SAN FRANCISCO--(BUSINESS WIRE)--Atlassian Corporation Plc (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its third quarter of fiscal 2019 ended March 31, 2019 and released a shareholder letter on the Investor Relations section of its website at https://investors.atlassian.com. All financial results and targets are based on the new revenue recognition standard IFRS 15, which the company adopted on July 1, 2018.
“We achieved a strong third quarter and wrapped up another successful Atlassian Summit, our flagship user conference,” said Mike Cannon-Brookes, Atlassian’s co-founder and co-CEO. “It was amazing to spend time with almost 5,000 users and partners at Summit. At Summit this year, we showcased our world-class Cloud offerings, along with our latest innovations that help solve the increasing collaboration challenges facing IT teams and enterprise customers.”
“We were also excited to welcome the newest member of the Atlassian family, AgileCraft, which we rebranded as Jira Align. Jira Align will play a vital role in helping larger enterprises scale the benefits of agile teamwork across their organizations,” said Scott Farquhar, Atlassian’s co-founder and co-CEO.
Third Quarter Fiscal Year 2019 Financial Highlights:
On an IFRS basis, Atlassian reported:
- Revenue: Total revenue was $309.3 million for the third quarter of fiscal 2019, up 38% from $224.3 million for the third quarter of fiscal 2018.
- Operating Loss and Operating Margin: Operating loss was $27.6 million for the third quarter of fiscal 2019, compared with operating loss of $10.3 million for the third quarter of fiscal 2018. Operating margin was (9%) for the third quarter of fiscal 2019, compared with (5%) for the third quarter of fiscal 2018.
-
Net Loss and Net Loss Per Diluted Share: Net loss was $202.8
million for the third quarter of fiscal 2019, compared with net loss
of $15.8 million for the third quarter of fiscal 2018. Net loss per
diluted share was $0.85 for the third quarter of fiscal 2019, compared
with net loss per diluted share of $0.07 for the third quarter of
fiscal 2018.
Net loss for the third quarter of fiscal 2019 included a non-cash charge of $172.6 million recorded in “other non-operating (expense) income, net”, as a result of marking to fair value the exchange feature of Atlassian’s exchangeable senior notes and the related capped calls.
- Balance Sheet: Cash and cash equivalents, and short-term investments at the end of the third quarter of fiscal 2019 totaled $1.8 billion.
On a non-IFRS basis, Atlassian reported:
- Operating Income and Operating Margin: Operating income was $58.0 million for the third quarter of fiscal 2019, compared with operating income of $39.0 million for the third quarter of fiscal 2018. Operating margin was 19% for the third quarter of fiscal 2019, compared with 17% for the third quarter of fiscal 2018.
- Net Income and Net Income Per Diluted Share: Net income was $52.4 million for the third quarter of fiscal 2019, compared with net income of $23.0 million for the third quarter of fiscal 2018. Net income per diluted share was $0.21 for the third quarter of fiscal 2019, compared with net income per diluted share of $0.09 per diluted share for the third quarter of fiscal 2018.
- Free Cash Flow: Cash flow from operations for the third quarter of fiscal 2019 was $133.3 million, while capital expenditures totaled $6.1 million, resulting in free cash flow of $127.1 million, an increase of 47% year-over-year. Free cash flow margin for the third quarter of fiscal 2019 was 41%.
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:
- Customer Growth: Atlassian ended the third quarter of fiscal 2019 with a total customer count, on an active subscription or maintenance agreement basis, of 144,038. Atlassian added 5,803 net new customers during the quarter.
- AgileCraft Acquisition: In early April, Atlassian closed its acquisition of AgileCraft, a leading provider of enterprise agile planning software. AgileCraft helps enterprise organizations build and manage a ‘master plan’ of their most strategic projects and workstreams. The acquisition was valued at approximately $166 million, comprising approximately $154 million in cash, and the remainder in Atlassian restricted shares, subject to continued vesting provisions. At Summit, Atlassian’s flagship user conference, the company announced the rebranding of AgileCraft as Jira Align.
- Opsgenie Innovations for IT Teams: Atlassian showcased Opsgenie’s latest incident management capabilities at Summit. These included features such as Actions, which helps resolve incidents faster by automatically triggering tasks on third-party platforms, and Edge Encryption, which secures sensitive data to help customers meet compliance requirements. We also announced deeper integrations with the Atlassian platform, as well as new integrations with Statuspage and Slack.
Financial Targets:
Atlassian is providing its financial targets for the fourth quarter and full fiscal year 2019. The company’s financial targets are as follows:
-
Fourth Quarter Fiscal Year 2019:
- Total revenue is expected to be in the range of $329 million to $331 million.
- Gross margin is expected to be approximately 82% on an IFRS basis and approximately 85% on a non-IFRS basis.
- Operating margin is expected to be approximately (13%) on an IFRS basis and approximately 13% on a non-IFRS basis.
- Net loss per diluted share is expected to be approximately ($0.17) on an IFRS basis, and net income per diluted share is expected to be approximately $0.16 on a non-IFRS basis.
- Weighted average share count is expected to be in the range of 240 million to 241 million shares when calculating diluted IFRS net loss per share and in the range of 250 million to 251 million shares when calculating diluted non-IFRS net income per share.
-
Fiscal Year 2019:
- Total revenue is expected to be in the range of $1,205 million to $1,207 million.
- Gross margin is expected to be approximately 82% on an IFRS basis and approximately 86% on a non-IFRS basis.
- Operating margin is expected to be in the range of (7%) to (6.5%) on an IFRS basis and in the range of 19.5% to 20% on a non-IFRS basis.
- Net loss per diluted share is expected to be approximately ($1.78) on an IFRS basis, and net income per diluted share is expected to be approximately $0.82 on a non-IFRS basis.
- Weighted average share count is expected to be in the range of 238 million to 239 million shares when calculating diluted IFRS net loss per share and in the range of 248 million to 249 million shares when calculating diluted non-IFRS net income per share.
- Cash flow from operations is expected to be in the range of $425 million to $435 million and free cash flow is expected to be in the range of $385 million to $395 million, which includes capital expenditures that are expected to be approximately $40 million.
With respect to Atlassian’s expectations under “Financial Targets” above, a reconciliation of IFRS to non-IFRS gross margin, operating margin, net income (loss) per diluted share, and free cash flow has been provided in the financial statement tables included in this press release.
Shareholder Letter and Webcast/Conference Call Details
A detailed shareholder letter is available on the Investor Relations section of Atlassian’s website at: https://investors.atlassian.com. Atlassian will host a webcast and conference call to answer questions today:
- When: Wednesday, April 17, 2019 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.
- Dial in: To access the call via telephone in North America, please dial 1-888-346-0688. For international callers, please dial 1-412-902-4250. Participants should request the “Atlassian call” after dialing in.
- Audio replay: An audio replay of the call will be available via telephone for seven days, beginning two hours after the call. To listen to the replay in North America, please dial 1-877-344-7529 (access code 10129468). International callers, please dial 1-412-317-0088 (access code 10129468).
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 144,000 customers, across large and small organizations - including General Motors, Walmart Labs, Bank of America Merrill Lynch, Lyft, Verizon, Spotify and NASA - 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, Trello, Bitbucket, Opsgenie, Jira Service Desk, and Jira Align at https://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, anticipated benefits of the AgileCraft acquisition, 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, net income (loss) per diluted share, and free cash flow.
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. 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 operating results. 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 changes in our assessment regarding the realizability of our deferred tax assets.
- 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.
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
- The related income tax effects on these items, and changes in our assessment regarding the realizability of our deferred tax assets
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 changes in our assessment regarding the realizability of our deferred tax assets 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 changes in our assessment regarding the realizability of our deferred tax assets allow for more meaningful comparisons between our operating results 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.
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; and
- In communications with our Board of Directors 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.
|
Atlassian Corporation Plc Consolidated Statements of Operations (U.S. $ and shares in thousands, except per share data) (unaudited) |
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| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| *As Adjusted | *As Adjusted | |||||||||||||||
| Revenues: | ||||||||||||||||
| Subscription | $ | 166,468 | $ | 106,295 | $ | 453,033 | $ | 290,390 | ||||||||
| Maintenance | 98,862 | 82,212 | 288,759 | 238,920 | ||||||||||||
| Perpetual license | 23,152 | 20,581 | 70,769 | 61,473 | ||||||||||||
| Other | 20,788 | 15,242 | 62,980 | 43,605 | ||||||||||||
| Total revenues | 309,270 | 224,330 | 875,541 | 634,388 | ||||||||||||
| Cost of revenues (1) (2) | 54,189 | 45,240 | 149,156 | 128,494 | ||||||||||||
| Gross profit | 255,081 | 179,090 | 726,385 | 505,894 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development (1) (2) | 153,069 | 108,544 | 408,813 | 304,730 | ||||||||||||
| Marketing and sales (1) (2) | 70,544 | 48,655 | 191,756 | 138,266 | ||||||||||||
| General and administrative (1) | 59,025 | 32,167 | 156,734 | 106,476 | ||||||||||||
| Total operating expenses | 282,638 | 189,366 | 757,303 | 549,472 | ||||||||||||
| Operating loss | (27,557 | ) | (10,276 | ) | (30,918 | ) | (43,578 | ) | ||||||||
| Other non-operating (expense) income, net | (173,324 | ) | 740 | (377,980 | ) | (418 | ) | |||||||||
| Finance income | 9,303 | 2,001 | 24,228 | 4,824 | ||||||||||||
| Finance costs | (10,103 | ) | (8 | ) | (30,024 | ) | (24 | ) | ||||||||
| Loss before income tax (expense) benefit | (201,681 | ) | (7,543 | ) | (414,694 | ) | (39,196 | ) | ||||||||
| Income tax (expense) benefit | (1,163 | ) | (8,280 | ) | 14,590 | (52,306 | ) | |||||||||
| Net loss | $ | (202,844 | ) | $ | (15,823 | ) | $ | (400,104 | ) | $ | (91,502 | ) | ||||
| Net loss per share attributable to ordinary shareholders: | ||||||||||||||||
| Basic | $ | (0.85 | ) | $ | (0.07 | ) | $ | (1.68 | ) | $ | (0.40 | ) | ||||
| Diluted | $ | (0.85 | ) | $ | (0.07 | ) | $ | (1.68 | ) | $ | (0.40 | ) | ||||
| Weighted-average shares outstanding used to compute net loss per share attributable to ordinary shareholders: | ||||||||||||||||
| Basic | 239,410 | 232,221 | 237,778 | 230,180 | ||||||||||||
| Diluted | 239,410 | 232,221 | 237,778 | 230,180 | ||||||||||||
|
(1) Amounts include share-based payment expense, as follows: |
||||||||||||||||
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Cost of revenues | $ | 4,871 | $ | 3,021 | $ | 12,156 | $ | 9,193 | ||||||||
| Research and development | 42,222 | 25,347 | 102,044 | 78,338 | ||||||||||||
| Marketing and sales | 10,979 | 5,816 | 28,590 | 18,161 | ||||||||||||
| General and administrative | 14,674 | 737 | 38,840 | 18,705 | ||||||||||||
|
(2) Amounts include amortization of acquired intangible assets, as follows: |
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| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Cost of revenues | $ | 7,068 | $ | 5,302 | $ | 19,479 | $ | 15,889 | ||||||||
| Research and development | 19 | — | 40 | — | ||||||||||||
| Marketing and sales | 5,716 | 9,022 | 25,072 | 27,067 | ||||||||||||
|
* As adjusted to reflect the impact of the full retrospective adoption of IFRS 15. |
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Atlassian Corporation Plc Consolidated Statements of Financial Position (U.S. $ in thousands) |
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| March 31, 2019 | June 30, 2018 | |||||||
| (unaudited) | *As Adjusted | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,445,284 | $ | 1,410,339 | ||||
| Short-term investments | 327,944 | 323,134 | ||||||
| Trade receivables | 63,777 | 46,141 | ||||||
| Current tax receivables | 991 | 12,622 | ||||||
| Prepaid expenses and other current assets | 44,495 | 29,795 | ||||||
| Total current assets | 1,882,491 | 1,822,031 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 65,249 | 51,656 | ||||||
| Deferred tax assets | 84,752 | 59,220 | ||||||
| Goodwill | 506,086 | 311,943 | ||||||
| Intangible assets, net | 108,138 | 63,577 | ||||||
| Other non-current assets | 228,428 | 113,401 | ||||||
| Total non-current assets | 992,653 | 599,797 | ||||||
| Total assets | $ | 2,875,144 | $ | 2,421,828 | ||||
| Liabilities | ||||||||
| Current liabilities: | ||||||||
| Trade and other payables | $ | 147,907 | $ | 113,105 | ||||
| Current tax liabilities | 6,170 | 172 | ||||||
| Provisions | 8,315 | 7,215 | ||||||
| Deferred revenue | 401,812 | 324,394 | ||||||
| Total current liabilities | 564,204 | 444,886 | ||||||
| Non-current liabilities: | ||||||||
| Deferred tax liabilities | 32,908 | 12,160 | ||||||
| Provisions | 4,788 | 4,363 | ||||||
| Deferred revenue | 31,222 | 18,477 | ||||||
| Exchangeable senior notes, net | 844,938 | 819,637 | ||||||
| Other non-current liabilities | 703,566 | 214,985 | ||||||
| Total non-current liabilities | 1,617,422 | 1,069,622 | ||||||
| Total liabilities | 2,181,626 | 1,514,508 | ||||||
| Equity | ||||||||
| Share capital | 24,027 | 23,531 | ||||||
| Share premium | 457,481 | 454,766 | ||||||
| Other capital reserves | 738,740 | 557,100 | ||||||
| Other components of equity | 1,390 | (61 | ) | |||||
| Accumulated deficit | (528,120 | ) | (128,016 | ) | ||||
| Total equity | 693,518 | 907,320 | ||||||
| Total liabilities and equity | $ | 2,875,144 | $ | 2,421,828 | ||||
|
* As adjusted to reflect the impact of the full retrospective adoption of IFRS 15. |
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Atlassian Corporation Plc Consolidated Statements of Cash Flows (U.S. $ in thousands) (unaudited) |
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| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| *As Adjusted | *As Adjusted | |||||||||||||||
| Operating activities | ||||||||||||||||
| Loss before income tax (expense) benefit | $ | (201,681 | ) | $ | (7,543 | ) | $ | (414,694 | ) | $ | (39,196 | ) | ||||
| Adjustments to reconcile loss before income tax (expense) benefit to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 16,303 | 20,111 | 54,403 | 61,681 | ||||||||||||
| Loss (gain) on sale of investments and other assets | 2 | (1,193 | ) | (2,345 | ) | (1,225 | ) | |||||||||
| Net unrealized loss (gain) on investments | 1 | — | (46 | ) | — | |||||||||||
| Net unrealized foreign currency (gain) loss | (742 | ) | 67 | (634 | ) | (95 | ) | |||||||||
| Share-based payment expense | 72,746 | 34,921 | 181,630 | 124,397 | ||||||||||||
| Net unrealized loss on exchange derivative and capped call transactions | 172,582 | — | 377,587 | — | ||||||||||||
| Amortization of debt discount and issuance cost | 8,535 | — | 25,301 | — | ||||||||||||
| Interest income | (9,417 | ) | (2,001 | ) | (24,228 | ) | (4,824 | ) | ||||||||
| Interest expense | 1,568 | — | 4,723 | — | ||||||||||||
| Changes in assets and liabilities: | ||||||||||||||||
| Trade receivables | 7,513 | (3,500 | ) | (15,627 | ) | (11,887 | ) | |||||||||
| Prepaid expenses and other assets | 4,046 | (797 | ) | (13,161 | ) | (1,125 | ) | |||||||||
| Trade and other payables, provisions and other non-current liabilities | 38,231 | 27,311 | 56,205 | 33,569 | ||||||||||||
| Deferred revenue | 16,201 | 24,300 | 88,946 | 67,194 | ||||||||||||
| Interest received | 8,235 | 1,677 | 21,956 | 4,468 | ||||||||||||
| (Income tax paid) tax refunds received, net | (872 | ) | (1,677 | ) | 8,600 | (3,704 | ) | |||||||||
| Net cash provided by operating activities | 133,251 | 91,676 | 348,616 | 229,253 | ||||||||||||
| Investing activities | ||||||||||||||||
| Business combinations, net of cash acquired | — | — | (263,554 | ) | — | |||||||||||
| Purchases of intangible assets | — | — | (850 | ) | — | |||||||||||
| Purchases of property and equipment | (6,106 | ) | (5,293 | ) | (24,629 | ) | (12,407 | ) | ||||||||
| Proceeds from sales of property, equipment and intangible assets | — | 1,000 | 3,721 | 1,000 | ||||||||||||
| Purchases of investments | (158,258 | ) | (64,896 | ) | (352,647 | ) | (292,024 | ) | ||||||||
| Proceeds from maturities of investments | 131,669 | 43,217 | 317,583 | 125,104 | ||||||||||||
| Proceeds from sales of investments | 3,070 | 18,907 | 8,742 | 100,965 | ||||||||||||
| Increase in restricted cash | — | (96 | ) | (552 | ) | (3,237 | ) | |||||||||
| Payment of deferred consideration | — | (3,290 | ) | — | (3,290 | ) | ||||||||||
| Net cash used in investing activities | (29,625 | ) | (10,451 | ) | (312,186 | ) | (83,889 | ) | ||||||||
| Financing activities | ||||||||||||||||
| Proceeds from exercise of share options | 1,125 | 932 | 2,829 | 3,087 | ||||||||||||
| Payment of exchangeable senior notes issuance costs | — | — | (410 | ) | — | |||||||||||
| Interest paid | — | — | (3,194 | ) | — | |||||||||||
| Net cash provided by (used in) financing activities | 1,125 | 932 | (775 | ) | 3,087 | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (56 | ) | 451 | (710 | ) | 642 | ||||||||||
| Net increase in cash and cash equivalents | 104,695 | 82,608 | 34,945 | 149,093 | ||||||||||||
| Cash and cash equivalents at beginning of period | 1,340,589 | 310,905 | 1,410,339 | 244,420 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 1,445,284 | $ | 393,513 | $ | 1,445,284 | $ | 393,513 | ||||||||
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* As adjusted to reflect the impact of the full retrospective adoption of IFRS 15. |
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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) |
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| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| *As Adjusted | *As Adjusted | |||||||||||||||
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Gross profit |
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| IFRS gross profit | $ | 255,081 | $ | 179,090 | $ | 726,385 | $ | 505,894 | ||||||||
| Plus: Share-based payment expense | 4,871 | 3,021 | 12,156 | 9,193 | ||||||||||||
| Plus: Amortization of acquired intangible assets | 7,068 | 5,302 | 19,479 | 15,889 | ||||||||||||
| Non-IFRS gross profit | $ | 267,020 | $ | 187,413 | $ | 758,020 | $ | 530,976 | ||||||||
|
Operating income |
||||||||||||||||
| IFRS operating loss | $ | (27,557 | ) | $ | (10,276 | ) | $ | (30,918 | ) | $ | (43,578 | ) | ||||
| Plus: Share-based payment expense | 72,746 | 34,921 | 181,630 | 124,397 | ||||||||||||
| Plus: Amortization of acquired intangible assets | 12,803 | 14,324 | 44,591 | 42,956 | ||||||||||||
| Non-IFRS operating income | $ | 57,992 | $ | 38,969 | $ | 195,303 | $ | 123,775 | ||||||||
|
Net income |
||||||||||||||||
| IFRS net loss | $ | (202,844 | ) | $ | (15,823 | ) | $ | (400,104 | ) | $ | (91,502 | ) | ||||
| Plus: Share-based payment expense | 72,746 | 34,921 | 181,630 | 124,397 | ||||||||||||
| Plus: Amortization of acquired intangible assets | 12,803 | 14,324 | 44,591 | 42,956 | ||||||||||||
| Plus: Non-coupon impact related to exchangeable senior notes and capped calls | 181,117 | — | 402,888 | — | ||||||||||||
| Less: Income tax effects and adjustments | (11,410 | ) | (10,389 | ) | (65,672 | ) | 11,673 | |||||||||
| Non-IFRS net income | $ | 52,412 | $ | 23,033 | $ | 163,333 | $ | 87,524 | ||||||||
|
Net income per share |
||||||||||||||||
| IFRS net loss per share - diluted | $ | (0.85 | ) | $ | (0.07 | ) | $ | (1.68 | ) | $ | (0.40 | ) | ||||
| Plus: Share-based payment expense | 0.29 | 0.14 | 0.76 | 0.53 | ||||||||||||
| Plus: Amortization of acquired intangible assets | 0.05 | 0.06 | 0.18 | 0.18 | ||||||||||||
| Plus: Non-coupon impact related to exchangeable senior notes and capped calls | 0.76 | — | 1.67 | — | ||||||||||||
| Less: Income tax effects and adjustments | (0.04 | ) | (0.04 | ) | (0.27 | ) | 0.05 | |||||||||
| Non-IFRS net income per share - diluted | $ | 0.21 | $ | 0.09 | $ | 0.66 | $ | 0.36 | ||||||||
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Weighted-average diluted shares outstanding |
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| Weighted-average shares used in computing diluted IFRS net loss per share | 239,410 | 232,221 | 237,778 | 230,180 | ||||||||||||
| Plus: Dilution from share options and RSUs (1) | 9,382 | 12,356 | 9,844 | 13,185 | ||||||||||||
| Weighted-average shares used in computing diluted non-IFRS net income per share | 248,792 | 244,577 | 247,622 | 243,365 | ||||||||||||
| Free cash flow | ||||||||||||||||
| IFRS net cash provided by operating activities | $ | 133,251 | $ | 91,676 | $ | 348,616 | $ | 229,253 | ||||||||
| Less: Capital expenditures | (6,106 | ) | (5,293 | ) | (24,629 | ) | (12,407 | ) | ||||||||
| Free cash flow | $ | 127,145 | $ | 86,383 | $ | 323,987 | $ | 216,846 | ||||||||
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* As adjusted to reflect the impact of the full retrospective adoption of IFRS 15. |
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(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, 2019 and 2018 because the effect would have been anti-dilutive. |
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Atlassian Corporation Plc Reconciliation of IFRS to Non-IFRS Financial Targets (U.S. $) |
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Three Months Ending June 30, 2019 |
Fiscal Year Ending June 30, 2019 |
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| Revenue | $329 million to $331 million | $1,205 million to $1,207 million | ||||
| IFRS gross margin | 82% | 82% | ||||
| Plus: Share-based payment expense | 1 | 2 | ||||
| Plus: Amortization of acquired intangible assets | 2 | 2 | ||||
| Non-IFRS gross margin | 85% | 86% | ||||
| IFRS operating margin | (13%) | (7%) to (6.5%) | ||||
| Plus: Share-based payment expense | 22 | 21 | ||||
| Plus: Amortization of acquired intangible assets | 4 | 5.5 | ||||
| Non-IFRS operating margin | 13% | 19.5% to 20% | ||||
| IFRS net loss per share - diluted | ($0.17) | ($1.78) | ||||
| Plus: Share-based payment expense | 0.29 | 1.02 | ||||
| Plus: Amortization of acquired intangible assets | 0.06 | 0.24 | ||||
| Plus: Non-coupon impact related to exchangeable senior notes and capped calls | 0.03 | 1.65 | ||||
| Less: Income tax effects and adjustments | (0.05) | (0.31) | ||||
| Non-IFRS net income per share - diluted | $ | 0.16 | $ | 0.82 | ||
| Weighted-average shares used in computing diluted IFRS net loss per share | 240 million to 241 million | 238 million to 239 million | ||||
| Dilution from share options and RSUs (1) | 10 million | 10 million | ||||
| Weighted-average shares used in computing diluted non-IFRS net income per share | 250 million to 251 million | 248 million to 249 million | ||||
| IFRS net cash provided by operating activities | $425 million to $435 million | |||||
| Less: Capital expenditures | (40 million) | |||||
| Free cash flow | $385 million to $395 million | |||||
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(1) The effects of these dilutive securities are not included in our IFRS calculation of diluted net loss per share for the three months ending June 30, 2019 and fiscal year ending June 30, 2019 because the effect would be anti-dilutive. |
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