Atlassian, the Australian enterprise collaboration software vendor behind popular tools like JIRA and HipChat, has filed its S-1 document with the Securities Exchange Commission to go public on the American markets.
The company, which was reportedly valued at $US3.3 billion earlier this year, does not specify how much it intends to raise in its IPO.
It will list on the Nasdaq Global Market under the ticker code $TEAM, a reflection of how its core products allow software teams to work more effectively together.
The filing reveals that Atlassian, whose customers include NASA and the US Department of Treasury, has been profitable for the last 10 years, and revenue grew 48.5% year-on-year in fiscal 2015 to $US319.5 million.
Atlassian is the latest high-profile tech company to announce plans to float shares to the public in recent weeks, after a year in which the pipeline of tech IPOs has been slower than usual. Last month digital payments company Square and Match Group, the owner of the popular Tinder dating app, both filed prospectuses for IPOs.
Like many tech companies, Atlassian employes a dual-class stock structure that ensures that its founders maintain a tight grip on the company. And as a foreign company incorporated in London, Atlassian is subject to different accounting standards than its US peers, the company notes.
Atlassian earned net income of $US6.78 million in fiscal 2015, which is actually down from net income of $US18.98 million in fiscal year 2014.
In the S-1 form, Atlassian says that the dip is because they’re reinvesting the cash in the company, in the form of research and development, as it reinvests in making its technology more cloud-friendly and attract more users. Going forward, Atlassian warns as a risk factor that this kind of R&D investment might hurt their ability to stay profitable in future quarters.
Interestingly, as recently as last week, Atlassian claimed that it had over 50,000 customers, across its whole spectrum of products, which includes Slack competitor HipChat, GitHub competitor Atlassian BitBucket, and the JIRA project management tool.
But in this filing, the company discloses that it has 48,000 customers, defined as “organisations that have at least one active and paid licence or subscription for which they paid more than $US10 per month.” It’s possible that the gap could be made up of nonprofits and other non-paying customers, as Atlassian is a big proponent of corporate philanthropy.
It also has 5 million monthly active users, which gives the founders a long way to go towards their stated goal of 100 million. Even so, it’s a large scale compared to lots of other enterprise software vendors, especially considering the company’s claim that “we have 864 customers who spent at least $US50,000 in fiscal 2015.”
The filing also boasts that companies like Cisco Systems, Kroger and Verizon Communications, bought their first Atlassian software before the beginning of 2003, and are still using it today.
That’s especially notable when you consider that Atlassian famously doesn’t employ a direct salesforce, instead relying on word-of-mouth — an approach actually cited by the company as a risk factor in a competitive marketplace.
The vast majority of Atlassian shares are owned by co-founders and co-CEOs Scott Farquhar and Mike Cannon-Brookes, who each own 37.7% of the company. And while Atlassian never sought a traditional venture capital round in the same way as plenty of other tech companies, Accel Partners bought in for 12.7% of the company via secondary share sales.
Even so, the founders will keep a tight control over the company after the IPO: Thanks to a dual-class stock voting structure, of the same type used by Google and Facebook, Cannon-Brookes and Farquhar will maintain a majority voting power over the other shareholders — though the filing does not specify what their exact share of voting power will be.
The fact that Atlassian is based in Australia is something investors should be aware of. As a foreign issuer, as defined by the SEC, it’s not subject to the same disclosure rules as domestic companies.
Among other things, this means that they report financials under IFRS accounting standards, rather than US GAAP and, while they report quarterly results they “will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies.”
The filing also reveals that they recently restructured and reincorporated in the United Kingdom, even though Atlassian’s main offices have stayed in Sydney and San Francisco.
Goldman Sachs and Morgan Stanley are leading the underwriting of the IPO.
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