Company: TEAM
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001650372-25-000068
Chunk: 31

Company: Atlassian Corp
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 activities to free cash flow for the periods presented (in thousands):

 Three Months Ended September 30, 20252024Net cash provided by operating activities$128,715 $80,492 Less: Capital expenditures(14,112)(6,151)Free cash flow$114,603 $74,341 

Free cash flow increased by $40.3 million during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase in free cash flow was primarily attributable to an increase in net cash provided by operating activities. The increase in net cash provided by operating activities was primarily attributable to an increase in cash received from customers, partially offset by an increase in cash paid to employees and vendors.

For more information about net cash provided by operating activities, please see “Liquidity and Capital Resources.”

28

Components of Results of Operations

Sources of Revenues

Subscription Revenues

Subscription revenues consist primarily of fees earned from subscription-based arrangements for providing customers the right to use our software in a cloud-based-infrastructure that we provide. We also sell on-premises term license agreements for our Data Center offerings, which consist of 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. Subscription revenues also include subscription-based agreements for our premier support services. Subscription revenues are driven primarily by the number and size of active licenses, the type of deployment, and the price of the licenses. Our subscription-based arrangements generally have a contractual term of one to twelve months. For Cloud offerings, subscription revenue is recognized ratably as services are performed, commencing with the date the service is made available to customers. For Data Center offerings, we recognize revenue upfront for the portion that relates to the delivery of the term license, and the support and related revenue is recognized ratably as the services are delivered over the term of the arrangement. Premier support consists of subscription-based arrangements for a higher level of support across different deployment options, and revenue is recognized ratably as the services are delivered over the term of the arrangement.

In September 2025, we announced plans to end-of-life our Data Center deployment offering. Beginning in March 2026, we will no longer sell term licenses to new customers, and we will stop selling term licenses and expansions to existing customers in March 2028. Subject to limited exceptions, we plan to end maintenance and support for these on-premises versions