Australian technology company Atlassian was famously started by Mike Cannon-Brookes and Scott Farquhar using $10,000 in credit card debt. The idea has since turned them into multi-billionaires.
The NASDAQ-listed venture recently celebrated its 20th anniversary and this week celebrates posting an annual net loss of more than US$600 million (A860m).
Atlassian (NASDAQ: TEAM ) released its fourth quarter and annual results today. Quarterly revenue rose 36 percent to $760 million from 12 months ago. Subscription revenue grew 55 percent to $597 million.
Annual revenue for 2022 was US$2.8 billion, up 21% by 34%.
The company’s operating loss for Q4 was US$63.3m, compared with a loss of US$7.5m 12 months ago.
Operating loss for fiscal year 2022 was $106.5 million, compared to operating income for fiscal year 2021 of $101.6 million.
Net loss for Q4 was $105.5 million, about half of the $213.1 million for Q4 12 months ago.
Net loss in FY22 was US$614.1 million (A$882m), while net loss in FY21 was US$696.3m (A$1 billion).
“We ended fiscal 2022 with strong Q4 results, growing cloud revenue 55% year-over-year,” said Mike Cannon-Brooks.
“While we cannot predict what will happen on a macro level in the future, we are moving forward with certainty and vigilance as we seek to deepen our strategic position.”
The number of heads increases
Atlassian ended Q4 with a total of 8,813 employees, a net increase of 634 in the quarter and more than 2,300 for the year, with most of the new hires being in R&D.
The business added 8,048 new customers to 242,000 in the quarter.
Atlassian’s share price is now down more than a third for 2022, following a small rally in the week before the results, following the broader tech market’s decline this year. But it has halved from a peak of $458 in October 2020. .
“It’s another fiscal year chock-a-block with wins,” Cameron Detsch, chief revenue officer at Canon Brooks & Farquhar, wrote in a shareholder letter published by Imomo.
“We ended FY22 with strong Q4 results across our three markets: agile and DevOps, IT service management (ITSM) and operations management,” they wrote.
“Not only was our customer base 242,000 higher this quarter, but our headcount grew by 634 new hires in R&D – a testament to our team’s ability to execute against ambitious hiring goals.”
The company pointed out that operating expenses have risen alongside revenues. Almost 50% of the expenditure from US$1.651 billion this fiscal year has reached US$2.443 billion this fiscal year.
Atlassian’s continued shift from organic word-of-mouth growth to higher marketing budgets continues, with marketing sales ranging from $195 million to $567,691. R&D expenses increased by US$432 million to US$1.397 billion.
“We strongly believe that Atlassian is uniquely positioned, with deep momentum and a distinct business model,” the shareholder said.
This gives us the confidence to make further investments – despite the current environment – that will fuel more sustainable growth in the long term and enhance our strategic advantages. Now we know this is an unusual choice.
Atlassian has named Microsoft veteran Joe Benz as its new chief financial officer (CFO) and chief financial officer, starting next month. He spent the last eight years as vice president of corporate finance at Microsoft.
The company forecasts total revenue in the range of US$795 million to US$810 million in Q1 FY23, and that its loss will triple to $US1.17 per share, higher than Q4’s loss of $US0.41 per share.
Meanwhile, after flotation of Atlassian at $21 per share in December 2015, Farquhar & Cannon-Brooks continue to control the business, holding more than 88% of the voting power and 43.08% of Atlassian’s outstanding Class B and A common stock. Shares – Just under 110 million shares in total.
Under ongoing preliminary business plans to sell off their holdings, the affiliates want to sell about 2 percent of the stock — up to 2.16 million Class B shares each, at current prices, then sold in the U.S. market. A total of $980 million.
It now has a market value of more than $100 billion, making its NSW-based co-founders Mike Cannon-Brookes and Scott Farquhar the richest 20 years after they started Atlassian after meeting at the University of NSW.
Forbes estimated their fortune at US$14.4 billion, down from US$5.5 billion six months ago, but still placing both 42-year-old Australians among the 125 richest.
Moving the voice of America
Plans to relocate the parent company from the UK to the US, announced in February, will be approved at a special shareholders’ meeting on August 22.
The workplace collaboration software business was founded in the United Kingdom in 2014 before listing on NASDAQ in 2015.
“We believe that moving our parent entity to the United States will increase access to a broader set of investors, support additional stock indexes, improve financial reporting comparability with our industry peers, align our corporate structure, and provide greater flexibility in accessing capital,” Atlassian’s co-CEOs said in a statement. They wrote in their stock letter.