Good afternoon, ladies and gentlemen. Thank you for joining Atlassian's earnings conference call for the second quarter of fiscal 2018. As a reminder, this conference call is being recorded and will be available for replay from the investor relations section of Atlassian's website following this call. I will now hand the call over to Ian Lee, Atlassian's Head of Investor Relations.
Good afternoon, welcome to Atlassian's second quarter fiscal 2018 earnings conference call. On the call today, we have Atlassian's Co-Founders and Co-CEOs, Scott Farquhar and Mike Cannon-Brookes, our Chief Financial Officer, Murray Demo, and our President, Jay Simons. Earlier today, we issued a press release and a shareholder letter with our financial results and commentary for our second quarter of fiscal year 2018. These items are also posted on the investor relations section of Atlassian's website at investors.atlassian.com. On our IR website, there's also an accompanying presentation and data sheet available. We'll make some brief opening remarks then spend the rest of the call on Q&A. Statements made on this call include forward-looking statements.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management's beliefs and assumptions only as of the date such statements are made. In addition, during today's call, we will discuss non-IFRS financial measures. These non-IFRS financial measures are in addition to, and not as a substitute for, or superior to measures of financial performance prepared in accordance with IFRS. There are a number of limitations related to the use of these non-IFRS financial measures versus their nearest IFRS equivalents, they may be different from non-IFRS measures used by other companies.
A reconciliation between IFRS and non-IFRS financial measures is available in our earnings release, our shareholder letter, and our updated investor data sheet on our IR website. Further information on these and other factors that could affect the company's financial results is included in filings we make with the Securities and Exchange Commission from time to time, including the section titled Risk Factors in our most recent Forms 20-F and 6-K. I will now turn the call over to Scott for his brief opening remarks before we move to Q&A.
Good afternoon. Thanks, everyone, for joining today. We had a strong close to calendar 2017. This quarter, we grew revenue 43% year-over-year and generated over $67 million of free cash flow. We now have more than 112,000 customers in total, and after adding 4,825 net new customers during the quarter. This is the most net new customers we've ever added in a single quarter and another milestone on our way to serving the Fortune 500,000. We saw solid demand across all our deployment options, cloud, server, and Data Center. We continue to expand with customers of all sizes and across numerous industries and geographies. Alongside the growth of our business, Mike and I are both humbled and excited by the rapid expansion of the vibrant ecosystem surrounding Atlassian.
There are thousands of developers and vendors outside of Atlassian who are creating apps that make our core products even more powerful and our customers even happier. Today, our Marketplace vendors offer more than 3,500 apps, and during the quarter, the Atlassian Marketplace passed $350 million in total lifetime sales since its inception in 2012. In our shareholder letter, we highlight three of our vendors who are helping to drive this growth. Our developers and vendors, combined with our global customer and partner base, form the foundation of the thriving Atlassian community. We'll soon be going on the road on our first Atlassian Team Tour to spend more time with our community, to unveil new product updates, share the latest in team practices, and discuss the future of teamwork.
We'll kick the tour off on February 8th in Amsterdam and then cross the globe with a total of 10 stops on three continents. Before we move to Q&A, I'd like to say a heartfelt thanks to our CFO, Murray Demo, as this is his last earnings call with us before James Beer takes over as our new CFO. It's been a privilege to work with Murray over the past years, both in his capacity as CFO and as an Atlassian board member before that. We wish him the best. With that, I'll turn the call over to the operator for Q&A.
Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. Our first question comes from Ittai Kidron with Oppenheimer. Please go ahead.
Thanks, guys, congrats on another great quarter. A couple of things from me. First of all, on Stride, it's still in limited access, early access. Can you give us some color on the feedback you've been getting from customers? What are some of the good things and bad things you're hearing from customers, how soon will we see it generally available in the Atlassian Marketplace?
Thanks for the question. It's Scott here. You're right. I mean, Stride, we had an early access program, we put a wait list in. We had so much demand for the product. The feedback we've had so far has been overwhelmingly positive. Our customers are really liking it. They're liking the differentiated features, the fact that Stride allows you to get work done, also as a whole communication platform rather than just a chat product. They're giving us great feedback about that. The differentiated features, actions and decisions, which we put in in order to help people progress work, we're getting a lot of great feedback around that. In the coming months, we'll move it from an early access sort of wait list program through to general availability, but we don't have the exact release date at this time.
Got it. The second question. Murray, maybe you could give us a little bit more color on very nice customer addition count. Is there any color you can give around that? In what product areas it was stronger than what you thought, what areas were maybe a little bit softer? Also just one question on the tax rate, just given the change of the tax code here in the U.S. How should we think about modeling your non-IFRS tax rate going forward?
Hey, Ittai, it's Murray. I'll turn it over to Jay to talk about the customer count, when he's done, we'll come back and talk about the tax rate.
Yeah, just quickly, Ittai. Obviously, we're really pleased with the adds in the quarter. There was pretty strong demand kind of universally across all products and platforms, so no real call-outs to highlight. Net customer adds does move around a bit quarter-to-quarter, even though we're really proud of the nearly 5,000 we added this quarter, it's kind of a drop in the bucket around the Fortune 500,000 we're chasing.
Yeah. In terms of the tax rate, couple things to kind of point out, makes us a little bit different. First of all, our fiscal year, half the year is at the 35% rate in the U.S., the other half's at 21%. We're not like other calendar companies where they're starting the calendar 2018 where you get a full year of benefit of the rate. Secondly, we are a U.S. and Australian company you've got to blend that way. When you kind of put all that together for FY 2018, so the second half of the year for us, we're not seeing a whole lot of benefit. That's going to show up in FY 2019 when we get a full year of the U.S. benefit and other activities that we've got, is where we'll see that.
I also just, since you brought up the tax rate, I just want to comment on one thing regarding our Q3 and Q4 EPS, our Q3 EPS target, our implied Q4 EPS target in the full year. We've got quite a swing in the tax rate that's embedded in the EPS targets for Q3 and implied for Q4, it's strictly from IFRS. The full year, nothing is changing. It's just under IFRS it's quite different from GAAP. We're just not in a position to smooth it out like you can in GAAP, we get these wild swings. There's nothing going on there other than just the way IFRS calculates it.
The focus should be more on what our full-year rate that's sort of implied on the EPS targets and not to get too focused on the Q3 EPS and implied tax rate and the Q4 rate.
Is there a way then to think about what a full-year fiscal 2019 tax rate could be? Some sort of a bracket range around that?
Yeah. We're not providing any targets for fiscal 2019, but we'd expect to see a lower rate as we go into 2019, and we'll be able to provide more details on that as we get to the point of giving our fiscal 2019 guidance.
Got it. Good luck, guys.
Thank you.
The next question comes from Gregg Moskowitz with Cowen and Company. Please go ahead.
Okay. Thank you. Congratulations everyone on a good all around quarter as well. Scott, you said that cloud server and Data Center all did well, but over the course of the last six months or so, have you seen any change with respect to the mix of new or existing customers adopting your cloud offerings? Do you say that that's been stable overall?
Gregg, good question. As we've seen for a long time, the trend is towards cloud. Clearly from us and other companies you see. Nothing has really changed over the last quarter. We continue to see strength in cloud, server, and Data Center. Yeah, there hasn't been some particular inflection point, we think there's still a long business in our behind-the-firewall server deployments for a long time.
Okay, perfect. Just a question for Murray. I'm wondering if you could help us possibly kind of parse for us the impact, if you will, to Q2 billings and revenue from any early maintenance renewals from customers who perhaps wanted to get ahead of the January one price increase. Part of the reason for my asking the question is also to sort of make sure the Street has some help with respect to modeling the March quarter appropriately as well. Thanks.
Yeah, Gregg, it's a good question. It's obviously something we were very focused on as well, is trying to understand any of this, if you want to call it pull forward bookings that's related to the change in pricing. One of the things that we have learned through the change in pricing on server, but also in cloud, is that the customers that are most sensitive to price, they tend to take action fairly quickly around the time of the announcements. What we saw is actually that we probably saw even a little more of the sort of pull forward bookings in the first quarter than we did in the second quarter because we announced it in the first quarter. What we also saw that was a little bit different was some of our customers chose to go multi-year.
You can see that on the balance sheet under the long-term deferred revenue. They're locking in with us for a number of years. They made a decision they wanted to go ahead and buy server maintenance revenue for multi-year up front, and we saw some of that. As you got later into the second quarter, it seemed to be all kind of behind us. It was more pronounced in the sort of September, October timeframe is where we saw it. Yeah, we're pleased to obviously have that, but obviously longer term, we'd rather have had them renew under the new pricing because that would, in theory, be a little bit of less revenue for us over the longer term. We're always happy to see customers that are committed to us for the longer term.
That's great. Murray, have you seen any uptick in churn following the cloud and server price increases just over the past few months or so?
What we saw there was in the first couple of months, which was Q1, which we talked to all of you about during that call and everything, is that we expected some customers to kind of downgrade from being a, call it a customer on monthly and kind of drop to the 10-user level where they could get the starter pricing. Some went to annual. We had factored all that into our calculations. All that kind of activity just kind of went away as we got into the second quarter, part of the reason why we saw a stronger customer count is actually lower churn in cloud. Our customers that were sensitive to price, they did what they wanted to do around that, but it's really been, as Jay said, well-received. It's behind us.
We continue to be a leader, obviously, in low price, high value, it was very successful. We're on track with the guidance we provided around the change in the cloud pricing of low single digits for the year. That's right on track. At this point, after five months, we're very pleased with the results we've seen and how highly correlated it is to all the modeling that we had done in advance.
That's very helpful. Thanks very much, guys.
The next question comes from Bhavan Suri with William Blair. Please go ahead.
Hey, guys. Can you hear me okay?
Yeah.
Yes, Bhavan.
Great. Thanks, and congrats. Yeah. Hey, guys. I guess two questions, one for maybe Jay and the guys here. We've seen sort of continuing momentum around Service Desk, Jira Service Desk. You guys certainly talked about it last quarter a lot. I guess when you think about that, and you think about some of the larger deals you're seeing there, and you think about the main competitor there, what do you think in terms of, is the gap there? When Jira was early on, there was this sort of gap with Rally. No one really talks about Rally anymore.
Now comparing that to Jira Service Desk and some of the competitors there, and obviously the investments there, do you think there's a material gap, and sort of how far behind those guys do you think you might be from an enterprise deployment perspective of Jira Service Desk versus, say, ServiceNow, or some of the other smaller guys there, like Cherwell or whatever?
Yeah. Hey, Bhavan, this is Mike. I can take that. Look, obviously, we remain really excited about Jira Service Desk. It is, as you mentioned, one of our fastest-growing product areas. As we said, I think last quarter, it's past 25,000 organizations now, so we're really happy about how it's coming along. I do think it's pretty differentiated to the competition, specifically in the way we think about service teams. It does a great job in IT and technical teams, but we see a much broader blue ocean in the service teams within an organization, much more focused on the broader business teams, so legal, finance, HR, and all the other teams that are effectively servicing other groups within an enterprise. I think that's the main differentiation that flows from a philosophy into the product, and into everything else.
At the same time, one of the other differentiations of Jira Service Desk, obviously, is bringing our ecosystem to bear. It's a great quarter for the marketplace, and the ecosystem is really coming along nicely inside Jira Service Desk of providing extensions, use cases, and useful value in different parts of a business.
I guess helpful. Thanks. One quick follow-up here just on R&D. You guys have sort of talked about R&D allocation. You've talked about a fair amount of effort re-platforming for the cloud. You have a team platform on mobile. As you think about optimizing R&D dollars, and obviously that's really the biggest expense you guys have, how are you guys thinking about that through 2018? I'm not going to ask about 2019, because I know Murray will shoot me down about 2019 targets. Over the next three to five years, sort of the optimization allocation of R&D, just sort of how you guys think about that would be helpful. Thank you.
In terms of R&D, Bhavan, yeah, we're not talking about 2019 right now, we're going to continue to invest. We just think we've got such a large market opportunity here. There's so many things we can do. We're going to continue to invest. It's been one of the clear differentiators and competitive advantages that we have in the marketplace, and we're going to continue to invest, try to drive revenue growth and get margin expansion through leverage. Sure, we're going to look to optimize everywhere we can in terms of being efficient, we are going to continue to invest for the long term. That's been what Scott and Mike and the team have done here for 15 years, and we're not going to change that approach.
Got it. Thanks, guys. Congrats again.
Thank you.
Thank you.
The next question comes from John DiFucci with Jefferies. Please go ahead.
Thank you. I have a question for Murray. It's kind of a follow-up to Gregg's question, Murray. It's try to get some help in modeling this going forward. No matter how you look at the numbers, they look strong. In this quarter, billings growth and even more importantly, like current billings growth, looking at the change in short-term deferred revenue, was about equal to revenue growth. Whereas in the recent past, like frankly, over the last year and a half, billings growth has been greater than revenue growth, I'm just kind of trying to figure it out. I mean, you're in the low 40s % growth, which is pretty amazing given your scale. Should we start to see that, I mean, the guidance implies that the growth comes down a little bit, but frankly, the guidance has implied that for a while now.
When we're looking forward, just so we're sort of prepared, it seems to me that with that sort of an indication that we will start to see the growth still be very meaningful, but not continue to accelerate like the revenue growth has over the last year and a half. Does that make sense?
Well, I mean, it's a good question. There's a lot of things going on there. I think if you look at the first quarter and the second quarter, one of the advantages we've had is that we're getting bookings and we're getting revenue from Trello that didn't exist in the prior year. As we go into the second half of this year now, we're going to have the Trello compare. Obviously, there's no purchase accounting haircut on bookings, it's just on revenue. In Q3, Q4, we've got the Trello bookings from last year that we're now going to be comparing to. We've got some of that. We also have when these price increases kind of work their way through, we'll see some of that where the bookings and revenue can shift. In the first quarter, we just had an easier compare.
Q1 of 2017 was a tougher quarter as we had talked before, just because we believe the Olympics and the Euro soccer and all that stuff that was going on in Q1 of 2017, we saw just a little softer on the booking side, and then we came back stronger in the second quarter of 2017. That gave us a more favorable compare in Q1 of 2018. As we go into the second half of the year, a big part of what you're seeing is the compare relative to having Trello now in the base. Over the longer term, obviously there's going to be the law of large numbers, et cetera, that we'll be facing like any company. As far as here in the second half, it's the Trello compare that's causing some of this.
It looks like the growth rate isn't what it was in the first half.
Okay, great. That's helpful. If I could, just a quick follow-up. I know it's really early. You're a few weeks into the quarter. Have you seen any change in business momentum? I know you have a pretty linear quarter, which is really unique in the software space. Have you seen any change in business momentum over the last few weeks after the price increase?
Well, again, if we look at the cloud, the price increases went in around July 31st. That's well past us. On server, we had, John, as you know, on the license was October 1st. Now maintenance is on January 1. The business in general is, the environment is good. We're not really commenting specifically, but so far, through the end of December, we're quite pleased, and there's nothing that's changed in the tone of business sense.
Got it. Okay. Thanks a lot. Nice job, guys.
Thanks, John.
The next question comes from Michael Turrin with Raymond James. Please go ahead.
Hey, guys. Two questions. First, I know you said that you did well across all deployment models. Can you comment, if you can drill down a little bit on Data Center and the Stack bundle, and talk about how much of a shift there might be there, how successful, how much of a benefit that has been to billings? I have another question.
Hey, Michael, it's Jay. It just continues to do well. We're pleased with it. No outsized contribution, relative to past quarters. There continues to just be strong demand in the server base for customers largely with more than 500 employees that are looking to move to Data Center that provides better high availability and an architecture to support the kind of scale. The other indication in Data Center growth we've talked about in the past is I think it shows the broader standardization as companies move from technical teams to IT to business teams. Stack is a small part of removing purchase friction. For companies that want to buy all of the Data Center family at once, Stack makes the purchase of all Data Center family products at once easier. There's going to be a handful of customers that do that.
A lot of them are going to start maybe with Jira and then expand to Confluence and expand with Jira Service Desk, et cetera. Finally, just the channel is a really important contributor to Data Center growth. They work with a lot of our larger customers and tend to help them move from the original server deployment to the Data Center one.
Thanks. Thanks, Jay. My follow-up, perhaps, is for you as well. As you're getting more adoption across the enterprise, obviously you're sticking with your frictionless model, but is there any change at all in go-to-market as you have to deal more with centralized IT, with procurement? Obviously, you've got the enterprise advocates. How is that transition going?
It's not really a transition. We've had enterprise advocates in the business for a couple of years, and there isn't a material change in the model at all. We described it in detail at the Investor Day. The focus for the company is just to make purchasing easy for customers, especially at scale. We do that by building a product that people can try on their own, by publishing pricing, so they don't have to call us and ask us what it is, by creating service teams like the enterprise advocates, and then through our channel to help them when they need extra help if there's things that they can't do on their own. I think the results of the business, I think, is validation that that's working, and we're really pleased with how it's going.
Okay, great. Thanks, Jay, and great quarter, everybody.
Thank you.
The next question comes from Heather Bellini with Goldman Sachs. Please go ahead.
Great. Thank you. A lot of the questions have been answered, I just wanted to know if you could share with us a little bit about the momentum you've been seeing with Trello, and how you've seen that evolve since the acquisition, and the type of customer synergies you might be seeing in leveraging the vast installed base that you guys already had.
Thanks, Heather. It's Mike. Look, Trello continues to power along, and we're really happy with its progress. As we've said previously, we're not even at the end of year one in terms of an integration program with the business, the team, et cetera, our main goal is maintaining the momentum of the product and business that Trello already is before we look at the opportunities potentially in combining the customer bases. We have a lot of time to go through in continuing to do that. We've been pretty happy in how the Trello team fits with the culture of the broader Atlassian family. I think on all sides, it's been a great success so far. The one thing we're doing is we're certainly not standing still. The product of Trello has had a number of improvements over the last period of time.
If you look in the shareholder letter, you can see that we've officially introduced Trello to the Japan market as a single example in November with a localized product and some partnerships and some marketing and things that we did down there, which is a good example of something that Atlassian brings to the table. We already had the office there in Yokohama, so we could use that as a leverage point to get Trello into the Japanese market. A lot of the things that you talk about are still ahead of us.
Okay, great. Thank you very much.
The next question comes from Sanjit Singh with Morgan Stanley. Please go ahead.
Thank you very much, and Happy New Year to the team. Murray, maybe I want to start with gross margins. That has been trending down for several quarters now, and I'm sure that's related to the accelerated depreciation. Can you give us a sense of how we should think about gross margin going forward? Is there a quarter when gross margin starts to plateau after we get through the accelerated depreciation phase?
Yes, Sanjit. In terms of the gross margin, that's correct. We've been going through a transition here, where we've been accelerating the depreciation on the server equipment that we run in our own data centers. Obviously, we're really excited about the fact that what the engineering team has done to get us to our new cloud platform, and we've actually reassessed the need for the remaining equipment and its useful life, and it's going to be fully depreciated through the third quarter, which is what we're in now, and will come to a close. That's kind of depressing the gross margin here in the third quarter, and then the implied numbers are in the fourth quarter, it gets better. As we go on from there, obviously, we're going to have a little bit of a benefit in 2019 versus 2018 because we don't have the accelerated depreciation.
At the same time, our business is moving to the cloud, and the cloud runs at a lower gross margin, like in all the other SaaS companies, where we have to incur the cost of hosting the application, servicing those applications. As you look at 2019, it'll just sort of be a little bit of a battle between the relief we get on the accelerated depreciation versus more transition to the cloud. As we go on from there, as that transition continues to that secular trend, moving to the cloud, there'll just sort of be a modest probably impact on lowering the gross margin over time as that transition goes to cloud. We are obviously very pleased with our overall gross margins, where we stand today. The server business that you have is very good gross margin. It's not going away overnight.
It continues to be very strong. You can see that in our results just this past quarter. That's also been a good lift for us from a gross margin standpoint.
Great. That's super helpful. The follow-up is on sort of the HipChat customer base. Any sort of details on how they're thinking about potentially upgrading to Stride or maybe sticking with their deployments or even potentially moving off to a competitive solution? What have the conversations been like with the HipChat customer base, and how do you see their deployment plans moving forward?
Yeah, good question. It's Scott here. We recommend all of the HipChat customers in the cloud upgrading to Stride, we actually have really strong migration paths for all those customers. It's a very seamless process, we're already migrating customers from one to the other. We're seeing great excitement amongst the HipChat base for all the new features and the sort of change in the product when they move from HipChat to Stride, that's going really well. We continue to sell HipChat behind the firewall for those customers that want something that they can deploy inside their network.
In terms of getting the cloud customers migrated over, is there any sort of timeframe that we should think about? Will that happen over the next two quarters or a year? Any timeframe that makes sense?
At this stage, we're not publicly stating a timeframe. We have all the pieces in place to aggressively move customers, we want to be sensitive to their timetables to make sure they have a great experience. We haven't got a sort of definitive end date on that at the moment.
Got it. Thank you very much, Scott.
The next question comes from Richard Davis with Canaccord. Please go ahead.
Hey, thanks. Most of the stuff's been asked, but basically, one of the questions I got from investors was, last year you bought Trello, so you obviously added a bunch of people, but you did pay a higher revenue multiple. What is your opinion right now of kind of the valuation expectations for possible M&A targets, and how does that inform your interest in future purchases? Thanks.
Yeah. Hi, Richard. It's Mike again. Look, we obviously don't comment on any targets or valuations of where other people sit at. I think there's a very complicated science in working out what works for both parties at a given time in a given market and for a given opportunity. Again, we continue to use M&A as one of a series of tools that we have over the last 15 years to build the business, both on small sort of tuck-in acquisitions through to obviously more transformative ones like Trello. We keep scanning the market that's out there. Again, we've been very efficient stewards of capital over time. I think our record speaks for itself there. We intend to continue to be so.
Super. Thank you.
Okay, the next question comes from Jonathan Kees with Summit Research. Please go ahead.
Hi. Great. Thanks for taking my questions, and my congrats also for the quarter. Just wanted to ask 2 questions, one being on the more strategic part. You've talked about before your land and expand strategy with corporate customers, and I'm sure the bulk of it, like with this quarter, is still the traditional Jira and Confluence and selling them more usage and additional products. Just curious if during the quarter, if you've seen any change in terms of the greenfield for like Service Desk or even Bitbucket and HipChat in terms of those sales, and then even the other way, where they are selling up to Jira and Confluence.
Jonathan, it's Scott here. Our business has always depended on sort of landing and expanding from a lot of different products. You're right, we've landed at Jira and Confluence, but Bitbucket lands a large number of customers, as does Trello, as does HipChat and Stride. The cross-sell paths aren't sort of linear. There are other companies out there in the market that have one very clear land product, and then they expand and have tuck-in add-ons on the back of that. We haven't got that. We're actually lucky that we've got a large number of areas that we land with. As Stride comes out in the market, we see that lands new customers. Obviously, the acquisition of Trello helps us land more customers than we were previously.
There's been nothing over the last period of time where I'd say there's an inflection point on landing with one particular product or a change in the mix. It's just that all the products get better at landing customers as we add more features and as we have more brand awareness in the marketplace.
Okay, great. That was helpful. My last question is more of a housekeeping. You have in the past talk, given account for Trello customers, even the Service Desk count. You just referenced last quarter's count of greater than 25,000. I'm sure an updated number will be greater than 25,000. Is it greater than 30,000? For Trello, would be curious what the latest number would be. I'm sure it's greater than 25 million, which is what you referred to last quarter. You guys have been great in terms of providing those numbers in the past, and obviously you're proud in terms of the performance. You've been happy with the performance. Any updated numbers in terms of that would be great.
Yeah. Hi, Duncan. We don't have any updated numbers to either those two. We continue to be happy with the performance of both. Again, the 25 million users in Trello is from Summit last year, so it's only, what, three or four months ago.
Okay, great.
Jonathan, let me just clarify that 25,000 is organizations, not customers.
Okay, great. Thanks for the clarification. Good luck, guys.
Thank you.
The next question comes from Patrick Walravens with JMP Securities. Please go ahead.
Oh, great. Thank you. Let me add my congratulations. I would love to drill down a little more on Bitbucket and to understand, you guys like to talk about sort of the philosophy and the differentiation, and in this case, maybe sort of the philosophy and the differentiation when compared to GitHub and how the whole open source development plays into that.
Yes. Great question. Bitbucket has millions of users that use it on a monthly basis. It's a very popular co-hosting service. Years ago, we chose to differentiate from some competitors by really focusing on where you go to do work as opposed to host open source projects. That differentiation actually flows through to numbers of the features that we put into the product, that make it appealing to businesses who want to do work around security features, around performance, around even just how teams are organized in the products. Look, the integration with Jira continues to be a big differentiator for that product as well because people don't choose these products in isolation.
One of Atlassian's great strengths is that not only do we integrate with ourselves and our competitors, but as we add more products and as we have more of a solution for our customers, they increasingly look to us to provide more of their solutions to their problems. Obviously the fact that it's an Atlassian product and most of the rest of our products is a big differentiator as well.
Great. Thank you. Then if I could sneak one more in. In my model, you're about three quarters away from hitting that billion-dollar run rate, which has been an oddly difficult hurdle for a lot of software companies. I'm just wondering how you guys think about that. Is it sort of a totally artificial barrier and you can just keep doing exactly what you're doing? Have you been thinking sort of hard about how we scale through that?
It's Scott again. Look, years ago, we've always had big, ambitious goals for Atlassian. When we were, I think, a handful of people in a shared office, we set a goal of having 50,000 customers, and that took us about 10 years to get there. That was a really big celebration. We're setting goals for active users and so forth out into the future as well. So revenue goals are really nice, and I think it's great for us to be up there with a very few select companies that have reached that milestone, if and when we do cross that milestone. For us, the things that get our staff engaged and get me and Mike excited about the impact you have on the world, which is often around usage and size of the customer base versus a dollar metric.
Okay, great. Thank you.
Again, if you have a question, please press star then one. The next question comes from Nate Cunningham with Guggenheim. Please go ahead.
Hi, guys. On Atlassian Home, it sounds like you've gotten good feedback so far, and I realize it's early, but have you seen any behavior like increasing engagement or more multi-product usage among customers that are participating in that beta?
It's Scott again. Just on the Atlassian Home. Look, we're still very early in that rollout, and we've been doing tests with customers, and we do see great results there, but not at a stage I'd be able to prepare to share them publicly. We're still early in the rollout of Home across all of our products, and so while we're seeing a lot of engagement on a one-to-one product basis, we're still early in the multi-product engagement cycle. We have done some experiments in that area, and we're seeing some great improvements to how we're cross-selling or cross-promoting products, but nothing I could give you concrete numbers on at this stage, apart from just being very happy with those results.
Thanks, Scott.
Seeing no further questions, this concludes our question and answer session. I would like to turn the conference back over to Mike Cannon-Brookes for any closing remarks.
Yeah, I'd just like to say thanks everyone for joining the call today. We appreciate your time and look forward to keeping you updated on our progress. I'd just like to send out a final thanks to Murray Demo on his final earnings call.
Thanks.
Thanks, everyone, for today.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.