Atlassian Corporation Plc revenue surged on 41.0% and EBITDA Margin increased on 3.2 pp from -0.25% to 2.9%
07/26/2018 • About Atlassian Corporation Plc (
$TEAM) • By InTwits
Atlassian Corporation Plc reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Atlassian Corporation Plc is a fast growth stock: FY2018 revenue growth was 41.0%, 5 year revenue CAGR was 42.5% at FY2018 ROIC -4.4%
- EBITDA Margin is quite volatile: 2.9% in FY2018, -0.2% in FY2017, 3.5% in FY2016, 5.4% in FY2015, 16.2% in FY2014
- Atlassian Corporation Plc spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 17.2%. Average EBITDA Margin for the same period was 3.7%. In FY2018 SBC/Revenue was even higher: 18.6%
- Atlassian Corporation Plc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's in pair with industry average of 7.4%
- CAPEX is quite volatile: $30m in FY2018, $15m in FY2017, $34m in FY2016, $32m in FY2015, $8m in FY2014
- In the last 5 years the company invested considerably less than D&A: $119m vs. $192m. In FY2018 this situation was still the same: CAPEX was 30 while D&A was 79
- The company has unprofitable business model: ROIC is -4.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 41.0%. Revenue growth showed small slowdown in FY18Q4 - it was 39.8% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.4 pp from 23.1% to 30.6% in 2018. During the last 5 years EBITDA Margin bottomed in FY2017 at -0.25%.
Gross Margin decreased slightly on 0.54 pp from 80.8% to 80.2% in FY2018. During the last 5 years Gross Margin topped in FY2015 at 83.4% and was declining since that time. SG&A as a % of Revenue decreased on 2.1 pp from 40.9% to 38.8% in FY2018. During FY2014-FY2018 SG&A as a % of Revenue topped in FY2017 at 40.9%. Stock Based Compensation (SBC) as a % of Revenue decreased on 3.5 pp from 22.2% to 18.6% in FY2018. SBC as a % of Revenue grew at 3.6 pp per annum in FY2014-FY2018.
Net Income margin decreased on 6.8 pp from -6.9% to -13.7% in FY2018. Net Income margin declined at -5.4 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 3.5% in FY2018. Atlassian Corporation Plc showed decline in CAPEX/Revenue of 6.5 pp from 9.9% in FY2015 to 3.5% in FY2018. Average CAPEX/Revenue for the last three years was 4.5%. To fuel its fast growth the company made large investments to CAPEX (118% of EBITDA).
Accounts receivable as a % of Revenue increased slightly on 0.96 pp from 4.3% to 5.3% in FY2018.
Return on investment
The company operates at negative ROIC (-4.4%) and ROE (-13.3%). ROIC increased on 4.8 pp from -9.3% to -4.4% in FY2018. ROE decreased on 8.0 pp from -5.2% to -13.3% in FY2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -23.0x and Debt / EBITDA is 31.9x. Debt jumped while cash jumped on 477%.
The company has no short term refinancing risk: short term debt is zero.
Management team
Michael Cannon-Brookes "Mike" is a Atlassian Corporation Plc's CEO. Michael Cannon-Brookes "Mike" is a founder and has spent 1 year with the company. CEO total compensation was
$651,068 in FY2018 which included
$594,582 salary. Atlassian Corporation Plc's CFO is James A Beer. James A Beer has 1 year tenure at the company.
The company has 1.1% shares owned by insiders. Insider ownership didn't change in 2018.
The company has 2,638 employees. The number of employees surged on 20.3%. Average revenue per employee in FY2018 was
$331,293 and it surged on 17.2%.
Financial and operational results
FY ended 06/30/2018
Atlassian Corporation Plc ($TEAM) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 215.1 | 319.5 | 457.1 | 619.9 | 874.0 | 41.0% |
| Gross Profit | 177.1 | 266.6 | 381.3 | 500.8 | 701.3 | 40.0% |
| SG&A | 77.0 | 124.0 | 178.8 | 253.7 | 339.2 | 33.7% |
| EBITDA | 34.8 | 17.2 | 16.0 | -1.5 | 25.7 | |
| EBIT | 21.5 | 1.7 | -5.9 | -63.1 | -53.7 | |
| Tax | 3.2 | -7.5 | -9.3 | -17.1 | 53.5 | |
| Net Income | 19.0 | 6.8 | 4.4 | -42.5 | -119.3 | |
| Stock Based Compensation | 11.4 | 41.5 | 75.5 | 137.4 | 162.9 | 18.5% |
Balance Sheet
|
|---|
| Cash | 116.8 | 187.1 | 259.7 | 244.4 | 1,410.3 | 477.0% |
| Accounts Receivable | 4.7 | 11.7 | 15.2 | 26.8 | 46.1 | 72.1% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 819.6 | |
Cash flow
|
|---|
| Capex | 8.1 | 31.8 | 34.2 | 15.1 | 30.2 | 99.7% |
| Dividends | 10.0 | | | | | |
| Acquisitions | | 10.6 | | 381.1 | | |
Ratios
|
|---|
| Revenue growth | 44.8% | 48.5% | 43.0% | 35.6% | 41.0% | |
| EBITDA growth | 38.4% | -50.6% | -6.8% | -109.6% | -1,768.0% | |
|
|---|
| Gross Margin | 82.3% | 83.4% | 83.4% | 80.8% | 80.2% | -0.5% |
| EBITDA Margin | 16.2% | 5.4% | 3.5% | -0.2% | 2.9% | 3.2% |
| EBIT Margin | 10.0% | 0.5% | -1.3% | -10.2% | -6.2% | 4.0% |
| SG&A, % of revenue | 35.8% | 38.8% | 39.1% | 40.9% | 38.8% | -2.1% |
| SBC, % of revenue | 5.3% | 13.0% | 16.5% | 22.2% | 18.6% | -3.5% |
| Net Income Margin | 8.8% | 2.1% | 1.0% | -6.9% | -13.7% | -6.8% |
| CAPEX, % of revenue | 3.8% | 9.9% | 7.5% | 2.4% | 3.5% | 1.0% |
|
|---|
| ROIC | | 1.8% | -1.6% | -9.3% | -4.4% | 4.8% |
| ROE | | 4.3% | 0.9% | -5.2% | -13.3% | -8.0% |
| Net Debt/EBITDA | -3.4x | -10.9x | -16.2x | | -23.0x |
People
|
|---|
| Insider ownership | 1.1% | 1.1% | 1.1% | 1.1% | 1.1% | 0.0% |
| Employees | 769 | 1,259 | 1,760 | 2,193 | 2,638 | 20.3% |
| Revenue/Employee, th. $ | 280 | 254 | 260 | 283 | 331 | 17.2% |
Atlassian Corporation Plc ($TEAM) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 195 | 215 | 224 | 244 | | 42.9% | 44.1% | 40.3% | 39.8% |
| EBITDA | 0 | 8 | 10 | 12 | | -90.0% | -7.4% | | |
| Net Income | -11 | -64 | -16 | -26 | | | | | |
Balance Sheet
|
|---|
| Cash | 306 | 311 | 394 | 1,410 | | 14.7% | -7.5% | 99.9% | 477.0% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 820 | | | | | |
Ratios
|
|---|
| Gross Margin | 79.5% | 79.9% | 79.8% | 81.9% | | -4.0% | -2.1% | 0.4% | 3.0% |
| EBITDA Margin | 0.1% | 3.7% | 4.4% | 5.1% | | -2.0% | -2.1% | 7.2% | 10.0% |
| Net Income Margin | -5.9% | -29.9% | -7.1% | -10.6% | | -3.9% | -28.8% | 3.9% | 1.3% |
Peers in Application Software
Below we provide Atlassian Corporation Plc benchmarking against other companies in Application Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| nFusz Inc ($FUSZ) | | | | | 433.3% |
| CloudCommerce Inc ($CLWD) | | -38.1% | 247.6% | 40.9% | 301.1% |
| Seven Stars Cloud Group, Inc. ($SSC) | | 134.7% | 663.8% | 310.3% | 161.7% |
| Aurora Mobile Limited ($JG) | | | | 304.9% | 150.8% |
| Intelligent Systems Corporation ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (150 companies) | 27.9% | 13.5% | 13.6% | 14.8% | 15.2% |
|---|
| Atlassian Corporation Plc ($TEAM) | | 48.5% | 43.0% | 35.6% | 41.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Skkynet Cloud Systems Inc ($SKKY) | 99.7% | 97.4% | 98.0% | 97.6% | 96.5% |
| hopTo Inc ($HPTO) | 91.8% | 87.8% | 95.9% | 98.2% | 95.4% |
| Aware, Inc. ($AWRE) | 75.4% | 87.2% | 90.3% | 94.6% | 92.3% |
| Alteryx, Inc. ($AYX) | 77.5% | 80.5% | 81.3% | 83.4% | 91.0% |
| Aspen Technology, Inc. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (149 companies) | 62.8% | 61.7% | 63.8% | 64.4% | 65.3% |
|---|
| Atlassian Corporation Plc ($TEAM) | 82.3% | 83.4% | 83.4% | 80.8% | 80.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aspen Technology, Inc. ($AZPN) | 34.5% | 42.2% | 46.0% | 45.2% | 43.3% |
| ANSYS, Inc. ($ANSS) | 45.9% | 45.8% | 45.1% | 41.9% | 41.4% |
| Paycom Software, Inc. ($PAYC) | 15.1% | 19.5% | 35.1% | 34.4% | 35.9% |
| j2 Global, Inc. ($JCOM) | 41.6% | 40.6% | 41.7% | 36.5% | 35.7% |
| Adobe Inc. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (151 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| Atlassian Corporation Plc ($TEAM) | 16.2% | 5.4% | 3.5% | -0.2% | 2.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($TFVR) | 0.0% | 350.5% | 4.3% | | 1,021.9% |
| MGT Capital Investments Inc ($MGTI) | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% |
| Integrated Ventures Inc ($INTV) | | | | | 199.9% |
| ShotSpotter, Inc. ($SSTI) | | 18.3% | 28.9% | 27.1% | 24.3% |
| Ellie Mae, Inc. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (152 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| Atlassian Corporation Plc ($TEAM) | 3.8% | 9.9% | 7.5% | 2.4% | 3.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InsPro Technologies Corp ($ITCC) | -558.9% | | | | 127.4% |
| Manhattan Associates, Inc. ($MANH) | 64.8% | 78.7% | 99.3% | 102.5% | 80.9% |
| Intuit Inc. ($INTU) | 34.2% | 23.7% | 52.1% | 72.6% | 66.8% |
| Aspen Technology, Inc. ($AZPN) | 133.4% | | | | 58.1% |
| Paycom Software, Inc. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (178 companies) | -14.3% | -13.1% | -9.8% | -11.8% | -9.8% |
|---|
| Atlassian Corporation Plc ($TEAM) | | 1.8% | -1.6% | -9.3% | -4.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Upland Software, Inc. ($UPLD) | | | 16.4x | 115.6x | 16.7x |
| Nuance Communications, Inc. ($NUAN) | 7.9x | 5.7x | 5.3x | 7.1x | 15.2x |
| Asure Software Inc ($ASUR) | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x |
| SS&C Technologies Holdings, Inc. ($SSNC) | 1.7x | 7.3x | 4.6x | 3.1x | 8.5x |
| Avaya Holdings Corp. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (69 companies) | -1.2x | -0.9x | -0.9x | -0.8x | -0.6x |
|---|
| Atlassian Corporation Plc ($TEAM) | -3.4x | -10.9x | -16.2x | | -23.0x |
