Atlassian Corporation · NASDAQ:TEAM
Atlassian — Atlassian Summit US 2017 Investor & Financial Analyst Session
138 slides from Atlassian's conference presentation, Sep 13, 2017
Slide 1: Atlassian Summit Investor & Financial Analyst Session
A ATLASSIAN Summit investor 8 ol x Financial ana 6 © a SCOTT FARQUHAR =§=MIKECANNON-BROOKES = JAYSIMONS = = ~~ SRIVISWANATH = = = =MURRAYDEMO = =——_—sIAN LEE PRESIDENT CFO = ~~ INVESTOR RELATIONS
Slide 2: Legal disclosure
Legal disclosure This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. Forward-looking statements include all statements that are not historical facts and, in so
Slide 3: Table of Contents
Table of Contents Introduction lan Lee, Investor Relations Go-to-market overview Jay Simons, President R&D overview Sri Viswanath, CTO Financial summary Murray Demo, CFO
Slide 4: Top takeaways: Go-to-market approach continues to scale
Top takeaways Go-to-market approach continues to scale Continue to add a large volume of new customers around the globe
Slide 5: Top takeaways: Expansion paths humming
Top takeaways Expansion paths humming Growth in both diverse team usage and large enterprise scale expansion
Slide 6: Top takeaways: R&D the lifeblood of our company
Top takeaways R&D: the lifeblood of our company Engineering innovation and excellence are central to our model
Slide 7: Top takeaways: The forecast is cloudy
Top takeaways The forecast is cloudy (in a good way) Set up for cloud at scale
Slide 8: Top takeaways: The price is right
Top takeaways The price is right! Taking a strategic, long-term approach to pricing
Slide 9: Top takeaways: A model financial model
Top takeaways A model financial model Consistent revenue growth and free cash flow generation
Slide 10: Go-to-Market Overview
Go-to-Market Overview JAY SIMONS President
Slide 11: Agenda
Atlassian Quick Overview Ag en d a The Atlassian Model Land-&-Expand Explained
Slide 12: Efficient go-to-market approach paired with strong R&D investments
Efficient go-to-market approach paired with strong R&D investments K ey 0 Model is key advantage takeaways a GTM approach continues to scale Continue to add a large volume of new customers around the globe Expansion paths humming Growth in both diverse team usage and enterprise expansion
Slide 13: Atlassian Quick Overview
Atlassian Quick Overview
Slide 14: We live in an incredible time, thanks to the work of teams
We live in an incredible time, thanks to the work of teams
Slide 15: Teamwork is hard
Teamwork is hard CONCEPT DEVELOPMENT IDEA 7 ©00@ * Build a new smart a Requirements Ly phone/ app / rocket assessment Customer input . Tradeoffs ree PROTOTYPE a : “ecco... oe > a @ Design . Material selection . . Testing / Evaluation Software development “2 @@0060.. @ Organize @ Create @ Support ©@
Slide 16: And getting harder
And getting harder New challenges Trapped knowledge Product fragmentation Lack of a shared vision New technology Al / Machine learning AR/VR Connected devices New ways of working Networked organizations Remote working Freelance economy
Slide 17: Our mission is to unleash the potential of every team
Our mission is to unleash the potential of every team.
Slide 18: We believe
WE BELIEVE When you open up work, you unleash the full potential of every team
Slide 19: We believe: open ways of working
Open Way of Working Unhindered access to the right context, the bigger picture, and the important information when its needed most WE BELIEVE When you open up work, you unleash the Open Way of Thinking Openness to feedback, debate, and free-flowing conversation in the context of the work being done
Slide 20: What we do
WHAT WE DO ee Team Organize Create A ATLASSIAN Discuss Support Work
Slide 21: Teamwork platform
TEAMWORK PLATFORM m ame ee ce £& Software Teams Marketing Teams IT Teams HR Teams Finance Teams | (w) Reactions @®, Convos (a) Mentions A @ Files BS Meetings & Decisions | @ JiraSoftware A Stride ® Trello 2 Confluence Bitbucket Planning & tracking Messaging & communicate Organizing projects Content
Slide 22: Jira Software, Jira Service Desk, Jira Core
o| 4 | Jira Software Jira Service Desk Jira Core
Slide 23: Jira products
¢ Jira Software 4 Jira Service Desk 4 Jira Core
Slide 24: Bitbucket and Statuspage
Bitbucket Statuspage
Slide 25: Statuspage and Bitbucket
@ Statuspage ®@ Bitbucket
Slide 26: Our competitive advantage
Our competitive advantage A) El ‘a = Why we win Who we compete with Great products Legacy incumbents Multiple landing points Pure play / Up-starts Low-friction Open source Disruptive pricing White space: Ease-of-use -> viral adoption docs+spreadsheets+email Marketplace -> custom apps
Slide 27: Virgin Media
nm @ Virgin Media delivers lightning- fast broadband. ts the standard for broadband in the UK, 3 supported mM Atlasssian.
Slide 28: The Daily Telegraph
#1 in the UK, Daily Telegraph reaches 3M reader a day. _ The Daily Telegraph uses Atlassian to’kt . + The Dai ATLASSIAN
Slide 29: Tesla
is Tesla work more ef int energy efficiency.
Slide 30: The Atlassian Model
S The Atlassian Model
Slide 31: Model philosophy
MODEL PHILOSOPHY Our model focuses on quick & efficient acquisition of customers, at scale Open pricing, easy trial Easy trial needs great product GREAT PRODUCT x LOW PRICING x AUTOMATION HIGH VOLUME Sell online, self-serve
Slide 32: The old way vs the Atlassian way
THE OLD WAY Hard to try & deploy Expensive to buy Heavy discounting Top down Month cycles Offline business model THE ATLASSIAN WAY & Do-it-yourself software Fits any budget Predictable pricing Bottom up Day cycles E-commerce business model
Slide 33: We optimize for customer self-service
WE OPTIMIZE FOR CUSTOMER SELF-SERVICE All pricing online All products free to try No forms or gates No custom contracts No hidden pricing All purchasing is simple
Slide 34: Land and expand strategy
Our growth is fueled by a powerful land & expand strategy Atlassian champion introduces Atlassian products to their team or a new user discovers us
Slide 35: Land and expand strategy
Our growth is fueled by a powerful land & expand strategy Original team demonstrates to other teams better, more open ways of working
Slide 36: Land and expand strategy
Our growth is fueled by a powerful land & expand strategy Usage and products spread, with many teams using multiple Atlassian products
Slide 37: Land and expand strategy
Our growth is fueled by a powerful land & expand strategy Usage and products spread, with many teams using multiple Atlassian products
Slide 38: Land and expand strategy
Our growth is wee coms itststi“‘“‘“C™SOC;*C*CR fueled by a powerful land & expand strategy New Atlassian champions created, who spread the word or move to new companies
Slide 39: Land-&-Expand Explained
An, Land-&-Expand Explained
Slide 40: The customer lifecycle
The customer lifecycle LEARN : TRY : BUY : PROMOTE
Slide 41: The customer lifecycle
The customer lifecycle Attract Convert Expand = ne oe = = “| vs/ 3 LEARN : TRY : BUY : PROMOTE
Slide 42: The customer lifecycle: Attract
The customer lifecycle Attract = a <i Q
Slide 43: Let us know
Let us know. News~ Video~ Events~ Crunchbase ~~ Join the 20k+ teams building the new shape of IT. A ATLASSIAN Search ‘lyn up now Mobile The apps, platforms and businesses redefining how we use computers. WA Xiaomi launches first Android One device How the Essential Phone won me over WhatsApp will ch
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Slide 45: te Oudiig | FeO gi leon
21 - =e te Oudiig | FeO gi leon bile iror, jip better ae re, faster.
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Slide 47: We operate multiple consumer-scale funnels
We operate multiple consumer-scale funnels... Monthly unique visitors by property | | A a 2.4m 2.0m 5.9m bitbucket.com atlassian.com trello.com 6-month average from March -> August 2017
Slide 48: Paid and organic channels
PAID -- SEM Display Retargeting Social ORGANIC Branded Search Word-of-mouth Community Customer comms www.atlassian.com 6-month average from March -> August 2017
Slide 49: A typical day
A TYPICAL DAY (AUGUST 8) Volume is our bread & butter SALES TRIALS $2.8m_ 6,841 16,742 sales unique domains unique domains
Slide 50: The customer lifecycle: Attract
The customer lifecycle Attract = a <i Q
Slide 51: The customer lifecycle: Convert
The customer lifecycle Convert fo = — A ~p— Ny, 4
Slide 52: We activate new users across those funnels
We activate new users across those funnels... New accounts created daily from new trials | A (i 5k 3k 24k bitbucket.com atlassian.com trello.com 6-month average from March -> August 2017
Slide 53: Smart touch aids land & expand
SMART TOUCH AIDS LAND & EXPAND Advocates Partners Atlassian 400+ global partner assistance teams network
Slide 54: Smart touch aids land & expand
SMART TOUCH AIDS LAND & EXPAND QQagQ & Loyalty Customer Product Enterprise Renewal Billing Tech pre-sales Enterprise scale assistance assistance assistance assistance Partner Partner assistance Partners 400+ global partner network As of June 30, 2017
Slide 55: 97% self service
Product Advocates 3% OPT-IN . 2 “How can | help you?” - 97% SELF SERVICE LEARN BUY For the period from September 2016 - August 2017
Slide 56: 97% self service
Product 97% SELF SERVICE Advocates 3% OPT-IN - WEBINARS) cece eee cere te trees “How can | help you?” eee EMAIL DRIP PO 2S 5 So oop consn poy “He IN-PRODUCT CHAT For the period from September 2016 - August 2017
Slide 57: Atlassian Partner Program
ATLASSIAN PARTNER PROGRAM A global network of partners with unique expertise, services, and products that complement Atlassian.
Slide 58: Atlassian partner types
ATLASSIAN PARTNER TYPES 'e] IEE» Solution Partner Training Partner Marketplace Vendor Corp/Gov Reseller Sales, consulting, Deliver Atlassian's Offer apps and Additional purchasing implementation and official courses in a live integrations to help interface on a global customization services classroo
Slide 59: Solution partners
SOLUTION PARTNERS Platinum y | Solution Partner ATLASSIAN $250k+ 8 - Certified Technical Professionals 8-Trained Sales Professionals Gold Solution Partner ATLASSIAN $50k-$249k 4-Certified Technical Professionals 4 -Trained Sales Professionals Silver Solution Partner ATLASSIAN <$50k 1- Certified Tech
Slide 60: Atlassian partners
ATLASSIAN PARTNERS NORTH AMERICA EUROPE 91 Partners 273 Partners 14 Platinums 36 Platinums ASIA/PACIFIC 51 Partners 5 Platinums As of Ji june 2017
Slide 61: Channel mix
CHANNEL MIX DIRECT / INDIRECT (FY17) © Direct Revenue @ Channel Revenue CHANNEL SALES BY GEO (FY17) © Americas @ APAC @ EMEA
Slide 62: We have a diverse mix of channel partners
We have a diverse mix of channel partners CUSTOMERS CGI Internal Project Teams, ProAction initiative Bank of Montreal Bell Canada MARKETS TERRITORIES Application US - including US development Federal Business Canada Process EMEA - UK, France, Engineering Benelux, Nordics CPRIME CUSTOMERS Oracle Amer
Slide 63: Consistent growth of our customer franchise
CONSISTENT GROWTH OF OUR CUSTOMER FRANCHISE 90,000 67,500 45,000 22,500 | a _ = =o | UJ ll [ FYo2 FYO3 FY04 FYOS5 FY06 FYO7 FYO8 FYO9 FY10 FY FY12 FY13 FY14 FY1S FY16 FY17
Slide 64: The customer lifecycle: Convert
The customer lifecycle Convert fo = — A ~p— Ny, 4
Slide 65: The customer lifecycle: Expand
The customer lifecycle Expand ss
Slide 66: Customer journey: Land -> Expand
CUSTOMER JOURNEY Land -> Expand
Slide 67: What team are you on?
WHAT TEAM ARE YOU ON? % Jira Software 4 jira Service Desk 4 Jira Core @ Software IT @ Business Atlassian survey of approximately 2,000 Cloud users of Jira Software, Jira Core & Jira Service Desk during August 2017 - September 2017
Slide 68: Amazon-like profiling & targeting drives expand
Amazon-like profiling & targeting drives expand MULTI-TOUCH PROMOTION TARGET “Sally Jones” JIRA ADMIN Try it FREE! Role: IT Manager for 7 days Industry: Healthcare Employer size: 5,000 people Lives: Boston, MA Free 3 month trial of Confluence In product, Web (www, support Customer lifetime: 6 months
Slide 69: Inline comment prompt
Try leaving an inline comment Did you know you can highlight any text on this page to leave feedback in context? Learn more PAVEEIciog
Slide 70: Apps
APPS JIRA Confluence try > Ill
Slide 71: Confluence trial prompt
% Confluence inactive on your sire ke Pages is a feature powered by Confluence. Lea) onea your wal tnshes, Your biting contact wil be Canee! your lal at any time: emaled three days before, InManaqe application.
Slide 72: Keep your team on the same page
Keep your team on the same page That's a lot of vital information! It’s easy to capture, share and store everything in a page. Createapage No thanks
Slide 73: Customer journey: Land > Expand
CUSTOMER JOURNEY Land > Expand
Slide 74: Customer journey: Land > Standardize
CUSTOMER JOURNEY Land > Standardize EXPAND Adds teams, products, more users SCALE 7 Enterprise expansion. Many teams and users. Introduce TAM, proactive advocates service, Enterprise products/services STANDARDIZE All teams, many different uses Growing internal dedicated Atlassian team
Slide 75: Enterprise expansion
Enterprise expansion SERVER Data Center Product Family Clustering for high availability, disaster recovery, SAML CLOUD e 1) Cloud Identity Manager Enterprise cloud security, admin controls SERVICES Enterprise Services Technical Account Manager Certification Premier Support
Slide 76: Enterprise Advocates
Enterprise Advocates _. INVOICE CONSOLIDATION ............. PEM red ENTERPRISE SERVICES INTRODUCTION ** DATA CENTER INTRODUCTION
Slide 77: An expanding enterprise business
‘ FISCAL YEAR $50K+ $500K+ An expanding e nterp rise FY2015 864 14 business FY2016 1,245 37 FY2017 1,817 75 LARGE CUSTOMER GROWTH
Slide 78: Large customer growth
GLOBAL CONSULTING FIRM $1,600,000 $1,200,000 $800,000 $400,000 | | ee Fe $0 FY05 FY06 FYO7 FY08 FYO9 FY10 FYN FY12 FY1S FY14 FY1S FYI6 FYI7 LARGE TECHNOLOGY COMPANY $1,800,000 $1,500,000 $1,200,000 $900,000 $600,000 $300,000 LARGE CUS $o NTH FY05 FYO6 FYO7 FY08 FYO9 FY10 FY11 FY12 FY13 FY14 FY15 FY1
Slide 79: Strong retention leads to more expansion
Strong retention leads to more expansion CUSTOMERS SPENDING >$50K ANNUALLY Retention rate Customers who spent >$50k in the prior fiscal year that were customers in the following year: FY15 FY16 FY17 99% 98% 98% Number of products of customers who spent >$50k in Favaig
Slide 80: Cumulative effect of recurring revenue
Cumulative Effect of Recurring Revenue YEAR OF CUSTOMER FIRST PURCHASE Mi Fy2002 { FY2003 1 Fy2004 |) FY2005 , @ Fy2006 Ml FY2007 Accelerating customer i Fy200s Ml FY2009 acquisition i Fy2010 MM FY2011 i Fy2012 (i FY2013 Hi Fy2014 “Ml FY2015 HM Fy2016 {| FY2017 Increasing sales to installed base Fy2
Slide 81: R&D overview
Slide 82: Competitive differentiator: R&D as % of revenue
Slide 83: Breadth of R&D impact
Slide 84: We've been busy
Slide 85: Looking back
Slide 86: New products & offerings
Slide 87: Acquisitions
Slide 88: Transformational projects
Slide 89: Vertigo: a massively transformational undertaking
Slide 90: Before and after
Slide 91: Key advantages
Slide 92: Current state of Vertigo
Slide 93: R&D formula
Slide 94: Customers come first
Slide 95: Global teamwork
Slide 96: 24 hours to innovate
Slide 97: We expose the APIs that build our ecosystem
Slide 98: R&D formula
Slide 99: Long-term initiatives
Slide 100: Long-term initiatives
Slide 101: Trust features
Slide 102: Simply powerful
Slide 103: Smarts
Slide 104: Teamwork platform
Slide 105: Mobile
Slide 106: R&D powers Atlassian
Slide 107: Financial Summary
Slide 108: Key components of our model
Slide 109: Large opportunity
Slide 110: Driving toward $1B in revenue
Slide 111: Predictable sales model
Slide 112: Recurring revenue model
Slide 113: Revenue mix by deployment
Slide 114: History of non-IFRS operating profits & free cash flow
Slide 115: Unique model drives competitive advantage
Slide 116: Pricing
Slide 117: Pricing across deployment models
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Atlassian — Atlassian Summit US 2017 Investor & Financial Analyst Session on 6ix