Core Viewpoint - Atlassian has agreed to acquire The Browser Company for $610 million in cash, aiming to enhance its capabilities in the AI browser market with the core product Dia [2][3]. Group 1: Acquisition Details - The Browser Company was valued at $550 million last year, with investors including Atlassian Ventures and Salesforce Ventures [2]. - The acquisition is intended to provide The Browser Company with new resources to accelerate the development and distribution of Dia across multiple platforms [7][19]. Group 2: Vision and Goals - The Browser Company believes that browsers are the future of computing and aims to improve online life quality through innovative browser solutions [6][24]. - The acquisition will allow Dia to become a central player in the AI browser space, leveraging Atlassian's extensive distribution capabilities [13][16]. Group 3: Operational Continuity - The leadership team, including the CEO and CTO, will remain in place, ensuring continuity in operations and vision [19][27]. - Arc and Arc Search will continue to operate, with a long-term plan to be announced [8][19]. Group 4: Future Directions - The company plans to enhance Dia's features, focusing on integration, security, and user experience, while expanding to various platforms including Mac, Windows, iOS, and Android [21][22]. - The collaboration with Atlassian is seen as a way to achieve a significant transformation in how browsers function, aligning with the company's long-term vision [23][24].

Core Viewpoint - The acquisition of The Browser Company by Atlassian for $610 million in cash highlights the growing importance of collaborative tools and the shift towards integrated information management systems in the tech industry [1][6][9] Development Timeline - The Browser Company was founded in 2019 and launched its first product, the Arc browser, in 2021, which gained early user traction due to its unique design [1][2] - In 2024, the company introduced Dia, a knowledge work tool aimed at enhancing collaboration and information organization, marking a strategic shift from a traditional browser to a collaborative platform [1][3] Product Evolution - Arc browser broke the conventional tabbed browsing model with a sidebar and card-based design, attracting users seeking a superior experience [3] - Dia is positioned as a "work canvas" that integrates various information sources, enabling cross-task management and prioritizing collaboration over individual efficiency [3] Strategic Importance of Atlassian - Atlassian, a veteran in collaboration software, aims to address the fragmented information entry points in its existing tools like Jira, Confluence, and Trello through the integration of Dia [4][5] - Dia is expected to serve as a front-end interface for Atlassian's tools, enhancing user experience and streamlining workflows [4] Market Dynamics - The $610 million acquisition reflects a design-driven differentiation strategy, indicating that even in saturated markets, innovative design can create new opportunities [6] - The competition for becoming the primary entry point for collaboration tools is intensifying, with Dia's product form aligning with this trend [6] Future Potential and Challenges - Dia has the potential to become a next-generation collaboration entry point, but its success will depend on market validation and user adoption [7][8] - Key challenges include high user education costs, integration with Atlassian's ecosystem, and competition from other players like Notion and Slack [10]

Productivity software maker Atlassian has agreed to acquire The Browser Company, which makes the Arc and Dia browsers, for $610 million in cash. https://t.co/ngEPUhdU3X ...

Group 1 - Atlassian has agreed to acquire The Browser Company for $610 million in cash, aiming to reimagine the browser for knowledge work in the AI era [1][2] - The acquisition will allow The Browser Company to operate independently under Atlassian while continuing to develop its browser, Dia [2][3] - The deal is expected to close in the second quarter of Atlassian's fiscal year 2026 [3] Group 2 - The Browser Company raised $50 million at a $550 million valuation last year, bringing its total funding to $128 million from various investors [4]

Acquisition Details - Atlassian has agreed to acquire The Browser Company for $610 million in cash [1][2] - The deal is expected to close in Atlassian's fiscal second quarter, ending in December [2] Company Background - The Browser Company was established in 2019 and has competed against major players like Google and Apple [2] - The startup launched its customizable browser, Arc, in 2022, which includes features like a built-in whiteboard and group tab sharing [3] Product Features and Challenges - Arc is designed to help users manage their work more effectively, with features for organizing tabs and archiving old ones [4] - Despite its innovative features, only a small percentage of Arc users have adopted these special functionalities [4] - The Browser Company has shifted focus away from developing new features for Arc, raising questions about the potential release of the browser under an open-source license [5]

Part I [Business](index=4&type=section&id=Item%201.%20BUSINESS) Atlassian provides team collaboration software on its Cloud Platform, serving over 300,000 customers globally through a product-led growth model and a dual sales motion - Atlassian's mission is to unleash the potential of every team through its team collaboration software, which serves over **300,000 customers** worldwide, including over **80% of the Fortune 500**[18](index=18&type=chunk)[21](index=21&type=chunk) - The company's strategy is built around a 'system of work' delivered through apps, AI agents, and Collections on the Atlassian Cloud Platform, which features a unified data model called the Teamwork Graph[23](index=23&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk) - A significant portion of the workforce is dedicated to innovation, with over **50% of employees** involved in research and development activities as of June 30, 2025[44](index=44&type=chunk) - The go-to-market strategy employs a dual 'flywheel' and 'sales-led' motion, using a low-touch, self-service approach for initial customer acquisition and a sales force for large enterprise expansion[48](index=48&type=chunk)[49](index=49&type=chunk) - As of June 30, 2025, the company had **13,813 full-time employees** and has adopted a distributed work model called 'Team Anywhere'[65](index=65&type=chunk)[75](index=75&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20RISK%20FACTORS) The company faces various business, technology, and financial risks, including intense competition, data security threats, and the concentrated voting power from its dual-class stock structure - The company's rapid historical growth makes future prospects difficult to evaluate, and it may not sustain its revenue growth rate or achieve GAAP profitability due to significant investments in R&D and cloud infrastructure[86](index=86&type=chunk)[87](index=87&type=chunk) - The markets for Atlassian's solutions are intensely competitive, with rivals ranging from large technology vendors to smaller, specialized companies, some with greater resources[91](index=91&type=chunk)[92](index=92&type=chunk) - A majority of revenue is derived from Jira, Confluence, and Jira Service Management, making the company's success highly dependent on the continued market acceptance of these key products[121](index=121&type=chunk) - Security breaches or unauthorized access to customer data could lead to loss of business, reputational damage, and significant liabilities, and the company has experienced security incidents in the past[135](index=135&type=chunk)[137](index=137&type=chunk) - The dual-class stock structure concentrates approximately **85% of voting power** with holders of Class B Common Stock, primarily the company's co-founders, limiting the ability of Class A stockholders to influence corporate matters[216](index=216&type=chunk) [Unresolved Staff Comments](index=48&type=section&id=Item%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[248](index=248&type=chunk) [Cybersecurity](index=48&type=section&id=Item%201C.%20CYBERSECURITY) Atlassian implements a cybersecurity risk management program based on NIST frameworks, overseen by the CTrO and CISO with board-level oversight, encompassing risk assessments and incident response - The cybersecurity program is designed and assessed based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and Secure Software Development Framework (SSDF)[250](index=250&type=chunk) - Oversight is managed by the Chief Trust Officer (CTrO) and Chief Information Security Officer (CISO), who report on risks to the Audit Committee quarterly and the full board of directors at least biannually[251](index=251&type=chunk)[253](index=253&type=chunk) - The risk management program includes risk assessments, a dedicated security team, use of external service providers, employee training, incident response playbooks, and a third-party risk management process[255](index=255&type=chunk) [Properties](index=52&type=section&id=Item%202.%20PROPERTIES) Atlassian's principal offices are leased facilities in Sydney, Australia, and the San Francisco Bay Area, supplemented by other leased offices globally - The company's principal offices are leased facilities in Sydney, Australia (**146,000 sq. ft.**) and the San Francisco Bay Area, California (**147,000 sq. ft.**) as of June 30, 2025[258](index=258&type=chunk) [Legal Proceedings](index=52&type=section&id=Item%203.%20LEGAL%20PROCEEDINGS) The company is involved in ordinary course legal proceedings, with management not expecting a material adverse effect on its financial position - Atlassian is party to litigation in the ordinary course of business but does not expect the outcomes to have a material adverse effect on its financial position[259](index=259&type=chunk) [Mine Safety Disclosures](index=52&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not applicable[260](index=260&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=52&type=section&id=Item%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) Atlassian's Class A Common Stock trades on Nasdaq under 'TEAM', with no foreseeable dividends, and the company actively engages in share repurchases - The company's Class A Common Stock is traded on The Nasdaq Global Select Market under the symbol 'TEAM'[262](index=262&type=chunk) - Atlassian does not anticipate declaring or paying any cash dividends in the foreseeable future, intending to retain earnings for business expansion and its share repurchase program[224](index=224&type=chunk)[264](index=264&type=chunk) Issuer Purchases of Equity Securities (Q4 FY2025) | Period | Total Number of Shares Purchased (thousand) | Average Price Paid Per Share ($) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (thousand) | | :--- | :--- | :--- | :--- | | April 2025 | 741 | 205.14 | 1,408,566 | | May 2025 | 685 | 213.69 | 1,262,175 | | June 2025 | 448 | 203.12 | 1,171,238 | | **Total** | **1,874** | | | - In September 2024, the Board authorized a new **$1.5 billion** share repurchase program, which commenced in April 2025 after the completion of the previous **$1.0 billion** program[271](index=271&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Atlassian's FY2025 total revenue grew 20% to $5.22 billion, driven by subscription and cloud revenue, while reporting a GAAP operating loss and net loss amidst increased R&D and marketing investments Fiscal Year 2025 vs 2024 Revenue Performance | Revenue Type | FY 2025 (million) | FY 2024 (million) | $ Change (million) | % Change | | :--- | :--- | :--- | :--- | :--- | | Subscription | $4,930.6 | $3,924.4 | $1,006.2 | 26% | | Other | $284.7 | $434.2 | ($149.5) | -34% | | **Total Revenues** | **$5,215.3** | **$4,358.6** | **$856.7** | **20%** | Key Business Metrics | Metric | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | Customers with > $10,000 in Cloud ARR | 51,978 | 45,842 | | Free Cash Flow (FY) | $1,415.5M | $1,415.6M | - The **20% increase** in total revenue was primarily driven by increased demand from existing customers, who accounted for over **90% of the revenue** recognized in fiscal year 2025[310](index=310&type=chunk) - Research and development expenses increased **22% to $2.7 billion**, representing **51% of total revenue**, primarily due to a **$462.7 million increase** in employee compensation expenses[315](index=315&type=chunk) - Marketing and sales expenses rose **29% to $1.1 billion**, driven by higher employee compensation and a **$74.9 million increase** in advertising and marketing program expenses[316](index=316&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=66&type=section&id=Item%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) The company faces market risks from foreign currency exchange rates and interest rates, mitigating currency exposure with hedging programs and having fixed-rate senior notes to limit debt interest rate risk - The company is exposed to foreign exchange risk as a substantial majority of sales are in U.S. dollars, while a large percentage of expenses are in other currencies, primarily the Australian dollar, Indian rupee, Euro, and British pound[348](index=348&type=chunk)[349](index=349&type=chunk) - Atlassian utilizes a cash flow hedging program with foreign currency forward contracts to manage this risk, where a hypothetical **10% strengthening or weakening** of the U.S. dollar would change the fair value of these contracts by **$102.2 million** as of June 30, 2025[350](index=350&type=chunk)[354](index=354&type=chunk) - Interest rate risk exists for the company's **$2.5 billion** in cash and cash equivalents and **$424.3 million** in short-term investments, though a sensitivity analysis showed a **100 basis point change** in rates would not materially impact their market value[355](index=355&type=chunk) - The company's outstanding senior notes totaling approximately **$985.6 million** have fixed annual interest rates, mitigating economic interest rate exposure on these debt obligations[356](index=356&type=chunk) [Financial Statements and Supplementary Data](index=68&type=section&id=Item%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) The audited consolidated financial statements for FY2025 show total assets of $6.04 billion, total liabilities of $4.70 billion, a net loss of $256.7 million on $5.22 billion revenue, and details on key accounting policies and financial position - The independent registered public accounting firm, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of June 30, 2025[361](index=361&type=chunk)[373](index=373&type=chunk) Consolidated Balance Sheet Highlights (as of June 30) | Account | 2025 (billion) | 2024 (billion) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $2.51 | $2.18 | | Total current assets | $3.89 | $3.08 | | Goodwill | $1.30 | $1.29 | | **Total Assets** | **$6.04** | **$5.21** | | **Liabilities & Equity** | | | | Deferred revenue, current | $2.23 | $1.81 | | Total current liabilities | $3.18 | $2.61 | | Long-term debt | $0.99 | $0.99 | | **Total Liabilities** | **$4.70** | **$4.18** | | **Total Stockholders' Equity** | **$1.35** | **$1.03** | Consolidated Statement of Operations Highlights (Fiscal Year Ended June 30) | Account | 2025 (million) | 2024 (million) | | :--- | :--- | :--- | | Total revenues | $5,215.3 | $4,358.6 | | Gross profit | $4,320.5 | $3,555.1 | | Total operating expenses | $4,450.8 | $3,672.2 | | Operating loss | ($130.4) | ($117.1) | | **Net loss** | **($256.7)** | **($300.5)** | | Net loss per share | ($0.98) | ($1.16) | Consolidated Statement of Cash Flows Highlights (Fiscal Year Ended June 30) | Account | 2025 (million) | 2024 (million) | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,460.4 | $1,448.2 | | Net cash used in investing activities | ($342.3) | ($963.7) | | Net cash used in financing activities | ($782.6) | ($408.2) | | **Net increase in cash** | **$335.6** | **$74.2** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=108&type=section&id=Item%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) This item is not applicable to the company - Not applicable[537](index=537&type=chunk) [Controls and Procedures](index=108&type=section&id=Item%209A.%20CONTROLS%20AND%20PROCEDURES) As of June 30, 2025, the CEO and CFO concluded the company's disclosure controls and internal control over financial reporting were effective, with no material changes during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[538](index=538&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of June 30, 2025, based on the COSO framework[539](index=539&type=chunk) [Other Information](index=108&type=section&id=Item%209B.%20OTHER%20INFORMATION) A board member adopted a Rule 10b5-1 trading plan to purchase up to $1.075 million of Class A Common Stock through August 2026 - A board member, Scott Belsky, adopted a Rule 10b5-1 trading plan on May 29, 2025, to purchase up to **$1,075,000** of Class A Common Stock[543](index=543&type=chunk) [Disclosures Regarding Foreign Jurisdictions That Prevent Inspections](index=109&type=section&id=Item%209C.%20DISCLOSURES%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS) This item is not applicable to the company - None[544](index=544&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=109&type=section&id=Item%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2025 Annual Meeting Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting of Stockholders[546](index=546&type=chunk) [Executive Compensation](index=109&type=section&id=Item%2011.%20EXECUTIVE%20COMPENSATION) Information concerning executive compensation is incorporated by reference from the 2025 Annual Meeting Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting of Stockholders[547](index=547&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=109&type=section&id=Item%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Information regarding security ownership is incorporated by reference from the 2025 Annual Meeting Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting of Stockholders[548](index=548&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=109&type=section&id=Item%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Information on related party transactions and director independence is incorporated by reference from the 2025 Annual Meeting Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting of Stockholders[549](index=549&type=chunk) [Principal Accountant Fees and Services](index=109&type=section&id=Item%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Information detailing fees paid to the principal accountant is incorporated by reference from the 2025 Annual Meeting Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2025 Annual Meeting of Stockholders[550](index=550&type=chunk) Part IV [Exhibit and Financial Statement Schedule](index=110&type=section&id=Item%2015.%20EXHIBIT%20AND%20FINANCIAL%20STATEMENT%20SCHEDULE) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including governance documents, debt agreements, and compensation plans - This item lists all financial statements, schedules, and exhibits filed with the Form 10-K, including governance documents, debt indentures, and executive compensation plans[553](index=553&type=chunk)[554](index=554&type=chunk) [Form 10-K Summary](index=114&type=section&id=Item%2016.%20FORM%2010-K%20SUMMARY) The company has not provided a summary for Form 10-K under this item - None[559](index=559&type=chunk)

Core Insights - The international operations of Atlassian (TEAM) are crucial for assessing its financial resilience and growth prospects, especially given its expansive global footprint [1][2] Group 1: Financial Performance - Atlassian's total revenue for the quarter ended June 2025 was $1.38 billion, reflecting a year-over-year increase of 22.3% [4] - EMEA generated $567.58 million, accounting for 41% of total revenue, surpassing Wall Street's estimate of $548.81 million by 3.42% [5] - Asia Pacific contributed $152.28 million, representing 11% of total revenue, exceeding the consensus estimate of $150.44 million by 1.22% [6] Group 2: Revenue Projections - Analysts project Atlassian's total revenue for the current fiscal quarter to be $1.4 billion, indicating a 17.9% increase from the prior year [7] - For the full year, total revenue is expected to reach $6.15 billion, also a rise of 17.9% from the previous year, with EMEA contributing $2.47 billion (40.1%) and Asia Pacific $665.55 million (10.8%) [8] Group 3: Market Dependency - Atlassian's reliance on international markets for revenue presents both opportunities and challenges, making the monitoring of overseas revenue trends essential for predicting future performance [9][10]

Core Insights - The article discusses the potential rebound of AI software stocks, highlighting that AI is transforming businesses and creating wealth for investors [1][2]. Group 1: Atlassian - Atlassian has received strong support from analysts, with 25 out of 31 rating it as a "buy" or "strong buy" [4]. - The average 12-month price target for Atlassian suggests an upside potential of around 60%, with the most pessimistic analyst predicting a 23% increase [5]. - Despite a 30% decline year to date and being nearly 50% below its 52-week high, Atlassian's revenue grew by 22% year over year to nearly $1.4 billion [6][7]. Group 2: Salesforce - Salesforce also enjoys positive sentiment, with 42 out of 54 analysts rating it as a "buy" or "strong buy" [8]. - The consensus 12-month price target indicates a potential increase of 45%, with one analyst forecasting an 80% rise [8]. - Similar to Atlassian, Salesforce's stock is down almost 30% year to date, but the company is pursuing an acquisition of Informatica for $8 billion to enhance its AI strategy [9]. Group 3: Adobe - Adobe has a favorable outlook, with 27 out of 40 analysts rating it as a "buy" or "strong buy" [10]. - The average 12-month price target for Adobe reflects an upside potential of around 42%, with one analyst predicting a nearly 79% increase [10]. - Adobe's stock has decreased over 20% this year, but it reported record revenue of $5.87 billion in Q2, up 11% year over year [11][12].

Group 1 - The article discusses the positive outlook for Atlassian (NASDAQ: TEAM), with a previous rating of "buy" based on the belief that the company will achieve its $10 billion revenue target by FY29 [1] - The author highlights the involvement of Amrita, who leads a family office fund focused on sustainable, growth-driven companies, indicating a trend towards investments that maximize shareholder equity [1] - Amrita's background includes experience in high-growth supply-chain start-ups and venture capital, emphasizing her expertise in maximizing returns and user acquisition strategies during the pandemic [1] Group 2 - The article mentions that Amrita's newsletter, The Pragmatic Optimist, has gained recognition as a top finance newsletter, reflecting a growing interest in accessible financial literacy [1] - The focus on democratizing financial literacy suggests a shift in the investment landscape towards more inclusive and understandable financial strategies [1]

Group 1 - The Q2 earnings season is revealing a trend of declining investor confidence amid a volatile 2025 [1] - Gary Alexander has extensive experience in technology sectors, contributing insights that shape industry themes [1] Group 2 - The article emphasizes the importance of understanding market dynamics and investor sentiment during earnings reports [1]