Atlassian (TEAM) Q4 2020 earnings summary

Executive summary

• FY20 revenue reached $1.614B, up 33% YoY; free cash flow was $500.4M and customer count rose to 174,097.

• Cloud-first transition advanced with more than 150,000 customers using cloud products and free cloud editions rolled out across Jira Software, Confluence and Jira Service Desk.

• IFRS net loss was $350.7M, largely reflecting fair-value movements in the exchangeable notes and capped-call derivatives, alongside investment in R&D and cloud infrastructure.

Financial highlights

• Revenue was $1.614B, up 33% YoY; over 90% came from customer accounts already active by June 30, 2019.

• Gross profit was $1.345B and gross margin 83%; operating income was $14.1M versus an operating loss of $63.4M in FY19.

• IFRS net loss was $350.7M versus $637.6M in FY19; diluted loss per share was $1.43 versus $2.67.

• Non-IFRS operating income was $370.0M; non-IFRS net income was $288.8M and diluted EPS was $1.15.

• Free cash flow was $500.4M versus $422.2M in FY19; operating cash flow was $574.2M. FY20 FCF deducts $35.7M capex and $38.1M lease payments.

Outlook and guidance

• FY21 perpetual license revenue was expected to decline, while maintenance revenue was expected to be flat YoY as server migrations offset renewals.

• FY21 revenue growth was expected to receive less contribution from pricing and packaging across deployment options.

• Operating income and operating cash flow were expected to decrease in FY21 as investment continued despite macroeconomic headwinds and slower revenue growth.

• Planned investment centers on personnel, primarily R&D, cloud services and platform, migration tools, new product initiatives, and cloud portfolio improvements.

• Existing cash and cash equivalents plus operating cash generation were expected to cover anticipated cash needs for at least 12 months.