Atlassian (TEAM): The System of Record for Work
1. Executive Summary
Atlassian (Jira, Confluence, Trello) owns the workflow of the software developer. As every company becomes a software company, Atlassian's TAM expands. The recent Cloud migration is largely complete, shifting the narrative to "Atlassian Intelligence"—using AI to connect the dots across an organization's knowledge base.
Key Thesis Points
- Rovo & AI: Atlassian's new AI agent "Rovo" can search across SaaS apps (Slack, Drive, Jira) to answer questions. TEAM has the unique "context" (project history) to make this effective.
- Pricing Power: The end of the "Server" product line forced customers to Cloud/Data Center editions, which carry higher lifetime value.
- Top-Down Sales: Historically a PLG (Product Led Growth) company, Atlassian is successfully moving up-market with "Atlassian Enterprise," closing 7-figure deals with Fortune 500s.
2. Business Overview
- Jira: Project management / Bug tracking. The industry standard.
- Confluence: Corporate wiki / documentation.
- Service Management (JSM): IT Service Management, competing with ServiceNow (NOW). This is the fastest-growing product.
3. Financial Analysis
(See Financials Tab for live data)
- Free Cash Flow: Highly efficient business model (low sales commissions due to PLG origins) generates robust FCF.
- Stock Based Comp: Investing in TEAM requires accepting high levels of dilution (SBC), though management has pledged to lower this over time.
4. Risks
- Seat Consolidation: In a tech downturn, companies fire developers. Fewer developers = fewer Jira seats.
- Developer Fatigue: Developers famously "hate" Jira. If a lightweight competitor (Linear) gains traction in the enterprise, the moat could erode from the bottom up.