EX-99.1 2 ex99172717.htm EXHIBIT 99.1 Exhibit


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Atlassian Announces Fourth Quarter and Fiscal Year 2017 Results

Quarterly revenue of $174.3 million, up 37% year-over-year
Quarterly IFRS operating margin of (19%) and non-IFRS operating margin of 14%
Quarterly free cash flow of $44.5 million

SAN FRANCISCO (July 27, 2017) — Atlassian Corporation Plc (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its fourth quarter and fiscal year ended June 30, 2017, and released a shareholder letter on the Investor Relations section of its website at https://investors.atlassian.com.

“Fiscal 2017 was an amazing year for Atlassian. Our continued success was driven by our commitment to building great products that help unleash the potential of teams for more than 89,000 customers globally,” said Scott Farquhar, Atlassian’s co-CEO and co-founder. “During the past year, we invested in our products and platform to support more cloud and enterprise customers, and complemented our product family with the additions of StatusPage and Trello - the two largest acquisitions in our history. We also achieved strong financial results, growing annual revenue to more than $619 million, and generating more than $183 million of free cash flow.”  

Fourth Quarter Fiscal Year 2017 Financial Highlights
On an IFRS basis, Atlassian reported: 
•
Revenue: Total revenue was $174.3 million for the fourth quarter of fiscal 2017, up 37% from $127.6 million for the fourth quarter of fiscal 2016.
•
Operating Loss and Operating Margin: Operating loss was $32.3 million for the fourth quarter of fiscal 2017, compared with $11.4 million for the fourth quarter of fiscal 2016. Operating margin was (19%) for the fourth quarter of fiscal 2017, compared with (9%) for the fourth quarter of fiscal 2016.
•
Net Loss and Net Loss Per Diluted Share: Net loss was $20.7 million for the fourth quarter of fiscal 2017, compared with $4.7 million for the fourth quarter of fiscal 2016. Net loss per diluted share was $0.09 for the fourth quarter of fiscal 2017, compared with $0.02 for the fourth quarter of fiscal 2016. 
•
Balance Sheet: Cash and cash equivalents, and short-term investments at the end of the fourth quarter of fiscal 2017 totaled $549.9 million.
On a non-IFRS basis, Atlassian reported: 
•
Operating Income and Operating Margin: Operating income was $24.3 million for the fourth quarter of fiscal 2017, compared with $15.6 million for the fourth quarter of fiscal 2016. Operating margin was 14% for the fourth quarter of fiscal 2017, compared with 12% for the fourth quarter of fiscal 2016.
•
Net Income and Net Income Per Diluted Share: Net income was $21.6 million for the fourth quarter of fiscal 2017, compared with $16.9 million for the fourth quarter of fiscal 2016. Net income per diluted share was $0.09 for the fourth quarter of fiscal 2017, compared with $0.07 per diluted share for the fourth quarter of fiscal 2016.
•
Free Cash Flow: Cash flow from operations for the fourth quarter of fiscal 2017 was $50.6 million, while capital expenditures totaled $6.1 million, resulting in free cash flow of $44.5 million, an increase of 153% year-over-year.
Fiscal Year 2017 Financial Highlights
On an IFRS basis, Atlassian reported: 
•
Revenue: Total revenue was $619.9 million for fiscal year 2017, up 36% from $457.1 million for fiscal year 2016.
•
Operating Loss and Operating Margin: Operating loss was $63.1 million for fiscal year 2017, compared with $5.9 million for fiscal year 2016. Operating margin was (10%) for fiscal 2017, compared with (1%) for fiscal 2016.

1


•
Net Income/Loss and Net Income/Loss Per Diluted Share: Net loss was $42.5 million for fiscal year 2017, compared with net income of $4.4 million for fiscal year 2016. Net loss per diluted share was $0.19 for fiscal year 2017, compared with net income per diluted share of $0.02 for fiscal year 2016.
On a non-IFRS basis, Atlassian reported:
•
Operating Income and Operating Margin: Operating income was $104.2 million for fiscal year 2017, compared with $77.1 million for fiscal year 2016. Operating margin was 17% for fiscal 2017, compared with 17% for fiscal 2016.
•
Net Income and Net Income Per Diluted Share: Net income was $84.9 million for fiscal year 2017, compared with $71.3 million for fiscal year 2016. Net income per diluted share was $0.36 for fiscal year 2017, compared with $0.35 per diluted share for fiscal year 2016. 
•
Free Cash Flow: Cash flow from operations for fiscal year 2017 was $199.4 million while capital expenditures totaled $16.1 million, leading to free cash flow of $183.3 million, an increase of 92% year-over-year.

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 fourth quarter of fiscal 2017 with a total customer count on an active subscription or maintenance agreement basis of 89,237, an increase of 46% year-over-year. Atlassian added 4,206 net-new customers during the quarter. 
•
European cloud infrastructure: In May 2017, Atlassian announced the global expansion of its cloud hosting infrastructure with the launch of an Amazon Web Services (AWS) data center in Ireland. European cloud customers will experience improved performance and reduced latency after their migration to the new infrastructure.
•
Summit Europe and AtlasCamp: In May 2017, Atlassian held its first ever European Summit user conference in Barcelona. Atlassian hosted over 1,700 attendees at the sold-out event, which was combined with our 10th AtlasCamp developer conference.

CFO Transition
Atlassian also announced that its Chief Financial Officer, Murray Demo, will be leaving Atlassian on December 31, 2017 to focus on his corporate and non-profit board work. After serving on Atlassian’s board for four years, Demo joined the company as Chief Financial Officer in 2015 to help support Atlassian through its transition to a public company. Atlassian will soon begin a search for a Chief Financial Officer to succeed Demo.

“Over his six years with Atlassian, Murray has been instrumental in helping shape our long-term strategy and operational and financial rigor,” said Scott Farquhar. “Mike and I are both grateful for his leadership and friendship over the many years. Atlassian exists to unleash the potential in every team, and both as a board member, and as our CFO, Murray helped unleash Atlassian’s potential.” 

“It's been a privilege to be part of the Atlassian journey over the past six years as both a board member and CFO,” said Murray Demo. “Atlassian’s world-class products, engaging culture, unique business model and talented employees have been the catalyst for Atlassian’s global success. I am excited for the company’s long-term future and look forward to cheering on Scott, Mike and TEAM’s continued strong results.”
Financial Targets
Atlassian is providing its financial targets for the first quarter and full fiscal year 2018. The company’s financial targets are as follows:
•
First Quarter Fiscal Year 2018: 
•
Total revenue is expected to be in the range of $184 million to $186 million.
•
Gross margin is expected to be approximately 80% on an IFRS basis and approximately 84% on a non-IFRS basis. 

2


•
Operating margin is expected to be approximately (18%) on an IFRS basis and approximately 17% on a non-IFRS basis. 
•
Net loss per diluted share is expected to be approximately ($0.11) on an IFRS basis, and net income per diluted share is expected to be approximately $0.09 on a non-IFRS basis.
•
Weighted average share count is expected to be in the range of 228 million to 230 million shares when calculating diluted IFRS net loss per share and in the range of 242 million to 244 million shares when calculating diluted non-IFRS net loss per share. 
•
Fiscal Year 2018: 
•
Total revenue is expected to be in the range of $826 million to $834 million.
•
Gross margin is expected to be approximately 80% on an IFRS basis and approximately 84% on a non-IFRS basis. 
•
Operating margin is expected to be in the range of (16%) to (15%) on an IFRS basis and in the range of 18% to 19% on a non-IFRS basis. 
•
Net loss per diluted share is expected to be in the range of ($0.46) to ($0.44) on an IFRS basis, and net income per diluted share is expected to be in the range of $0.42 to $0.44 on a non-IFRS basis. 
•
Weighted average share count is expected to be in the range of 232 million to 234 million shares when calculating diluted IFRS net loss per share and in the range of 244 million to 246 million shares when calculating diluted non-IFRS net loss per share. 
•
Free cash flow is expected to be in the range of $230 million to $240 million, which includes capital expenditures that are expected to be in the range of $25 million to $30 million in fiscal 2018.

With respect to Atlassian’s expectations under “Financial Targets” above, a reconciliation of IFRS to non-IFRS gross margin, operating margin, net income per diluted share, and free cash flow has been provided in the financial statement tables included in this press release.

Investor & Financial Analyst Session at Atlassian Summit U.S. - September 13, 2017
Atlassian will be holding an Investor & Financial Analyst session on Wednesday, September 13, 2017 as part of its Summit U.S. user conference in San Jose, CA. Keynotes and breakout sessions at Summit U.S. will be held at the San Jose Convention Center on September 13-14, 2017, and the Investor & Financial Analyst session will be held at the Hilton San Jose adjoining the Convention Center.
Atlassian's Investor & Financial Analyst session will be available via live webcast on September 13, 2017, beginning at 1:00 p.m. Pacific Time (4:00 p.m. Eastern Time), and an archive version will be available for 12 months. Both will be available on the Investor Relations section of Atlassian’s website at: https://investors.atlassian.com.

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: Thursday, July 27, 2017 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 10109534). International callers, please dial 1-412-317-0088 (access code 10109534).
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.


3


About Atlassian
Atlassian unleashes the potential in every team. Our collaboration software helps teams organize, discuss and complete shared work. Teams at more than 89,000 customers, across large and small organizations - including Citigroup, eBay, Coca-Cola, Visa, BMW and NASA - use Atlassian's project tracking, content creation and sharing, real-time communication and service management products to work better together and deliver quality results on time. Learn more about our products including JIRA Software, Confluence, HipChat, Trello, Bitbucket and JIRA Service Desk at https://atlassian.com/.

Investor Relations Contact
Ian Lee
IR@atlassian.com
Media Contact
Paul Loeffler
press@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, 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 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 reflect adjustments based on the items below:
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.

4


Non-IFRS net income and non-IFRS net income per diluted share. Excludes expenses related to share- based compensation, amortization of acquired intangible assets and related income tax effects on these items.
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 and acquired intangible assets.
We exclude expenses related to share-based compensation, amortization of acquired intangible assets and the related income tax effects on these items 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 and the related income tax effects on these items allow for more meaningful comparisons between our operating results from period to period.
We include the effect of our outstanding share options and restricted share units (“RSUs”) in weighted-average shares used in computing non-IFRS net income per diluted share. IFRS excludes the impact of the full weighting of these outstanding equity awards until the effectiveness of our initial public offering (“IPO”). We have presented the full weighting impact of these additional shares from previously granted share options and RSUs, as if they were outstanding from the date of grant, in order to provide investors with insight into the full impact of all potentially dilutive awards outstanding and to provide comparability across periods.
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.

5


Atlassian Corporation Plc
Consolidated Statements of Operations
(U.S. $ and shares in thousands, except per share data)
(unaudited)

 
Three Months Ended June 30,
 
Fiscal Year Ended June 30,
 
2017
 
2016
 
2017
 
2016
Revenues:
 

 
 

 
 

 
 

Subscription
$
72,502

 
$
43,590

 
$
242,128

 
$
146,659

Maintenance
71,648

 
58,808

 
265,521

 
218,848

Perpetual license
19,359

 
17,911

 
74,565

 
65,487

Other
10,822

 
7,279

 
37,722

 
26,064

Total revenues
174,331

 
127,588

 
619,936

 
457,058

Cost of revenues (1) (2)
36,805

 
21,126

 
119,161

 
75,783

Gross profit
137,526

 
106,462

 
500,775

 
381,275

Operating expenses:
 

 
 

 
 
 
 
Research and development (1)
90,691

 
60,830

 
310,168

 
208,306

Marketing and sales (1) (2)
45,887

 
30,980

 
134,908

 
93,391

General and administrative (1)
33,204

 
26,042

 
118,785

 
85,458

Total operating expenses
169,782

 
117,852

 
563,861

 
387,155

Operating loss
(32,256
)
 
(11,390
)
 
(63,086
)
 
(5,880
)
Other non-operating income (expense), net
(536
)
 
(342
)
 
(1,342
)
 
(1,072
)
Finance income
1,048

 
1,244

 
4,851

 
2,116

Finance costs
(24
)
 
(9
)
 
(75
)
 
(71
)
Loss before income tax benefit
(31,768
)
 
(10,497
)
 
(59,652
)
 
(4,907
)
Income tax benefit
11,060

 
5,795

 
17,148

 
9,280

Net income (loss)
$
(20,708
)
 
$
(4,702
)
 
$
(42,504
)
 
$
4,373

Net income (loss) per share attributable to ordinary shareholders:
 

 
 

 
 
 
 
Basic
$
(0.09
)
 
$
(0.02
)
 
$
(0.19
)
 
$
0.02

Diluted
$
(0.09
)
 
$
(0.02
)
 
$
(0.19
)
 
$
0.02

Weighted-average shares outstanding used to compute net income (loss) per share attributable to ordinary shareholders:
 

 
 

 
 
 
 
Basic
225,805

 
214,505

 
222,224

 
182,773

Diluted
225,805

 
214,505

 
222,224

 
193,481

 
(1)Amounts include share-based payment expense, as follows:
 
Three Months Ended June 30,
 
Fiscal Year Ended June 30,
 
2017
 
2016
 
2017
 
2016
Cost of revenues
$
2,159

 
$
1,606

 
$
6,856

 
$
5,371

Research and development
24,598

 
12,542

 
79,384

 
35,735

Marketing and sales
5,455

 
3,385

 
17,395

 
11,945

General and administrative
9,125

 
7,553

 
33,813

 
22,429


(2)Amounts include amortization of acquired intangible assets, as follows:
 
Three Months Ended June 30,
 
Fiscal Year Ended June 30,
 
2017
 
2016
 
2017
 
2016
Cost of revenues
$
5,280

 
$
1,909

 
$
14,587

 
$
7,405

Marketing and sales
9,988

 
21

 
15,269

 
86



6


Atlassian Corporation Plc
Consolidated Statements of Financial Position
(U.S. $ in thousands)
(unaudited)
 
 
June 30, 2017
 
June 30, 2016
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
244,420

 
$
259,709

Short-term investments
305,499

 
483,405

Trade receivables
26,807

 
15,233

Current tax receivables
12,445

 
6,013

Prepaid expenses and other current assets
23,317

 
14,178

Total current assets
612,488

 
778,538

Non-current assets:
 
 
 
Property and equipment, net
41,173

 
58,762

Deferred tax assets
188,239

 
127,411

Goodwill
311,900

 
7,138

Intangible assets, net
120,789

 
13,577

Other non-current assets
9,269

 
5,547

Total non-current assets
671,370

 
212,435

Total assets
$
1,283,858

 
$
990,973

Liabilities
 
 
 
Current liabilities:
 
 
 
Trade and other payables
$
73,192

 
$
57,886

Current tax liabilities
2,207

 
286

Provisions
6,162

 
4,716

Deferred revenue
245,306

 
173,612

Total current liabilities
326,867

 
236,500

Non-current liabilities:
 
 
 
Deferred tax liabilities
43,950

 
6,639

Provisions
3,333

 
2,170

Deferred revenue
10,691

 
7,456

Other non-current liabilities
4,969

 
6,545

Total non-current liabilities
62,943

 
22,810

Total liabilities
$
389,810

 
$
259,310

Equity
 
 
 
Share capital
$
22,726

 
$
21,620

Share premium
450,959

 
441,734

Other capital reserves
437,346

 
244,335

Other components of equity
6,246

 
4,699

Retained earnings (accumulated deficit)
(23,229
)
 
19,275

Total equity
$
894,048

 
$
731,663

Total liabilities and equity
$
1,283,858

 
$
990,973


7


Atlassian Corporation Plc
Consolidated Statements of Cash Flows
(U.S. $ in thousands)
(unaudited)

 
Three Months Ended June 30,
 
Fiscal Year Ended June 30,
 
2017
 
2016
 
2017
 
2016
Operating activities
 
 
 
 
 

 
 

Loss before income tax
$
(31,768
)
 
$
(10,497
)
 
$
(59,652
)
 
$
(4,907
)
Adjustments to reconcile loss before income tax to net cash provided by operating activities:
 
 
 
 
 

 
 

Depreciation and amortization
23,766

 
6,342

 
61,546

 
21,926

Net loss (gain) on sale of investments and other assets
25

 
(33
)
 
(397
)
 
165

Net unrealized foreign currency loss
92

 
160

 
93

 
152

Share-based payment expense
41,337

 
25,086

 
137,448

 
75,480

Interest income
(1,048
)
 
(1,244
)
 
(4,851
)
 
(2,116
)
Changes in assets and liabilities:
 
 
 
 
 
 
 
Trade receivables
(295
)
 
(1,101
)
 
(10,208
)
 
(3,487
)
Prepaid expenses and other assets
(2,788
)
 
(2,454
)
 
(5,647
)
 
(4,203
)
Trade and other payables, provisions and other non-current liabilities
1,639

 
5,647

 
10,947

 
11,622

Deferred revenue
23,252

 
14,979

 
72,604

 
44,503

Interest received
1,393

 
1,381

 
6,540

 
2,839

Income tax paid, net of refunds
(5,008
)
 
(3,271
)
 
(9,042
)
 
(12,432
)
Net cash provided by operating activities
50,597

 
34,995

 
199,381

 
129,542

Investing activities
 
 
 
 
 

 
 

Business combinations, net of cash acquired
—

 
—

 
(381,090
)
 
—

Purchases of property and equipment
(5,208
)
 
(17,394
)
 
(15,129
)
 
(34,213
)
Purchases of intangible assets
(925
)
 
—

 
(925
)
 
—

Proceeds from sale of other assets
—

 
—

 
342

 
—

Purchases of investments
(85,155
)
 
(133,639
)
 
(423,540
)
 
(569,067
)
Proceeds from maturities of investments
31,215

 
17,470

 
111,403

 
65,294

Proceeds from sales of investments
54,911

 
43,140

 
488,672

 
49,501

Increase in restricted cash
(2
)
 
—

 
(3,371
)
 
—

Payment of deferred consideration
—

 
—

 
(935
)
 
(1,025
)
Net cash used in investing activities
(5,164
)
 
(90,423
)
 
(224,573
)
 
(489,510
)
Financing activities
 
 
 
 
 

 
 

Proceeds from issuance of ordinary shares upon initial public offering, net of offering costs
—

 
—

 
—

 
431,447

Proceeds from exercise of share options
2,035

 
2,466

 
9,438

 
6,732

Employee payroll taxes paid related to net share settlement of equity awards
—

 
—

 
—

 
(5,395
)
Net cash provided by financing activities
2,035

 
2,466

 
9,438

 
432,784

Effect of exchange rate changes on cash and cash equivalents
70

 
(223
)
 
465

 
(201
)
Net increase (decrease) in cash and cash equivalents
47,538

 
(53,185
)
 
(15,289
)
 
72,615

Cash and cash equivalents at beginning of period
196,882

 
312,894

 
259,709

 
187,094

Cash and cash equivalents at end of period
$
244,420

 
$
259,709

 
$
244,420

 
$
259,709



8


Atlassian Corporation Plc
Reconciliation of IFRS to Non-IFRS Results
(U.S. $ and shares in thousands, except per share data)
(unaudited)
 
Three Months Ended June 30,
 
Fiscal Year Ended June 30,
 
2017
 
2016
 
2017
 
2016
Gross profit:
 

 
 

 
 

 
 

IFRS gross profit
$
137,526

 
$
106,462

 
$
500,775

 
$
381,275

Plus: Share-based payment expense
2,159

 
1,606

 
6,856

 
5,371

Plus: Amortization of acquired intangible assets
5,280

 
1,909

 
14,587

 
7,405

Non-IFRS gross profit
$
144,965

 
$
109,977

 
$
522,218

 
$
394,051

Operating income:
 

 
 

 
 

 
 

IFRS operating loss
$
(32,256
)
 
$
(11,390
)
 
$
(63,086
)
 
$
(5,880
)
Plus: Share-based payment expense
41,337

 
25,086

 
137,448

 
75,480

Plus: Amortization of acquired intangible assets
15,268

 
1,930

 
29,856

 
7,491

Non-IFRS operating income
$
24,349

 
$
15,626

 
$
104,218

 
$
77,091

Net income:
 

 
 

 
 

 
 

IFRS net income (loss)
$
(20,708
)
 
$
(4,702
)
 
$
(42,504
)
 
$
4,373

Plus: Share-based payment expense
41,337

 
25,086

 
137,448

 
75,480

Plus: Amortization of acquired intangible assets
15,268

 
1,930

 
29,856

 
7,491

Less: Income tax effects and adjustments
(14,277
)
 
(5,437
)
 
(39,864
)
 
(16,018
)
Non-IFRS net income
$
21,620

 
$
16,877

 
$
84,936

 
$
71,326

Net income per share:
 

 
 

 
 

 
 

IFRS net income (loss) per share - basic
$
(0.09
)
 
$
(0.02
)
 
$
(0.19
)
 
$
0.02

Plus: Share-based payment expense
0.18

 
0.12

 
0.62

 
0.42

Plus: Amortization of acquired intangible assets
0.07

 
0.01

 
0.13

 
0.04

Less: Income tax effects and adjustments
(0.06
)
 
(0.03
)
 
(0.18
)
 
(0.09
)
Non-IFRS net income per share - basic
$
0.10

 
$
0.08

 
$
0.38

 
$
0.39

 
 
 
 
 
 
 
 
IFRS net income (loss) per share - diluted
$
(0.09
)
 
$
(0.02
)
 
$
(0.19
)
 
$
0.02

Plus: Share-based payment expense
0.18

 
0.11

 
0.59

 
0.37

Plus: Amortization of acquired intangible assets
0.06

 
0.01

 
0.13

 
0.04

Less: Income tax effects and adjustments
(0.06
)
 
(0.03
)
 
(0.17
)
 
(0.08
)
Non-IFRS net income per share - diluted
$
0.09

 
$
0.07

 
$
0.36

 
$
0.35

Weighted-average diluted shares outstanding:
 
 
 
 
 
 
 
Weighted-average shares used in computing diluted IFRS net income (loss) per share
225,805

 
214,505

 
222,224

 
193,481

Dilution from share options and RSUs (1)
13,596

 
17,417

 
13,833

 
—

Dilution from share options and RSUs granted in periods prior to IPO (2)
—

 
—

 
—

 
8,205

Weighted-average shares used in computing diluted non-IFRS net income per share
239,401

 
231,922

 
236,057

 
201,686

Free cash flow:
 

 
 

 
 

 
 

IFRS net cash provided by operating activities
$
50,597

 
$
34,995

 
$
199,381

 
$
129,542

Less: Capital expenditures
(6,133
)
 
(17,394
)
 
(16,054
)
 
(34,213
)
Free cash flow
$
44,464

 
$
17,601

 
$
183,327

 
$
95,329

(1) The effects of these dilutive securities were not included in the IFRS calculation of diluted net loss per share for the three months ended June 30, 2017 and 2016 and the fiscal year ended June 30, 2017 because the effect would have been anti-dilutive.
(2) Gives effect to share options and RSUs in periods prior to our IPO for comparability.

9


Atlassian Corporation Plc
Reconciliation of IFRS to Non-IFRS Results
(as a percentage of total revenues)
(unaudited)

 
Three Months Ended June 30,
 
Fiscal Year Ended June 30,
 
2017
 
2016
 
2017
 
2016
Operating margin
 

 
 

 
 
 
 
IFRS operating margin
(19
%)
 
(9
%)
 
(10
%)
 
(1
%)
Plus: Share-based payment expense
24

 
20

 
22

 
17

Plus: Amortization of acquired intangible assets
9

 
2

 
5

 
2

Non-IFRS operating margin
14
 %
 
12
 %
 
17
 %
 
17
 %


10


Atlassian Corporation Plc
Reconciliation of IFRS to Non-IFRS Financial Targets
(U.S. $)

 
Three Months Ending
September 30, 2017
 
Fiscal Year Ending
June 30, 2018
Revenue
$184 million to $186 million

 
$826 million to $834 million

 
 
 
 
IFRS gross margin
80%

 
80%

Share-based payment expense
1

 
1

Amortization of acquired intangible assets
3

 
3

Non-IFRS gross margin
84%

 
84%

 
 
 
 
IFRS operating margin
(18%)

 
(16%) to (15%)

Share-based payment expense
27

 
27

Amortization of acquired intangible assets
8

 
7

Non-IFRS operating margin
17%

 
18% to 19%

 
 
 
 
IFRS net loss per share - diluted
($0.11)

 
($0.46) to ($0.44)

Share-based payment expense
0.21

 
0.95

Amortization of acquired intangible assets
0.06

 
0.23

  Income tax effects and adjustments
(0.07
)
 
(0.30
)
Non-IFRS net income per share - diluted
$0.09

 
$0.42 to $0.44

 
 
 
 
Weighted-average shares used in computing diluted IFRS net income per share
228 million to 230 million

 
232 million to 234 million

Dilution from share options and RSUs (1)
14 million

 
12 million

Weighted-average shares used in computing diluted non-IFRS net income per share
242 million to 244 million

 
244 million to 246 million

 
 
 
 
IFRS net cash provided by operations
 
 
$255 million to $270 million

Less: Capital expenditures
 
 
(25 million) to (30 million)

Free cash flow
 
 
$230 million to $240 million


(1) The effect of these dilutive securities are not included in our IFRS calculation of diluted net loss per share for the three months ending September 30, 2017 and fiscal year ending June 30, 2018 because the effect would be anti-dilutive.


11