[April 19, 2018]

Atlassian Announces Third Quarter Fiscal Year 2018 Results

Atlassian Corporation Plc (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its third quarter of fiscal 2018 ended March 31, 2018 and released a shareholder letter on the Investor Relations section of its website at https://investors.atlassian.com.

"Atlassian had a strong quarter, adding more than 6,000 net new customers for the first time, and engaging with almost 3,000 users and partners around the world as part of our Team Tour," said Mike Cannon-Brookes, Atlassian's co-CEO and co-founder. "We were also excited to open our newest office in Bengaluru, India. This office will play an important role in expanding our global presence as we scale Atlassian to serve the Fortune 500,000."

Third Quarter Fiscal Year 2018 Financial Highlights:

On an IFRS basis, Atlassian reported:

• Revenue: Total revenue was $223.7 million for the third quarter of fiscal 2018, up 40% from $159.9 million for the third quarter of fiscal 2017.
• Operating Loss and Operating Margin: Operating loss was $10.9 million for the third quarter of fiscal 2018, compared with $23.1 million for the third quarter of fiscal 2017. Operating margin was (5%) for the third quarter of fiscal 2018, compared with (14%) for the third quarter of fiscal 2017.
• Net Loss and Net Loss Per Diluted Share: Net loss was $14.3 million for the third quarter of fiscal 2018, compared with $17.5 million for the third quarter of fiscal 2017. Net loss per diluted share was $0.06 for the third quarter of fiscal 2018, compared with $0.08 for the third quarter of fiscal 2017.
• Balance Sheet: Cash and cash equivalents and short-term investments at the end of the third quarter of fiscal 2018 totaled $763.9 million.

On a non-IFRS basis, Atlassian reported:

• Operating Income and Operating Margin: Operating income was $38.4 million for the third quarter of fiscal 2018, compared with $24.5 million for the third quarter of fiscal 2017. Operating margin was 17% for the third quarter of fiscal 2018, compared with 15% for the third quarter of fiscal 2017.
• Net Income and Net Income Per Diluted Share: Net income was $24.6 million for the third quarter of fiscal 2018, compared with $18.9 million for the third quarter of fiscal 2017. Net income per diluted share was $0.10 for the third quarter of fiscal 2018, compared with $0.08 per diluted share for the third quarter of fiscal 2017.
• Free Cash Flow: Cash flow from operations for the third quarter of fiscal 2018 was $91.7 million, while capital expenditures totaled $5.3 million, resulting in free cash flow of $86.4 million, an increase of 26% year-over-year.

A reconciliation of IFRS to non-IFRS financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below, under the heading "About Non-IFRS Financial Measures."

Recent Business Highlights:

• Customer growth: Atlassian ended the third quarter of fiscal 2018 with a total customer count on an active subscription or maintenance agreement basis of 119,158, having added 6,587 net new customers during the quarter.
• Atlassian Team Tour: Atlassian kicked off its "Team Tour" in February 2018, a global customer event unveiling product updates, sharing the latest in team practices, and discussing the future of teamwork with almost 3,000 users and partners. Atlassian has nearly completed its tour of 11 cities, with the event concluding in Tokyo on May 23.
• Bengaluru launch: Atlassian announced the opening of its newest office in Bengaluru, India. The new location will add to Atlassian's world-class R&D and customer support centers around the globe.

Board of Directors Announcements:

"We're excited about two big changes to our Board of Directors," said Scott Farquhar, Atlassian's co-CEO and co-founder. "We're announcing the appointment of Shona Brown, a current Board member, as the new Chair the Board, where she will continue to improve our governance and processes, and help guide Atlassian as we scale. We are also adding a new Board member, Sasan Goodarzi, who brings almost 15 years of experience driving product leadership and growth at Intuit, and has first-hand knowledge of what it takes to scale a successful software business in the cloud."

• Appointment to Chair of the Board: Shona Brown

Atlassian is pleased to announce the appointment of Shona Brown to Chair of the Board, succeeding Scott Farquhar, who remains on the Board. She has served as a member of Atlassian's Board of Directors since November 2015, and also as Chair of the Compensation and Leadership Development Committee.

Dr. Brown is a former member of the Google executive team, which she joined in 2003. She served as vice president of business operations from 2003 to 2006 and as senior vice president of business operations from 2006 to 2011, after which she transitioned to a role leading Google's technology for social impact efforts until 2012. Dr. Brown moved into a senior advisory role with Google from 2013 to 2015. Previously, Dr. Brown was a partner at McKinsey & Company, a management consulting firm. She is currently an advisor and board member to a portfolio of technology startups and also serves on the board of PepsiCo. Dr. Brown holds a bachelor of computer systems engineering from Carleton University, a master of arts in philosophy and economics from Oxford University (which she attended as a Rhodes scholar) and a Ph.D. in industrial engineering and industrial management from Stanford University.

• Appointment to the Board: Sasan Goodarzi

Atlassian is excited to welcome Sasan Goodarzi to our Board. Mr. Goodarzi is executive vice president and general manager of Intuit's Small Business and Self-Employed Group. Appointed to this role in May 2016, he leads an organization that offers a global platform with a suite of products and services under the QuickBooks brand in pursuit of Intuit's mission of powering prosperity around the world.

Mr. Goodarzi has held multiple general management positions during two separate stints at Intuit, including as senior vice president and general manager for the company's ProTax division and Intuit Financial Services from 2004 to 2010, as chief information officer leading Intuit's transition to the cloud from 2011 to 2013, and as general manager and executive vice president of TurboTax from 2013 to 2016. Prior to joining Intuit, Mr. Goodarzi worked for Invensys, a global provider of industrial automation, transportation and controls technology, serving as global president of the products group. He also held a number of senior leadership roles in the automation control division at Honeywell.

Mr. Goodarzi earned his bachelor's degree in electrical engineering at the University of Central Florida and a master's degree in business administration from the Kellogg School of Management at Northwestern University.

Financial Targets:

Atlassian is providing its financial targets for the fourth quarter and full fiscal year 2018. The company's financial targets are as follows:

• Fourth Quarter Fiscal Year 2018:
  • Total revenue is expected to be in the range of $232 million to $234 million.
  • Gross margin is expected to be approximately 81% on an IFRS basis and approximately 85% on a non-IFRS basis.
  • Operating margin is expected to be approximately (5%) on an IFRS basis and approximately 19% on a non-IFRS basis.
  • Net loss per diluted share is expected to be approximately ($0.05) on an IFRS basis, and net income per diluted share is expected to be approximately $0.12 on a non-IFRS basis.
  • Weighted-average share count is expected to be in the range of 234 million to 235 million shares when calculating diluted IFRS net loss per share and in the range of 246 million to 247 million shares when calculating diluted non-IFRS net income per share.
• Fiscal Year 2018:
  • Total revenue is expected to be in the range of $862 million to $864 million.
  • Gross margin is expected to be approximately 80% on an IFRS basis and approximately 84% on a non-IFRS basis.
  • Operating margin is expected to be approximately (7%) on an IFRS basis and approximately 19% on a non-IFRS basis.
  • Net loss per diluted share is expected to be in the range of ($0.44) to ($0.43) on an IFRS basis, and net income per diluted share is expected to be in the range of $0.47 to $0.48 on a non-IFRS basis.
  • Weighted-average share count is expected to be in the range of 231 million to 232 million shares when calculating diluted IFRS net loss per share and in the range of 243 million to 244 million shares when calculating diluted non-IFRS net income per share.
  • Free cash flow is expected to be in the range of $265 million to $272 million, which includes capital expenditures that are expected to be approximately $30 million.

With respect to Atlassian's expectations under "Financial Targets" above, a reconciliation of IFRS to non-IFRS gross margin, operating margin, net income per diluted share, and free cash flow have been provided in the financial statement tables included in this press release.

Shareholder Letter and Webcast/Conference Call Details

A detailed shareholder letter is available on the Investor Relations section of Atlassian's website at: https://investors.atlassian.com. Atlassian will host a webcast and conference call to answer questions today:

• When: Thursday, April 19, 2018 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).
• Webcast: A live webcast of the call can be accessed from the Investor Relations section of Atlassian's website at: https://investors.atlassian.com. Following the call, a replay will be available on the same website.
• Dial in: To access the call via telephone in North America, please dial 1-888-346-0688. For international callers, please dial 1-412-902-4250. Participants should request the "Atlassian call" after dialing in.
• Audio replay: An audio replay of the call will be available via telephone for seven days, beginning two hours after the call. To listen to the replay in North America, please dial 1-877-344-7529 (access code 10118114). International callers, please dial 1-412-317-0088 (access code 10118114).

Atlassian has used, and will continue to use, its Investor Relations website at https://investors.atlassian.com as a means of making material information public and for complying with its disclosure obligations.

About Atlassian

Atlassian unleashes the potential of every team. Our collaboration software helps teams organize, discuss and complete shared work. Teams at more than 119,000 customers, across large and small organizations - including Citigroup, eBay, Coca-Cola, Visa, BMW and NASA - use Atlassian's project tracking, content creation and sharing, real-time communication and service management products to work better together and deliver quality results on time. Learn more about products including Jira Software, Confluence, Stride, Trello, Bitbucket and Jira Service Desk at https://atlassian.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward looking, including risks and uncertainties related to statements about our products, customers, expansion, technology and other key strategic areas, and our financial targets such as revenue, share count and IFRS and non-IFRS financial measures including gross margin, operating margin, net income (loss) per diluted share and free cash flow.

We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. 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 such statements are made.

Further information on these and other factors that could affect our financial results is included in filings we make with the Securities and Exchange Commission from time to time, including the section titled "Risk Factors" in our most recent Forms 20-F and 6-K (reporting our quarterly results). These documents are available on the SEC Filings section of the Investor Relations section of our website at: https://investors.atlassian.com/.

About Non-IFRS Financial Measures

Our reported results and financial targets include certain non-IFRS financial measures, including non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share, and free cash flow. Management believes that the use of these non-IFRS financial measures provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our results of operations, and also facilitates comparisons with peer companies, many of which use similar non-IFRS or non-GAAP financial measures to supplement their IFRS or GAAP results. Non-IFRS results are presented for supplemental informational purposes only to aid in understanding our operating results. The non-IFRS results should not be considered a substitute for financial information presented in accordance with IFRS, and may be different from non-IFRS or non-GAAP measures used by other companies.

Our non-IFRS financial measures reflect adjustments based on the items below:

Non-IFRS gross profit. Excludes expenses related to share-based compensation and amortization of acquired intangible assets.

Non-IFRS operating income. Excludes expenses related to share-based compensation and amortization of acquired intangible assets.

Non-IFRS net income and non-IFRS net income per diluted share. Excludes expenses related to share- based compensation, amortization of acquired intangible assets, the related income tax effects on these items and changes in our assessment regarding the realizability of our deferred tax assets.

Free cash flow. Free cash flow is defined as net cash provided by operating activities less capital expenditures, which consists of purchases of property and equipment and acquired intangible assets.

We exclude expenses related to share-based compensation, amortization of acquired intangible assets, the related income tax effects on these items and changes in our assessment regarding the realizability of our deferred tax assets from certain of our non-IFRS financial measures as we believe this helps investors understand our operational performance. In addition, share-based compensation expense can be difficult to predict and varies from period to period and company to company due to differing valuation methodologies, subjective assumptions and the variety of equity instruments, as well as changes in stock price. Management believes that providing non-IFRS financial measures that exclude share-based compensation expense, amortization of acquired intangible assets, the related income tax effects on these items and changes in our assessment regarding the realizability of our deferred tax assets allow for more meaningful comparisons between our operating results from period to period.

Management considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by our business that can be used for strategic opportunities, including investing in our business, making strategic acquisitions and strengthening our statement of financial position.

Management uses non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share and free cash flow:

• As measures of operating performance, because these financial measures do not include the impact of items not directly resulting from our core operations;
• For planning purposes, including the preparation of our annual operating budget;
• To allocate resources to enhance the financial performance of our business;
• To evaluate the effectiveness of our business strategies; and
• In communications with our Board of Directors concerning our financial performance.

The tables in this press release titled "Reconciliation of IFRS to Non-IFRS Results" and "Reconciliation of IFRS to Non-IFRS Financial Targets" provide reconciliations of non-IFRS financial measures to the most recent directly comparable financial measures calculated and presented in accordance with IFRS.

We understand that although non-IFRS gross profit, non-IFRS operating income, non-IFRS net income, non-IFRS net income per diluted share and free cash flow are frequently used by investors and securities analysts in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations as reported under IFRS.

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