Atlassian Corporation

Good afternoon and thank you for joining Atlassian's earnings conference call for the second quarter of fiscal year 2025. 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 Lamb, Atlassian's head of investor relations.

Welcome to Atlassian's second quarter of fiscal year 2025 earnings call. Thank you for joining us today. On the call with me today, we have Atlassian CEO and co-founder Mike Cannon-Brooks and Chief Financial Officer Joe Bin. Earlier today, we published a shareholder letter and press release with our financial results and commentary for our second quarter of fiscal year 2025. The 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. 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. We 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 obligation 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. A 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, so 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 Mike for opening remarks.

Thank you all for joining us today. As you've already read in our shareholder letter, we executed well in Q2 as we scaled past $5 billion in annual run rate revenue, driven by subscription revenue, which grew 30% year over year. Our investments in our key strategic priorities of serving enterprise customers, delivering rapid innovation in AI, and breaking down knowledge silos with our system of work are driving momentum across the business and increasing customer commitment to the Atlassian platform. Companies like Cisco, DHL, and Reddit are turning to Atlassian to help solve their toughest team collaboration challenges, bridging the gap between their technology and business teams. And our world-class cloud platform with AI threaded throughout is delivering. With more than 20 years of data and insights on how software, IT and business teams plan, track and deliver work, we're uniquely positioned to help teams across every organization on the planet work better together. Today, more than 1 million monthly active users are utilizing our Atlassian Intelligence features to unlock enterprise knowledge, supercharge workflows and accelerate their team collaboration. These features are clearly delivering value as we're seeing a number of AI interactions increase more than 25x year over year. These powerful AI capabilities, along with automation and analytics, are also driving increasing adoption of premium and enterprise editions, with sales to higher value SKUs up over 40% year over year. With the breadth of our offering, the pace of innovation, and the recognition of our product leadership across all the markets we play in, the Atlassian platform is incredibly well positioned to further connect technology and business teams across the Fortune 500,000. We had some incredible customer wins in Q2, including a record number of deals greater than $1 million in annual contract value signed during the quarter, with some of the largest companies in the world committing to the Atlassian cloud and embracing the Atlassian system of work. If you're interested in hearing more about the ongoing evolution of our go-to-market motion, check out the loom that I just posted to our IR website. The progress we're making across our business and the signals we're getting from our customers reinforces our conviction that we're making the right investments to help us scale to $10 billion in revenue and beyond. We're eager to get after it and build on this momentum, pushing ahead on our mission to unleash the potential of every team. With that, I'll pass the call to the operator for Q&A.