Atlassian Corporation (NASDAQ:TEAM) Q2 2023 Earnings Call Transcript

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Joe Binz: And then, Ryan, to take the second part of your question. In terms of the guide, we continue to expect data center revenue growth to moderate in H2, that’s primarily because we are lapping some of the event driven growth in the prior year. I would also highlight, though, our outlook is better than we expected three months ago, driven by the strong Q2 billings performance that we saw. And then, lastly, it’s always good to remind everyone that data center revenue growth can be volatile given the portion of upfront revenue recognition in DC sales. So, as you think about the DC business performance, keep that in mind, as well as some of the pricing changes that are being implemented this month.

Ryan MacWilliams: Appreciate the color. Thanks.

Operator: Your next question comes from Ittai Kidron from Oppenheimer. Please go ahead.

Ittai Kidron: Thanks. I want to go back to Work Management at the last Investor Day, this was one of the three key pillars of growth for you going forward and not mentioned even once in your press release, which I found quite strange. Can you — outside of Confluence, can you talk about the rest of the portfolio there, would it be fair to say that growth over there is perhaps underwhelming, that competitively you are not getting the win rates that you would like to see against, yes and no, the Mondays of the world . Help me understand why such an important area of investment growth is not mentioned even once in your press release?

Joe Binz: Yeah. I will take that, Ittai. I am not — no, I wouldn’t be curious at all. Look, I think, we are incredibly bullish on Work Management. So to your question there, I don’t think so. It’s — I would say, it’s a different point in its life cycle as a market currently to where ITSM is, which is why us calling that out particularly in the press release. There are no favorite children at Atlassian don’t worry. Atlas is doing really well, right? But it’s a very new product. We always say it takes two years, three years, four years, five years to build a great product and a franchise, and we are patient long-term investors towards doing that. Everything in Work Management is targeted towards the Fortune 500,000. So Atlas and Jira Work Management, both of which are the newest offerings in that space.

It’s early in their journey. I can’t say that enough, but we are pretty bullish, both Scott and I have been around two decades now and seen plenty of 1.0 products and 1.1 products and 2.0 products and understand how product S codes of adoption work in our customer base and so we are working diligently on that and both the teams are working really hard there. Confluence continues to go from strength-to-strength. It’s always been a shining light in the Atlassian portfolio and continues to be so. So it doesn’t mean from the press release or anything else that we aren’t there. Again, we continue to get analyst recommendations and plaudits in various different waves and charts and all the different bits and pieces there. And we continue to get great encouragement from our customers that we are the only Work Management vendor at scale and we are one of the largest scale wealth management voters out there that combines their technical and non-technical teams.

This is increasingly a challenge for customers as they look across all sorts of different work that they are trying to manage. Just as Cameron and Scott were talking about, ITSM being close to the modern ways of operating DevOps and DevSecOps and everything else. Same with work management, how do you get your marketing and finance and business teams closer to your engineering and operations teams, that’s a huge strength of ours in the area that we continue to do well from.

Ittai Kidron: Great. Good. I appreciate it. Thank you.

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