Atlassian Corp (TEAM) 2017 Q1 法說會逐字稿

Good afternoon ladies and gentlemen. Thank you for joining Atlassian's earnings conference call for the first quarter of FY17. As a reminder, this conference call is being recorded and will be available for replay from the investor relations section of Atlassians website following this call. I will now hand the call over to Ian Lee, Atlassians head of Investor Relations.

Good afternoon and welcome to Atlassians first quarter FY17 earnings conference call. On the call today we have Atlassian's co-founders and CEOs Scott Farquhar and Mike Cannon-Brooks; our Chief Financial Officer, Murray Demo and our President Jay Simons.

Earlier today we issued a press release and a shareholder letter with our results and commentary for the first quarter of FY17. These items are also posted on the Investor relations of Atlassian's website at investors.atlassian.com. On our IR website there is also an accompanying presentation and data sheet available. As we noted last quarter, we're moving to a new [ns core] format today, we'll make some brief opening remarks and then spend the rest of the call on Q&A.

Statements made on this call include forward-looking statements. Forward looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. 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 of such statements are made.

In addition, during today's call we will discuss non-IFRS financial measures. These non-IFRS financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with IFRS. There are a number of limitations related to the use of these non-IFRS financial measures versus the nearest IFRS equivalents and may be different from non-IFRS used by other companies. The reconciliation between IFRS and non-IFRS financial measures is available in our earnings web release, our shareholder letter and our updated investor data sheet on our investor relations website. Further information on these and others factors that could effect coming financial results are included in filings we make with the Securities and Exchange Commission from time to time, including our form 20F report that was filled on August 17, 2016. I will now turn the call over to Scott for his brief opening remarks before we move to Q&A.

Good afternoon. Thanks everyone for joining today. We had another great quarter and a strong start to FY17 ending the first quarter with more than 65,000 customers. The highlight, certainly, over the last few months was definitely Atlassian Summit, our annual user conference. Mike and I personally got to speak with many dozens of our customers and partners.

This is our eighth Summit, and I always leave energized the customer stories and excitement about how Atlassian is helping potential of teams across their organizations. We heard so many great stories about how are customers using our products to make the teams more effective and their daily work lives easier.

We are also pleased to see and hear how many of our customers have expanded the use of our products across their organizations, often starting small and then spreading to a range of different teams. Contributing to the success of the Summit were the many customers sharing Atlassian stories [respective] with other customers. Among the amazing groups of companies who presented at summit were BMW, VMWare, Netflix, DocuSign, Rockwell Collins, Zero, and GoPro, to name a few.

We also showcased a number of innovations across our product portfolio at Summit such as Jira Service Desk for external customer support, BitBucket Pipelines and the beta launch of HipChat data center. We have provided more details on these on these product announcements in the shareholder letter that we have published on our investor relations website. Overall it was a great event, and we can't wait for next year's Summit.

With that I will turn the call over to the operator for Q&A.

Thank you. We will now begin the question-and-answer session.

(Operator Instructions)

Heather Bellini with Goldman Sachs

Thank you, this is Jack Cogan; I'm filling in for Heather. So it was a nice acceleration in customer count growth. So, traditionally I think that JIRA and Confluence have been the products that new customers would adopt first, and I know other parts of the portfolio, like Service Desk and HipChat have seen great uptake within the install base, but can you share any stats about how these other parts of the portfolio are leading the way, and landing new customers on their own, and how they are competing with the competition on the standalone basis?

Yes, a great question. So you saw with the JIRA 7 launch and JIRA Renaissance, where we basically packaged JIRA software specifically for software teams, JIRA Service Desk specifically for IT, and JIRA Core for business teams. We have seen both nice expansion from the technical team stronghold that we have established over 14 years. In addition, we have seen nice expansion both to IT teams with JIRA Service Desk, but also beginning to land IT teams with JIRA Service Desk as the first product they start with. We've also seen historically customers start with Confluence, as a product to begin content collaboration and then move deeper both with the technical teams with JIRA Service Desk and across the organization with both the JIRA Confluence and HipChat product families.

Great. Then if I could just get one follow-up, sales and marketing spend continues to be extremely efficient. I know that you are mentioning the marketing as a huge opportunity, that's in its early days, is there any sense -- or are there any plans to maybe accelerate some of the marketing spend and pursue more of a land grab strategy here?

You know, materially, we spend on demand generation and brand advertising to generate demand, but again, word-of-mouth, and high velocity/ low touch model, is what we're going to continue to invest in going forward.

Great. Thank you.

Bhavan Suwi with William Blair

Hey you guys, congrats, and thank you for taking my question. Just touching on JIRA Service Desk, you started to attack the customer support market -- you announced that obviously a couple of weeks ago at the conference -- rather than the internal service desk. Can you just you talk about how easy it is for current customers to begin using JIRA Service Desk to handle external customer support? And then who do you run up in that market? And I've got a quick follow-up for Murray.

Yes, Bhavan, it's Mike. Look, I think it is important to note that the move to JIRA Service Desk into customer support is part of a long journey for that product, so obviously we started very hyper-targeted on IT teams and IT service desks. And then over the past two years, it has obviously expanded heavily into business teams, the legal, HR, all sorts of other service-driven teams inside organizations for all sorts of business and functional use cases, often reflecting e-mail and other systems that were not really good for managing their workflows.

But what we have definitely noticed over the last 12 months are a lot of customers using Service Desk and requesting features around external customer support. So that is really why you have seen us take that move in the last year, obviously launching at Summit with customer organizations and a whole bunch of other features inside Service Desk to allow them to do that for external customer support.

Obviously, it's not designed for large-scale consumer support, as you might do with Twitter or Facebook or those sorts of things. But for a lot of organizations with all sorts of external customers, it is a fantastic solution, and it has been really well received so far.

Thanks. Great -- that is great color. Just one quick one for Murray. Obviously, just good numbers in the quarter, but as you look at the full-year guidance and the raise, and everything else, you just didn't let that flow through. I was just wondering about the linearity of the quarters, and linearity and [presumptions] done online, does any of that change, or does that remain consistent?

Bhavan, at this point, we do have in the first quarter -- we had some summer seasonality. We also had the loss of a full quarter of our pricing benefit that we've have talked about for a long period of time. It is immaterial for the full-year, but we did see some benefit as the last full quarter in Q1. Now we move into Q2, there is a just little bit left of that, we have talked ad nauseam about that.

It ends in November for the maintenance piece, so for the most part that is just about out of the system. For the rest of the year, it tends to be sort of in our predictable, linear model, given that we have such a high level of recurring revenue through our various subscription lines and a high level of maintenance revenue.

The other thing I guess I would add, maybe one other item, in terms of seasonality, is that typically in our third quarter we tend to see the highest level of renewals on maintenance. It is one of those things that historically over the years, we tend to see more of that, and so we'll end up driving more deferred revenue in bookings around just that, to the annual maintenance subscription that happens more in our third, and in some cases into the fourth quarter.

That is great. Thanks for my questions, guys. I appreciate it.

John DiFucci with Jefferies

Thank you. Nice job on the quarter, guys. I have a question that sort of looks out a little bit. At the core of JIRA is workflow, and that is why we hear of it being used beyond its original purposes of software development and you have capitalized on that, sort of informally with JIRA Core, but also directly with JIRA Service Desk.

And just wondering if you could talk about any other, what I will call, direct opportunities to automate other processes with specific applications built on top of JIRA. Are there anything you can actually talk about, that may be in the works, or is there anything that we should expect anytime soon?

Yes, this is Scott Farquhar here. The way I think about this -- actually, we can't talk about things we haven't released yet. But the way that we think about the market is there is already a lot of long-term uses of JIRA in many other departments in an organization, whether it is using it for financial close process, or legal help desk, or marketing, actually adopting some of the agile practices needed to run their marketing rhythms.

We say have a lot, and what we have to choose is where do we want to then add marketing energy and other things around there to target specific markets where they are large enough. I think that, [what are] those long-term markets we won't ever put marketing energy around, because they are too expensive to try and target directly. But of course we're already inside of the organization; we've spread horizontally into those markets. So, we will use all of the feedback we get from people using it already to then give us direction on where we should invest in the future.

Scott, are there any sort of upside outliers in Atlassian Marketplace? It is something that we see, that number, and it is pretty impressive, the growth in there. But is there anything there that you can point out that seems to be outliers on the upside -- even areas or specific application-type areas?

There's a lot of different ways to categorize the marketplace, we have integrations with third parties, we have areas of functionality that is generic across a lot of different domains, and we also have functionality that is specific to a domain. So, I think what you're asking about in the specific domain is are there any outliers there?

And you can go to our Marketplace and it is pretty easy to see -- by using their websites and other ones -- for you to get a good color on where there is over-performance there. We are not going to break that out on the call. But we also, in terms of acquiring or anything out of the Marketplace, we always want to encourage variety across the system; I think we have done that really well, by making sure that we [play agonistically] with every one in the [agent] system.

Okay. Great. Thank you.

Steve Ashley with Robert Baird

Terrific. I was just wondering, if you go to market, if you have been able to identify any use cases against other department lineup business, within legal department or within marketing, that are just common use cases that you are able to market to and drive your awareness and your adoption into departments outside of the IT department?

Hello, Steve. It's Mike. There is just hundreds and hundreds and hundreds of use cases, so we do market, you can see from our website and from some of the other things, too, sort of broad bucket use cases, so if you look at the HR department, for example, you see a lot of people using us for recruiting and also all sorts of other functions.

But, we do not use JIRA for recruiting anymore. We used to; as we've gotten bigger, you move out of some of those use cases. But there are other use cases in a large corporation; there are thousands and thousands of possible use cases for our products.

The Marketplace sold some of those. We have a feature called Blueprints, both in Confluence and JIRA that helps you get started with some of the possible use cases that you might want, be it from the HR department, the legal department.

In finance, we see a lot of people using it for quota close. The other thing that is worth noting there is we have an extremely strong community around the company of users and of user groups in hundreds of cities around the world. One of the things that you see them talking about is these use cases and passing it back and forth.

Increasingly we have user groups within individual industries or communities, so we had a large science user group, for example, meet at Summit to talk about different usages of JIRA and Confluence and how we comply in an environment like life sciences, and exchanging with each other how they use the products to get that sort of thing done. So we obviously try to foster and promote that community-driven activity for the customers to find the use cases of our products.

Great. And then, Murray, I don't know if you're going to give this metric one last time, but the benefit from pricing optimization, we said it would be modest this quarter, and I was just wondering if you could quantify that for us?

Steve, we have not provided a specific number. It is immaterial in the full-year. We did have some benefit in Q1; we're just trying to move on from that at this point. So, yes, there was some benefit, and you could probably look at the Q1 actual, look at the guidance for Q2. We got a little bit of benefit in Q2 amid some -- put some thoughts around that, but at this point it is behind us, and we are moving forward. Hopefully, that makes sense.

Yes. Thank you.

Brent Thill with UBS

Thanks. Murray, the OP margin was a lot better than the Street had anticipated. What were you seeing in terms of where are the sources of upside growth to the plan? And secondarily, can you talk about the US business? The growth rate actually stated pretty hard, is that just a lot of large numbers or was there something that you saw more pronounced outside of the US that may have had some impact there, running close to 50%? I think in this quarter you ran in the low 30%s on growth rate.

On the first question regarding OP margin, yes. Obviously, we have got a terrific leverage model here, and with solid strong revenue growth in the quarter, that obviously contributed to higher-margin. But if you look at the gross margin, as it was in our shareholder letter, we had lower depreciation expense.

We talked last quarter about this accelerated depreciation. It did begin, but the assets were placed in service a little later in the quarter than we anticipated. So, that led to less depreciation expense than we were expecting in Q1. It is all going to get made up in Q2 through Q4,so by the end of the year it will be neutral, but we did sort of get this benefit in Q1. We also had some lower support costs in our gross margin area, and so the combination of those two drove the 86[%] and we had targeted 84[%], so that kind of flows down to the operating margin.

In operating expenses, there were two areas where we came in lower. One was in consulting, we had some projects that we were focused on that we just sort of moved out later in the year. Then also we probably had too ambitious of a hiring plan in the quarter, and so that led to us coming in lower in headcount than planned so the employer related expenses associated with came in lower. So it is really those two factors on operating expense, the better gross margin and then the higher revenue contributed to the high OP margin.

In terms of the US revenue, the US is where we are seeing a faster adoption of DataCenter, and so more and more moving to the clouds. They are both moving towards the subscription model and not getting that revenue up front relative to what we see in other geos around the world. So that is really kind of driving the transition to more subscription, away from upfront revenue, so that is lowering it, as well as, obviously the Americas is a larger number than the other geos.

Thank you.

Sanjit Singh with Morgan Stanley

Thank you for taking the question. I wanted to talk a little bit about some of the trends in average revenue per customer. If I back out sort of the contribution from StatusPage, in terms of your customer count this quarter, really healthy adds there still. But if I look at sort of average rate per customer did decelerate, so I wanted to get some context around that, whether that reflects a mix shift in your product mix, or does it reflect some of the fading benefits from the pricing benefits that we saw last year?

What happens here is that, we have said, in the past, approximately 3/4 of our new customers that are coming in are going to cloud. Those initial purchase prices, if you will, on cloud tend to be lower than they would be on the server side, and as cloud continues to increase as a larger percentage of our overall business, it is having somewhat of a mitigating effect on that. If we had no new customers in the quarter then the average per customer would go up, so it is really related a lot to that mix, more and more cloud, they tend to be smaller customers, and start out in slower amounts and build from there.

Understood. That makes a lot of sense. For Scott or Mike, I sort of had a conceptual question for you. I attended the Summit, and there's obviously a lot of healthy innovation going on in the product portfolio. And so I wanted to get a sense of how you guys think about mapping the goals that you guys have as a company, which is to get your software in the hands of all different types of teams, target 500,000 customers, over the life of the Company, and how investors should track your progress against those goals.

Because, anecdotally we certainly hear a lot of positive feedback from your partners and your customers. But how should investors think about tracking your progress against those goals, maybe not necessarily on a quarterly basis, but over time?

Sure. It's a great question. Look, I think obviously in terms of the Fortune 500 thousand targeting, obviously we've passed 65,000 customers, so we're making really good progress toward that from a, I guess, a longitudinal tracking sense, if you like. We said that we put in place large goals, sort of targeting the decade time span, so that is probably not going to be tracking on a quarterly basis, right?

I think in terms of the product portfolio and the customer mix, probably what is interesting to watch is over time, if you zoom out to the 5 or 10 year time span, you can see us continually simplifying and broadening the appeal of our products at a high level. So at JIRA, we are continually working on the interface and simplification to appeal to an ever greater number of users across different types of teams. You can see the same thing in Confluence, and also then the focusing of some of those products and parts of the portfolio.

So obviously Renaissance JIRA 7 was a huge shift for us, in not just pulling out JIRA Call for businesses users, and separating JIRA into pieces, but allowing us to get more dedicated in effect for software teams in JIRA software. So we actually kind of went both ways on that, which is really important to note. You can do the same thing with Service Desk as we go out to service teams there, so, I think at the long arc of time you will see the product portfolio continue to go in those sort of two directions.

As a just quick follow-up, what are your thoughts in terms of the importance of metrics, such as monthly active users, or the number of customers adopting more than one product, those types of product option, cross-sell metrics. Is that sort of relevant in terms of tracking your progress? Is that how you guys look at it internally?

This is Scott here, over the long-term, obviously moving of those numbers is really important to us, and we do increase the number of active users, we increase all those metrics. Unfortunately, there is some variation, quarter-to-quarter, but we don't really keep them on the short- term, because we have add more new customers.

That averages $8.00 per customer, and adds the number of products per customer, and we add a few [layers]. So it more it jumps around too much on a quarter-to-quarter basis, but obviously all those longitudinal metrics over long-term are headed in the right direction and we look at them closely.

Just to chip in one thing from Mike, I think it's real important to understand is our products are adopted team by team, so we'll land in a single team, and then a second team, and a third team. That is really important for the economics of our model. It is really important for how we build products and how we think about the best way to get software into enterprises to make those teams effective.

What you will often see, though, is we will land, for example, in a software and IT team, and then maybe marketing users added to that to interact with that software team, so we kind of will get the marketing users into JIRA, and then they will go out and run marketing projects. Now, when did we move into marketing? Well, the first people there were really still software project, it was just marketing people participating. The second shift into a marketing project actually did not get us any economic benefit, because they had already paid for the users, but at long-term gives us great economic benefits, because they will start running more and more marketing projects, so it was quite a complicated thing to think through and parse through a big organization like that.

I appreciate the thoughts guys, thanks.

Michael Trent with Raymond James

Michael, are you there?

Oh sorry, mute. My apologies. Two questions, first with regard to the two questions about -- where you answered that the shift to the cloud was both suppressing US sales a bit, on revenue side and also ARPU. Are you -- is the shift to cloud happening faster than you expected, and do you have enough visibility into how that is going into impact those kinds of numbers on the revenue side going forward at this point? And then I have a follow-up.

Well, we believe certainly that the cloud is the future, that is obvious, and that transition has been ongoing. I don't think that we have seen anything that says, hey, did it materially change one quarter to the other; but we definitely are seeing more of that. I think the error that we have seen, even a faster uptick than maybe we planned was the move to Data Center, which is subscription offering, so it has the same sort of financial presentation look as the cloud subscription.

And we have been really impressed by the way that's been taken up by organizations. At Summit, we heard quite a bit about companies that are moving to Data Center, which is at a higher price from a revenue perspective for us, but also gives them great capabilities that they don't get necessarily just in the standard server products. We are really excited about where Data Center can go and that is another factor in terms of the transition from a perpetual plus maintenance to a subscription model.

My follow-up is regarding -- margins are down this year because of some currency issues, but also because there is a shift to cloud, accelerated depreciation and the COGS that is coming along with the past CapEx. Are you at the point where we can quantify that so that we can get some feeling about what kind of margin expansion and leverage we would get into 2018?

Obviously, we have got a great leverage model, we saw what happened this quarter with just an out-performance on revenue, and some of the things we had on the spending side, missed our ability to hire at that pace. Last year that we were around 17%, and we're targeting 16% for the full-year this year, without that pricing benefit that gave us a great margin results early in FY16.

So great model, but as far as sending any kind of signal for FY18, we have not -- we're not providing any numbers there. We did talk, though, about our long-term model for OP margin, and that range was in the 20% to 30%, so clearly, we believe that over the longer-term that margins will improve, based on our revenue, our growth opportunities relative to that TAM and our ability to have a leveraged model going forward.

Okay. Thanks, Murray.

Ittai Kidron with Oppenheimer

Thanks guys, good quarter. A couple of questions for me. First, on StatusPage, can you talk about how the integration is going there? And then second, to you, Murray, how should we think about tax rate going forward? I do not think that this was mentioned in the prepared materials.

Hello, Ittai. Look, StatusPage is obviously very early, in its joining of the Atlassian family now for one to two quarters. Integration is going very well. The team is settled. We shipped our first technical integration with JIRA Service Desk, which is obviously the most natural fit for the product, so that when you, as a customer come to request help, or create a ticket, you will see in the Service Desk portal if there is some sort of system outage or downtime or maintenance, obviously to stop the request in its tracks.

It was extremely well-received at Summit by our customer base from that integration perspective, a lot of people understood the broader internal management story that we are starting to tell there. It is obviously a critical time to have your teams collaborating, in a time of crisis, be it the downtime or something else going on. StatusPage plays a pretty key role there.

What is really important is to see how it integrates with all our other products over time. Already, people use HipChat in these times of crisis for real-time communications, both with obviously messaging and the group video capabilities we also added during the quarter. Both of those are fantastic for the speed of a team communicating.

HipChat, sorry, Confluence in JIRA have both been used in that incident management process for all sorts of different purposes over time, so I think that there is a lot of work that the team is doing now. Ahead of us, I am continuing to integrate StatusPage with the rest of our offerings, broadly around that incident management story for teams.

In term of tax rate, our tax rate is really driven because of the mix of where our profits are around the world in different countries because of the different rates. So that can move around. When you look at our EPS, and the guidance that we gave at the outset of the year for the full- year, it was $0.32 to $0.34, and then you saw the beat in Q1 of $0.03, and then you look at our revised guidance at $0.33 and $0.34 and trying to kind of rationalize the beat in Q1, how is that flow through on EPS?

We have seen a mix change on where the profits are around the world, and that has led to a higher rate, and that is what you see the guidance that we've got for the full-year at $0.33 to $0.34. It's assuming an increase in the tax rate because of this profit mix.

Very good. Good luck, guys.

Gregg Moskowitz from Cowen and Company

Okay. Thank you. Good afternoon, guys. I wanted to go back to JIRA Service Desk, if I could. The adoption continues to be really impressive, with now over 20,000 teams. But curious if there any trends that you would point out here over the past few months? For instance, are you seeing any change in uptick levels by enterprise versus SMB, or anything that might stand out from a geo perspective?

This is Jay, Greg. Not materially. I think, again, when you see 20,000 organizations for JIRA Service Desk, it is pretty wide and broad adoption across teams of all sizes and all geographies.

As we mentioned, I think there is just a nice new growth trajectory, starting with IT and business service teams and expanding the customer service and support, where customers want to make sure that they're connecting -- customers and service requests, that customers are making with the teams inside of their organizations that are trying to improve the service for their customers. And then, naturally I think that we see the expansion of Service Desks. Once we land with one use case like IT, we see Service Desk expanding to a whole bunch of different types of internal service teams within the organization.

Okay, great. At Summit, you announced an interesting promotion for your Data Center products, with AWS which includes significant AWS credits to help get customers started. I'm wondering if there's been very any early customer feedback that you could point to in regard to that?

It was pretty positively received at Summit, and I think what it sort of demonstrates is our continued support of customer choice and flexibility, where our products are available both in the cloud, if customers want to deploy them that way and have us run them in server or with the Data Center product line for customers that want to manage them on their own infrastructure. And then sort of that hybrid approach, where customers might want to move to a managed service but actually have the products run on AWS. It is really early, but I think that there were a lot of customer requests and demand for it, and it was pretty well received at Summit.

Perfect. And if I could ask one last one for Murray. So your subscription revenue growth, very strong in the quarter. But this was the first time that perpetual licenses have declined sequentially for you as a public company. Are there any high-level thoughts that you could share with us on the magnitude of change in perpetual license growth going forward? Or do you view this is more reflective of Q1 seasonality than anything else? Thanks.

It could be a number of factors, but probably the most important one is just again, more customers are choosing to go to Data Center, which is a subscription offering, as opposed to the perpetual offering, and they are choosing cloud. So, over time, we continue to believe that we are going to see that kind of a switch. Now we can have some movements quarter-to-quarter that can kind of bounce around, but in long-term trend is, customers are adopting Data Center and cloud before they are adopting server.

Okay. Thanks very much.

(Operator Instructions)

Jonathan Kees with Summit Redstone

Great. Thanks for taking my questions and my congrats also for this quarter. I just wanted to follow up. Two questions, one is just a follow-up question in regard to StatusPage. I am sure you are going to integrate, and we saw some of that at Summit, in terms of the two lines on the top of the Service Desk offering.

StatusPage was its own product line, it was unique in terms of it already had its own revenues and a substantial number of customers. Are you going to -- even though you are integrating, are still going to be able to offer that separately, like you would some of the other products, or is your plan just to completely integrate that and mesh it with your other products?

This is Mike here, no, it is still going to be offered as a stand-alone offering. Like all of our products, a key part of our model is to be able to land with a single team and then expand to other teams; similarly, to land with a single product and expand to other products. So there are no plans to stop the stand-alone offering of StatusPage. You can see from the customer numbers in the shareholder letter, we picked up a substantial number of new customers that we did not already have, and obviously there is this potential in those for other products. But StatusPage will continue to bring in its own internal cohort of new customers to us, as well as obviously, be very attractive to our existing customer base.

So I know it is pretty early, and regarding that set of customers that are coming in from StatusPage, are there any efforts to cross-sell to them the other products, and what has been the reception so far?

Look, just the normal way that our model works. We are a patient, long-term company, and we will continue to do all of the normal marketing and promotional activities in app, out app, throughout the customer base. Obviously there was a fair bit of focus on StatusPage at Summit being something new for the existing customer base.

But you will see us do just the standard things that we do to get every customer to be aware of every product. Again, where it makes sense to that customer, so we have great insight into the customer base through the engagement engine about what teams are on, et cetera. Obviously, StatusPage, very applicable to IT teams and software teams, and where we see customers using those products and from those teams, we will certainly make sure they are aware of how StatusPage can help them.

Okay. Great. Thanks for that color. Keep the good work, you guys.

This concludes our question-and-answer session. I would now like to turn the call back over to Atlassian's management team for closing remarks.

I just want to say thank you everyone for joining the call today, we really appreciate your time, and look forward to keeping you updated on our progress as we continue.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.