Atlassian Corporation (TEAM) Citi's 2024 Global TMT Conference (Transcript)

Atlassian Corporation (NASDAQ:TEAM) Citi's 2024 Global TMT Conference Industry/Company - Industry: Software, particularly enterprise collaboration and project management - Company: Atlassian Corporation (NASDAQ:TEAM) Key Points and Evidence 1. Company Milestones: - Revenue of close to $4.4 billion with$1.4 billion in free cash flow in FY '24. - Hit first $1 billion quarter in revenue and subscription. - Released Atlassian Intelligence capabilities in the platform, bringing GenAI into workflows across Jira and Confluence. - Jira, a$1.8 billion business, continues to grow at least as fast as the overall Atlassian business. - Reached 300,000 customer mark. - Completed first $1 billion acquisition with Loom, which has performed well post-acquisition. - Customers with over$1 million in contract value grew 50% last year. - [3, 5, 7, 9] 2. Focus Areas: - Enterprise adoption - AI and Atlassian Intelligence - System of work (Atlassian portfolio of products) - [6, 7, 8] 3. Enterprise Adoption: - Substantial investments in R&D for scale, reliability, data management, data residency, security, compliance, and certification. - Data center enterprise customers choosing to adopt Cloud due to enterprise readiness of products. - [6] - Launched Atlassian Intelligence and Rovo, an AI agent building framework. - Thousands of customers have adopted Atlassian Intelligence. - [7] - Atlassian portfolio of products used in a mission-critical way by many customers. - [8] 4. GTM Strategy: - Focus on consolidation rather than traditional enterprise sales motion. - Explain the consolidation story and support the consolidation narrative for customers. - Bring channel partners into the conversation to provide value-added services. - [15, 16] 5. Cross-Selling and Expansion: - $14 billion opportunity for cross-selling existing product base to existing enterprise customers. - Demonstrating total cost of ownership (TCO) benefits for customers who consolidate tools. - Approach from multiple insertion points at the bottom and follow a coexistence strategy for several years, followed by a displacement strategy. - [19, 20, 24] 6. **JSM (Jira Service Management)**: - Fastest-growing business at Atlassian. -$600 million business growing faster than other core businesses. - Advantages in price, horizontal nature of tools, and time to value. - Greenfield vs. brownfield approach: enter at mid-market range and smaller range, displacing email or Excel sheets. - [31, 32, 33, 34, 35] 7. Pricing Strategy: - Price for value with steady price increases across the entire portfolio. - No fatigue from customers around pricing due to R&D investments and customer value delivered. - Exploration of consumption-based pricing, especially in AI world. - [37, 38, 40, 41] 8. Cloud Migration: - Server end-of-life as a symbolic moment of moving away from on-premise products. - Cloud as the ultimate destination for all customers. - Migrations coming from server and data center customer bases. - Running programs to support customers' journey from data center to cloud, including ride-along programs and channel partners. - [42, 43, 44, 45, 46, 47] 9. CRO Transition: - Looking for a CRO to address the next set of problems as a company: scaling the machine, meeting enterprise customers where they are, and ensuring customer adoption and deployment. - CRO will focus on procurement, delivery, and go-to-market, while R&D team focuses on product innovation. - [48, 49, 50] 10. Resource Allocation and M&A: - Continue to be smart and prudent about M&A to expand audiences and improve adjacencies. - Loom acquisition as a great example of an acquisition that aligns with product ethos and go-to-market motion. - R&D will continue to be one of the most important investments, with smart and efficient allocation. - [56, 57, 58, 59, 60]