That might sound curious given tech companies reporting outrageous losses have routinely plunged 80 per cent in 2022. Not Atlassian, though. In fact, it’s up 657 per cent in five years and now boasts a near $100 billion valuation.
First, it should be noted Atlassian’s definition of free cashflow is unofficial. Atlassian itself cautions it should be viewed as how much cash is generated by its business that can be used for investment, acquisitions, strategic opportunities, and strengthening its balance sheet.It reaches the $US763.7 million free cashflow figure by taking net cash provided by operating activities of $US883.5 million and subtracting capital expenditure on property and equipment of $US70.
Free cashflow excludes $US707.1 million in share-based payment expenses accrued over the year and $US434.3 million in writedowns to the fair value of debt for equity notes.For Atlassian paying your staff $US707.1 million in shares to save on cash makes a hell of a lot of sense. It also works perfectly when the market ignores the dilution, as well-paid aligned staff grow the business and investors bid the stock higher in response.
In theory, if Atlassian faced competition and the share price tanked its staff may demand cash instead of shares to mean its free cashflow could turn negative.
better tell this guy