Atlassian Corporation

Welcome to Atlassian's fourth quarter and fiscal year 2025 earnings call. Thank you for joining us today. On the call today, we have Atlassian CEO and co-founder Mike Cannon-Brooks and Chief Financial Officer Joe Binns. Earlier today, we published a shareholder letter and press release with our financial results and commentary for our fourth quarter and fiscal year 2025. The shareholder letter is available on the investor relations section of our website where you will also find our other earnings-related materials, including the earnings press release and supplemental investor data sheet. As always, our shareholder letter contains management insights 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. 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. 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 and 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. Out of respect for others on the call, we will take one question at a time. With that, I'll turn the call over to Mike for opening remarks.

Thanks, Martin, and thank you all for joining us today. As you've already read in our shareholder letter, we closed out FY25 with stellar execution from our enterprise sales teams and partner teams. In FY25, we generated over $5.2 billion in revenue and over $1.4 billion in free cash flow, delivering another year of balanced Rule of 40-plus performance. All up, Our teamwork platform powers workflows at over 300,000 customers like Infosys, IAG, Woolworths, Globant, and Honeywell. We feel a real sense of momentum coming out of Q4 as we signed a record number of deals greater than $1 million in ACV in the quarter, up over 2x year on year. We reached 2.3 million AI now, up 50% from last quarter, And in less than a full quarter since its launch at Team 25, the teamwork collection has seen incredibly strong momentum and is exceeding our expectations. We are making significant progress on our key strategic priorities of serving the enterprise, delivering game-changing innovation in AI to our customers, and connecting all teams through the Atlassian system of work. These big bets are paying off, resulting in a cloud net revenue retention rate of 120%. To further accelerate our progress, We are partnering with Google Cloud to bring our AI-powered teamwork platform together with Google Cloud's AI-optimized infrastructure. This partnership marks a major milestone in Atlassian's multi-cloud strategy, accelerating our cloud transformation and delivering advanced AI solutions to millions more users worldwide. In the AI era, we believe the need for collaboration increases significantly as more people are able to create and more ideas can be brought to life. This creates a huge opportunity for Atlassian. Our platform powers teamwork, business processes, and workflows across all types of teams, with now 50% of users of our core apps being business users, reinforcing the mission-critical role that our platform plays in helping both businesses and technology teams collaborate. If you'd like to hear more about how this sets us up to win in the AI era, check out the loon that I just posted to our IR website. This quarter, we saw more enterprises realize the power of going wall-to-wall with the Atlassian system of work, with many of them consolidating from a variety of other tools onto the Atlassian cloud platform. The result is continued revenue growth across our core apps of Jira, Confluence, Jira Service Management, and Loom, all of which are growing in line or faster than total company revenue with significant runway ahead of all. As we forge ahead into FY26, we're bringing a new level of intensity to our pursuit of the massive market opportunities in front of us. We're playing offense and relentlessly innovating in order to further strengthen our competitive position, delivering differentiated customer experiences and value, and making Atlassian the system of work for the Fortune 500,000 and beyond. Also this quarter, we're announcing that Anu has decided to transition away from her role as Atlassian president at the end of December after almost 12 years. While we're very saddened to see her leave, we're incredibly grateful for all of her impact. Like everything we do, we're long-term in our thinking and are thoughtful always in our plans. Anu's greatest legacy is the talented team of leaders that she has built and developed, and we'll have more updates on leadership transitions soon. And before anyone on the call asks, I'm not going anywhere, so you're going to have to put up with me for many more years. I love my job, and this is the most exciting time to be at Atlassian. We're creating amazing products, and capabilities which are delighting our customers like never before. We have a fantastic tailwind from new AI technologies, and it's incredible to see our vision resonating with our three major transformations of AI, enterprise, and system of work, all bearing fruit and multiplying together. With that, I'll pass the call to the operator for Q&A.

We will now begin the question and answer session. If you have a question, please press star followed by the one on your phone. If you'd like to withdraw from the queue, please press star followed by the two. Your first question comes from Keith Weiss from Morgan Stanley. Please go ahead.