compli!nce for Jir! Softw!re !nd Confluence Cloud in Q3, with compli!nce for Jir! Service M!n!gement on the ne!r-term horizon. This comes right on the heels of compliance for the EMEA financial services industry in Q2 !nd exp!nded d!t! residency options in Q1. With every evolution of our pl!tform, !n incre!sing number of our Server !nd D!t! Center customers !re !ble to begin their Cloud migr!tion journey. We’ve now migr!ted over one-third of our Server user b!se, !nd more customers complete their migr!tion every d!y. And not just from Server products, but from D!t! Center !s well. Looking !he!d, we expect Cloud revenue to grow !pproxim!tely 50% ye!r-over-ye!r for FY23 !nd FY24, with !pproxim!tely 10 points of Cloud revenue growth to be driven by migr!tions. ATLASSIAN + FUGRO “[Thanks to Atlassian Cloud products], our team can focus on innovation that serves our clients. This ultimately supports Fugro’s vision to unlock insights from Geo-data for a safe and livable world.” Scott Carpenter Global Cloud Architect at Fugro Bec!use our pl!tform lets us build function!lity once, then surf!ce it everywhere, we multiply the ROI we get from every hour spent on product development !nd !re !ble to deliver new innov!tions f!ster th!n ever before.

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Q3 FY22 4 Driving innovation across three global markets As we spoke with customers !t Te!m ‘22, one thing we he!rd over !nd over w!s how ch!llenging it c!n be to give te!ms the freedom they need to move quickly, while still keeping everyone pointed in the s!me direction. We believe the secret is to cre!te ! culture of !utonomy !nd !lignment. The more !n org!niz!tion sh!res !n underst!nding of wh!t problem needs to be !ddressed !nd why, the more te!ms c!n work independently !nd coll!bor!te freely with e!ch other to find the best solution. Th!t’s why Atl!ssi!n products bring !ll types of te!ms together, empowering them to work, communic!te, !nd celebr!te in wh!tever w!y works best for them. Addition!lly, we le!rned from our Executive Customer Advisory Bo!rd (CAB) th!t prioritiz!tion is ! const!nt concern. How do comp!nies m!ke sure te!ms !re working on the highest-v!lue projects? How c!n they !ddress c!p!city issues or help te!ms th!t !re struggling? Across our three m!ssive (!nd incre!singly interconnected) m!rkets, Atl!ssi!n products connect people to projects !nd str!tegies, !s well !s to e!ch other. In other words, we m!ke work visible. And th!t goes ! long w!y tow!rd !ligning priorities !cross the org!niz!tion so te!ms c!n decide for themselves how best to contribute, then go get it done. Agile and DevOps According to Atl!ssi!n’s recent State of the Developer Survey, 54% of developers s!y the number of tools they use in their role is incre!sing, !nd ! m!jority of developers whose toolch!ins !re exp!nding s!y this m!kes their jobs more complex – especi!lly those whose toolch!ins !re growing and inflexible. Plus, in ! DevOps culture, softw!re te!ms !re incre!singly involved in the oper!tions side, necessit!ting even more tools to get the job done. When left unm!n!ged, this becomes unwieldy over time. Enter Atlassian Analytics, ! d!t! visu!liz!tion tool built on our recent acquisition of Chartio. It lets customers build custom d!shbo!rds to tr!ck things like rele!se re!diness !nd te!m c!p!city so they know where to !lloc!te resources. Atl!ssi!n An!lytics is powered by the Atl!ssi!n D!t! L!ke !nd currently pulls in d!t! from Jir! Softw!re !nd Jir! Service M!n!gement, with support for more Cloud products coming soon. It c!n even incorpor!te d!t! from other business intelligence systems to provide ! more comprehensive view.

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Q3 FY22 5 customers through our e!rly !ccess progr!m, with !n eye tow!rd m!king it gener!lly !v!il!ble l!ter this c!lend!r ye!r. Atl!ssi!n h!s !n incredible opportunity to become ! str!tegic p!rtner for our customers !s they n!vig!te incre!sing competition !nd embr!ce emerging technologies. For softw!re te!ms, thriving in this environment me!ns !dopting !gile !nd DevOps pr!ctices. And while tools !lone c!n’t m!ke ! te!m !gile, products like Jir! Softw!re !nd Jir! Align c!n help –especi!lly when !gile !nd DevOps tr!nsform!tions !re h!ppening !t enterprise sc!le. In ! total economic impact (TEI) study rele!sed this month, Forrester found th!t for org!niz!tions with !pproxim!tely 2,000 developers !nd product m!n!gers, Jir! Align delivers ! cumul!tive net benefit of roughly $20 million over three ye!rs b!sed on improved productivity, reduced w!ste due to better investment decisions, !nd increment!l revenue from f!ster time-to- m!rket. Forrester also found th!t our Open DevOps fr!mework s!ves developers 1.5 hours per d!y !nd delivers !n ROI of more th!n 350% over 3 ye!rs. Atl!ssi!n h!s !lw!ys strived to deliver more v!lue th!n we ch!rge for, !nd it’s gr!tifying to see our success in th!t reg!rd confirmed by !n independent source. IT service management The w!y our customers !re running intern!l service !nd support te!ms h!s ch!nged forever, especi!lly those who’ve tr!nsitioned to digit!l-first mode just within the p!st couple of ye!rs. With “desk drive-bys” ! thing of the p!st, service te!ms need to m!ke getting help simple !nd lightning f!st. With th!t in mind, we !re now shipping ! Confluence-powered knowledge b!se !s p!rt of Jir! Service M!n!gement !t no extr! ch!rge. With ! n!tive knowledge b!se, it’s e!sy for support !gents to cre!te !rticles on common topics th!t f!cilit!te employee self-service, right within Jir! Service M!n!gement. And th!nks to our pl!tform’s “build once, run everywhere” !rchitecture, knowledge b!se !rticles fe!ture !ll the rich content !nd form!tting options Confluence h!s to offer, such !s m!cros, inline comments, emojis, embedded medi!…the works. As we !nnounced !t Te!m ‘22, Compass is Atl!ssi!n’s !nswer to this problem, offering developers ! unified view of their components !nd the te!ms th!t coll!bor!te on them. Comp!ss is currently !v!il!ble to select

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Q3 FY22 With 40,000 customers !nd counting, Jir! Service M!n!gement is Atl!ssi!n’s f!stest-growing product !t sc!le. We’ll keep investing here to deliver new c!p!bilities th!t unle!sh more of IT te!ms’ potenti!l. Work management As cross-function!l coll!bor!tion t!kes root inside more comp!nies, te!ms !re discovering th!t it c!n be ch!llenging to keep t!bs on !ll the projects th!t m!tter to them. Our l!test offering in the work m!n!gement sp!ce, Atlas, ch!nges th!t. Atl!s surf!ces progress upd!tes !nd dependencies with other projects to help !void bottlenecks. Org!niz!tions c!n !lso use Atl!s to est!blish go!ls (think KPI t!rgets or the “O”s in Objectives !nd Key Results), then 6 A n!tive knowledge b!se is yet !nother ex!mple of the v!lue Jir! Service M!n!gement delivers !nd why it’s so beloved by customers. In f!ct, we’re delighted to sh!re th!t Atl!ssi!n w!s recognized with the Customer’s Choice distinction in the G!rtner Peer Insights “Voice of the Customer” IT Service M!n!gement Tools report. G!rtner Peer Insights Customers’ Choice constitute the subjective opinions of individu!l end-user reviews, r!tings, !nd d!t! !pplied !g!inst ! documented methodology; they neither represent the views of, nor constitute !n endorsement by, G!rtner or its !ffili!tes. The G!rtner Peer Insights Customers’ Choice b!dge is ! tr!dem!rk !nd service m!rk of G!rtner, Inc., !nd/or its !ffili!tes, !nd is used herein with permission. All rights reserved. G!rtner Peer Insights Customers’ Choice constitute the subjective opinions of individu!l end-user reviews, r!tings, !nd d!t! !pplied !g!inst ! documented methodology; they neither represent the views of, nor constitute !n endorsement by, G!rtner or its !ffili!tes. link them to !ll the projects !nd people contributing to e!ch go!l so it’s e!sy to see how everybody’s work is connected. And bec!use it’s built on the Atl!ssi!n Cloud pl!tform, coll!bor!tive fe!tures like comments, @mentions, !nd re!ctions !re b!ked right in.

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Q3 FY22 7 In Q3, Trello l!unched one of its most powerful fe!tures yet, which !llows te!ms to tr!ck ! customized portfolio of work !cross multiple c!rds !nd multiple bo!rds. Dashcards !re ! speci!l type of Trello c!rd th!t summ!rizes key metrics on the c!rd cover !nd c!n be opened to reve!l the component c!rds !nd their metrics. With D!shc!rds, te!ms h!ve e!sier visibility into !ll their workstre!ms while still enjoying the flexibility Trello is f!mous for. When it comes to m!n!ging individu!l projects, Confluence h!s !lw!ys been the pl!ce to l!y out det!iled pl!ns th!t link out to t!sks tr!cked in Jir! or Trello. Now we’ve flipped the script with ! new integr!tion th!t surf!ces project pl!ns !nd rel!ted p!ges inside Jir!, putting !ll the inform!tion te!ms need !t their fingertips – no m!tter which product they h!ppen to be in. And if they h!ppen to be in Jir! Work M!n!gement, they’ll now be !ble to see upd!tes to ! t!sk’s st!tus, !ssignee, due d!te, !nd more in re!l-time with the new multipl!yer mode. Supporting Ukraine and protecting our customers Atl!ssi!n w!tched in horror !s Russi! inv!ded Ukr!ine this qu!rter. While we do not h!ve !ny direct employees in Russi! or Ukr!ine, we took immedi!te !ction to support the s!fety of our Ukr!ini!n contr!ctors !nd !re providing ongoing support for Atl!ssi!ns with f!mily !nd friends in Ukr!ine. People !re !t the he!rt of wh!t we do, me!ning their well-being comes first. Alw!ys. To enh!nce the protection of our customer d!t!, we upd!ted our network infr!structure to ensure customer d!t! doesn’t flow through the !ffected regions. We rem!in in close cont!ct with our p!rtners in Ukr!ine to provide both direct !nd indirect support. Atl!ssi!n h!s !lso p!used new s!les within Russi! !nd Bel!rus, !nd suspended licenses owned by the Russi!n government !nd businesses supporting the w!r. Th!t s!id, we continue to honor the oblig!tions we h!ve to our other existing customers in Russi!. We believe cutting ties with the perpetr!tors of this w!r while still supporting customers who !re uninvolved is the best w!y to live our mission !nd v!lues. Our public st!tement on Russi!’s inv!sion of Ukr!ine c!n be found !t: https://www.atlassian.com/blog/announcements/atlassian-stands-with-ukraine. ATLASSIAN + SPROUT SOCIAL “Jira, or it didn’t happen.” Jade Melcher Program Management Lead at Sprout Social Multipl!yer improves visibility !nd turns Jir! Work M!n!gement into the pl!ce work h!ppens – not just where it’s tr!cked.

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Q3 FY22 8 Mike Cannon-Brookes Co-founder and co-CEO Scott Farquhar Co-founder and co-CEO MIKE & SCOT T The bottom line
Atl!ssi!n continues to deliver innov!tive new products !nd fe!tures !cross the !gile/DevOps, ITSM, !nd work m!n!gement m!rkets. And we c!n do it f!ster th!n ever, th!nks to our cloud pl!tform.
This month’s out!ge reve!led !re!s where we c!n improve the w!y we serve customers, !nd we’re !lre!dy incorpor!ting the lessons le!rned.
Atl!ssi!n st!nds with the people of Ukr!ine !nd took immedi!te !ction to protect our contr!ctors there, !s well !s our customers’ d!t!. Atlassian has a new Chief Technology Officer We !re thrilled to !nnounce th!t R!jeev R!j!n will join Atl!ssi!n !s our new Chief Technology Officer (CTO). R!jeev brings ! we!lth of knowledge !nd experience in sc!ling glob!l technology comp!nies, h!ving spent ne!rly five ye!rs !t Met!, most recently !s Vice President !nd He!d of Engineering for F!cebook !nd He!d of Office for Met! in the P!cific Northwest Region. Prior to th!t, R!jeev spent over two dec!des !t Microsoft !cross multiple products from Exch!nge to SQL Server to Active Directory, culmin!ting in Office 365. We’re excited to welcome R!jeev to Atl!ssi!n on M!y 19, 2022. As previously !nnounced l!st qu!rter, Sri Visw!n!th, Atl!ssi!n’s current CTO, will be le!ving the comp!ny !t the end of fisc!l ye!r 2022. We !re !s excited !s ever to pursue the m!ssive opportunities in front of Atl!ssi!n. Here’s to the ro!d !he!d, !nd to unle!shing the potenti!l of every te!m.

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Q3 FY22 We ended Q3 with ! tot!l of 234,575 customers, ! net incre!se of 8,054 from Q2. During the qu!rter, our over!ll customer count w!s reduced by !pproxim!tely 1,800 due to Russi!-b!sed customers dropping out of our tot!l. Some were suspended !nd others !re un!ble to p!y us, owing to s!nctions levied on their p!yment networks. Customer highlights 9 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 234,575226,521 216,500 204,754 188,033 174,948 166,180159,433156,863151,731 In Q1’22, we refined our definition of a customer to capture unique domains that have at least one active and paid product license or subscription, with 2 or more seats, excluding starter licenses/subscriptions. The primary difference between the customer count under the prior and updated definition is that we are no longer including Trello single-user accounts in the customer count. Seeing so m!ny customers !nd investors in person !t Te!m ‘22 w!s f!nt!stic !fter two ye!rs of Zoom-only inter!ctions. More, ple!se! We welcomed thous!nds of customers, p!rtners, !nd Atl!ssi!ns to the event in L!s Veg!s, !nd !n !ddition!l 12,000+ people joined virtu!lly from !round the world. If you missed the event, be sure to t!ke !dv!nt!ge of the on-demand streaming content, !s well !s the recording and written materials from Investor Day. Cameron Deatsch Chief Revenue Officer For each period ended Customers

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Q3 FY22 10 For me, getting to meet directly with customers through events like our Executive CAB session !nd Technic!l Account M!n!ger D!y is !lw!ys my f!vorite p!rt of the conference. Customers were more enthusi!stic !bout Atl!ssi!n th!n I’ve ever seen in my 10 ye!rs here. Sever!l of our Solution P!rtners told me th!t they c!n’t hire f!st enough to keep p!ce with the incre!sing dem!nd for our products. He!ring customers describe the difference Atl!ssi!n h!s m!de in terms of visibility !nd cl!rity – !nd the ripple effects on their well-being in !nd outside of work – reminds !ll of us why we do wh!t we do. Whether it’s infl!tion, w!rs, or p!ndemics, m!ny of our customers !re contending with situ!tions they’ve never seen before. However, in every convers!tion, it’s cle!r th!t h!ving Atl!ssi!n behind the scenes supporting them !s they n!vig!te these ch!llenges !nd grow their businesses is critic!l. And we see this m!nifest in our customers’ loy!lty. We provide the glue between the te!ms. We help customers be !gile, le!rn, !nd !d!pt quickly. We owe it to them to continue le!rning from our own experiences, whether wins or losses, !nd help them re!lize their full potenti!l. When we s!y we m!ke softw!re with hum!ns !t the center, we me!n it. The bottom line
Customer growth rem!ined strong this qu!rter, despite the loss of !pproxim!tely 1,800 Russi!-b!sed !ccounts.
Te!m ‘22 in L!s Veg!s w!s ! huge success. In-person !ttend!nce !nd online viewership numbers demonstr!te how much our customers v!lue Atl!ssi!n.

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Q3 FY22 11 Financial highlights Third quarter fiscal year 2022 Q3’22 w!s !nother qu!rter of solid execution from Atl!ssi!n. We continue to see strong dem!nd for our products !nd ste!dy progress with Cloud migr!tions. Highlights for Q3’22 include: • Subscription revenue grew 59% ye!r-over-ye!r. Cloud revenue grew 60% ye!r-over-ye!r while D!t! Center revenue grew 59% ye!r-over-ye!r. • Free c!sh flow tot!led $312.3 million, representing ! 42% free c!sh flow m!rgin. • In Q3’22, we !dded 791 net new Atl!ssi!ns, our l!rgest sequenti!l he!dcount growth qu!rter on record. We will continue to invest in top-tier t!lent wherever they !re !round the globe to drive dur!ble growth !cross our three core m!rkets. Rec!ll th!t during Q3’21 our fin!nci!l results s!w !cceler!ted short-term dem!nd for on- premises products !s ! result of customers purch!sing !he!d of the discontinu!tion of new Server license s!les !nd price ch!nges to on-premises products. The signific!nt, event-driven purch!sing seen in Q3’21 cre!ted ! tough comp!re for Q3’22 tot!l revenue growth. A reconciliation of IFRS to non-IFRS measures is provided within the tables at the end of this letter as well as in our earnings press release, and on our Investor Relations website. !+4((
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---

 

Q3 FY22 12 33% 29%     #($418(4;($4
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 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 $740.5 $688.5 $614.0 $559.5$568.7 $501.4 Total revenue U.S. $ in millions (Y/Y growth rate in %) 34% 30% 37% 23% 38% 30% (in thousands, except percentage data) Revenue

---

 

Q2 FY22 13 Year-over year growth % Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 Cloud 36% 35% 47% 53% 58% 60% Data Center 42% 75% 62% 68% 83% 59% Marketplace and services 5% 86% 13% 26% 20% (4%) Server 5% 17% (2%) (7%) (12%) (19%) Total revenues 23% 38% 30% 34% 37% 30% In Q3’22, Server revenue includes approximately $12 million of perpetual license revenue. In Q3’22, Marketplace and services revenue includes approximately $5 million of premier support revenue. Included in Server is perpetual license revenue. Perpetual license revenue is captured as other revenue on the Consolidated Statements of Operations. (1) (4) (3) Included in Marketplace and services is premier support revenue. Premier support is a subscription-based arrangement for a higher level of support across different deployment options. Premier support is recognized as subscription revenue on the Consolidated Statements of Operations as the services are delivered over the term of the arrangement. (2) U.S. $ in millions Revenue by deployment $740.5 $688.5 $614.0 $559.5$568.7 $501.4 Q2’21 Q3’21 Q4’21 Q1’22 Q2’22 Q3’22 $132.3 $135.5 $139.5 $140.3$164.2 $153.4 $57.6 $49.8 $45.4 $39.9 $59.9 $41.5 $151.1 $139.1 $111.2 $99.1 $94.7 $76.1 $399.5$364.1 $317.9$280.2$249.9$230.4 Cloud Data Center Marketplace and services Server (2) (1) (4) (3) Note: revenue totals may not foot due to rounding

---

 

Q3 FY22 14 Revenue by Geography Q3’21 ($) Q3’21 Y/Y Growth % Q3’22 ($) Q3’22 Y/Y Growth % Americas $272M 32% $366M 35% EMEA $233M 45% $291M 25% Asia Pacific $64M 42% $83M 31% Total $569M 38% $740M 30% Revenue by geogr!phy w!s consistent with expect!tions !cross !ll geogr!phies. Rec!ll th!t in Q3’21, we s!w signific!nt short-term, “event-driven” on-premises dem!nd th!t w!s prim!rily driven by p!rtners in EMEA, !nd to ! lesser extent APAC. Q3’22 did not see the s!me m!gnitude of event-driven beh!vior. This m!de for ! p!rticul!rly tough comp!re in EMEA, !nd to ! lesser extent APAC, which is reflected in the Q3’22 revenue by geogr!phy growth r!tes. In Q3’22 we did not observe !ny ch!nges in the dem!nd environment in EMEA from the previous qu!rter. The proportion of tot!l revenue gener!ted in EMEA incre!sed sequenti!lly to 39% in Q3’22 from 38% in Q2’22. While it’s still e!rly in Q4’22, to d!te, we h!ve not seen !ny m!teri!l ch!nges in dem!nd levels specific to Europe !nd we continue to see strong growth !round the world.

---

 

Q3 FY22 15 Headcount Tot!l employee he!dcount w!s 8,179, !n incre!se of 791 employees since the end of Q2’22. We hired !cross !ll m!jor functions, with the l!rgest number being !dded in R&D. Net income (in thousands, except percentage data)     4155
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---

 

Q3 FY22 16 Financial targets  !+4((
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3/22/54 Fiscal year 2022 outlook Revenue For FY22, we expect to see the following trends: SUBSCRIPTION REVENUE • We now expect subscription revenue growth ye!r-over-ye!r to be in the mid-50s % r!nge for FY22, versus our prior expect!tion of !pproxim!tely 50% growth. • We expect our ye!r-over-ye!r subscription revenue growth r!te to be lower in the second h!lf of FY22 rel!tive to the first h!lf. • Rec!ll, our subscription revenue in Q3’21 benefited from ! strong D!t! Center revenue growth r!te, driven by !cceler!ted dem!nd resulting from the discontinu!tion of new Server license s!les !nd customers purch!sing !he!d of both Server !nd D!t! Center price incre!ses th!t went into effect during Q3’21. • For D!t! Center revenue, ! portion of ! customer’s commitment is recognized up-front !s subscription revenue in the period th!t the contr!ct is signed, while the rem!inder is recognized r!t!bly over the life of the contr!ct. • In !ddition, it is import!nt to note th!t Q4’21 continued to see strong D!t! Center revenue growth, !s it benefited from r!t!ble revenue rolling off of our deferred revenue b!l!nce. Our deferred revenue b!l!nce !lso benefited from the event-driven purch!sing observed in Q3’21, !s noted !bove. • For FY22, we expect our Cloud revenue growth r!te to !cceler!te rel!tive to FY21.

---

 

Q3 FY22 17 MAINTENANCE REVENUE • We expect m!inten!nce revenue to slowly contr!ct over the rem!inder of FY22 !s customers continue to migr!te to our subscription products. In Q4’22, we expect m!inten!nce revenue to decline to !pproxim!tely $115 million. OTHER REVENUE • We expect M!rketpl!ce revenue, which is reflected in other revenue !nd the prim!ry driver of this line item, to be !pproxim!tely fl!t rel!tive in FY22 rel!tive to FY21. • Rec!ll, M!rketpl!ce revenue will be imp!cted by the lowered M!rketpl!ce t!ke r!tes on the s!les of third-p!rty Cloud !pps which !re designed to incentivize further Cloud !pp development. • Note th!t revenue on the s!le of third-p!rty M!rketpl!ce !pps is recognized in the period the product is purch!sed. • As noted previously, upgr!des of existing licenses !re no longer offered, !nd !s ! result, we do not expect !ny m!teri!l level of perpetu!l license revenue in Q4’22 or beyond. Profitability We expect to further r!mp our hiring pl!ns in Q4’22 !nd beyond. As noted !bove, hiring !nd the retention of our t!lented te!m is the key to Atl!ssi!n’s future. We will continue to hire t!lent from !cross the globe with the m!jority in R&D. Our investments will focus on migr!ting our on-premises customers, pl!tform !dv!ncements, new Cloud fe!tures !nd products in e!ch of our three core m!rkets, !nd bolstering the ecosystem !round us. We expect the following in FY22: • Gross m!rgin will decline in FY22 rel!tive to FY21 due to our investments to support our Cloud migr!tions !nd the shift from Server to Cloud. These investments include migr!tion-focused personnel costs !s well !s incre!sed cloud hosting costs. • Oper!ting m!rgin is expected to decline !s we continue to invest in innov!tion !nd hiring. • Free c!sh flow is expected to see v!ri!bility !s ! result of the business mix shift to the Cloud !s well !s the imp!ct of !ny event-driven customer purch!sing !ctivity rel!ted to price ch!nges, loy!lty discount reductions (effective July 1, 2022), !nd the end of Server upgr!des. The reduction in oper!ting m!rgin in FY22 noted !bove will !lso imp!ct our free c!sh flow m!rgin in FY22. The !bove trends reflect our commitment to our long-term str!tegy !nd the m!ssive m!rket opportunities in front of us th!t we !re well equipped to t!p.

---

 

Q3 FY22 18 SHARE COUNT We expect sh!re-b!sed compens!tion (SBC) expense to be signific!ntly higher in FY22 versus FY21 !s we invest in hiring !nd ret!ining our te!m. Rec!ll th!t we report our fin!nci!l st!tements in !ccord!nce with IFRS. SBC is recognized on ! more front-lo!ded schedule comp!red to U.S. GAAP. SBC is !lso imp!cted by ! number of v!ri!bles e!ch of which !re inherently difficult to forec!st. We !re t!rgeting !pproxim!tely 1-2% sh!re count dilution in FY22. Despite the expected incre!se in SBC expense in FY22, our comp!r!ble sh!re dilution will still be r!nked in the lower h!lf of our peer comp!ny set. Redomiciling from the United Kingdom to the United States As we noted !t Investor D!y, we !re exploring redomiciling our p!rent holding comp!ny from the United Kingdom to the United St!tes. We believe moving our p!rent entity to the United St!tes will incre!se our !ccess to ! bro!der set of investors, support our inclusion in !ddition!l stock indices, improve fin!nci!l reporting comp!r!bility with our industry peers, stre!mline our corpor!te structure, !nd provide more flexibility in !ccessing c!pit!l. We do not !nticip!te signific!nt oper!tion!l or business model ch!nges !s ! result. We !lso do not expect our over!ll corpor!te income t!x r!te to ch!nge m!teri!lly. Our income t!x r!te is prim!rily driven by our oper!tions in the U.S. !nd Austr!li!. This would not ch!nge !fter we redomicile. Redomiciling to the U.S. would le!d us to ch!nge our !ccounting st!nd!rds from IFRS to U.S. GAAP. This tr!ns!ction is subject to fin!l !pprov!l, including by our Bo!rd of Directors !nd sh!reholders. We’re continuing to work on this initi!tive in prep!r!tion for ! fin!l Bo!rd review. If we secure Bo!rd !pprov!l, we would submit the propos!l for sh!reholder !pprov!l. Pending !ll required !pprov!ls, we would !im to close the tr!ns!ction e!rly in fisc!l ye!r 2023 !nd begin reporting under U.S. GAAP for Q1’23.

---

 

Q3 FY22 ATLASSIAN CORPORATION PLC Consolidated statements of operations (U.S. $ and shares in thousands, except per share data) (unaudited) 19 !+4((
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Q3 FY22 24 FORWARD-LOOKING STATEMENTS This shareholder letter contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward looking, including risks and uncertainties related to statements about our products, customers, anticipated growth, infrastructure, platform, proposed redomiciliation, outlook, technology and other key strategic areas, and our financial targets such as revenue, share count, and IFRS and non-IFRS financial measures including gross margin, operating margin, and net income (loss) per diluted share. We undertake no obligation to update any forward-looking statements made in this shareholder letter to reflect events or circumstances after the date of this shareholder letter or to reflect new information or the occurrence of unanticipated events, except as required by law. The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management’s beliefs and assumptions only as of the date such statements are made. Further information on these and other factors that could affect our financial results is included in filings we make with the Securities and Exchange Commission from time to time, including the section titled “Risk Factors” in our most recent Forms 20-F and 6-K (reporting our quarterly results). These documents are available on the SEC Filings section of the Investor Relations section of our website at: https://investors.atlassian.com. ABOUT NON-IFRS FINANCIAL MEASURES Our reported results and financial targets include certain non-IFRS financial measures, including non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow. Management believes that the use of these non-IFRS financial measures provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our results of operations, and also facilitates comparisons with peer companies, many of which use similar non-IFRS or non-GAAP financial measures to supplement their IFRS or GAAP results. Non-IFRS results are presented for supplemental informational purposes only to aid in understanding our results of operations. The non-IFRS results should not be considered a substitute for financial information presented in accordance with IFRS, and may be different from non-IFRS or non- GAAP measures used by other companies. Our non-IFRS financial measures include: • Non-IFRS gross profit. Excludes expenses related to share-based compensation and amortization of acquired intangible assets. • Non-IFRS operating income. Excludes expenses related to share-based compensation and amortization of acquired intangible assets. • Non-IFRS net income and non-IFRS net income per diluted share. Excludes expenses related to share-based compensation, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and a discrete tax impact resulting from a non-recurring transaction. • Free cash flow. Free cash flow is defined as net cash provided by operating activities less capital expenditures, which consists of purchases of property and equipment and payments of lease obligations. Our non-IFRS financial measures reflect adjustments based on the items below: • Share-based compensation. • Amortization of acquired intangible assets. • Non-coupon impact related to exchangeable senior notes and capped calls: • Amortization of notes discount and issuance costs. • Mark to fair value of the exchangeable senior notes exchange feature. • Mark to fair value of the related capped call transactions. • Net loss on settlements of exchangeable senior notes and capped call transactions. • The related income tax effects on these items, and a discrete tax impact resulting from a non-recurring transaction. • Purchases of property and equipment and payments of lease obligations. We exclude expenses related to share-based compensation, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and a discrete tax impact resulting from a non-recurring transaction from certain of our non-IFRS financial measures as we believe this helps investors understand our operational performance. In addition, share-based compensation expense can be difficult to predict and varies from period to period and company to company due to differing valuation methodologies, subjective assumptions, and the variety of equity instruments, as well as changes in stock price. Management believes that providing non-IFRS financial measures that exclude share-based compensation expense, amortization of acquired intangible assets, non-coupon impact related to exchangeable senior notes and capped calls, the related income tax effects on these items, and a discrete tax impact resulting from a non-recurring transaction allow for more meaningful comparisons between our results of operations from period to period.

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Q3 FY22 25 Management considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by our business that can be used for strategic opportunities, including investing in our business, making strategic acquisitions, and strengthening our statement of financial position. Management uses non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow: • As measures of operating performance, because these financial measures do not include the impact of items not directly resulting from our core operations. • For planning purposes, including the preparation of our annual operating budget. • To allocate resources to enhance the financial performance of our business. • To evaluate the effectiveness of our business strategies. • In communications with our Board of Directors and investors concerning our financial performance. The tables in this shareholder letter titled “Reconciliation of IFRS to non-IFRS Results” and “Reconciliation of IFRS to non-IFRS financial targets” provide reconciliations of non-IFRS financial measures to the most recent directly comparable financial measures calculated and presented in accordance with IFRS. We understand that although non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow are frequently used by investors and securities analysts in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations as reported under IFRS. ABOUT ATLASSIAN Atlassian unleashes the potential of every team. Our team collaboration and productivity software helps teams organize, discuss and complete shared work. Teams at more than 225,000 customers, across large and small organizations - including Bank of America, Redfin, NASA, Verizon, and Dropbox - use Atlassian's project tracking, content creation and sharing, and service management products to work better together and deliver quality results on time. Learn more about our products, including Jira Software, Confluence, Jira Service Management, Trello, Bitbucket, and Jira Align at https://atlassian.com. Investor relations contact: Martin Lam, [email protected] Media contact: Marie-Claire Maple, [email protected]

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