Atlassian Corporation Plc (NASDAQ:TEAM) Q4 2023 Earnings Call Transcript

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As far as who will choose what, as Joe said, we largely see that customer choice falling in line with what we kind of seen over the last year. And of course, the customer’s awake for the last minute, definitely will have data center as a easy migration path for them if they want to stay on prem.

Operator: Your next question comes from Ryan MacWilliams from Barclays. Please go ahead.

Ryan MacWilliams: Thanks for taking the question. A two-part question here on 4Q cloud results. Could you maybe provide some context around what the contribution was from migration to cloud growth in the quarter? And how should we also think about the contribution from the expiration of the loyalty discount program to that fourth quarter cloud growth? Thanks.

Joe Binz: Yes, thanks for the question. The first part of the question in terms of migrations, the migrations contribution to growth in the quarter was very consistent with what it’s been in the past. I think we’ve talked about it being approximately 10 points in FY ’23, that was a similar outcome in Q4. In terms of outperformance to the revenue guide, the outperformance was driven by stronger-than-expected purchasing in June and primarily in enterprise ahead of the expiration of our loyalty discount program and that came in the form of both more deals and higher contract value per deal and it drove strong results in migration, seed expansion and upsell to premium and enterprise versions of our products across both our cloud and data center businesses and better over the outperformance there.

The server outperformance in the quarter was driven strictly by stronger-than-expected renewals and larger deal sizes. And then finally marketplace outperformance is driven by app pull through on the stronger cloud and data center sales I noted earlier. Hope that helps.

Ryan MacWilliams: Yes.

Cameron Deatsch: And this is Cameron. Just from a customer perspective, I just want to say that none of this was really a surprise for the customers. Now we’ve been very open along the way, for over the last few years about how the loyalty discount program would be staging down over three years and going away entirely on July 1st. And it’s that openness that these customers, largely, we’ve been working with them for many months sometimes with these bigger customers for years, knowing that this date was out there and gave them a large compelling event to make that choice. Of course, as I already mentioned, we still yet have another big date out there with next February, and we’ll continue to work with our customers, who still remain on server between now that.

Operator: Your next question comes from Kash Rangan from Goldman Sachs. Please go ahead.

Kash Rangan: Hi, thank you very much. I was curious if you could just comment on the transition that we’ve had, a transition of SAARs in the company and with the zero transition, how are you approaching the next year’s planning? Are you looking for a new leader within the company hiring to the outside, what are the considerations on that transition? Thank you so much.

Scott Farquhar: Hey, Kash, Scott here. I just want to say a huge thank you to Cameron for his 11-years at Atlassian. And, Cameron has done, you know, every job at Atlassian, he’s done marketing presales and now eventually, you know, which is after running all of our, you know, sales and marketing, and he’s done an incredible job. And, when we chatted about this, it’s been, you know, the right time for the Cameron to get back, because the cloud migrations and end of life of server are just are going so well. So, it turned out that’s, you know, the right time for Cameron to spent a bit of time skiing given he was up in Tahoe at the moment. In terms of what happens going forward, Cameron has some really strong a leaders under him, inside the business, particularly on the sales side.

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