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Atlassian (TEAM)

Participants
Martin Lam Head, Investor Relations
Scott Farquhar Co-Founder and Co-Chief Executive Officer
Mike Cannon-Brookes Co-Founder and Co-Chief Executive Officer
Cameron Deatsch Chief Revenue Officer
Fatima Boolani Citi
Michael Turrin Wells Fargo
Arjun Bhatia William Blair
Quinton Gabrielli Piper Sandler
Gregg Moskowitz Mizuho
Luv Sodha Jefferies
Alex Zukin Wolfe Research
Adam Tindle Raymond James
Steven Koenig SMBC Nikko
Sanjit Singh Morgan Stanley
Ari Terjanian Cleveland Research
Fred Havemeyer Macquarie
Kash Rangan Goldman Sachs
Call transcript
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Operator

Good afternoon and thank you for joining Atlassian's Earnings Conference Call for the Fourth Quarter and Full Fiscal Year 2022.

As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Atlassian's website following this call. I will now hand the call over to Martin Lam Atlassian's Head of Investor Relations.

Martin Lam

Welcome to Atlassian's fourth quarter and full fiscal year 2022 earnings call. Thank you for joining us today.

call and have Chief Mike Cameron the co-CEOs, co-Founders Executive on Deatsch. Farquhar Scott Cannon-Brookes; me today Atlassian's we and Officer, Joining and our our letter we quarter fourth fiscal press a today full and shareholder XXXX. Earlier release for published and with financial year our results commentary and supplemental that press is earnings-related data you blog will investor find Work other and release our the shareholder letter Atlassian's of where The Investor including website earnings the materials, and available on Life Relations section sheet. also

As contains for always, insight the management's quarter. shareholder our weather and commentary

So, during time brief then forward-looking the on call remarks our a today include we'll focus will statements. opening have Q&A. call This and

risks, performance forward-looking statements. statements or materially to factors and the be other cause or implied from by or Forward-looking unknown that future any achievements achievements known different involve expressed results uncertainties, actual and may results, performance,

You upon events. should not look statements as future of predictions forward-looking

and other results make included Commission XX-F Form financial X-K. the the factors and statements assume Form affect such our to of assumptions be or we management's as Risk Exchange statements the cease filings from our could to obligation Securities current. and including section most recent company's should with no made time-to-time Forward-looking were in such they update titled or change information is these beliefs represent statements only on revise in such and Further -- that date Factors and we quarterly

non-IFRS to Please queue release if that the time. performance I'll our is in a we take accordance you we'll as the measures in like in data later at superior a Please and IFRS. opening another To shareholder come call or prepared turn one will best remarks. non-IFRS question on a mind substitute measures. the in question back many investor are not participate financial session. of sheet IFRS to available to call letter reconciliation addition keep website. Scott we'll measure between follow-up with Q&A to today's During are or IR allow measures discuss in this earnings and you that, A to non-IFRS the facilitate rejoin and and financial financial to These over also to financial as you our With we'd possible. that have do for in for

Scott Farquhar

Thank joining today. you for us

Agile our read business model. XXXX you've As Cloud Wealth shareholder all with Atlassian we PFM Management. and and and QX XX% across in positioned the in grew results over fiscal revenue great markets: year already uniquely XXXXXX with strong a year-over-year and ended letter three ended of momentum customers. differentiated QX DevOps our by having is

This fuel we're Now, while vigilance future we of and growth long to ahead can't with continue term macro look and take durable will our mention call a to long-term as interim take quarter as incoming I CFO. first that earnings as operating time last welcome momentum we're am fiscal this the Joe to forging we continue the the holds Binz as be also advantages. the way excited XXXX. at against I'd goals over CFO. our our deepen and to interim we predict proud into strategic my and what incredibly this level to execute as CFO conviction We're we

pass operator the call him so on I'll the to the excited to call for you introduce and earnings bring that, next quarter. Joe questions-and-answers. With are We in to next

Operator

Please Fatima question-and-answer begin Your We session. from comes question Citi. ahead. will go Boolani now first [Operator Instructions] the from

Fatima Boolani

Thanks everyone. question. for my Hey taking

migration as Just impacts the about I'm cloud encouraging growth. one the curious think is for magnitude XXXX cloud very fiscal expectations which that well you of when the of about around that to growth What the reiterated is you've migratory reiteration impact behavior prior the from are the similar is expecting in which What year of dynamic or fiscal base XXXX? i.e. XXXX customers fiscal from XXXX? fiscal you migrated type fiscal expansion much the of those to in how purchasing XXXX, as

Scott Farquhar

Scott here answering question. that

previously ago from reiterating growth earnings in FY growth expect year-on-year single-digit this to on we so year. XXXX months said given a approximately and We've remains for be the and of in there's Investor that and we call, few Day, now any As mentioned migrations, XX% also cloud our FY same. high that XXXX that comes

again, so continue. could that expect we And

we've that We And haven't previously, rate rate though our have looked similar XXXX at in in of our XXX% cloud, that in migrating are cloud. stated we customers, we instances. larger see a customers goes. XXX% What in do how FY dynamic, for have existing we a to terms expansion of the also of expand customers and the net

I And all that's stage. give on you so this that, can at

Martin Lam

This is Martin.

Just are of years. two expecting for to growth of points in clarify, XX% growth, we XX next the the cloud

Fatima Boolani

you, back Thank get I’ll Understood. queue. in the

Operator

next Turrin go Please from Your Fargo. question comes Micheal. from Michael ahead, Wells

Michael Turrin

strong end great you won't fiscal year the year. from coming -- nice a we a fiscal the a you've Scott, it stat, but on know I congrats CFO often, photo, suite always just revenue letter run long-term in very the as of see and XX% playbook. Thanks There's well. consistent of we great. emphasized with know generally, Hi. materials on

that confident contribute of the catch-up you. if there? and periods? are is gathered the you on consistent for wondering, we moderation experience just fairly it cohorts, cohorts do given you've number prior And see some side that just other you're to newer you then that, through similarly newer work can the there's So of Thank expertise the as a the model, landing, with

Scott Farquhar

XX% before I compliments, the we're year planned bloom too that. often customers. come think you results they this Yes you're we've the [indiscernible] this from chatting appreciate the in in suite. our safer the [ph] that this planting existing won't we good revenue years we year, in that, on our are to What how call And just given comes the about future. historically were of getting said the if any yes, thank seasonally ago for right And imports. you work I in on on year

sales very time. not carefully, to number of characteristics this return is the do force, investments, we a a about a long-term very enterprise all at have are make period. point any trying that So business in think particular particular the to where We extensive we in a

so two- think And we're are XX% over to now, like investments number we particular continue that to that the see likely, three-year but any that really in long-term off period. making change paying a to not we that's time, about

Michael Turrin

you. Thank

Operator

question next comes go ahead, William Blair. from from Bhatia Arjun Your Please Arjun

Arjun Bhatia

a Thank you, guys quarter. for great the Congrats on question. taking

Shareholder I'm curious, you migration macro But would as the know change of I addressed in relates you macro just to a to it -- you all As guys given the situation the specifically, the at shape little expect bit Letter. little steam are they hearing total seeing say front? reconsider a pause go ahead? and cost to you on is there, ownership to do or they and from customers, hey What going do of full and that bit customers the partners migration I'm

Cameron Deatsch

This one. that is Cameron, take I'll and

going So than to of this for on the journey We years has more migrating now. of ago cloud. up, a couple XX gave years been as know, a decision customers the on you and months three end life, heads migration announced make over to server

good a planning, that's or that's stages administrative of is get, and they this those of Many technical perspective a whether their costs hardware unlocking the in ROI from when at increasingly savings to reducing move surprise. our their cloud, that of perspective, larger conversations, the of customers we none costs, are the a own new course cloud. honestly about ton innovation whether and budgetary getting So in different are

the that, to have cloud. addition research customers into Total Impact we get actually In we've report, that Economic a cost actually when to they overall where savings, done move deep Forrester the

very the a we to of results. And results answer short planned no, with you lot the continue is, as in happy migrations that, So recent plans saw our our date. QX and are

Operator

your Jim Your Sandler. from next Fish state comes question question. Piper from Please

Quinton Gabrielli

Jim growth guys. on you. relative But out my terms numbers Fish. This specific really across on than Looking you're if for a demand your side perspective Thank second, is from geographic at there more for the a all looks here place is it or taking geos. can keeping wondering is strong strength? Hey you eye anything to the maybe others? call of like that one Thanks for Sticking there just in question. weakness Quinton

Cameron Deatsch

exceedingly the additions funnel, in Cameron in. I'd course Thank we again. Quinn. all migrations And up say Ukraine February. of back retention coming our and here starting watching across war stages that's being rates vigilant set this are with you, upgrades, Russia funnel, whether our customers the really new of

to trend very industry of customer date to have we or date. special any segments news gives good have to see size even keeping in EMEA as geographically a that been eye us pause The worry or region. the yet We is in or specific in

to continue So a something new hawk, share like there's we no watch today. but to news

Operator

comes question Moskowitz Gregg from go ahead. from Please Your Mizuho. next

Gregg Moskowitz

you. Thank quarter Anything with for you well. been just growth after center those you're at products clarification wondering few everybody a the 'XX. comment on in Has tell about last regard their any where may. time change months? very comfortable you're to And I believe over quick data low Shareholder of I just revenue if models, just moderating much. with to to the vague. us mid-XXs given customer numbers QX the able somewhat help as to projecting sold Thank with mix stand? in And the different fiscal growth to the was then somewhere good consensus very Letter Congrats prioritization? I'm consensus being a there if if this

Cameron Deatsch

question. mix. handle new This the I'll that is speak CFO, of Cameron. interim I'll our to the part second let

perspective. mix, to to-date. demand, any vein cross-sell you compelling very the with use, to we Trello the Management it, one our lines. see to continue take across with competitive Jira a I struck from -- have customer as don't As to Jira products. product surpassing that's we seem no I offering overall strong far well we there Software shift easy to to have to seen out demand away of Confluence, want strongest that call continue feature Service as our highly pricing market very customers motions as name as Service from Jira board. And in the in demand continue very strong a across complete other do the see XX,XXX just But not our significant have

help, that and [indiscernible] well cultural see to transformation tools we projects throughout, this technical these running digital tools to projects As continue and they're take those transformation. help as manage embracing our needing large as people

out as us to continue this all back in or the We figuring whether new hybrid. see are working of way of remote office it's

see strong. products And collaboration that the to there. We half second demand for to to continue continue Scott be

Scott Farquhar

shape have to the revenue. server new for people question of your we to just Again, offerings. around story those our Yes, DC reminder a just end-of-life

directly cloud choose our have they process center if they timeframe, or a so to And to to as they're choice to make moving to longer starting step not a they're whether data longer move cloud. or a

happy and X/X we've come. already. again that Investor migrations migration X/X so, data Day about migrations our really come the our actually customers happy of And at from our been about our We with center said of

we directions really starting cloud. so, all And in towards it

Now quarters. any quarters those And on that's we that happening. we the up you Letter, next QX center to see think seasonality specifically maintaining how end in Shareholder through four in the more we terms highlighted before moderating can't into terms but that, of growth might in over details give really the just give the data of of three we high sort over our revenue remaining migrations might

Gregg Moskowitz

Yes, thank you.

Operator

from Thill next your Brent, Brent Your comes question question. please from Jefferies. state

Luv Sodha

planning Luv into on an it investments where Thill. in us It Brent margins Thank R&D. that This are you. directed looks And to? real you sounds this some continue like ask into is color maybe question in the these a quick to on was quarter. to being increase next Could you're year. investment Wanted there like Sodha for give

Scott Farquhar

before. of for do how those question. highlighted opportunities every we've the couple And opportunities. about, Investor business. that that in myriad migrating but for think of at business. we had the sort they're as migration. products them you invest and And our management our and a and demand us. customers migrating incredible to And to behind can opportunities Thanks those seeing we add We're getting we to for the for a incredible those our of for made we on. to decision cloud mid-teens. than cloud. the result -- the And all the them, for invest be great of seeing behind ITSM there for are And opportunities them. that's if of We've we throughput are great seen we margins our with we, and can Investor Day Yes. customers long-term. And onboarded some a opportunities great to we again, starting think then, kind those demand about XXXX we go the If And team these we a incredible in I had discussion that, are Day improve customers past features the our as a products heavier our that shareholders But corner it's our for there expect we across in these in of said can in And we also FY market. us

largely And are R&D. investments so you those of in areas mentioned are as

are where customers can huge the of investments some seeing features. sort really our XXX% to of our require features the of stage because We cloud getting there more and we accommodate

doesn't handholding of well shows up our in that because the some to the areas P&L. in You in investments other R&D it example will are also see get areas in other across they P&L, show customers as as for some turn

but largely other may the migrate. that helping you of P&L just R&D areas So some our see to way we're impacted customers

Luv Sodha

Perfect. Thank you.

Operator

Your question state Alex, question. from Alex comes next from your Wolfe Research. Zukin

Alex Zukin

guess, we're or I kind happening the impact that data the seeing to the of some like slightly of seeing. real quick seeing then when from Perfect. congrats time business, the you what much conversion versus are the great Thanks follow-up. impacts environment? and are Or called and so seeing our why macro just the of paid a customers? I've delays larger other in think versus analyze learning only maybe Is on in the macro cycles think customers. do out not impact companies other When you side. about you in demand guess that's got two what's sales quarter. pipeline, slower I customers you free it a I you longer you're And -- migration dissect as in you and are think you the

Cameron Deatsch

This can I first is cover piece. Yeah, that again. Cameron

teams mentioned as our migrations, that's results, our been future. QX call to in do be net supporting to operate our have this more expansion productively and rate that's this And additions to our great help strong. our see upgrades, products, And see. what to you existing that's continue our overall already continues you you largely many we the we've demand funnels in been discussed is products exceedingly of our So across cross-sell on see customers here. what their work for the retention And whether

user Those and one in our customers continue years that's so premium As of And want more in XXth customers thing in seen is enter April, they and in -- the all of we people thousands far many, the a the as had standard two they that just user experience, signing realize this that literally are are you into calling slower up card. to get plans quarters. last a to we capabilities that seen to their slight land previous to many plans. timeframe and thing reasons we've out, credit slightly simply in that plans month we're And about pay add all relatively we they customers is came have the mentioned June net or worth premium new additions. cohort free the many, rate those Shareholder the of need our than that in we've paid what converting XXth at free Letter then either just but an the which that in May this

geography, the those to are to a they're seems simply quarter of haven't love activating, say there. but using or It industry. specific those I'd just value in they cohort last and hit products they're the segment no a or cards customer in customers general an up specific put getting that credit paid There's product, yet. Now signing been just have those walls that's

So that's that continue we to one those vigilant. of areas be

see are R&D the that those chances focused plans multiple onboarding customer us growth revenue take And existing convert not our continued XX% teams multiple future. existing of gives and growth year. our more that in That them customers teams that away it remain paid from to the have We we analytics as our well the more as in to in drives than also active. base, on ensuring teams does

Alex Zukin

expanding going the guess that the business, How growth growth I like are a extraordinary is growing existing maybe the that center center And center data question, you're part to customers just Perfect. versus what growth In get in of I growth. cloud data to server that apologize quarter. your think for data accelerating back the to within driver in of seeing of data center? activity multipart to center customers XX% for much from of in understanding center migration addition migration seeing I the migration data a the and as sense to cloud points coming range data of server from from cloud you're the that just XX versus the growth

Cameron Deatsch

Got you.

I think address can that. I

So then to overall the to center journey. server data cloud talk demand, we cloud about can hit or first that and data I'll center

get So as commitment as it's years, center. way to seeing customers. our of putting see data to out for give get all go to we than term. most we which And we've possible And and you or what the decisions that's long those end-of-life And we can is so where to Atlassian That's doing already where mentioned incentives up. increased good either been three customers that to are are have cloud, message customers of lead many innovation cloud, an they they choose investment two as this optioning more we every going see with. quarter heads increasingly obviously customers server

it see and stone data seeing time the a a and that customers that just stepping to But down fantastic and the course those them again more center is of this again, we they're cloud data optionality journey. as product. gives jump when However, center

our cloud stepping I historically third statement. you to anything drives to Scott, have our which we've that XX% cost don't, you And roughly growth of add into XX% have center from but drives a So from that? center. specifically that of Okay. growth said, stone we've customers much overall come share. how that data see it's do customers, migrations that on shown our I all roughly proves the coming can data That's overall know are

Operator

state Tindle next your question please Your from Adam, James. from question. Adam comes Raymond

Adam Tindle

I just investment very Thank on trends. much. Okay. to margin and you operating wanted period the touch

XXXX offense. in about You talked playing mid-teens fiscal

said the you the wondering of think investment second I a in that's lower here. indicative I'm half of of year. multiyear if period

certainly expectations earn investor just invest XXXX. I'm how if You right to based Thank to the seen I in since Street sure what is about wanted on so consistent with I think we've not you're thinking you. things. improvement set modeling that's level fiscal far.

Scott Farquhar

Thank you, Adam.

incredible Just flow been look business does remind amount to has Atlassian Day, And our historically public public a said everyone during seven we've the a which model. this of generate back an arctic over company, large and free we business time, before being cash if and at the Investor is a model years you company margin returns.

and that's they business. more long-term to we than abundant so the if ever And before that's opportunities that we've invest. are like the we in look of And the fundamentals sort the reason seen have at

for we your on said is margins period, mid-teens guided FY the investment specific what going year FY XXXX. is and through Now that investment we've to XXXX

at end any XXXX. FY the guidance given haven't doing be of FY XXXX we'll for that We and

Operator

Your next go Lee Peter from ahead. comes [ph] Peter, from question Bernstein.

Unidentified Speaker

Thank you.

a of So look plan. migration kind at your overall taking

off it maybe that slower see is the do seeing you $XX base? effort how been about maybe least you're to to bit shrinking had a curiosity anticipated affecting bit your ramp Has something was a stickier? it which and from itself? where think and talking seen getting to of that think I year customers are originally How you having I of than more been migration million you're cloud existing the migrate? time anticipating. customer roll maintenance you And encouraging And at little spend had it's a a than I little of more now down now

Cameron Deatsch

Yes, Cameron this again. is

to why rates the And to good to cloud. plenty center As existing to they give decision not migration people that customers the out XXXX customer board whether of high news server make mentioned, reasons we retention cloud server offerings. the we maintain to incentives it's base going that's want way have effectively February whether any customer for going we would The until strong. this. data base, our Obviously, or to they or our remains demand remove any throughout along very to continue we where continue to of cloud blockers on adopt is entire a move across and the see option

to to loyal center these remain we continue see we decision they're there best the see in data The out technical largely their what people see as customers and happen, we option good figuring their server and Atlassian cloud. renewals So part for to out and is companies. continue to continue the is long-term

And We to we've line already focusing cloud. are date. we been mentioned, largely as migration with our have on in plans

there vigilant continue cloud. to we'll incentivize next customers the to our as we continue to year, be choose So over

Unidentified Analyst

And to or Do to see that in that like cloud through? continue migration see you're I you are success built to to seeing some expand personnel think have being kind going been you've you investing the that out, of fully personnel.

Cameron Deatsch

significant in volume are We we migrations. handle the previous technical that's those customers again. to long as fairly engineers and migration in as the more the stable coming well and a management across Yeah, through a migration This as can people we dedicated come Cameron and so tooling is cloud help they over next and migration a fiscal dedicated date did of these teams variety coming make the have and that investments quarters. -- year believe can support

Unidentified Analyst

you. Thank

Operator

from Your please Nikko. go Koenig Steven, Steven from comes next ahead. SMBC question

Steven Koenig

a Great. lot question. Hey, my thanks for taking

hiring wondering been I'm about. and you've see you're let's your investing talking So that regarding

progress cutting hiring lot of is out postings solid on in a congrats by in progressing me. of quick Any price of then on very your Thanks Your that note your I'm their on want? the just finding relative since hiring center. can February addendum. And to much are that's talent how I add to -- there data hire adjustments pricing your And certainly increase your terms job if plan a vendors for remaining comments borne great you look your as are all a on at wondering server whereas plans. tactical plans other your pretty XX we and quarter.

Mike Cannon-Brookes

can Hey, Mike I that. call. lot questions then getting on of it's Steve, be And here. take today's a product

one Look we're me So of in let offense. been and playing we've jump the talent take ones. pretty that clear right

tell We and we We're cash There's this advantages competition, continue go to over to that time that quarter strategic as quarter our say -- the they they of using competition. funding would period out. in deepen increase right? less position have the

so, we a opportunity have good think forward. And really we going

have of over and two with retooling where years our are time we the hiring a really We really, pipeline lot at spent excited the also last stand moment.

the multipliers and had we've to two last quarters we in that's we marker. look an our number hiring volume Obviously, so. I don't biggest absolute two continue believe do or at the of of quarters So just sort

no and We continue are and talent fit to other also, mentioned, period. position that sure to realized there. we a incredibly that the strong things hiring company will I in cultural The we huge that R&D play of strategic were made very in as just would which important the again We as a us thing already There's in going scale. deepen incredibly challenge a available to we is that the to Scott the XXXX paused continue And and do difficult similar while that easier other last those then we say majority for doubt then as think positions for have. to is circumstances. of that get the a obviously that quality or same little and in difficult we push making we sort that out that's to to reminder a try relative XXXX, companies and is of

four results five for we've and so hired product. real of that coming the a period And out three, the and the we years benefits updraft and that this as of through with we afterwards saw products the got well

us such of So in as we're we hiring all opportunities them. massive believe have in behind markets. front three we And of our

Steven Koenig

That's months price comment of great. Can pricing on in since increase? you the say actions February last six any the note guys

Cameron Deatsch

Yeah.

this is So Cameron.

As you have on already server in price did products and increases our February. mentioned, center we data

we changes they as on across -- of budgets decent No of the they're pricing changes customers, websites for up our available and price board plan well accordingly. our remains and All to all on these customers give and heads we public our other so a as changes their pricing are can all relatively made consistent. strategy price our our mention

Steven Koenig

Great. Great. Well, thanks color. very much for the

Operator

next comes go Please question Morgan ahead, Stanley. from Weiss from Your Keith Keith.

Sanjit Singh

the Thank Sanjit Singh question. you for for taking is Keith. This

question another Somewhat the had sort investment. we annoying, on for of case

XX-plus management take teams, to active monthly trying you users. business, from X.XX million customers, As think you you business active stands XXX sort of line billion of getting $X if sort And users, work look of expanding with at where the business and developers look I to customers, today, you to one at a IT have have initiatives. where business, monthly million you're the million the

you has the longer $X tail going to I As and markets this and of million be as you economics business? economics attractive out sort these sort What that unit the how of could of the to expanding the into billion was think to unit into does built wondering, X.XX frame and longer these what if markets. this versus customers, of are do and product get of customers tail customers? newer here expand into you today users the from just -- to business

Scott Farquhar

we very And in we don't prudent moment. look would business we've continue as the And change I Look, can unit feel that forward. take very our I ROI at high bullish always think forward. Mike, opportunities been of stewards Sure. capital invest why I in the obviously about economics that again. to see and going

mentioned You knowledge there. and are billion workers. approximately numbers the There are in of there Obviously, millions or some our millions and around one of world. businesses millions

possibility, inside amount huge a of have expansion we our even just customers. So existing

north again quarter. remain of and the north that we we As segment NER XXX% Cameron in XXX% large and of saw customer numbers this in earlier, mentioned our

where and are more And not many, point further in Management get employees water in expansion Confluence specifically we our customers, we view that segment so, in touch large those employees of have further into to to look from the do Atlas and -- the wall-to-wall that within those many an of millions And to organization all Work in see and continuing companies. customers. you access of those existing Trello,

as other incredibly continue just in the terms product thing and Cameron focused growth we're well where economics unit trials the the and the obviously say be think mentioned evaluations earlier, I our of incredibly free instrumented I on got understand funnel would to, this. there and that, sales is not year. our believe evolve I and of and we marketing spending dollar conversion doing of every through absolutely improve a on value expansion customer we our best-in-class the base. we're continue of and XX of or We've rate to the and really experience years funnel, single

capital products also we've the product power got are when expansion the a We're our on the we economics. bringing to I really, very it across very activity motions. when more have it and should proud change keep in set. And very, raising sales how focus don't product-led to same enterprise that to customers automated human We all of and but it do the the that at to same time again, funnel, bar we unit we just and in in being term, activities good on the those comes premium lot year. also We of think, really new long growth the coming activities. it sales it out, take don't at comes every whole more expand take of efficient

Sanjit Singh

the the quarter. congrats you. and subscription on Really results thoughts cloud appreciate data great center this and Thank

Operator

comes Research. next go Your Ari Cleveland question from from Terjanian Ari, ahead. please

Ari Terjanian

pull Letter. more release team. to press what the areas Hi, more the results. the opportunity. if is detail industries, to do deal these that that trigger, taking was because on some to complete, for signing? hesitant had and was want hoping just Europe could move the caused just know Germany, you the think congrats double-click I you historically Is great I that Thanks in provide cloud. or Deutsche that out on regulated banking, just them are cloud called Shareholder the question I migration Bank And the on to it or

deal provide color could a these you please it geos and think and beachhead Thank verticals on cause if you. some wondering could just be that more if So start you others in moving. to and

Cameron Deatsch

Yes.

Yes, again. was deeply time. Deutsche Cameron, some quite I Bank for involved with So,

for like and journey up that a they've investments the they checked us them to just users conversation for their planning we've a moving no, that We've fact, like started about our time. quite think, and it's and getting answer regulated they their your deployment cloud to are organization. speaking But they serious work bank I requirements years. our you so from for nailed name well getting perspective our regulated, for the a some things for years. a requirements last begin I To saying open And of data journey will done our that testament on that and about They been us it door are had customers have scale Germany a largely literally applications it adopt them Many day. they multi-quarter of allowed running it single the that to shows, band have -- inside question performance as than e-mail multi-month we've we've specific center cloud. just cloud journey. many the And to are scale every and for with to have right financial highly made In get boxes applications mean them years that and the fees, of you services or our And over size data. in opportunity more have many important cloud. couple in massive the started and there, be as mission-critical all been regulation German complexity customer customer bank. been the its it the how the cloud migration are we

out having they've cloud incredible throughout looking forward them, have but on to So very and upcoming this that in we quarters. cloud been them the the exploration we plan it's XXX% diligently something to partners with are of

Ari Terjanian

you. Thank

Operator

Fred from question Your Instructions] ahead. next from Havemeyer [Operator please Macquarie. Fred, comes go

Fred Havemeyer

of rates. Shareholder your noted this net rather ask net north that throughout expansion about the rather in XXX% Thank today been you discussing were wanted I or retention net to strong because that rate. Hi. cloud posting XXX% I you. XXX% retention rate topping you've saw year Letter larger customers net cloud or

a from can that reach that? with to where So departments Is us a new this to you kind that appreciated. what's help that growth understand expansion technical something Anything is greatly or coming help I seat-based can ask upsell be to expansion into is of wanted cross-sell driving characterize non-technical would departments? characterize

Scott Farquhar

you appreciate the question. Day and I Fred, in from year think are Shareholder Investor -- stated last our numbers of some today. in we've correct them our asking reiterated our and Yes quoted the Letter

tens think an even seats. see be different of like they maybe been large and been on we with vectors business value such other. part a and until a aren't And we couple maybe our a are coordinated seats organization in from a that has each and that about model Atlassian's to Bank of all there number if they've And those small small of where starting about land teams or of motion team thousands Now it way products enterprise even expand organization teams number multiple they historically one land -- talked of expand the the of a you with team up continues deployments incredible vectors. with across a the inside maybe Deutsche

there. where land you a so there's expand and And aspect seat

a We customers product see on expand that basis. also

Atlassian how other product integrated. where to they've they're and and well discover can they do with we problems start their deeply come what particularly, to value they cloud they together, then in that these So that have solve products work got back the that products one do

another And so one. that's

premium have additions now We with enterprise. and different

the the And to functionality and they want functionality products. so unlock in love additional customers

can application for want third-party to I our so as our versions and well. I marketplace. pay And enterprise premium on to willing they're go is on also but touch one

functionality marketplaces in of have easily the in customers We our areas functionality or software of marketplace. enterprise can and new whole incremental adopt one best

And very how across functionality see various typically across about that our the comfortable can in our very one all ways. how see a additional we sticky they customer. take, there's not we so expansion part unlock specific and forward vectors we're becoming organization start great those And but that given much of they once feel going customers and products are

Fred Havemeyer

time. available the if to I you wouldn't market up can it to for wanted also customer I also here now and Thank of getting another your journey ask that scale today user scaling. And one Because think scale I base. more that take really in If noted Shareholder been about get entire XX,XXX non-current instances the I there the difficulties are you. are in Letter cloud out project that management users. tools looking large to a some has achieving across recall have other some you

a would management scalable to So you ask live project been collaborative does take what what view as generally build I And journey competitive to that highly wanted tool? And has it that a such moat? like?

Mike Cannon-Brookes

the in Mike I things Sure. There's data specifically point to of there testament there's teams infrastructural the scaling take offerings R&D our terms question. and few cloud. would a teams engineering I It's here. there. in to can Look, that

for listening. or in reminder I case We started at X,XXX about, anyone instance you our a mentioned cloud single expanded X,XXX journey Jira five to With to of Software a range. we then the seat that So XX. there think

ended XX XX in early and access program. I have XX,XXX just believe we've we've we think and now I

parts So, back-end we've allow increase to in infrastructure Software the instance. At scale same our a that Jira instance time, to continuing beyond Jira single of a single scaled multiple further other amount of Software.

get unlimited So you see that in our enterprise instances. addition where you

investment user obviously go beyond perspective our say, lots on amount hard. scaling continued continued really one an because and spend R&D identity you at world-leading would revenue from problems of the XX,XXX very that's have moment. to our It's a customers and testament instances can those is just of I in difficult. we of this the can you So that there. And stuff it's

to upwards. obviously and the are infrastructure and a period discipline You need ambitious work long to be out to hard scaling of continue that over of and a continue what parts lot work time to of push

many and who limits. many, customers' well center have were on-premise We the beyond data XX,XXX

won't see higher push larger higher there. work you us limit So We'll with that those to and customers. as we continue stop

handle It cloud most everything that layers below built the the say in Atlassian the would we've happen testament of I happens in it's software have we people doesn't have to databases layer Lastly to cetera that other actually mentioning videos infrastructure our about a scale the because services all way the scaling world. networking that Software platform with is serving your in platform that, from through Collaborative team. Jira connecting various all it's all to shared it's et on whether whether users. the or

the user So if an time, awfully it's customer long you a it experience get mentioned satisfaction. customer you and takes low poor very

smarts in sure exact a find with sheer scale find as you that all couple and trying of across amounts to AI the very huge your a the a very, scaling as that dig mention of to when employees user, we experiences XX,XXX can. fast person there's that's user And about make just example numbers we sure strokes happen and you're not key it's that learning the fast. at making for So machine

probably lot and time spend and more come. So on and of numbers look MER that in we continue cloud effort to our we'll reflected great to so awful do and

Operator

Your Sachs. Kash from Goldman question go please comes from next Rangan ahead. Kash,

Kash Rangan

probably be and much. we Hi, with in, of that coming on caliber is Joe's a you CFO Street thank [Indiscernible] CFO the bag say and in set can needs that to have achieve have possible you the this very in with comfortable have Microsoft that that our cloud quarter, level new ensure transition? new in wants investments you wanted very company you of the because respect cloud executive. I you congratulations comfortable to the On that guide make to all a coming how the thought, factored reset imagine I that but would Because transition. margins to terrific margin to are

That's the level So and congratulations. it already much Thank comfortable I'm into and just with of investments been you model? for spoken wondering guided for me. get the how that very did have Joe

Scott Farquhar

XX Thank been years. we've months. the just for a This brings you. been really last you from their of for how how coming the Mike running set how answer public set top. celebrated how last our our individual shareholders about anniversary around philosophy I'll Scott Atlassian in open And is is CFO we business into interact we the and whole guidance bunch and year mine few seven and have their And experience transparent with I way we years and XXth in that. work, that an it the here. each we and -- should whilst opinions run at around

deep way And us. material to team. exciting, have But with great as really that's guide, had he's Microsoft here really they to their we transition. the way his extremely that we there and to experience of know given early a And so, get to to for the we changes be previous excited way Joe his the a well board. really, to to to allocate on that have capital He's excited any excited that. interact the don't the cloud front shareholders with we Joe in at we're And to I his us we opportunities with done invest own about our super result be positions. amazing I'm across going help I'm addition ability expect of

Operator

question Capital KeyBanc next Markets. go Michael ahead. comes please from Turits Your from Michael,

Unidentified Analyst

Billy give you've events? for different once unlock think industry Thanks Michael. doing FedRAMP maybe you question. much you the the Can been on just taking you these around verticals? sector, is out work us the opportunity, for This on public there and is Hi. update how And an regulatory

Cameron Deatsch

This is briefly to that. speak I Cameron. can

that knock-off not mentioned, diverse but platform, over actually cloud many scale, we our with we very in, regulatory years, very, as the this compliance transition. years in has. couple these and And we customers a capabilities, quarter start just single to all last continue the announce Mike we've that as our data requirements mentioned before, of just every invest been to cohort So and of able of you see base gets their cloud new cloud unlocked customer and to single as every requirements, new these quarter

just our that, journey. that as ahead a roadmap. can should that we cloud been our public all with area, forward. do on our to of their addition future-looking in publish roadmap increasing so up that's confidence And And teams going overall In on of customers, critical plan gives as for our start migration actually our they they part engage well when this conversation

in and have additional done we months, last requirements Banfi, to work we the our So, just board, HIPAA, we have XX on we've across continuing all and the continue compliance of to SOI FedRAMP. are our

our across part customer we base, cloud-first is the data is, there's federal up we stop Great today. have to and customers But many to hit FedRAMP, only with in. mandates, invest there doesn't invest significant looking do specific them industry-related and that regulatory go and those cloud federal all Our specific have to all to we continue agencies simply the to platform actually will base it customer requirements. majority still continue although, efforts center for cloud in of those on other server are like ability of

they're more even highly and our out and to confidence, secured run to build have out be apps has partners up to within as customers even do to new was well I that, infrastructure. giving as to platform, want opportunity Forge them Atlassian our our build customers cloud apps addition to In in industries. cloud which deploy call the opened more capability platform, basically the allow Marketplace Marketplace our within regulated for if our This

Operator

Mike Thank our that question-and-answer for turn you. to the will over session. call now closing remarks. And concludes I

Mike Cannon-Brookes

everyone. Thanks

for before sign-off we Two small the things call. Just thank joining you here.

on Scott CFO congratulations Firstly, interim role. to his

done super I We're join us we take wheel. October fine Barrowing to think to him job joining excited the our forward today. have any a call. he's on look to emergencies Joe

events on our the last in saw our unique theme each earlier success you of as building tailored XXXX Secondly, to Shareholder be quarter, Letter, we'll the markets. now holding of

Francisco with XXth Work in Life. in Management we're September kick things calling we'll San event, off Center a Work September, that Chase on specific So, the the in of

call can With today. differently together. you out check everyone come our joining and So it please thank see that, how for work teams

questions. the a always, of not Atlassians support to continued As you least, on And we but last all fantastic your year. thoughtful and appreciate really definitely all thank

to you next We will talk quarter.