Atlassian Corporation Plc (NASDAQ:TEAM) Q3 2019 Earnings Conference Call Transcript
Apr 17, 2019 • 05:00 pm ET
We will now begin the question-and-answer session.
Our first question comes from Gregg Moskowitz with Mizuho. Please go ahead.
Okay. Thank you very much, and good afternoon, gentlemen. Maybe just to start off, I know that you don't guide to it, but your deferred revenue did come in a fair amount, lower than most people were expecting. So, I guess, I'm just curious how you would frame the impact of prior pull forward activity on billings growth and revenue growth this quarter?
Yes. This quarter, you're quite right, when you look at the sequence of deferred revenue, we did see a different pattern emerging and this is very much driven by what we talked about last quarter, where in Q2 we saw relatively robust deferred revenue as various customers stepped in front of the price increases that we had announced in the middle part of September last year and that drove an unusual level of activity in Q2. And so, of course, that activity was drawing from quarters such as Q3 and the fact we think that we will also draw some activity from quarters into the future as well. So, it's very much driven by that moving forward of activity into Q2, driven by customers reacting to price increases that were about to come into play.
Okay. Thank you, James. And then just to clarify, are you seeing or have you seen any underlying changes to demand for any of your products or across any of your Jiras?
Well, we've been pleased by the underlying strength. If you look at the subscription line, for example, it reflects nice ongoing strength year-over-year, particularly right across our cloud products and, of course, the data center business has accounted for within that line as well and that continues to grow as well.
Okay. And then just one last quick one, if I may. Given that you closed the Opsgenie acquisition about six months ago and significantly lowered the price points almost immediately after, I'm just curious to get your thoughts on what you've seen around demand elasticity for that product so far? Thank you.
It's Scott here. I'll talk about that. Well, Gregg, yes, eventually we closed Opsgenie, that's in a space we're excited about the natural adjacency to the products that we have today. And we've had a history of pricing our products aggressively to make sure we capture that market share out there and we've done that from the various with Jira and Confluence, and we've done that with other products since, you continue to see us do that, we think it's a very nice end market and at this stage we're off to capturing market share versus maximizing any individual customer. We know that happens a lot wider as you get a larger customer base.
Okay. Terrific. Thanks very much.
The next question comes from Nikolay Beliov with Bank of America. Please go ahead.
Hey, guys. Thanks for taking my questions. Hey, gents, just to follow-up on your