Atlassian Closes Out a Record Year
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Productivity software provider Atlassian (NASDAQ: TEAM) reported its fiscal fourth-quarter results after the market closed on Thursday. Just as they did in the third quarter, non-cash charges hit its bottom line. But for the period, which ended June 30, both revenue and adjusted earnings grew at strong double-digit percentage rates. Here's what investors need to know.
Atlassian's results: The raw numbers
| Metric | Q4 2019 | Q4 2018 | Change |
|---|---|---|---|
| Revenue | $334.6 million | $246.6 million | 35.7% |
| IFRS net income | ($237.5 million) | ($21.9 million) | N/A |
| Non-IFRS net income | $51.2 million | $36.9 million | 38.8% |
| Non-IFRS earnings per share | $0.20 | $0.14 | 42.9% |
IFRS = International Financial Reporting Standards, an accounting standard similar to the generally accepted accounting principles (GAAP). Data source: Atlassian.
What happened this quarter?
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Atlassian's net income on an IFRS basis was diminished by a $156.3 million non-cash charge resulting from marking to fair value the exchange feature of the company's exchangeable senior notes and the related capped calls. An additional non-cash charge of $54.7 million was due to the writedown of Atlassian's deferred tax assets.
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The company ended the quarter with 152,727 customers on either an active subscription or a maintenance agreement. The company added 8,689 net new customers during the quarter.
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Subscription revenue was $180.9 million, up 50.4% year over year.
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Maintenance revenue was $105.8 million, up 20.8% year over year.
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Perpetual license revenue was $22.8 million, up 5.2% year over year.
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Other revenue was $25.1 million, up 47.5% year over year.
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Atlassian had cash, cash equivalents, and short-term investments of $1.7 billion at the end of the quarter.
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Operating cash flow was $117.7 million, and free cash flow was $98.2 million. Free cash flow was up 52% year over year.
Image source: Atlassian.
What management had to say
During the fiscal fourth-quarter earnings call, Co-CEO Michael Cannon-Brookes gave an update on Trello:
As we've said, look, our primary goal with Trello is still to continue to establish Trello as a brand, Trello as a product, and continue to grow the momentum that it has as a standalone business. We are doing more and more integration over time, but that's a long-term journey.
The company laid out some numbers on its larger customers in its letter to shareholders :
With regard to larger customers, at the end of fiscal 2019, we had 4,091 customers spending $50,000 or more annually -- up from 2,678 at the end of fiscal 2018. And we had 171 customers spending more than $500,000 annually at the end of fiscal 2019, up from 124 customers at the end of fiscal 2018.