Notes from the Atlassian S-1 IPO Filing

Atlassian, makers of popular software engineering and management tools, just released their S-1 IPO filing. Almost 10 years ago I used their JIRA issue tracker software and have been a fan ever since. Atlassian is known within the tech entrepreneur community for hitting $100 million in sales with no sales people — pretty amazing. In addition, they raised a $60 million Series A in 2010, which is large by today’s standards, and was incredibly large back then.

Here are a few notes from the Atlassian S-1 IPO filing:

  • To reach this expansive market, we distribute and sell our products online without traditional sales infrastructure where users can get started in minutes without the need for assistance. We focus on enabling a self-service, low-friction model that makes it easy for users to try, adopt and use our products. (pg. 2)
  • More than 5 million monthly active users of the products and more than 48,000 customers (pg. 2)
  • Revenues (pg. 2)
    • 2013 – $148.5 million
    • 2014 – $215.1 million
    • 2015 – $319.5 million
  • Net Income (profits! – pg. 2)
    • 2013 – $10.8 million
    • 2014 – $19.0 million
    • 2015 – $6.8 million
  • Free Cash Flow (pg. 2)
    • 2013 – $47.1 million
    • 2014 – $65.0 million
    • 2015 – $65.5 million
  • Core values (pg. 4)
    • Open Company
    • No Bullsh*t
    • Build with Heart and Balance
    • Don’t #@!% the Customer
    • Play, as a Team
    • Be the Change You Seek
  • In fiscal 2014 and 2015, our research and development expenses were 37% and 44% of our revenue, respectively. (pg. 14)
  • 1,259 employees as of June 30, 2015 (pg. 14)
  • We have in the past experienced breaches of our security measures and our products are at risk for future breaches as a result of third-party action, or employee, vendor or contractor error or malfeasance. (pg. 15)
  • We believe that a critical contributor to our success has been our corporate culture, which we believe fosters innovation, teamwork and an emphasis on customer-focused results. (pg. 22)
  • The dual class structure of our ordinary shares has the effect of concentrating voting control with certain shareholders, in particular, our co-chief executive officers and their affiliates, which will limit your ability to influence the outcome of important transactions, including a change in control. (pg. 29)
  • Great products x Low pricing x Automation = High volume (pg. 82)
  • Build great products -> Keep prices low -> Low prices necessitate volume -> Volume means we sell to everyone -> Selling to everyone means we sell online -> Selling online requires transparent pricing and easy trial -> Easy trial means we need to build great product. So… (pg. 82)
  • Web site visitors have the opportunity to try our products for free and we generate on average more than 6,500 such evaluations per typical business day (pg. 83)
  • Equity ownership positions (pg. 114):
    • Co-CEO #1 – 37.7%
    • Co-CEO #2 – 37.7%
    • Accel Partners – 12.7%

As far as I can tell, Atlassian will be the first publicly traded software company with no sales team and no product price negotiations. Because the company is controlled by Co-CEOs with their special voting stock (and huge ownership positions!), they’ll be able to operate with a long-term view and focus on steady, profitable growth indefinitely. This is not your typical software company.

What else? What are some more thoughts on the Atlassian S-1 IPO filing?

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