EX-99.1 2 ex991-4272017.htm EXHIBIT 99.1 Exhibit


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Atlassian Announces Third Quarter Fiscal Year 2017 Results

Quarterly revenue of $159.9 million, up 36% year-over-year
Quarterly IFRS operating margin of (14%) and non-IFRS operating margin of 15%
Quarterly free cash flow of $68.3 million

SAN FRANCISCO (April 27, 2017) — Atlassian Corporation Plc (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for the third quarter of fiscal 2017 ended March 31, 2017, and released a shareholder letter on the Investor Relations section of its website at https://investors.atlassian.com.

“Q3 was a great quarter for Atlassian. We again drove strong execution across our cloud, server and data center products, and our innovative model continues to combine consistent revenue growth with significant free cash flow generation,” said Scott Farquhar, Atlassian co-CEO and co-founder. “In addition to our broad-based growth, we completed our acquisition of Trello in February and recently launched new Trello integrations for JIRA, Confluence, Bitbucket and HipChat. Together with Trello, we now serve more than 85,000 customers around the world, expanding our path towards supporting teams across the Fortune 500,000.”

Third Quarter Fiscal Year 2017 Financial Highlights:
On an IFRS basis, Atlassian reported: 
•
Revenue: Total revenue was $159.9 million for the third quarter of fiscal 2017, up 36% from $117.9 million for the third quarter of fiscal 2016.
•
Operating Loss and Operating Margin: Operating loss was $23.1 million for the third quarter of fiscal 2017, compared with $4.9 million for the third quarter of fiscal 2016. Operating margin was (14%) for the third quarter of fiscal 2017, compared with (4%) for the third quarter of fiscal 2016.
•
Net Loss and Net Loss Per Diluted Share: Net loss was $17.5 million for the third quarter of fiscal 2017, compared with $1.1 million for the third quarter of fiscal 2016. Net loss per diluted share was $0.08 for the third quarter of fiscal 2017, compared with $0.01 for the third quarter of fiscal 2016. 
•
Balance Sheet: Cash and cash equivalents and short-term investments at the end of the third quarter of fiscal 2017 totaled $503.6 million.
On a non-IFRS basis, Atlassian reported: 
•
Operating Income and Operating Margin: Operating income was $24.5 million for the third quarter of fiscal 2017, compared with $18.3 million for the third quarter of fiscal 2016. Operating margin was 15% for the third quarter of fiscal 2017, compared with 15% for the third quarter of fiscal 2016.
•
Net Income and Net Income Per Diluted Share: Net income was $18.9 million for the third quarter of fiscal 2017, compared with $17.0 million for the third quarter of fiscal 2016. Net income per diluted share was $0.08 for the third quarter of fiscal 2017, compared with $0.07 per diluted share for the third quarter of fiscal 2016.
•
Free Cash Flow: Cash flow from operations for the third quarter of fiscal 2017 was $72.9 million, while capital expenditures totaled $4.6 million, resulting in free cash flow of $68.3 million, an increase of 68% 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.”


1


Recent Business Highlights:
•
Customer growth: Atlassian ended the third quarter of fiscal 2017 with a total customer count on an active subscription or maintenance agreement basis of 85,031. Atlassian added 16,194 net new customers during the quarter; this number benefited from an increase of 12,789 customers as a result of our acquisition of Trello during the quarter. Excluding Trello, Atlassian ended the third quarter of fiscal 2017 with a total customer count of 72,242, an increase of 26% year-over-year. Net new customers during the quarter excluding Trello were 3,405. 
•
Trello integrations with Atlassian products: In March we launched new integrations, called “Power-Ups,” that integrate Trello with the cloud versions of JIRA Software, Confluence, and Bitbucket, and enhanced the existing Power-Up for HipChat. Now teams can customize their Trello boards to surface real-time updates on their work. Attaching issues, pages, and pull requests to Trello cards, or creating cards from their HipChat room, gives teams confidence that they’re working on the most important items. 
•
Atlassian Marketplace: With over 3,000 add-ons designed to enhance Atlassian products, the Atlassian Marketplace is one of the largest enterprise software marketplaces and passed a new milestone during the quarter, with more than $250 million in lifetime sales since its inception in 2012.
Financial Targets:
Atlassian is providing its financial targets for the fourth quarter and full fiscal year 2017. The company’s financial targets are as follows:
•
Fourth Quarter Fiscal Year 2017: 
•
Total revenue is expected to be in the range of $170 million to $172 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 approximately (20%) on an IFRS basis and approximately 14% on a non-IFRS basis. 
•
Weighted-average share count is expected to be in the range of 238 million to 240 million shares on a fully diluted basis. 
•
Net loss per diluted share is expected to be approximately ($0.10) on an IFRS basis, and net income per diluted share is expected to be approximately $0.08 on a non-IFRS basis.
•
Fiscal Year 2017: 
•
Total revenue is expected to be in the range of $616 million to $618 million.**
•
Gross margin is expected to be approximately 81% on an IFRS basis and approximately 84% on a non-IFRS basis. 
•
Operating margin is expected to be approximately (11%) on an IFRS basis and approximately 17% on a non-IFRS basis. 
•
Weighted-average share count is expected to be in the range of 235 million to 236 million shares on a fully diluted basis. 
•
Net loss per diluted share is expected to be approximately ($0.20) on an IFRS basis, and net income per diluted share is expected to be approximately $0.35 on a non-IFRS basis. 
•
Free cash flow is expected to be in the range of $173 million to $177 million, which factors in capital expenditures that are expected to be approximately $15 million in fiscal 2017.

*Our fourth quarter fiscal 2017 revenue target includes a revenue contribution from Trello of approximately $3 million. 
** Our full year fiscal 2017 revenue target includes a revenue contribution from Trello of approximately $4 million.

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 have been provided in the financial statement tables included in this press release.


2


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, April 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 10103769). International callers, please dial 1-412-317-0088 (access code 10103769).
Atlassian has used, and will continue to use, its Investor Relations website at https://investors.atlassian.com as a means of disclosing material non-public information and for complying with its disclosure obligations.
About Atlassian
Atlassian unleashes the potential in every team. Our collaboration software helps teams organize, discuss and complete shared work. Teams at more than 85,000 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 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 Atlassian’s products, technology and other key strategic areas, and Atlassian’s 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.

Atlassian undertakes 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.

3



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.
•
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 primarily of purchases of property and equipment. 

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.

4


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 March 31,
 
Nine Months Ended March 31,
 
2017
 
2016
 
2017
 
2016
Revenues:
 

 
 

 
 

 
 

Subscription
$
63,369

 
$
38,691

 
$
169,626

 
$
103,069

Maintenance
67,072

 
56,178

 
193,873

 
160,040

Perpetual license
19,495

 
16,430

 
55,206

 
47,576

Other
9,973

 
6,643

 
26,900

 
18,785

Total revenues
159,909

 
117,942

 
445,605

 
329,470

Cost of revenues (1) (2)
32,895

 
19,764

 
82,356

 
54,657

Gross profit
127,014

 
98,178

 
363,249

 
274,813

Operating expenses:
 

 
 

 
 
 
 
Research and development (1)
82,262

 
54,170

 
219,477

 
147,476

Marketing and sales (1) (2)
36,625

 
24,436

 
89,021

 
62,411

General and administrative (1)
31,190

 
24,507

 
85,581

 
59,416

Total operating expenses
150,077

 
103,113

 
394,079

 
269,303

Operating income (loss)
(23,063
)
 
(4,935
)
 
(30,830
)
 
5,510

Other non-operating expense, net
(492
)
 
54

 
(806
)
 
(730
)
Finance income
1,040

 
703

 
3,803

 
872

Finance costs
(6
)
 
(5
)
 
(51
)
 
(62
)
Income (loss) before income tax benefit
(22,521
)
 
(4,183
)
 
(27,884
)
 
5,590

Income tax benefit
5,060

 
3,111

 
6,088

 
3,485

Net income (loss)
$
(17,461
)
 
$
(1,072
)
 
$
(21,796
)
 
$
9,075

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

 
 

 
 
 
 
Basic
$
(0.08
)
 
$
(0.01
)
 
$
(0.10
)
 
$
0.05

Diluted
$
(0.08
)
 
$
(0.01
)
 
$
(0.10
)
 
$
0.05

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

 
 

 
 
 
 
Basic
223,333

 
212,920

 
221,034

 
172,272

Diluted
223,333

 
212,920

 
221,034

 
180,417

 
(1)Amounts include share-based payment expense, as follows:
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2017
 
2016
 
2017
 
2016
Cost of revenues
$
1,853

 
$
1,258

 
$
4,697

 
$
3,765

Research and development
21,628

 
9,495

 
54,786

 
23,193

Marketing and sales
5,336

 
2,754

 
11,940

 
8,560

General and administrative
8,965

 
7,739

 
24,688

 
14,876


(2)Amounts include amortization of acquired intangible assets, as follows:
 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2017
 
2016
 
2017
 
2016
Cost of revenues
$
4,907

 
$
1,921

 
$
9,307

 
$
5,496

Marketing and sales
4,866

 
22

 
5,281

 
65



6


Atlassian Corporation Plc
Consolidated Statements of Financial Position
(U.S. $ in thousands)
(unaudited)
 
 
March 31, 2017
 
June 30, 2016
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
196,882

 
$
259,709

Short-term investments
306,676

 
483,405

Trade receivables
26,481

 
15,233

Current tax receivables
6,070

 
6,013

Prepaid expenses and other current assets
19,337

 
14,178

Total current assets
555,446

 
778,538

Non-current assets:
 
 
 
Property and equipment, net
45,190

 
58,762

Deferred tax assets
179,775

 
127,411

Goodwill
311,748

 
7,138

Intangible assets, net
134,992

 
13,577

Other non-current assets
8,513

 
5,547

Total non-current assets
680,218

 
212,435

Total assets
$
1,235,664

 
$
990,973

Liabilities
 
 
 
Current liabilities:
 
 
 
Trade and other payables
$
71,381

 
$
57,886

Current tax liabilities
5,250

 
286

Provisions
5,585

 
4,716

Deferred revenue
221,860

 
173,612

Total current liabilities
304,076

 
236,500

Non-current liabilities:
 
 
 
Deferred tax liabilities
57,240

 
6,639

Provisions
2,942

 
2,170

Deferred revenue
10,884

 
7,456

Other non-current liabilities
6,914

 
6,545

Total non-current liabilities
77,980

 
22,810

Total liabilities
$
382,056

 
$
259,310

Equity
 
 
 
Share capital
$
22,422

 
$
21,620

Share premium
448,986

 
441,734

Other capital reserves
379,555

 
244,335

Other components of equity
5,166

 
4,699

Retained earnings (accumulated deficit)
(2,521
)
 
19,275

Total equity
$
853,608

 
$
731,663

Total liabilities and equity
$
1,235,664

 
$
990,973


7


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

 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2017
 
2016
 
2017
 
2016
Operating activities
 
 
 
 
 

 
 

Income (loss) before income tax
$
(22,521
)
 
$
(4,183
)
 
$
(27,884
)
 
$
5,590

Adjustments to reconcile income (loss) before income tax to net cash provided by operating activities:
 
 
 
 
 

 
 

Depreciation and amortization
18,485

 
5,678

 
37,780

 
15,584

Loss (gain) on sale of investments and other assets
(15
)
 
61

 
(422
)
 
198

Net unrealized foreign currency loss (gain)
209

 
(442
)
 
1

 
(8
)
Share-based payment expense
37,782

 
21,246

 
96,111

 
50,394

Interest income
(1,040
)
 
(703
)
 
(3,803
)
 
(872
)
Changes in assets and liabilities:
 
 
 
 
 
 
 
Trade receivables
2,155

 
1,003

 
(9,913
)
 
(3,311
)
Prepaid expenses and other assets
(89
)
 
(796
)
 
(2,859
)
 
(824
)
Trade and other payables, provisions and other non-current liabilities
12,707

 
10,717

 
9,308

 
5,975

Deferred revenue
25,035

 
15,272

 
49,352

 
29,524

Interest received
1,470

 
1,352

 
5,147

 
1,458

Income tax paid, net of refunds
(1,255
)
 
(961
)
 
(4,034
)
 
(9,161
)
Net cash provided by operating activities
72,923

 
48,244

 
148,784

 
94,547

Investing activities
 
 
 
 
 

 
 

Business combinations, net of cash acquired
(362,795
)
 
—

 
(381,090
)
 
—

Purchases of property and equipment
(4,623
)
 
(7,531
)
 
(9,921
)
 
(16,819
)
Proceeds from sale of other assets
—

 
—

 
342

 
—

Purchases of investments
(105,021
)
 
(318,785
)
 
(338,385
)
 
(435,428
)
Proceeds from maturities of investments
23,088

 
13,202

 
80,188

 
47,824

Proceeds from sales of investments
235,173

 
6,361

 
433,761

 
6,361

Increase in restricted cash
—

 
—

 
(3,369
)
 
—

Payment of deferred consideration
—

 
—

 
(935
)
 
(1,025
)
Net cash used in investing activities
(214,178
)
 
(306,753
)
 
(219,409
)
 
(399,087
)
Financing activities
 
 
 
 
 

 
 

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

 
—

 
—

 
431,447

Proceeds from exercise of share options
1,535

 
764

 
7,403

 
4,266

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

 
—

 
—

 
(5,395
)
Net cash provided by financing activities
1,535

 
764

 
7,403

 
430,318

Effect of exchange rate changes on cash and cash equivalents
440

 
371

 
395

 
22

Net increase (decrease) in cash and cash equivalents
(139,280
)
 
(257,374
)
 
(62,827
)
 
125,800

Cash and cash equivalents at beginning of period
336,162

 
570,268

 
259,709

 
187,094

Cash and cash equivalents at end of period
$
196,882

 
$
312,894

 
$
196,882

 
$
312,894



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 March 31,
 
Nine Months Ended March 31,
 
2017
 
2016
 
2017
 
2016
Gross profit
 

 
 

 
 

 
 

IFRS gross profit
$
127,014

 
$
98,178

 
$
363,249

 
$
274,813

Plus: Share-based payment expense
1,853

 
1,258

 
4,697

 
3,765

Plus: Amortization of acquired intangible assets
4,907

 
1,921

 
9,307

 
5,496

Non-IFRS gross profit
$
133,774

 
$
101,357

 
$
377,253

 
$
284,074

Operating income
 

 
 

 
 

 
 

IFRS operating income (loss)
$
(23,063
)
 
$
(4,935
)
 
$
(30,830
)
 
$
5,510

Plus: Share-based payment expense
37,782

 
21,246

 
96,111

 
50,394

Plus: Amortization of acquired intangible assets
9,773

 
1,943

 
14,588

 
5,561

Non-IFRS operating income
$
24,492

 
$
18,254

 
$
79,869

 
$
61,465

Net income
 

 
 

 
 

 
 

IFRS net income (loss)
$
(17,461
)
 
$
(1,072
)
 
$
(21,796
)
 
$
9,075

Plus: Share-based payment expense
37,782

 
21,246

 
96,111

 
50,394

Plus: Amortization of acquired intangible assets
9,773

 
1,943

 
14,588

 
5,561

Less: Income tax effects and adjustments
(11,162
)
 
(5,157
)
 
(25,587
)
 
(10,581
)
Non-IFRS net income
$
18,932

 
$
16,960

 
$
63,316

 
$
54,449

Net income per share
 

 
 

 
 

 
 

IFRS net income (loss) per share - basic
$
(0.08
)
 
$
(0.01
)
 
$
(0.10
)
 
$
0.05

Plus: Share-based payment expense
0.17

 
0.10

 
0.44

 
0.30

Plus: Amortization of acquired intangible assets
0.04

 
0.01

 
0.07

 
0.03

Less: Income tax effects and adjustments
(0.05
)
 
(0.02
)
 
(0.12
)
 
(0.06
)
Non-IFRS net income per share - basic
$
0.08

 
$
0.08

 
$
0.29

 
$
0.32

 
 
 
 
 
 
 
 
IFRS net income (loss) per share - diluted
$
(0.08
)
 
$
(0.01
)
 
$
(0.10
)
 
$
0.05

Plus: Share-based payment expense
0.17

 
0.09

 
0.42

 
0.26

Plus: Amortization of acquired intangible assets
0.04

 
0.01

 
0.06

 
0.03

Less: Income tax effects and adjustments
(0.05
)
 
(0.02
)
 
(0.11
)
 
(0.06
)
Non-IFRS net income per share - diluted
$
0.08

 
$
0.07

 
$
0.27

 
$
0.28

Weighted-average diluted shares outstanding
 
 
 
 
 
 
 
Weighted-average shares used in computing diluted IFRS net income (loss) per share
223,333

 
212,920

 
221,034

 
180,417

Plus: Dilution from share options and RSUs (1)
12,900

 
18,023

 
13,900

 
—

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

 
—

 
—

 
11,247

Weighted-average shares used in computing diluted non-IFRS net income per share
236,233

 
230,943

 
234,934

 
191,664

Free cash flow
 

 
 

 
 

 
 

IFRS net cash provided by operating activities
$
72,923

 
$
48,244

 
$
148,784

 
$
94,547

Less: Capital expenditures
(4,623
)
 
(7,531
)
 
(9,921
)
 
(16,819
)
Free cash flow
$
68,300

 
$
40,713

 
$
138,863

 
$
77,728

(1) The effects of these dilutive securities were not included in the IFRS calculation of diluted net loss per share for the three and nine months ended March 31, 2017 and the three months ended March 31, 2016 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 March 31,
 
2017
 
2016
Operating margin
 

 
 

IFRS operating margin
(14
%)
 
(4
%)
Plus: Share-based payment expense
23

 
17

Plus: Amortization of acquired intangible assets
6

 
2

Non-IFRS operating margin
15
 %
 
15
 %


10


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

 
Three Months Ending
June 30, 2017
 
Fiscal Year Ending
June 30, 2017
Revenue
$170 million to $172 million

 
$616 million to $618 million

 
 
 
 
IFRS gross margin
80%

 
81%

Plus: Share-based payment expense
1

 
1

Plus: Amortization of acquired intangible assets
3

 
2

Non-IFRS gross margin
84%

 
84%

 
 
 
 
IFRS operating margin
(20%)

 
(11%)

Plus: Share-based payment expense
27

 
23

Plus: Amortization of acquired intangible assets
7

 
5

Non-IFRS operating margin
14%

 
17%

 
 
 
 
IFRS net loss per share - diluted
($0.10)

 
($0.20)

Plus: Share-based payment expense
0.19

 
0.60

Plus: Amortization of acquired intangible assets
0.05

 
0.12

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

 
$0.35

Weighted-average shares used in computing diluted non-IFRS net income per share
238 million to 240 million

 
235 million to 236 million

 
 
 
 
IFRS net cash provided by operations
 
 
$188 million to $192 million

Less: Capital expenditures
 
 
(15 million)

Free cash flow
 
 
$173 million to $177 million



11