Atlassian reports strong revenue growth as longstanding CFO quits

Atlassian co-founders Scott Farquhar and Mike Cannon-Brookes. Source: supplied

Leading Australian tech company Atlassian has reported a 37% jump in fourth quarter revenue to $US174.3 million, just above guidance.

However, Atlassian shares dipped as the company announced that chief financial officer (CFO) Murray Demo is leaving the company at the end of this year.

Investing.com

Demo served on the board for four years before becoming CFO in 2015 to help guide the company through its listing on the NASDAQ stock exchange.

According to a report in the Financial Review, Demo told investors that he leaves the company on good terms and flagged a transition period to find his replacement.

“It’s been a privilege to be part of the Atlassian journey over the past six years as both a board member and CFO,” he said.

“Atlassian’s world-class products, engaging culture, unique business model and talented employees have been the catalyst for Atlassian’s global success. I am excited for the company’s long-term future and look forward to cheering on Scott, Mike and Atlassian’s continued strong results.”

The Q4 results show that subscription fees overtook product-maintenance revenue as the biggest contributor to earnings, as Atlassian continues its transition towards cloud-based offerings.

According to Atlassian’s shareholder letter, more than 70% of its customers now use a cloud-based product.

Total revenue for the 2017 financial year was $US619.9 million, up 36% year-on-year.

Net losses also increased to $US42.5 million. That was due to employee share-based payments and the write-down of intangible assets being booked through the statement of income & expenditure, so that Atlassian’s reported figures are compliant with the International Financial Reporting Standards (IFRS). Atlassian’s non-IFRS net income for the year was $US84.9 million.

Operationally, the company generated $183.3 million in free cash-flow and finished the 2017 financial year with $US549.9 million in cash & equivalents and liquid short-term investments.

Atlassian is forecasting total revenue of between $US826 and $US834 million in 2018.

Following the purchase of productivity software company Trello in January, Atlassian expects it to contribute $US20 million to earnings in the 2018 financial year.

Free cash flow is expected to be between $US230 million and $US240 million, net of capital expenditure of $US25 million to $US30 million.

Atlassian President Jay Simons told Business Insider in May that the company is looking to expand its operations into Europe and Asia.

The company grew its customer base to more than 89,000 in the June quarter and co-CEO Scott Farquhar said that 100,000 customers is now a realistic target.

Atlassian shareholder letter

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.