Global tech

Atlassian’s revenue is up 30%, but the business still runs in the red

- July 30, 2021 2 MIN READ
Atlassian, Mike Cannon-Brookes, Scott Farquhar.
Atlassian co-founders and co-CEOs Mike Cannon-Brooke and Scott Farquhar.
Atlassian’s June quarter revenue is up 30% on 12 months ago to US$559.5 million (A$760m), but the losses continue for the 19-year-old software giant, which posted a US$213.1 million net loss for Q4 FY21.

The revenue figure is a considerable beat on market expectations and the company’s own Q3 prediction of US$513m to $528m.

The net loss is a US$172 million improvement on Q4 FY20’s US$385.2m loss.

But a rise in expenses matched the revenue growth, with costs such as R&D, marketing and admin up 30% YoY to US$469.1 million for the quarter.

The net loss for Q4 FY21 included a charge of US$200.5 million recorded in “other non-operating expense, net,” compared with a charge of US$382.7 million in Q4 FY20 relating to our exchangeable senior notes and related capped calls.

Of this amount, a loss of US$180.9 million is related to marking to fair value the exchange feature of the notes and related capped calls that remain outstanding as of quarter-end. In addition, a net loss of US$19.6 million is related to the net impact of settling a portion of the notes and the unwinding of the related capped calls during this quarter.

The net loss per diluted share was $2.79 for FY21, compared with a net loss per diluted share of $1.43 for FY20.

Subscription revenue was US$385.5 million for the fourth quarter, up 50% on 12 months earlier.

The operating loss was US$7.5 million for Q4 FY21 compared to an operating loss of $3.3 million for the fourth quarter FY20.

Atlassian’s financial results.

Atlassian’s co-founder and co-CEO Mike Cannon-Brookes said it “was a ripper of a quarter” with subscription revenue up 50% year-over-year, and 23,000 new customers.

“We are incredibly proud of our resilience and execution during fiscal 2021,” he said.

“We continued to innovate with five new products built on top of our cloud platform, surpassed 200,000 customers and $2 billion in revenue, and added over 1,500 new Atlassians to the team.”

His co-founder and co-CEO Scott Farquhar the opportunities for the company have never been greater.

““We are reimagining the future of work and are keen to seize the massive opportunities that we see across our three core markets: agile development; IT service management; and work management for all teams,” he said.

“We will continue to put in the hard yards to execute and advance on our mission to unleash the potential of every team.”

In their letter to shareholders, the pair wrote:

“We capped off FY21 with strong operating margin and free cash flow margin results, even as we continued to invest heavily in cloud R&D and executed on certain marketing initiatives during Q4. Our strong financial position provides us with the flexibility to invest purposefully in FY22 to further our cloud-first goals and create value for our customers in our three core markets.”

The business ended the financial year with a total of 236,118 customers. Of the 23,311 net new customers during the quarter, 6,520 were single-user Trello accounts.

Atlassian now employs more than 6,300 people globally.

Total revenue for the first quarter of FY22 is expected to be in the range of US$575 million to $590 million.

As the business moves into its 20th year of operation, Atlassian hinted it may be in the black in the coming quarter, forecasting a net income per diluted share in the range of US$0.09 to $0.10 on an IFRS basis

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