
Atlassian files for IPO - joewadcan
http://www.sec.gov/Archives/edgar/data/1650372/000155837015001685/filename1.htm
======
chollida1
Interesting

Slack and Github investors will be watching this closely! Will be interesting
to see what the market thinks about a profitable company going public.

13 years from starting to going public, so those of you who join a startup
going on its 4th year, something to keep in mind. You could have joined in
year 5 and had your shares vest by year 9 and then be waiting for an
additional 4 years for your liquidity event!

>
> [https://www.sec.gov/Archives/edgar/data/1650372/000104746915...](https://www.sec.gov/Archives/edgar/data/1650372/000104746915008450/a2226437zf-1.htm#dy77101_principal_shareholders)

Kindof weird that their CFO resigned in October, just before they went public.
That's probably something I'd want to know about in more depth if I was going
to invest.

I wonder if they delayed the IPO so this could happen before they filled.
Seeing as they brought him in to lead them through the IPO process, this seems
a bit of a weird time to leave, this is probably the busiest time for a CFO.

>
> [http://www.bloomberg.com/news/articles/2015-02-11/atlassian-...](http://www.bloomberg.com/news/articles/2015-02-11/atlassian-
> appoints-erik-bardman-cfo-ahead-of-planned-ipo)

~~~
nailer
> 13 years from starting to going public, so those of you who join a startup
> going on its 4th year, something to keep in mind

Atlassian started in Australia, a country where technology is generally
considered a scam to separate idiots from their wallets. This significantly
slowed down growth, and the founders have said they wished the company had
left Australia sooner.

Edit: this went from +2 to -2 very quickly. For anyone unfamiliar with
Australian technology industry, here's a reference for Atlassian CEO comments:
[http://www.computerworld.com.au/article/557248/atlassian-
ceo...](http://www.computerworld.com.au/article/557248/atlassian-ceo-gets-why-
startups-want-leave-australia/)

The Australian government also taxes employee options in such a way to make
them non-viable:
[http://www.techworld.com.au/article/535906/what_atlassian_mo...](http://www.techworld.com.au/article/535906/what_atlassian_move_says_about_australia_startup_scene/)

My own experience working in Australia (as an Australian) in innovative
technology was extreme wariness of tech: it's an expense, not an investment.
Local companies were cynical of technologies, even mainstream technologies in
the US and UK, until there was at least one other Australian company using
them.

~~~
balls187
> Atlassian started in Australia, a country where technology is generally
> considered a scam to separate idiots from their wallets.

Perhaps ironically, when I was in Australia a few weeks back, every merchant
assumed my credit card supported NFC.

They got a kick out of my explanation that American credit cards just finally
caught up with Smart Chips, and now Australia has moved on.

~~~
Rapzid
Been in NZ for just over 4 years. The AU/NZ banking system is way out ahead of
the US in my experience. Instant acct-acct transfers even on weekends. Hourly
posting for bank to bank transfers. Better online experiences. Most of the big
banks, and kiwibank, offer good free expense tracking and budgeting software
ala mint.. I really hate having to deal with my US accounts :|

~~~
fungi
Do you know a free way to transfer cash from aus bank to nz bank?

I want to buy from www.lastseason.co.nz without getting stung.

~~~
tajen
OzForex? CurrenciesDirect? There are many similar exchange agents: You
transfer to their bank account of country 1, they transfer from their local
bank account in country 2, avoiding international transfer fees. Few days,
less than 1% away from the Google rate, unbeatable.

------
gtrubetskoy
Two similar companies that I can think of that went public recently is Splunk
(SPLK) and Hortonworks (HDP) - their stock is trading mostly sideways, nothing
exciting.

Not sure what to attribute this to - having reliable business clients pay for
your software seems like very solid business to me, after all isn't that how
IBM's and Oracle's of this world came about.

I suspect it comes down to how competitive this space is. Campfire used to be
the thing not long ago, and then everyone went to Slack - who's to say that
another competitor will not emerge and everyone will ditch their Jira's for
something better?

~~~
volaski
"Reliable business" is a double edged sword in this case because reliable also
means predictable. A lot of blue chip companies get their high valuation
because the public can see the potential but not completely so. Whereas
companies like Splunk or Hortonworks it's pretty much predictable how they
will keep making money (at least for the next couple of years assuming that
nothing surprising will happen)

~~~
7Figures2Commas
> Whereas companies like Splunk or Hortonworks it's pretty much predictable
> how they will keep making money...

Huh? Neither Splunk nor Hortonworks are profitable.

~~~
volaski
I guess i should have been clear. I meant "making money" as in having a
business model. Being profitable and having a business model are two different
things. We can ask Amazon

~~~
adventured
Ok, so let's ask Amazon: they are both profitable and have a business model
(further, for years running now, they've been able to demonstrate
profitability whenever they feel like it to satisfy Wall Street worries).
Their retail business has always had low margins, no different than Walmart by
comparison.

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mikkelewis
Wow, the founders still hold a combined 75% of equity.

~~~
nostrademons
It really helps to not need funding when you go to seek funding.

------
unethical_ban
I'd short it technically because Confluence is Satan's wiki, but corps eat it
up because WYSIWYG and because it costs money. (FOSS is bad, doncha know).

~~~
mlindner
Yeah I'm also considering shorting this as well. Having worked at a company
that ate Atlassian software day and night, every single piece of software they
have in their portfolio is a complete ugly mess. For every piece of software
they have there's a better alternative that is cheap or free.

~~~
katbyte
Could you list the cheap and or free alternatives?

~~~
mschuster91
Well, for wikis it's obviously MediaWiki, and Bugzilla for JIRA.

Only thing that I don't know of free software replacement is the Agile
Development tooling that JIRA provides. But tbh, "agile development" is a
hellhole of buzzwords, expensive consultants and ridiculous bullshit rules
anyway.

~~~
rubidium
Or, you know, something a fortune 200 company uses to set its release dates
for its flagship software. And is able to communicate how scope creep would
affect sales to their internal team. And hits that release date.

------
w8rbt
I hope bitbucket stays the same. Great service for private repos with git and
mercurial support.

~~~
tomschlick
Except for the availability issues over the past few months that would happen
almost every other day. Moved my team to Github and __poof __, issues gone.

------
shabuta
Core values include "Don’t #@!% the Customer" and it ended up on their SEC
statement. Their stock went up in my book.

~~~
WWKong
No one wanted to translate it to some mature phrase like, "do right by the
customer"? Too much work?

------
esaym
I hope it works well for them. I've seen many companies go down the tubes
after deciding to go public. Which makes me wonder why one would even want to
go public in the first place? The allure of perhaps making more money?

~~~
Blackthorn
You know all those employees that you gave equity to in order to lure them
onboard? Well, you've got a few options at that point. You can go public so
they can cash out. Or you can do some kind of revenue-sharing scheme so they
can get cash. Or something. Point is, you have to make good on your promise to
them (their equity) at some point or they're all going to quit.

~~~
esaym
There is that issue, but surely not all startups offer that?

~~~
theseatoms
Equity investors of all kinds will eventually want to liquidate.

------
kaizendad
Presumably this is why they completely repackaged JIRA a few weeks ago.
[http://www.cio.com/article/2989783/atlassian-takes-jira-
beyo...](http://www.cio.com/article/2989783/atlassian-takes-jira-beyond-the-
development-world.html). Now they have the broad corporate-focused packages
that will play well on Wall Street. They also have upside growth from the
repackaging that can drive speculative pricing beyond what their current
financial statements would justify.

------
jamesfzhang
Revenue:

$148.5m (FY2013)

$215.1m (FY2014)

$319.5m (FY2015)

Net income:

$10.8m (FY2013)

$19.0m (FY2014)

$6.8m (FY2015)

~~~
guiomie
why is it down for FY2015 net income? And Aren't those margins kinda thin?

~~~
nemo44x
Not at all. They are investing their profits into scaling and growing the
business.

~~~
mbesto
This. And no, software margins are not categorically thin (see SAP, Oracle,
Microsoft, etc).

------
nemo44x
This will be a great litmus test for relatively new and growing technology
companies to determine when it's right to IPO in this market.

There have been a number of recent IPO's from companies with great growth but
no profits to show for it. The market has mainly rejected these companies and
the companies are trading near IPO levels or below. Some of them after taking
a down round to go public even, such as HDP.

Atlasssian is showing very good growth and profits, however modest (which they
should be for them - reinvesting in the company is the best action right now),
which I assume would end up with a pretty decent multiple.

My midline would be a 4 billion market cap based on current growth trajectory,
current and potential earnings (and their reinvestment in the business) and
cash on hand which should limit and sort of second round any time in the
foreseeable future.

This isn't based on PE (it would be extremely high right now) but rather the
revenue growth and cash stability to allow sustainable reinvestment in the
companies marketing, R&D and sales departments. It's a bit over 10x forward
revenue.

------
KeepTalking
I think very highly of JIRA and would use it again, but at a previous
workplace ( over 1000 users) we required to have a JIRA/confluence admin who
was spending over 50% of his time either keeping it running, adding
connectors, or making modifications to suite various interest groups.

~~~
zajd
Is that a bad thing? Why the but?

~~~
netheril96
Perhaps because he believes a good solution should take care of itself without
human intervention most of the time?

------
_kyran
Interesting that this has happened so soon after relocating to the UK (2014)
from Australia. I wonder if they plan to stay there or move the US as well?

~~~
bsimpson
I didn't realize that they weren't based in SF, since they have a large
presence here. In fact, the Chief Legal Officer cited in that filing is based
in SF.

According to statements made by the founder[1], the move to London was
designed to make them more integrated into the global economy ahead of their
IPO. That tells me that they aren't moving again any time soon.

[1] [http://www.afr.com/technology/atlassians-farquhar-
justifies-...](http://www.afr.com/technology/atlassians-farquhar-justifies-
london-switch-20140217-ixrqy)

~~~
tajen
According to the "foreign private issuer" paragraph, "more than 50% of our
assets cannot be located in the United States", and ditto for the board
members.

They are primarily based in Sydney, they might be the biggest importers of
developers in Australia actually ;) but the SF office is large too, they hold
a few usergroups in it, as well as the Atlassian Summit which just ended (3-5
Nov). [https://summit.atlassian.com](https://summit.atlassian.com) . No wonder
you believed they were SF based.

------
halayli
Their products are well designed but often sluggish which ruins the
experience. I stopped using them because of that, unfortunately. It created a
barrier in my head and made me hesitant every time I wanted to interact with
their software.

------
bjacks
How can I buy shares?

~~~
castis
I am not well versed in the stock exchange but I believe your options are: A.
Work for Atlassian. B. Wait until they go public.

~~~
mediocrejoker
I believe the document these comments are linked to is a filing that states
that Atlassian is, in fact, going public.

------
mcv
With Goldman Sachs? That's disappointing. I don't trust anything they do
anymore.

------
tajen
The most awesome of the awesomest companies: " An application has been made to
list our Class A ordinary shares on the NASDAQ Global Market under the symbol
"TEAM"."

Only Atlassian could ask to be listen as "TEAM".

Is there a "quiet period"? I can't find the date of IPO on the document
either.

Does an IPO introductory price usually match the last round of funding? It
seems on page 10, they mention $2.23 for Class A shares and $0.51 for Class B
shares, which makes a total valuation of $148m. Last round valuation was
$3.15bn [1]. It means those shares have been bought 21 times higher at the
last round than the price mentioned in this document. Did I read it correctly?

Page 62, chart: For $1 initial purchase, customers end up spending $8 in
additional users, renewals and other products.

It's my first time reading an F-1/S-1, it's awesome, there's plenty of
information! Sales per continent, page 71! Marketing expenses page 80! That's
awesome!

[1]
[https://www.crunchbase.com/organization/atlassian](https://www.crunchbase.com/organization/atlassian)

~~~
hobbyjogger
The prices on Page 10 (I actually see similar but slightly different numbers,
the document may have been updated) are weighted-average _exercise prices_ for
all outstanding options. Since many of those options would have been issued
years ago (presumably with low strike prices) the average option price bears
little relationship to the IPO price (which we won't know until the IPO is
priced by the underwriters--note the blanks throughout).

------
s73v3r
That's a shame. I liked their products.

~~~
codezero
Why is this a shame? Do you think IPOing will affect their products &
direction?

~~~
s73v3r
Yes. Going public has never done anything good for any company. Once going
public, it's all about quarterly reports and pleasing a few hedge funds.

~~~
codezero
This seems overly broad. Red Hat has done a lot of very good things since
going public and I'm sure if you sat down and looked at a lot of public
companies shoes software you use it's likely they have done good things.

~~~
codezero
shoes -> whose :)

------
skhatri11
You mean a S-1?

~~~
danellis
No, F-1, because they're a foreign company.

------
tonytamps
[http://media.tumblr.com/tumblr_m09a7gL67A1r79r7q.gif](http://media.tumblr.com/tumblr_m09a7gL67A1r79r7q.gif)

I even love saying the word "TEAM".

