Atlassian Corp 10-Q

ITEM 1. Financial Statements ATLASSIAN CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par value and share data) (Unaudited) September 30, 2025 June 30, 2025 Assets Current assets: Cash and cash equivalents $ 2,322,360 $ 2,512,874 Marketable securities 456,040 424,268 Accounts receivable, net 536,863 778,302 Prepaid expenses and other current assets 311,857 175,793 Total current assets 3,627,120 3,891,237 Non-current assets: Property and equipment, net 99,711 105,118 Operating lease right-of-use assets 134,610 169,127 Strategic investments 204,066 221,942 Intangible assets, net 235,890 244,840 Goodwill 1,318,028 1,304,445 Deferred tax assets 3,632 3,762 Other non-current assets 97,443 101,499 Total assets $ 5,720,500 $ 6,041,970 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 195,313 $ 222,092 Accrued expenses and other current liabilities 562,329 681,601 Deferred revenue, current portion 2,064,083 2,227,002 Operating lease liabilities, current portion 49,050 50,164 Total current liabilities 2,870,775 3,180,859 Non-current liabilities: Deferred revenue, net of current portion 217,073 254,252 Operating lease liabilities, net of current portion 188,573 201,483 Long-term debt 988,143 987,684 Deferred tax liabilities 23,726 23,881 Other non-current liabilities 53,274 48,157 Total liabilities 4,341,564 4,696,316 Commitments and contingencies (Note 11) Stockholders’ equity Class A Common Stock, $ 0.00001 par value; 750,000,000 shares authorized, 167,247,629 and 165,949,196 issued and outstanding at September 30, 2025 and June 30, 2025, respectively 2 2 Class B Common Stock, 0.00001 par value; 230,000,000 shares authorized, 96,049,867 and 97,030,987 issued and outstanding at September 30, 2025 and June 30, 2025, respectively 1 1 Additional paid-in capital 5,925,417 5,574,290 Accumulated other comprehensive income (loss) ( 2,814 ) 13,226 Accumulated deficit ( 4,543,670 ) ( 4,241,865 ) Total stockholders’ equity 1,378,936 1,345,654 Total liabilities and stockholders’ equity $ 5,720,500 $ 6,041,970 The above condensed consolidated financial statements should be read in conjunction with the accompanying notes. 3 ATLASSIAN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (Unaudited) Three Months Ended September 30, 2025 2024 Revenues: Subscription $ 1,374,502 $ 1,131,948 Other 58,051 55,833 Total revenues 1,432,553 1,187,781 Cost of revenues (1) (2) 257,924 217,624 Gross profit 1,174,629 970,157 Operating expenses: Research and development (1) (2) 755,994 603,101 Marketing and sales (1) (2) 336,427 252,393 General and administrative (1) 178,545 146,641 Total operating expenses 1,270,966 1,002,135 Operating loss ( 96,337 ) ( 31,978 ) Other income (expense), net 18,804 ( 19,432 ) Interest income 29,845 28,564 Interest expense ( 8,636 ) ( 7,318 ) Loss before income taxes ( 56,324 ) ( 30,164 ) Provision for (benefit from) income taxes ( 4,454 ) 93,605 Net loss $ ( 51,870 ) $ ( 123,769 ) Net loss per share attributable to Class A and Class B common stockholders: Basic $ ( 0.20 ) $ ( 0.48 ) Diluted $ ( 0.20 ) $ ( 0.48 ) Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders: Basic 262,991 260,477 Diluted 262,991 260,477 (1) Amounts include stock-based compensation, as follows: Cost of revenues $ 19,931 $ 18,214 Research and development 246,494 193,445 Marketing and sales 43,984 35,992 General and administrative 40,718 38,495 (2) Amounts include amortization of acquired intangible assets, as follows: Cost of revenues $ 9,957 $ 10,116 Research and development 94 94 Marketing and sales 3,599 3,672 The above condensed consolidated financial statements should be read in conjunction with the accompanying notes. 4 ATLASSIAN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) (Unaudited) Three Months Ended September 30, 2025 2024 Net loss $ ( 51,870 ) $ ( 123,769 ) Other comprehensive income (loss), net of reclassification adjustments: Foreign currency translation adjustment ( 5,746 ) 5,660 Net change in unrealized gain on marketable and privately held debt securities 394 1,354 Net gain (loss) on cash flow hedging derivative instruments ( 10,688 ) 10,506 Other comprehensive income (loss), before tax ( 16,040 ) 17,520 Income tax effect — — Other comprehensive income (loss), net of tax ( 16,040 ) 17,520 Total comprehensive income (loss), net of tax $ ( 67,910 ) $ ( 106,249 ) The above condensed consolidated financial statements should be read in conjunction with the accompanying notes. 5 ATLASSIAN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) (Unaudited) Three Months Ended September 30, 2025 Common Stock Additional paid in capital Accumulated other comprehensive income (loss) Accumulated deficit Total stockholders’ equity Class A Class B Shares Amount Shares Amount Balance at June 30, 2025 165,860 $ 2 97,031 $ 1 $ 5,574,290 $ 13,226 $ ( 4,241,865 ) $ 1,345,654 Common stock issued 1,717 — — — — — — — Conversion from Class B Common Stock to Class A Common Stock 981 — ( 981 ) — — — — — Stock-based compensation — — — — 351,127 — — 351,127 Repurchases of Class A Common Stock ( 1,383 ) — — — — — ( 249,935 ) ( 249,935 ) Other comprehensive income (loss), net of tax — — — — — ( 16,040 ) — ( 16,040 ) Net loss — — — — — — ( 51,870 ) ( 51,870 ) Balance at September 30, 2025 167,175 $ 2 96,050 $ 1 $ 5,925,417 $ ( 2,814 ) $ ( 4,543,670 ) $ 1,378,936 Three Months Ended September 30, 2024 Common Stock Additional paid in capital Accumulated other comprehensive income (loss) Accumulated deficit Total stockholders’ equity Class A Class B Shares Amount Shares Amount Balance at June 30, 2024 159,388 $ 2 101,012 $ 1 $ 4,212,064 $ 25,300 $ ( 3,204,516 ) $ 1,032,851 Common stock issued 1,284 — — — 4 — — 4 Conversion from Class B Common Stock to Class A Common Stock 1,017 — ( 1,017 ) — — — — — Stock-based compensation — — — — 286,146 — — 286,146 Repurchases of Class A Common Stock ( 1,131 ) — — — — — ( 183,918 ) ( 183,918 ) Other comprehensive income (loss), net of tax — — — — — 17,520 — 17,520 Net loss — — — — — — ( 123,769 ) ( 123,769 ) Balance at September 30, 2024 160,558 $ 2 99,995 $ 1 $ 4,498,214 $ 42,820 $ ( 3,512,203 ) $ 1,028,834 T he above condensed consolidated financial statements should be read in conjunction with the accompanying notes. 6 ATLASSIAN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Three Months Ended September 30, 2025 2024 Cash flows from operating activities: Net loss $ ( 51,870 ) $ ( 123,769 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 24,333 22,827 Stock-based compensation 351,127 286,146 Impairment charges for leases and leasehold improvements 26,673 — Deferred income taxes ( 80 ) ( 768 ) Amortization of interest rate swap contracts ( 5,552 ) ( 7,155 ) Net loss (gain) on strategic investments ( 26,526 ) 15,292 Net foreign currency loss 1,831 3,040 Other 168 991 Changes in operating assets and liabilities, net of business combinations: Accounts receivable, net 241,361 144,030 Prepaid expenses and other assets ( 92,680 ) ( 39,914 ) Accounts payable ( 24,957 ) ( 10,144 ) Accrued expenses and other liabilities ( 115,016 ) ( 108,168 ) Deferred revenue ( 200,097 ) ( 101,916 ) Net cash provided by operating activities 128,715 80,492 Cash flows from investing activities: Business combinations, net of cash acquired ( 15,698 ) ( 4,975 ) Purchases of property and equipment ( 14,112 ) ( 6,151 ) Purchases of strategic investments — ( 14,050 ) Purchases of marketable securities ( 62,763 ) ( 43,704 ) Proceeds from maturities of marketable securities 31,887 46,148 Proceeds from sales of strategic investments — 4,042 Net cash used in investing activities ( 60,686 ) ( 18,690 ) Cash flows from financing activities: Repurchases of Class A Common Stock ( 252,807 ) ( 183,610 ) Other — ( 3,143 ) Net cash used in financing activities ( 252,807 ) ( 186,753 ) Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash ( 5,929 ) 3,564 Net decrease in cash, cash equivalents, and restricted cash ( 190,707 ) ( 121,387 ) Cash, cash equivalents, and restricted cash at beginning of period 2,513,762 2,178,122 Cash, cash equivalents, and restricted cash at end of period $ 2,323,055 $ 2,056,735 Reconciliation of cash, cash equivalents, and restricted cash within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above: Cash and cash equivalents $ 2,322,360 $ 2,055,597 Restricted cash included in other non-current assets 695 1,138 Total cash, cash equivalents, and restricted cash $ 2,323,055 $ 2,056,735 Non-cash investing and financing activities: Purchase of property and equipment included in accrued expenses and other current liabilities 4,202 2,655 Repurchases of Class A Common Stock included in accrued expenses and other current liabilities 1,295 3,250 The above condensed consolidated financial statements should be read in conjunction with the accompanying notes. 7 ATLASSIAN CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ( Unaudited ) 1. Description of Business Atlassian Corporation (the “Company”) is a global technology company with a mission to unleash the potential of every team. The Company’s team collaboration software enables organizations to connect all teams through a system of work that unlocks productivity at scale. The Company’s portfolio of interconnected apps, AI agents, and products, each with discrete value propositions, delivers solutions for software teams, IT operations and support teams, and business teams. The Company’s fiscal year ends on June 30 of each year. References to fiscal year 2026, for example, refer to the fiscal year ending June 30, 2026. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which are established primarily by the Financial Accounting Standards Board (“FASB”). The accompanying condensed consolidated financial statements contain all normal recurring adjustments which are necessary to fairly present the condensed consolidated balance sheets as of September 30, 2025 and June 30, 2025, the statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for the three months ended September 30, 2025 and 2024. These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are sufficient to make the information not misleading . Results of operations for interim periods are not necessarily indicative of results for the entire year or of the results to be expected in future periods. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions in the Company’s condensed consolidated financial statements. These estimates are based on information available as of the date of the condensed consolidated financial statements. Such management estimates and assumptions include, but are not limited to, the determination of: • the standalone selling price of performance obligations for revenue contracts with multiple performance obligations; • the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions. Actual results could differ materially from these estimates. Segment The Company operates as a single operating segment and derives revenue primarily from fees earned from subscription-based arrangements for providing customers with software in a cloud-based-infrastructure that the Company provides, and from the sale of on-premises term license agreements. 8 An operating segment is defined as a component of an entity for which discrete financial information is available and whose results of operations are regularly reviewed by the chief operating decision maker (“CODM”). The Company has identified the CEO, Mike Cannon-Brookes, as the CODM. The CODM manages the Company using consolidated financial information. Further, the Company offers a connected portfolio of apps that are built on a single Atlassian platform and data model. Accordingly, the Company has determined it operates as a single operating and reportable segment. The CODM uses consolidated net loss to allocate resources, including headcount, and make business investment decisions during the Company’s budgeting process. The CODM also uses consolidated net loss to assess performance by comparing the consolidated results to forecasts. Significant segment expenses are organized by function and are presented on the condensed consolidated statements of operations. Other segment items included in consolidated net loss are: other income and expense, net, interest income, interest expense, and the provision for income taxes, which are reflected in the condensed consolidated statements of operations. Significant Accounting Policies There were no significant changes to the Company’s significant accounting policies disclosed in Note 2, “ Summary of Significant Accounting Policies, ” of its Annual Report on Form 10-K for fiscal year 2025, which was filed with the SEC on August 15, 2025. Concentration of Credit Risk and Significant Customers Financial instruments potentially exposing the Company to credit risk consist primarily of cash, cash equivalents, accounts receivable, derivative contracts, and investments. The Company holds cash at financial institutions that management believes are high credit, quality financial institutions and invests in investment grade securities rated A- and above. The Company’s derivative contracts expose it to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. The Company enters into master netting agreements with select financial institutions to reduce its credit risk and trades with several counterparties to reduce its concentration risk with any single counterparty. The Company does not have significant exposure to counterparty credit risk at this time. In addition, the Company does not require nor is required to post collateral of any kind related to any foreign currency derivatives. Credit risk arising from accounts receivable is mitigated to a certain extent due to the Company’s large number of customers and their dispersion across various industries and geographies. The Company’s customer base is highly diversified, thereby limiting credit risk. The Company manages credit risk with customers by closely monitoring its receivables and contract assets. The Company continuously monitors outstanding receivables locally to assess whether there is objective evidence that outstanding accounts receivable and contract assets are credit-impaired. As of September 30, 2025, and June 30, 2025, no customer represented more than 10% of the total accounts receivable balance. For the three months ended September 30, 2025, and 2024, no customer represented more than 10% of total revenues. New Accounting Standards Not Yet Adopted in Fiscal Year 2026 In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of the new guidance and does not expect it to have a material impact on its consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03 “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures.” This ASU requires disaggregated disclosure of income statement expenses for public entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. 9 In July 2025, the FASB issued ASU 2025-05 “ Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets for Private Companies and Certain Not-for-Profit Entities,” which amends ASC 326-20 to provide a practical expedient and an accounting policy election (for all entities, other than public business entities that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. This ASU is effective for fiscal years beginning after December 15, 2025, and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” This ASU makes targeted improvements to the accounting for internally developed software subject to ASC 350-40. This ASU is effective for fiscal years beginning after December 15, 2027, and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. 3. Fair Value Measurements The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2025, by level within the fair value hierarchy (in thousands): Level 1 Level 2 Total Assets measured at fair value Cash and cash equivalents: Money market funds $ 1,599,347 $ — $ 1,599,347 Marketable securities: U.S. treasury securities — 215,676 215,676 Agency securities — 3,216 3,216 Certificates of deposit and time deposits — 10,000 10,000 Commercial paper — 24,623 24,623 Corporate debt securities — 202,525 202,525 Derivative financial instruments — 18,454 18,454 Total assets measured at fair value $ 1,599,347 $ 474,494 $ 2,073,841 Liabilities measured at fair value Derivative financial instruments $ — $ 5,389 $ 5,389 Total liabilities measured at fair value $ — $ 5,389 $ 5,389 The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2025, by level within the fair value hierarchy (in thousands): 10 Level 1 Level 2 Total Assets measured at fair value Cash and cash equivalents: Money market funds $ 1,774,138 $ — $ 1,774,138 Corporate debt securities — 382 382 Marketable securities: U.S. treasury securities — 176,661 176,661 Agency securities — 3,216 3,216 Certificates of deposit and time deposits — 10,000 10,000 Commercial paper — 19,697 19,697 Corporate debt securities — 214,694 214,694 Derivative financial instruments — 23,234 23,234 Total assets measured at fair value $ 1,774,138 $ 447,884 $ 2,222,022 Liabilities measured at fair value Derivative financial instruments $ — $ 2,445 $ 2,445 Total liabilities measured at fair value $ — $ 2,445 $ 2,445 Due to the short-term nature of accounts receivable, net, contract assets, accounts payable, accrued expenses, and other current liabilities, their carrying amount is assumed to approximate their fair value. Determination of Fair Value The Company uses quoted prices in active markets for identical assets to determine the fair value of the Company’s Level 1 investments. The fair value of the Company’s Level 2 investments is determined based on quoted market prices or alternative market observable inputs. Strategic Investments Measured and Recorded at Fair Value on a Non-Recurring Basis The Company’s investments in privately held companies are not included in the tables above and are discussed in Note 4, “Investments.” The carrying value of the Company’s privately held equity securities are adjusted on a non-recurring basis upon observable price changes in orderly transactions for identical or similar investments of the same issuer, or impairment (referred to as the measurement alternative). Privately held equity securities that have been remeasured during the period based on observable price changes in orderly transactions are classified within Level 2 or Level 3 in the fair value hierarchy because the Company estimates the value based on valuation methods which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, rights and preferences of the investments, and obligations of the securities the Company holds. The fair value of privately held equity securities that have been remeasured due to impairment is classified within Level 3. The Company’s privately held debt and equity securities amounted to $ 150.6 million and $ 168.8 million as of September 30, 2025, and June 30, 2025, respectively. 11 4. Investments Marketable Securities The Company’s investments of marketable securities as of September 30, 2025, consisted of the following (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. treasury securities $ 215,159 $ 530 $ ( 13 ) $ 215,676 Agency securities 3,198 18 — 3,216 Certificates of deposit and time deposits 10,000 — — 10,000 Commercial paper 24,623 — — 24,623 Corporate debt securities 201,821 704 — 202,525 Total marketable securities $ 454,801 $ 1,252 $ ( 13 ) $ 456,040 The Company’s investments of marketable securities as of June 30, 2025, consisted of the following (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. treasury securities $ 176,338 $ 388 $ ( 65 ) $ 176,661 Agency securities 3,197 19 — 3,216 Certificates of deposit and time deposits 10,000 — — 10,000 Commercial paper 19,697 — — 19,697 Corporate debt securities 214,190 527 ( 23 ) 214,694 Total marketable securities $ 423,422 $ 934 $ ( 88 ) $ 424,268 The table below summarizes the Company’s marketable securities by remaining contractual maturity (in thousands): September 30, 2025 June 30, 2025 Due in one year or less $ 319,559 $ 271,923 Due in one year through five years 136,481 152,345 Total marketable securities $ 456,040 $ 424,268 The Company regularly reviews the changes to the rating of its marketable securities by rating agencies and monitors the surrounding economic conditions to assess the risk of expected credit losses. As of September 30, 2025, and June 30, 2025, unrealized losses and the related risk of expected credit losses were not material. Strategic Investments Carrying value of privately held debt securities The Company’s investments of privately held debt securities as of September 30, 2025, consisted of the following (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value Privately held debt securities $ 7,430 $ — $ ( 3,000 ) $ 4,430 The Company’s investments of privately held debt securities as of June 30, 2025, consisted of the following (in thousands): Amortized Cost Unrealized Gains Unrealized Losses Fair Value Privately held debt securities $ 7,780 $ — $ ( 3,350 ) $ 4,430 12 Carrying value of publicly traded and privately held equity securities Publicly traded equity securities are recorded at fair value, and privately held equity securities are measured using the measurement alternative. The carrying value is measured as the total initial cost plus the cumulative net gain (loss). The carrying values for publicly traded and privately held equity securities as of September 30, 2025 are summarized below (in thousands): Publicly traded equity securities Privately held equity securities Total Initial total cost $ 20,000 $ 146,302 $ 166,302 Cumulative net gains (losses) 24,729 ( 112 ) 24,617 Carrying value $ 44,729 $ 146,190 $ 190,919 Privately held equity securities’ cumulative net losses are composed of downward adjustments and impairment charges of $ 9.0 million and upward adjustments of $ 8.9 million as of September 30, 2025. During the period ended September 30, 2025, one of the Company's privately held equity investments completed an initial public offering. This publicly traded equity security was reclassified from strategic investments to prepaid expenses and other current assets on the condensed consolidated balance sheets as the Company intends to sell this investment within 12 months from the balance sheet date. The Company did not have any publicly traded equity securities as of June 30, 2025 and the carrying values for privately held equity securities as of June 30, 2025 are summarized below (in thousands): Privately held equity securities Initial total cost $ 166,302 Cumulative net losses ( 1,909 ) Carrying value $ 164,393 Privately held equity securities’ cumulative net losses are composed of downward adjustments and impairment charges of $ 8.5 million and upward adjustments of $ 6.6 million as of June 30, 2025. Gains and Losses on Strategic Investments The components of gains and losses on strategic investments were as follows (in thousands): Three Months Ended September 30, 2025 2024 Unrealized gains recognized on publicly traded equity securities $ 24,729 $ — Unrealized gains recognized on privately held equity securities 2,297 — Unrealized losses recognized on privately held equity securities including impairment ( 500 ) — Unrealized gains, net $ 26,526 $ — Realized losses recognized on privately held equity securities — ( 34 ) Gains (losses) on strategic investments, net $ 26,526 $ ( 34 ) Unrealized gains recognized during the reporting period on privately held equity securities still held at the reporting date $ 1,797 $ — Unrealized gains recognized on privately held equity securities include upward adjustments from equity securities accounted for under the measurement alternative, while unrealized losses recognized on privately held equity securities include downward adjustments and impairment. Realized gains on sales of privately held securities, net, reflect the difference between the sale proceeds and the carrying value of the security at the beginning of the period or the purchase date, if later. 13 Equity Method Investment Vertical First Trust (“VFT”) was established for the construction project associated with the Company’s new global headquarters in Sydney, Australia (the “Australian HQ Property”). In fiscal year 2023, the Company completed a non-cash sale of the controlling interest of VFT to a third-party buyer as part of the contemplated transactions for the buyer to invest in and develop the Australian HQ Property. The Company retained a minority equity interest of 13 % in the form of ordinary units in VFT and has significant influence in VFT. The Company’s interest in VFT is accounted for using the equity method in the condensed consolidated financial statements. Under the equity method, the Company records its proportionate share of VFT’s earnings or losses. The following table sets forth the carrying amounts of the equity method investment and the movements during fiscal year 2025 and the three months ended September 30, 2025 (in thousands): Equity Method Investment Balance as of June 30, 2024 $ 74,510 Share of losses ( 20,433 ) Effect of change in exchange rates ( 958 ) Balance as of June 30, 2025 53,119 Share of losses — Effect of change in exchange rates 327 Balance as of September 30, 2025 $ 53,446 The carrying amount of the Company’s investment in VFT was reported within strategic investments in the condensed consolidated balance sheets. 5. Derivative Contracts The Company has derivative instruments that are used for hedging activities as discussed below. The following table sets forth the notional amounts of the Company’s hedging derivative instruments as of September 30, 2025 (in thousands): Notional Amounts of Derivative Instruments Notional Amount by Term to Maturity Classification by Notional Amount Under 12 months Over 12 months Total Cash Flow Hedge Non Hedge Total Forward contracts $ 936,656 $ 65,922 $ 1,002,578 $ 739,524 $ 263,054 $ 1,002,578 The following table sets forth the notional amounts of the Company’s hedging derivative instruments as of June 30, 2025 (in thousands): Notional Amounts of Derivative Instruments Notional Amount by Term to Maturity Classification by Notional Amount Under 12 months Over 12 months Total Cash Flow Hedge Non Hedge Total Forward contracts $ 1,064,280 $ 79,858 $ 1,144,138 $ 765,613 $ 378,525 $ 1,144,138 14 The fair values of the Company’s derivative instruments were as follows (in thousands): Balance Sheet Location September 30, 2025 June 30, 2025 Derivative assets Derivatives designated as hedging instruments: Foreign exchange forward contracts Prepaid expenses and other current assets $ 17,080 $ 16,210 Foreign exchange forward contracts Other non-current assets 288 3,715 Derivatives not designated as hedging instruments: Foreign exchange forward contracts Prepaid expenses and other current assets 1,086 3,309 Total derivative assets $ 18,454 $ 23,234 Derivative liabilities Derivatives designated as hedging instruments: Foreign exchange forward contracts Accrued expenses and other current liabilities $ 4,794 $ 2,409 Foreign exchange forward contracts Other non-current liabilities 432 — Derivatives not designated as hedging instruments: Foreign exchange forward contracts Accrued expenses and other current liabilities 163 36 Total derivative liabilities $ 5,389 $ 2,445 The pre-tax effects of derivatives designated as cash flow hedging instruments on the condensed consolidated financial statements were as follows (in thousands): Three Months Ended September 30, 2025 2024 Beginning balance of accumulated gains in accumulated other comprehensive income (loss) $ 24,679 $ 41,424 Gross unrealized gains (losses) recognized in other comprehensive income (loss) ( 6,709 ) 18,015 Net losses (gains) reclassified from cash flow hedge in accumulated other comprehensive income (loss) into profit or loss: Recognized in cost of revenues 180 ( 43 ) Recognized in research and development 1,083 ( 440 ) Recognized in marketing and sales 47 57 Recognized in general and administrative 263 72 Recognized in interest expense ( 5,552 ) ( 7,155 ) Ending balance of accumulated gains in accumulated other comprehensive income (loss) $ 13,991 $ 51,930 15 6. Property and Equipment Property and equipment, net consisted of the following (in thousands): September 30, 2025 June 30, 2025 Equipment $ 15,949 $ 15,008 Computer hardware and software 60,081 58,559 Furniture and fittings 25,322 25,217 Leasehold improvements and other 152,444 154,113 Property and equipment, gross 253,796 252,897 Less: accumulated depreciation ( 154,085 ) ( 147,779 ) Property and equipment, net $ 99,711 $ 105,118 Depreciation expense was $ 10.7 million and $ 8.9 million for the three months ended September 30, 2025, and 2024, respectively. During the three months ended September 30, 2025, the Company recorded a $ 1.1 million impairment charge, which is recorded in leasehold improvements and other, as a result of its facilities consolidation restructuring efforts. Refer to Note 14, “ Restructuring ,” for additional information. 7. Business Combinations Completed Acquisition During the first quarter of fiscal year 2026, the Company completed an acquisition to expand Atlassian’s product and service offerings. The transaction was accounted for as a business combination and was not material to the condensed consolidated financial statements. Pending Acquisition A Software Company In September 2025, the Company entered into a definitive agreement to acquire A Software Company (“ DX”), a leader in engineering intelligence. Under the terms of the agreement, the Company will acquire DX for approximately $ 1.0 billion , inclusive of DX’s cash balance, subject to customary adjustments. Total consideration will be comprised of cash and shares of the Company’s Class A Common Stock, which are subject to continued vesting provisions. The Company expects to fund the cash consideration through existing cash balances. The transaction is anticipated to close in the second quarter of fiscal year 2026, subject to customary closing conditions, including required regulatory approvals. Subsequent Event The Browser Company of New York Inc. On October 20, 2025, the Company acquired 100 % of the outstanding equity of The Browser Company of New York Inc. (“BCNY”), the company behind the Dia and Arc browsers. Under the terms of the agreement, the Company acquired BCNY for approximately $ 610 million. Total consideration was composed of approximately $ 488.3 million in cash, which was funded through the Company’s existing cash balance, and the remainder in the form of shares of the Company’s Class A Common Stock, which are subject to continued vesting provisions. The Company is currently evaluating the purchase price allocation for this acquisition, which will be treated as a business combination. 8. Goodwill and Intangible Assets Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill amounts are not amortized, but rather tested for impairment at least annually during the fourth quarter, or when indicators of impairment exist. 16 Goodwill consisted of the following (in thousands): Goodwill Balance as of June 30, 2025 $ 1,304,445 Additions 13,835 Effect of change in exchange rates ( 252 ) Balance as of September 30, 2025 $ 1,318,028 Intangible Assets Intangible assets consisted of the following as of September 30, 2025 (in thousands): Gross Carrying Amount Accumulated Amortization Net Acquired developed technology $ 471,632 $ ( 288,482 ) $ 183,150 Patents, trade names, and other rights 70,928 ( 38,815 ) 32,113 Customer relationships 135,687 ( 115,060 ) 20,627 Total Intangible Assets $ 678,247 $ ( 442,357 ) $ 235,890 Intangible assets consisted of the following as of June 30, 2025 (in thousands): Gross Carrying Amount Accumulated Amortization Net Acquired developed technology $ 466,932 $ ( 278,525 ) $ 188,407 Patents, trade names, and other rights 70,928 ( 37,337 ) 33,591 Customer relationships 135,687 ( 112,845 ) 22,842 Total Intangible Assets $ 673,547 $ ( 428,707 ) $ 244,840 The weighted-average remaining useful lives of the Company’s acquired intangible assets as of September 30, 2025 were as follows: Weighted-Average Remaining Useful Lives (Years) Acquired developed technology 5 Patents, trade names, and other rights 6 Customer relationships 3 Amortization expense for intangible assets was approximately $ 13.6 million and $ 13.9 million for the three months ended September 30, 2025, and 2024, respectively. The following table presents the estimated future amortization expense related to intangible assets held as of September 30, 2025 (in thousands): Fiscal Years: Remainder of 2026 $ 40,395 2027 49,036 2028 46,808 2029 41,303 2030 37,870 Thereafter 20,478 Total future amortization expense $ 235,890 17 9. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): September 30, 2025 June 30, 2025 Accrued expenses $ 208,105 $ 180,197 Employee benefits 288,536 422,986 Tax liabilities 3,856 36,726 Customer deposits 19,188 16,396 Restructuring provision 18,269 — Other payables 24,375 25,296 Total accrued expenses and other current liabilities $ 562,329 $ 681,601 10. Debt Credit Facility In August 2024, the Company’s principal U.S. operating subsidiary, Atlassian US, Inc., entered into an amended and restated credit agreement (the "2024 Credit Agreement") which eliminated a term loan facility and provides for a $ 750 million senior unsecured revolving credit facility (the “2024 Credit Facility”). The 2024 Credit Agreement replaced the Company's prior credit agreement entered into in October 2020 (“2020 Credit Agreement”) which provided for a $ 1 billion senior unsecured delayed-draw term loan facility (the “Term Loan”) and a $ 500 million senior unsecured revolving credit facility. The 2024 Credit Facility bears interest, at the Company’s option, at a base rate or the Secured Overnight Financing Rate, plus, in each case, a spread of 0.875 % to 1.50 % per annum. In each case, the applicable margin will be determined by the consolidated leverage ratio of the Company and its subsidiaries, or, following the Company’s one-time option, the Company’s credit rating. The Company may repay outstanding loans under the 2024 Credit Facility at any time, without premium or penalty, and the Company has the option to request an increase of $ 250 million in certain circumstances. The 2024 Credit Facility matures in August 2029. As of September 30, 2025 there were no borrowings under the 2024 Credit Facility. The Company is also obligated to pay a commitment fee on the undrawn amounts of the 2024 Credit Facility at an annual rate ranging from 0.075 % to 0.20 %, determined by the Company’s consolidated leverage ratio, or, following the Company’s one-time option, the Company’s credit rating. The 2024 Credit Facility requires compliance with various financial and non-financial covenants, including affirmative and negative covenants. The financial covenants include a maximum consolidated leverage ratio of 3.5 x, which increases to 4.5 x during the period of four fiscal quarters immediately following a material acquisition. As of September 30, 2025, the Company was in compliance with all covenants associated with the 2024 Credit Facility. Senior Notes On May 15, 2024, the Company issued $ 500.0 million aggregate principal amount of 5.250 % senior notes due 2029 (the “2029 Notes”) and $ 500.0 million aggregate principal amount of 5.500 % senior notes due 2034 (the “2034 Notes,” and together with the 2029 Notes, the “Notes”). The 2029 Notes and the 2034 Notes will mature on May 15, 2029, and May 15, 2034, respectively. The 2029 Notes bear interest at a rate of 5.250 % per year. The 2034 Notes bear interest at a rate of 5.500 % per year. Interest on the Notes is paid semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2024. The Notes are senior unsecured obligations of the Company. The Company may redeem either series of the Notes, in whole or in part, at any time or from time to time at the applicable redemption price. Upon the occurrence of a change of control event, the Company will be required to make an offer to repurchase all outstanding Notes from their holders at a price equal to 101 % of their principal amount thereof, plus accrued and unpaid interest to, but not including, the date of repurchase. The indenture governing the Notes also includes covenants (including certain limited covenants restricting the Company’s ability to incur certain liens and enter into certain sale and leaseback transactions), events of default, and other customary provisions. As of September 30, 2025, the Company was in compliance with all covenants associated with the Notes. 18 The Company incurred debt discount and issuance costs of approximately $ 14.3 million in connection with the Notes offering, which were allocated on a pro rata basis to the 2029 Notes and 2034 Notes. The debt discount and issuance costs are amortized on an effective interest rate method to interest expense over the contractual term of the Notes. The proceeds from this offering, net of debt discounts and issuance costs, were $ 985.7 million. The net proceeds were used primarily to repay the Term Loan. The components of the Notes were as follows (in thousands, except percentage data): Instrument Expected Remaining Term (years) Contractual Interest Rate Effective Interest Rate September 30, 2025 June 30, 2025 2029 Notes 3.6 5.250 % 5.55 % $ 500,000 $ 500,000 2034 Notes 8.6 5.500 % 5.71 % 500,000 500,000 Unamortized debt discount and issuance costs ( 11,857 ) ( 12,316 ) Long-term debt $ 988,143 $ 987,684 The total estimated fair value of the Notes was approximately $ 1.05 billion and $ 1.03 billion as of September 30, 2025, and June 30, 2025, respectively. The estimated fair value of the Notes, which the Company deems Level 2 financial instruments, was determined based on quoted bid prices in an over-the-counter market on the last trading day of the reporting period. 11. Commitments and Contingencies Noncancellable Purchase Obligations The Company has contractual commitments for services with third parties related to its cloud services platform, marketing-related contracts, and other services. These commitments are non-cancellable and expire within two to seven years , as disclosed in Note 11, “Commitments and Contingencies ” of its Annual Report on Form 10-K for fiscal year 2025. Operating Leases During the three months ended September 30, 2025, the Company recorded a $ 25.2 million impairment charge for operating lease right-of-use assets as a result of its facilities consolidation restructuring efforts. Refer to Note 14, “ Restructuring ,” for additional information. There were no other material changes to the Company’s operating lease arrangements and future lease payments under non-cancelable operating leases, including, obligations for leases that have not yet commenced, disclosed in Note 9, “ Leases, ” of the Company’s Annual Report on Form 10-K for fiscal year 2025. Supplemental information related to operating leases was as follows (in thousands): Three Months Ended September 30, 2025 2024 Operating lease costs $ 10,625 $ 10,666 Right-of-use assets obtained in exchange for new operating lease liabilities $ 239 $ 7,426 Legal Proceedings From time to time, the Company is party to litigation and other legal proceedings in the ordinary course of business. While the Company does not believe the ultimate resolutions of these pending legal matters are likely to have a material adverse effect on the Company’s financial position, the results of any litigation or other legal proceedings are uncertain and as such the resolution of such legal proceedings, either individually or in the aggregate, could have a material adverse effect on its business, results of operations, financial condition or cash flows. The Company accrues for loss contingencies when it is both probable that it will incur the loss and when it can reasonably estimate the amount of the loss or range of loss. For the periods presented, the Company has not recorded any liabilities as a result of the litigation or other legal proceedings in its condensed consolidated financial statements. 19 Indemnification Provisions The Company’s agreements include provisions indemnifying customers against intellectual property and other third-party claims. In addition, the Company has entered into indemnification agreements with its directors, executive officers and certain other officers that will require the Company to, among other things, indemnify these individuals for certain liabilities that may arise as a result of their affiliation with the Company. For the periods presented, the Company has not incurred any costs as a result of such indemnification obligations and has not recorded any liabilities related to such obligations in its condensed consolidated financial statements. 12. Revenue Remaining Performance Obligations The transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price allocated to the remaining performance obligations is influenced by several factors, including the timing of renewals, the timing of delivery of software licenses, average contract terms, and foreign currency exchange rates. Unbilled portions of the remaining performance obligations are subject to future economic risks, including bankruptcies, regulatory changes, and other market factors. As of September 30, 2025, approximately $ 3.3 billion of revenue is expected to be recognized from the transaction price allocated to remaining performance obligations. The Company expects to recognize revenue on approximately 74 % of these remaining performance obligations over the next 12 months, with the balance recognized thereafter. Disaggregated Revenue The Company’s revenues by geographic region based on end-users who purchased the Company’s offerings were as follows (in thousands): Three Months Ended September 30, 2025 2024 Americas United States $ 613,017 $ 506,227 Other Americas 92,769 78,272 Total Americas 705,786 584,499 EMEA Germany 141,978 117,802 Other EMEA 424,101 351,467 Total EMEA 566,079 469,269 Asia Pacific 160,688 134,013 Total revenues $ 1,432,553 $ 1,187,781 The Company’s revenues by deployment options were as follows (in thousands): Three Months Ended September 30, 2025 2024 Cloud $ 997,708 $ 792,306 Data Center 372,648 335,594 Marketplace and other 62,197 59,881 Total revenues $ 1,432,553 $ 1,187,781 20 The Company provides different deployment options for its product offerings. Cloud offerings provide customers the right to use the Company’s software in a cloud-based infrastructure that the Company provides. Data Center offerings are on-premises term license agreements for the Company’s Data Center products, which are software licensed for a specified period, and include support and maintenance services that are bundled with the license for the term of the license period. Marketplace and other offerings mainly include fees received for sales of third-party apps in the Atlassian Marketplace and services like premier support, advisory services and training services. Premier support consists of subscription-based arrangements for a higher level of support across different deployment options, and revenues from this offering are included in Subscription revenues within the Company’s condensed consolidated statements of operations. In September 2025, the Company announced plans to end-of-life its Data Center deployment offering. Beginning in March 2026, the Company will no longer sell term licenses to new customers, and the Company will stop selling term licenses and expansions to existing customers in March 2028. Subject to limited exceptions, the Company plans to end maintenance and support for its Data Center offerings in March 2029. Deferred Revenue The Company records deferred revenues when cash payments are received or due in advance of the Company satisfying its performance obligations, including amounts that are refundable. The changes in the balances of deferred revenue were as follows (in thousands): Three Months Ended September 30, 2025 2024 Balance, beginning of period $ 2,481,254 $ 2,114,736 Additions 1,232,455 1,085,865 Revenue ( 1,432,553 ) ( 1,187,781 ) Balance, end of period $ 2,281,156 $ 2,012,820 For the three months ended September 30, 2025 and 2024, approximately 61 % of revenue recognized was from the deferred revenue balances at the beginning of each fiscal year. Deferred Contract Acquisition Costs The changes in the balances of deferred contract acquisition costs were as follows (in thousands): Three Months Ended September 30, 2025 2024 Balance, beginning of period $ 136,340 $ 79,711 Additions 19,097 12,230 Amortization expense ( 14,839 ) ( 8,497 ) Balance, end of period $ 140,598 $ 83,444 Deferred contract acquisition costs included in: Prepaid expenses and other current assets $ 53,163 $ 31,786 Other non-current assets 87,435 51,658 Total $ 140,598 $ 83,444 There were no impairment losses recorded during the periods presented. 21 13. Geographic Information The Company’s long-lived assets by geographic regions were as follows (in thousands): September 30, 2025 June 30, 2025 United States $ 134,248 $ 168,841 Australia 54,595 54,073 India 30,632 34,909 All other countries 14,846 16,422 Total long-lived assets $ 234,321 $ 274,245 Long-lived assets for this purpose consist of property and equipment and operating lease right-of-use assets. 14. Restructuring During the three months ended September 30, 2025, the Company initiated a rebalancing of resources resulting in the elimination of certain roles. These actions were part of the Company’s initiatives to reduce additional capacity no longer necessary due to the increased ability, accessibility, performance, stability, and supportability of its products. As a result, the Company recorded severance and other termination benefits of $ 27.9 million, and stock-based compensation of $ 1.4 million for the affected employees for the three months ended September 30, 2025. In addition, during the three months ended September 30, 2025, the Company exited certain floors of a leased property, which it plans to sublease, in order to optimize its real estate footprint. As a result, the Company recorded impairment charges for the related operating lease right-of-use assets and leasehold improvements of $ 26.3 million for the three months ended September 30, 2025. The fair values of the impaired assets were estimated using discounted cash flow models (income approach) based on market participant assumptions with Level 3 fair value inputs. The assumptions used in estimating fair value include the expected downtime prior to the commencement of future subleases, projected sublease income over the remaining lease periods, and discount rates that reflect the level of risk associated with receiving future cash flows. The execution of these actions, including cash payment of the severance and other termination benefits related liabilities, is expected to be substantially completed as of December 31, 2025. A summary of the Company’s restructuring charges for the three months ended September 30, 2025, by major activity type was as follows (in thousands): Severance and Other Termination Benefits Stock-based Compensation Lease Consolidation Total Cost of revenue $ 27,794 $ 1,432 $ 2,366 $ 31,592 Research and development — — 12,102 12,102 Marketing and sales — — 8,154 8,154 General and administrative 95 — 3,735 3,830 Total $ 27,889 $ 1,432 $ 26,357 $ 55,678 The following table is a summary of the changes in the liabilities, included within accrued expenses and other current liabilities on the condensed consolidated balance sheets as of September 30, 2025, related to the restructuring charges (in thousands): Severance and Other Termination Benefits Stock-based Compensation Lease Consolidation Total Charges $ 27,889 $ 1,432 $ 26,357 $ 55,678 Payments ( 9,224 ) — — ( 9,224 ) Non-cash items ( 446 ) ( 1,432 ) ( 26,307 ) ( 28,185 ) Liability as of September 30, 2025 $ 18,219 $ — $ 50 $ 18,269 22 15. Stockholders’ Equity Stock-based Compensation A summary of restricted stock unit (“RSU”) activity for the three months ended September 30, 2025 was as follows (in thousands except share and per share data): Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Balance as of June 30, 2025 $ 16,578,020 $ 190.98 $ 3,366,830 Granted 9,646,235 171.37 — Vested ( 1,692,427 ) 205.00 281,741 Forfeited or cancelled ( 820,398 ) 181.93 — Balance as of September 30, 2025 $ 23,711,430 $ 182.22 $ 3,786,715 As of September 30, 2025, total compensation cost not yet recognized in the condensed consolidated financial statements related to employee and director RSU awards was $ 3.3 billion. During the three months ended September 30, 2025, the Company granted 7,744 shares of restricted stock awards (“RSA”) in connection with a business combination. During the three months ended September 30, 2024, the Company did not grant any shares of RSA. As of September 30, 2025 and June 30, 2025, there were 72,874 and 90,083 shares of RSA outstanding, respectively. These outstanding shares of RSA are subject to forfeiture or repurchase at the original exercise price during the repurchase period following employee termination, as applicable. The total aggregate intrinsic value of outstanding shares of RSA were $ 11.6 million and $ 18.3 million as of September 30, 2025 and June 30, 2025, respectively. Share Repurchase Program In January 2023, the Board of Directors authorized a program to repurchase up to $ 1.0 billion of the Company’s outstanding Class A Common Stock (the “2023 Repurchase Program”). The 2023 Repurchase Program was completed in fiscal year 2025. In September 2024, the Board of Directors authorized a new program under which the Company may repurchase up to an additional $ 1.5 billion of the Company’s outstanding Class A Common Stock (the “2024 Repurchase Program”). The 2024 Repurchase Program commenced in April 2025 following completion of the 2023 Repurchase Program. The 2024 Repurchase Program does not have a fixed expiration date, may be suspended or discontinued at any time, and does not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares. The Company may repurchase shares of Class A Common Stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in accordance with applicable securities laws and other restrictions. The timing, manner, price, and amount of any repurchases will be determined by the Company at its discretion and will depend on a variety of factors, including business, economic, and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. During the three months ended September 30, 2025, the Company repurchased and subsequently retired approximately 1.4 million shares of its Class A Common Stock for approximately $ 249.9 million at an average price per share of $ 180.74 . All repurchases were made in open market transactions. As of September 30, 2025, $ 921.3 million of the Company’s Class A Common Stock remained available for repurchase under the 2024 Repurchase Program. 16. Net Loss Per Share The Company computes net loss per share of Class A and Class B Common Stock using the two-class method. As the liquidation and dividend rights for both Class A and Class B Common Stock are identical, the net loss is allocated on a proportionate basis to the weighted-average number of shares of common stock outstanding for the period. Basic net loss per share attributable to Class A and Class B stockholders is computed by dividing the net loss by the weighted-average number of Class A and Class B Common Stock outstanding during the period. 23 For the calculation of diluted net loss per share, net loss for basic earnings per share is adjusted by the effect of dilutive securities, including awards under the Company’s equity compensation plans. The dilutive potential shares of common stock are computed using the treasury stock method or the as-if converted method, as applicable. Since the Company is in a loss position for all periods reported, basic and diluted net loss per share are the same for all periods as the inclusion of potential dilutive shares would have been anti-dilutive. The following tables present the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except per share data): Three Months Ended September 30, 2025 2024 Class A Class B Class A Class B Numerator: Net loss $ ( 32,539 ) $ ( 19,331 ) $ ( 76,255 ) $ ( 47,514 ) Denominator: Weighted-average shares outstanding, basic and diluted 164,979 98,012 160,482 99,995 Net loss per share, basic and diluted $ ( 0.20 ) $ ( 0.20 ) $ ( 0.48 ) $ ( 0.48 ) The potential weighted average dilutive securities that were not included in the dilutive earnings per share calculation because the effect would be anti-dilutive were as follows (shares in thousands): Three Months Ended September 30, 2025 2024 Class A Common Stock restricted stock units 8,569 10,390 Class A Common Stock restricted stock awards 3 19 Total 8,572 10,409 17. Income Taxes The Company computes its provision for (benefit from) income taxes by applying the estimated annual effective tax rate to year-to-date ordinary income and adjusting the provision for (benefit from) income taxes for discrete tax items recorded in the period. In each quarter, the Company updates the estimated annual effective tax rate and makes a year-to-date adjustment to the provision. The estimated annual effective tax rate is subject to volatility due to several factors, including changes in the Company’s relative proportion of domestic and foreign earnings, current cash taxes in jurisdictions with valuation allowances, material discrete tax items, or a combination of these factors as a result of certain transactions or events. The Company reported an income tax benefit of $ 4.5 million for the three months ended September 30, 2025, as compared to an income tax provision of $ 93.6 million for the three months ended September 30, 2024, respectively. The income tax benefit for the three months ended September 30, 2025 was primarily attributable to the mix of earnings and losses at various jurisdictions, valuation allowances in the U.S. and Australia, and non-deductible stock-based compensation in certain foreign jurisdictions. The income tax provision for the three months ended September 30, 2024 was primarily attributable to the mix of earnings and losses at various jurisdictions, non-deductible stock-based compensation in certain foreign jurisdictions, and valuation allowances in the U.S. and Australia, offset by research and development tax credits and incentives. On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act (“OBBBA”), which includes, among other provisions, changes to the U.S. corporate income tax system such as allowing the immediate expensing of qualifying domestic research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. Certain provisions are effective for the Company beginning in fiscal year 2026. The changes had an immaterial impact on the Company’s benefit from income taxes for the three months ended September 30, 2025. The Company regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, the Company considers both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more 24 likely than not that some or all of the deferred tax assets will not be realized. Based on available evidence as of September 30, 2025, the Company will continue to maintain a valuation allowance against U.S. federal, U.S. state, and Australian deferred tax assets. The Company intends to maintain the valuation allowance until sufficient positive evidence exists to support the reversal of, or a decrease in, the valuation allowance. 18. Subsequent Events In October 2025, the Board of Directors authorized a new program to repurchase up to $ 2.5 billion of the Company’s outstanding Class A Common Stock (the “2025 Share Repurchase Program”) which will commence after the completion of the 2024 Share Repurchase Program. The 2025 Share Repurchase Program does not have a fixed expiration date, may be suspended or discontinued at any time, and does not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares. The Company may repurchase shares of Class A Common Stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, in accordance with applicable securities laws and other restrictions. The timing, manner, price, and amount of any repurchases will be determined by the Company at its discretion and will depend on a variety of factors, including business, economic, and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. 25