Atlassian (TEAM) Q4 2018 earnings summary

Executive summary

• FY18 revenue reached $874.0M, up 41% YoY; free cash flow was $281.2M, up 53% YoY.

• Year-end customers totaled 125,796, including more than 100,000 Cloud customers for the first time.

Financial highlights

• Revenue was $874.0M versus $619.9M in FY17; IFRS gross profit was $701.3M and operating loss was $53.7M.

• IFRS net loss was $119.3M, or $0.52 per diluted share, versus a $42.5M loss, or $0.19 per share, in FY17.

• Non-IFRS operating income was $166.4M; non-IFRS net income was $118.6M and diluted EPS was $0.49.

• Operating cash flow was $311.5M; after $30.2M of capital expenditures, free cash flow was $281.2M.

Outlook and guidance

• FY19 priorities include expanding software and business team adoption and sharpening focus on IT teams, including through R&D, partnerships and marketing investment.

• R&D expense is expected to rise in absolute dollars and may rise as a share of revenue; marketing, sales and G&A expenses are also expected to increase in absolute dollars.

• FY19 capital expenditures are expected to increase, including for office facilities; cash and operating cash generation were expected to cover anticipated needs for at least 12 months.

• IFRS profitability is not expected in the near term as investment continues in cloud infrastructure, R&D, global operations and product development.