Atlassian (US:TEAM)2025-05-02 20:30Customer Growth - As of March 31, 2025, the company had more than 300,000 customers, with 50,715 customers generating over $10,000 in annualized recurring revenue from Cloud offerings[109][110]. - The number of customers with greater than $10,000 in Cloud ARR increased from 44,336 in March 2024 to 50,715 in March 2025, reflecting strong growth in the customer base[110]. Financial Performance - Total revenues increased by $167.6 million, or 14%, to $1,356.7 million for the three months ended March 31, 2025, compared to the same period in 2024[128]. - Subscription revenues rose by $201.5 million, or 19%, to $1,272.9 million, driven by paid seat expansion and price increases[129]. - Other revenues decreased by $33.9 million, or 29%, primarily due to a $27.8 million decline in maintenance revenue from the end of support for Server offerings[130]. - Net income (loss) for the three months ended March 31, 2025, was a loss of $70.8 million, compared to a net income of $12.8 million in the same period in 2024[127]. - Operating income (loss) for the three months ended March 31, 2025, was a loss of $12.5 million, compared to an income of $17.8 million in the same period of 2024[127]. - Total revenues increased by $603.9 million, or 19%, to $3,830,960 thousand for the nine months ended March 31, 2025, compared to $3,227,013 thousand for the same period in 2024[144]. - Subscription revenues rose by $762.6 million, or 27%, to $3,618,072 thousand for the nine months ended March 31, 2025, driven by paid seat expansion and price increases[145]. Cash Flow and Liquidity - Free cash flow for the three months ended March 31, 2025, was $638.3 million, an increase of $83.4 million compared to the same period in 2024, primarily due to increased cash received from customers[111]. - Net cash provided by operating activities increased by $63.1 million to $1,085,078,000 for the nine months ended March 31, 2025, compared to $1,021,940,000 for the same period in 2024[161]. - Free cash flow for the nine months ended March 31, 2025, was $1,055,225,000, compared to $1,002,418,000 for the same period in 2024[176]. - As of March 31, 2025, the company had cash and cash equivalents totaling $2.7 billion and marketable securities of $313.6 million[159]. - The company believes existing cash and cash equivalents, along with cash generated from operations, will be sufficient to meet anticipated cash needs for at least the next 12 months[170]. Expenses and Investments - Operating expenses are primarily driven by compensation expenses, which include salaries, bonuses, and stock-based compensation[119]. - Research and development expenses increased by $108.8 million, or 19%, to $685.3 million, mainly due to a $112.8 million rise in employee compensation expenses[132]. - Marketing and sales expenses grew by $72.0 million, or 32%, to $295.8 million, attributed to increased compensation and advertising expenses[133]. - General and administrative expenses rose by $10.8 million, or 7%, to $168.3 million, primarily due to higher employee compensation expenses[134]. - Research and development expenses increased by $373.6 million, or 23%, to $1,968,634 thousand for the nine months ended March 31, 2025, mainly due to increased employee compensation[148]. - Marketing and sales expenses rose by $182.2 million, or 29%, to $820,119 thousand for the nine months ended March 31, 2025, attributed to higher employee compensation and marketing event expenses[149]. - General and administrative expenses increased by $25.4 million, or 6%, to $483,694 thousand for the nine months ended March 31, 2025, primarily due to higher employee compensation[150]. Market Conditions and Risks - Economic conditions, including inflation and geopolitical tensions, may impact the company's results of operations and financial position[104]. - There have been no material changes to market risk from the information presented in the Annual Report on Form 10-K for the year ended June 30, 2024[179]. Debt and Share Repurchase - As of March 31, 2025, the company had $500 million in 5.250% senior notes due 2029 and $500 million in 5.500% senior notes due 2034[164]. - The company authorized a new share repurchase program in September 2024, allowing for the repurchase of up to $1.5 billion of Class A Common Stock, following the completion of the previous $1 billion program[167]. - Approximately 2.1 million shares of Class A Common Stock were repurchased for approximately $391.2 million at an average price of $185.57 during the nine months ended March 31, 2025[168]. Tax and Non-GAAP Measures - The projected non-GAAP tax rate for fiscal year 2025 is 26%, down from 27% for fiscal year 2024[177]. - Non-GAAP net income for the nine months ended March 31, 2025, was $716,832,000, compared to $590,982,000 for the same period in 2024[176].