Yahoo Finance Atlassian Corporation (NASDAQ:TEAM) Q3 2024 Earnings Call Transcript
Atlassian Corporation (NASDAQ:TEAM) Q3 2024 Earnings Call Transcript April 25, 2024
Atlassian Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon and thank you for joining Atlassian's Earnings Conference Call for the Third Quarter of Fiscal Year 2024. As a reminder, this conference call is being recorded and will be available for replay on 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 Third Quarter of Fiscal Year 2024 Earnings Call. Thank you for joining us today. Joining me on the call today, we have Atlassian's co-Founders and co-CEOs, Scott Farquhar; and Mike Cannon-Brookes, and Chief Financial Officer, Joe Binz. Earlier today, we published a shareholder letter and press release with our financial results and commentary for our third quarter of fiscal year 2024. Shareholder letter is available on Atlassian's Work Life blog and the investor relations section of our website, where you will also find other earnings-related materials, including the earnings press release and supplemental investor data sheet. As always, our shareholder letter contains management’s insight and commentary for the quarter.
So during the call today, we'll have brief opening remarks and then focus our time on Q&A. This call will include forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, and assumptions. 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 and we undertake no obligations to update or revise such statements should they change or cease to be current.
Further information on these and other factors that could affect our business performance and 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 recently filed annual and quarterly reports. During today's call, we will also discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and are not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. The reconciliation between GAAP and non-GAAP financial measures is available in our shareholder letter, earnings release and investor data sheet on the investor relations section of our website. We'd like to allow as many of you to participate in Q&A as possible.
Out of respect for others on the call, we'll take one question at a time. With that, I'll turn the call over to Scott for opening remarks.
Scott Farquhar: Thank you for joining us today. As you've already read in our shareholder letter, Q3 was truly a milestone quarter for Atlassian. Today, Atlassian is a cloud-majority company. We have over 300,000 customers using our cloud products and have seen a three-time increase in paid seats in the cloud since we announced the winding-down support for Server 3.5 years ago. And while this is just one significant moment among many across our multi-year cloud journey, we are thrilled with what we've achieved to-date. We migrated more paid seats to cloud than we initially projected, and our churn has been consistently lower than expected from our Server base. This speaks volumes about the mission critical role our products play, the value they deliver, and our customers' desire to realize the innovation in our cloud products.
We now have an even larger opportunity in cloud than originally believed. You'll see us continue to execute it against our roadmap and do with more innovation to pave the path for these data-centric customers to move to cloud [technical difficulty] drive durable future growths. We're also announcing that I'll be stepping down as co-CEO of Atlassian on the 31st of August this year. It's been a difficult decision, but after 23 years, it's time to pursue some other passions I have, particularly philanthropy, investing, and to help grow and build the global technology industry.
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Mike Cannon-Brookes: Thanks, Scott. Yes, milestone quarter for a number of reasons. Now there will be plenty of time for celebrations and farewells as this is not Scott's last earnings call but I do want to touch on his news briefly. As you all know, Scott and I have known each other for nearly three decades and have experienced every major life milestone together. This company simply would not be Atlassian without Scott. And I'm truly thankful to have had him by my side every day for the last 23 years. In this next chapter, I am sure we will remain great mates and trusted partners, and I'm glad that I can support him through this both personally and professionally as I continue to lead Atlassian forward as CEO. Atlassian has always been my Number One professional priority and focus.
Scott and I have both won every hat over the last two decades, so I’m confident in taking over full responsibility of the company. I'm incredibly excited about the massive opportunities that we have in front of us across our three markets in work management, software development and service management. We also have huge opportunities ahead of us in both the enterprise transition and AI, where our unique team data and insights allow us to offer unique capabilities and unleash our customers' potential. As we continue to attack our opportunities, I want to reiterate the commitments that we've made to continue to grow over the long term, while returning to our historical margin levels. We have a thoughtful plan in place to continue to drive durable revenue growth, and we feel really good about our agile-approach to appraise behind key strategic areas like enterprise NII, while driving leverage as we scale, and we couldn't be more excited about the future.
With that, I'll pass the call to the operator for Q&A.
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