Atlassian Corp

Previous wording

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “plan,” “should,” “estimate,” or “continue,” and similar expressions or variations, but these words are not the exclusive means for identifying such statements. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results and timing expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. Except as may be required by law, we assume no obligation to update these forward-looking statements or the reasons that results could differ from these forward-looking statements. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

Current wording

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “aim,” “seek,” “could,” “would,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “forecast,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that articulate our expectations, strategy, plans or intentions, but these words are not the exclusive means for identifying such statements. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results and timing expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. Except as may be required by law, we assume no obligation to update these forward-looking statements or the reasons that results could differ from these forward-looking statements. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

Previous wording

Our deeply interconnected portfolio of apps, AI agents, and products, each with discrete value propositions, delivers solutions for software teams, IT operations and support teams, leadership, and business teams. We’ve put AI at the center of our portfolio to enhance teamwork for users across our apps and Collections, a carefully curated set of apps and agents designed to solve complex tasks. These apps, agents, and Collections are all built on the Atlassian Cloud Platform and data model: a common technology foundation that seamlessly connects teams, information, and workflows throughout an organization.

Current wording

Our deeply interconnected portfolio of apps, AI agents, and Collections, each with discrete value propositions, delivers solutions for software teams, IT operations and support teams, leadership and business teams. As an AI-first company, we have embedded AI capabilities across every surface of our platform, enabling organizations to orchestrate work effectively across both human and AI teammates. These apps, agents, and Collections are all built on the Atlassian Cloud Platform and data model: a common technology foundation that seamlessly connects teams, information, context, and workflows throughout an organization.

Previous wording

In September 2025, we announced plans to end-of-life our Data Center deployment offering. As of March 2026, we 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 also plan to end maintenance and support for on-premises versions of our products in March 2029. In order to support customers who face unique requirements or challenges, we will offer an approximately three-year extended maintenance period for certain customers.

Current wording

In September 2025, we announced plans to end-of-life our Data Center offering. As of March 2026, we 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 also plan to end maintenance and support for on-premises versions of our products in March 2029. In order to support customers who face unique requirements or challenges, we will offer an approximately three-year extended maintenance period for certain customers.

Previous wording

Free cash flow decreased by $77.1 million and $210.8 million during the three and nine months ended March 31, 2026, respectively, as compared to the three and nine months ended March 31, 2025. The decrease in free cash flow was primarily attributable to a decrease in net cash provided by operating activities. The decrease in net cash provided by operating activities was primarily attributable to an increase in cash paid to employees, including payments made under restructuring plans, vendors, and cash paid for income taxes, partially offset by an increase in cash received from customers.

Current wording

Free cash flow increased by $348.0 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. 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 vendors and employees.

Previous wording

In September 2025, we announced plans to end-of-life our Data Center deployment offering. As of March 2026, we 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 of our products in March 2029.

Current wording

In September 2025, we announced plans to end-of-life our Data Center offering. As of March 2026, we 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 of our products in March 2029.

Previous wording

Other revenues primarily include fees received for sales of third-party apps in the Atlassian Marketplace. Advisory services and training services are also included in other revenues. Revenue from the sale of third-party apps via Atlassian Marketplace is recognized on the date of product delivery given that all of our obligations have been met at that time and on a net basis as we function as the agent in the relationship. Revenue from advisory services is recognized over the time period that the customer has access to the service. Revenue from consulting and training is recognized over time as the services are performed.

Current wording

Other revenues primarily include fees received for sales of third-party apps in the Atlassian Marketplace. Advisory services and training services are also included in other revenues. Revenues from the sale of third-party apps via Atlassian Marketplace is recognized on the date of product delivery given that all of our obligations have been met at that time and on a net basis as we function as the agent in the relationship. Revenues from advisory services is recognized over the time period that the customer has access to the service. Revenues from consulting and training is recognized over time as the services are performed.

Previous wording

Cost of revenues primarily consists of expenses related to hosting our cloud infrastructure, which includes third-party hosting fees and depreciation associated with computer equipment, compensation expenses for our employees, including stock-based compensation, payment processing fees, consulting and contractors costs associated with our customer support and infrastructure service teams, amortization of acquired intangible assets, such as the amortization of the cost associated with an acquired company’s developed technology, certain IT program expenses, and facilities and related overhead costs.

Current wording

Cost of revenues primarily consists of expenses related to third-party hosting fees, including expenses related to our Cloud infrastructure and AI inference incurred through our customer’s usage of our AI tools, compensation expenses for our employees, including stock-based compensation, amortization of acquired intangible assets, such as the amortization of the cost associated with an acquired company’s developed technology, payment processing fees, consulting and contractor costs associated with our customer support and infrastructure service teams, and facilities and related overhead costs.

Previous wording

We expect cost of revenues to increase as we continue to invest in our cloud-based infrastructure and AI to support our Cloud customers and their increased usage of Rovo.

Current wording

We expect cost of revenues to increase as we continue to invest in our cloud-based infrastructure and AI to support our Cloud customers and their related AI usage.

Previous wording

We expect gross margin to be approximately flat, driven by the revenue mix shift from Data Center offerings to Cloud offerings and increases in cost of revenues to support our increasing number of Cloud customers and their related AI usage, offset by the continued optimization of our Cloud infrastructure and support costs.

Current wording

We expect gross margin to decline slightly in fiscal year 2027, driven by decreased total revenue growth in fiscal year 2027 when compared to fiscal year 2026 due to greater upfront term license revenue recognized in fiscal year 2026, revenue mix shift from Data Center offerings to Cloud offerings, and increases in cost of revenues to support our increasing number of Cloud customers and their related AI usage, partially offset by the continued optimization of our Cloud infrastructure and support costs.

Previous wording

Research and development expenses consist primarily of compensation expenses for our employees, including stock-based compensation, facilities and related overhead costs, certain IT program expenses, and consulting and contractor costs associated with our software development teams. We continue to focus our research and development efforts on building new apps, and AI agents, adding new features and services, integrating acquired technologies, increasing functionality, enhancing our Cloud infrastructure, and advancing our artificial intelligence capabilities.

Current wording

Research and development expenses consist primarily of compensation expenses for our employees, including stock-based compensation, third-party hosting fees to support the development of our offerings and AI inference, facilities and related overhead costs, and consulting and contractor costs associated with our software development teams. We continue to focus our research and development efforts on building new apps and AI agents, adding new features and services, integrating acquired technologies, increasing functionality, enhancing our Cloud infrastructure, and advancing our AI capabilities.

Previous wording

There have been no other significant changes to our critical accounting policies and estimates during the three and nine months ended March 31, 2026, as compared to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Results of Operations included in our Annual Report on Form 10-K for fiscal year 2025.

Current wording

There have been no significant changes to our critical accounting policies and estimates during the three months ended September 30, 2026, as compared to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for fiscal year 2026.

Previous wording

Total revenues increased $430.3 million, or 32%, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Growth in total revenues was primarily attributable to increased demand for our offerings from existing customers. Of total revenues recognized in the three months ended March 31, 2026, over 90% was attributable to sales to customer accounts existing on or before December 31, 2025.

Current wording

Total revenues increased $339.6 million, or 24%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Growth in total revenues was primarily attributable to increased demand for our offerings from existing customers. Of total revenues recognized in the three months ended September 30, 2026, over 90% was attributable to sales to customer accounts existing on or before June 30, 2026.

Previous wording

Subscription revenues increased $426.0 million, or 33%, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in subscription revenues was primarily attributable to paid seat expansion from our existing customers and price increases.

Current wording

Subscription revenues increased $323.3 million, or 24%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase in subscription revenues was primarily attributable to paid seat expansion, cross-sell of additional offerings to our existing customers, and price increases.

Previous wording

Other revenues increased $4.2 million, or 5%, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in other revenues was primarily attributable to an increase of $3.1 million in marketplace revenue.

Current wording

Other revenues increased $16.3 million, or 28%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase in other revenues was primarily attributable to an increase of $11.3 million in marketplace revenue.

Previous wording

Cost of revenues increased $43.1 million, or 20%, in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The overall increase was primarily attributable to an increase of $28.1 million in hosting fees and an increase of $14.6 million in amortization expense, partially offset by a decrease of $15.9 million in compensation expense for employees, and a decrease of $4.3 million in fees paid for consulting and other professional services. In addition, we recorded restructuring charges of $21.0 million in the three months ended March 31, 2026, which were comprised of $16.7 million of severance and other termination benefits, and $4.3 million of impairment charges for lease and leasehold improvements.

Current wording

Cost of revenues increased $4.0 million, or 2%, in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The overall increase was primarily attributable to an increase of $40.9 million in hosting fees and an increase of $14.5 million in amortization expense, partially offset by a decrease of $19.2 million in compensation expense for employees (which includes a decrease of $7.5 million in stock-based compensation), and restructuring charges of $31.6 million recorded during the three months ended September 30, 2025.

Previous wording

Marketing and sales expenses increased $143.2 million, or 48%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The overall increase was primarily attributable to an increase of $68.5 million in compensation expenses for employees (which includes an increase of $10.1 million in stock-based compensation), and an increase of $12.7 million in advertising and marketing program expenses. In addition, we recorded restructuring charges of $42.6 million in the three months ended March 31, 2026, which were comprised of $24.4 million of severance and other termination benefits, and $18.2 million of impairment charges for lease and leasehold improvements.

Current wording

Marketing and sales expenses increased $53.9 million, or 16%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The overall increase was primarily attributable to an increase of $44.1 million in compensation expenses for employees (which includes an increase of $4.3 million in stock-based compensation), and an increase of $10.2 million in advertising and marketing program expenses, partially offset by restructuring charges of $8.2 million recorded during the three months ended September 30, 2025.

Previous wording

Other income (expense), net increased $42.6 million, or 101% in the nine months ended March 31, 2026 compared to the nine months ended March 31, 2025. The overall increase in other income was primarily attributable to an increase of $24.7 million in unrealized gains on public equity investments and a decrease of $20.4 million in expenses related to our share of loss from an equity method investment.

Current wording

Other income (expense), net decreased $35.3 million, or 188%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The overall decrease in other income, expense was primarily attributable to a decrease of $24.7 million in unrealized gains on public equity investments and an increase of $8.7 million in unrealized losses on private equity investments.

Previous wording

Interest income decreased $15.2 million, or 55% in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease was primarily attributable to a decrease in investment income as a result of decreased invested cash balances and declining interest rates.

Current wording

Interest income decreased $17.8 million, or 60%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The decrease was primarily attributable to a decrease in investment income as a result of decreased invested cash balances.

Previous wording

Interest expense increased $6.3 million, or 81% in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily attributable to the amortization of interest rate swap contracts.

Current wording

Interest expense increased $5.6 million, or 64% in the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily attributable to the amortization of interest rate swap contracts recorded during the three months ended September 30, 2025.

Previous wording

Provision for income taxes decreased $27.9 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The decrease was primarily attributable to the change in valuation allowance on Australian deferred tax assets related to deferred revenue recognition and the change in the mix of earnings and losses in foreign jurisdictions. See Note 17, “Income Taxes,” of the notes to our condensed consolidated financial statements for additional information.

Current wording

Provision for income taxes increased $83.9 million for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. The increase was primarily attributable to generating pre-tax income in the current period as compared to a pre-tax loss in the prior year period and the change in valuation allowance on Australian deferred tax assets related to deferred revenue recognition. See Note 15, “Income Taxes,” of the notes to our condensed consolidated financial statements for additional information.

Previous wording

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 costs and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. Certain provisions are effective for us beginning in fiscal year 2026. The changes had an immaterial impact on our provision for income taxes for the three and nine months ended March 31, 2026 and we currently do not anticipate these changes to have a material impact on our results for fiscal year 2026. We will continue to monitor any developments and guidance related to OBBBA.

Current wording

On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act. Certain provisions are effective for us beginning in fiscal years 2026 and 2027. The changes had an immaterial impact on our provision for income taxes for the three months ended September 30, 2026, and we currently do not anticipate these changes to have a material impact on our results for fiscal year 2027.

Previous wording

The Organization for Economic Co-operation and Development introduced a framework for a global minimum corporate income tax of 15% known as the Global Anti-Base Erosion rules. This legislation has been enacted in certain jurisdictions where we operate and is effective for our fiscal year 2026. As of March 31, 2026, the global minimum tax does not have a significant impact on our financial statements. As additional jurisdictions enact legislation, transitional rules lapse, and other provisions of the global minimum tax legislation become effective, our effective tax rate and cash tax payments may increase in future years.

Current wording

The Organization for Economic Co-operation and Development introduced a framework for a global minimum corporate income tax of 15% known as the Global Anti-Base Erosion rules. This legislation has been enacted in certain jurisdictions where we operate. As of September 30, 2026, the global minimum tax does not have a significant impact on our financial statements. As additional jurisdictions enact legislation, transitional rules lapse, and other provisions of the global minimum tax legislation become effective, our effective tax rate and cash tax payments may increase in future years.

Previous wording

As of March 31, 2026, we had cash and cash equivalents totaling$1.1 billion andaccounts receivable totaling$907.4 million. Since our inception, we have primarily financed our operations through cash flows generated by operationsand corporate debt.

Current wording

As of September 30, 2026, we had cash and cash equivalents totaling$1.1 billion andaccounts receivable totaling$812.3 million. Since our inception, we have primarily financed our operations through cash flows generated by operationsand corporate debt.

Previous wording

Net cash provided by operating activities decreased by $211.1 million for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025. The net decrease was primarily attributable to an increase in cash paid to employees, vendors, and cash paid for income taxes, partially offset by an increase in cash received from customers.

Current wording

Net cash provided by operating activities increased by $339.8 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The net increase was primarily attributable to an increase in cash received from customers, partially offset by an increase in cash paid to vendors and employees.

Previous wording

Net cash used in investing activities increased by $593.1 million during the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025. The net increase was primarily attributable to an increase in cash consideration paid for acquisitions, net of cash acquired of approximately $1.2 billion, partially offset by an increase in net inflows of $578.8 million related to marketable securities activity, and an increase in net inflows of $50.8 million related to strategic investment activity.

Current wording

Net cash used in investing activities decreased by $54.6 million during the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The net decrease was primarily attributable to a decrease in net outflows of $30.9 million related to marketable securities activity, and a decrease in cash consideration paid for acquisitions, net of cash acquired of approximately $15.0 million.

Previous wording

Net cash used in financing activities increased by $1.1 billion for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025. The net increase was primarily attributable to an increase in repurchases of Class A Common Stock of $1.1 billion.

Current wording

Net cash used in financing activities increased by $335.2 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The net increase was attributable to an increase in repurchases of Class A Common Stock of $335.2 million.

Previous wording

In September 2024, the Board of Directors authorized a program to repurchase up to $1.5 billion of our outstanding Class A Common Stock (the “2024 Repurchase Program”). The 2024 Repurchase Program commenced in April 2025 following completion of the prior repurchase program. The 2024 Repurchase Program was completed in March 2026. In October 2025, the Board of Directors authorized a new program under which we may repurchase up to an additional $2.5 billion of the Company’s outstanding Class A Common Stock (the “2025 Repurchase Program” and, together with the 2024 Repurchase Program, the “Repurchase Programs”). The 2025 Repurchase Program commenced in March 2026 following completion of the 2024 Repurchase Program. The Repurchase Programs do not have a fixed expiration date, may be suspended or discontinued at any time, and do not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares.

Current wording

In October 2025, the Board of Directors authorized a program under which we may repurchase up to $2.5 billion of the Company’s outstanding Class A Common Stock (the “2025 Repurchase Program”). The 2025 Repurchase Program commenced in March 2026 following completion of the previous repurchase program. The Repurchase Program does not have a fixed expiration date, may be suspended or discontinued at any time, and does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares.

Previous wording

During the three and nine months ended March 31, 2026, we repurchased and subsequently retired approximately 11.8 million and 14.5 million shares of Class A Common Stock for approximately $1.0 billion and $1.5 billion at an average price per share of $85.04 and $100.51, respectively. The 1% excise tax as a result of the Inflation Reduction Act is excluded in the total repurchase cost and average price paid. All repurchases were made in open market transactions. As of March 31, 2026, $2.2 billion of Class A Common Stock remained available for repurchase under the 2025 Share Repurchase Program.

Current wording

During the three months ended September 30, 2026, we repurchased and subsequently retired approximately 3.3 million shares of Class A Common Stock for approximately $581.4 million at an average price per share of $174.10. The 1% excise tax as a result of the Inflation Reduction Act is excluded in the total repurchase cost and average price paid. All repurchases were made in open market transactions. As of September 30, 2026, $1.3 billion of Class A Common Stock remained available for repurchase under the 2025 Share Repurchase Program.

Previous wording

We believe that our existing cash and cash equivalents, together with cash generated from operations, and borrowing capacity from the 2024 Credit Facility will be sufficient to meet our anticipated cash needs for at least the next 12 months. Our other future cash requirements will depend on many factors including our growth rate, the timing and extent of spend on research and development efforts, investment in AI, employee headcount, marketing and sales activities, investment in enterprise sales, payments to tax authorities, acquisitions of additional businesses and technologies, the introduction of new software and services offerings, enhancements to our existing software and services offerings and the continued market acceptance of our offerings.

Current wording

We believe that our existing cash and cash equivalents, together with cash generated from operations, and borrowing capacity from the 2024 Credit Facility will be sufficient to meet our anticipated cash needs for at least the next 12 months. Our other future cash requirements will depend on many factors including our growth rate, the timing and extent of spend on research and development efforts, investment in AI, employee headcount and changes to employee compensation programs, marketing and sales activities, investment in enterprise sales, payments to tax authorities, acquisitions of additional businesses and technologies, the introduction of new software and services offerings, enhancements to our existing software and services offerings and the continued market acceptance of our offerings.

Previous wording

•Free cash flow. Free cash flow is defined as net cash provided by operating activities less capital expenditures, which consists of purchases of property and equipment.

Current wording

•Free cash flow. Free cash flow is defined as net cash provided by operating activities less capital expenditures, which consist of purchases of property and equipment.

Previous wording

The following table presents a reconciliation of our Non-GAAP Financial Measures to the most comparable GAAP financial measure for the three and nine months ended March 31, 2026 and 2025 (in thousands, except percentage and per share data):

Current wording

The following table presents a reconciliation of our Non-GAAP Financial Measures to the most comparable GAAP financial measure for the three months ended September 30, 2026 and 2025 (in thousands, except percentage and per share data):

Previous wording

(3) Restructuring charges include stock-based compensation expense related to the rebalancing of resources for the nine months ended March 31, 2026.

Current wording

(1) Restructuring charges include stock-based compensation expense related to the rebalancing of resources for the three months ended September 30, 2025.

Previous wording

(1) We utilize a fixed long-term projected non-GAAP tax rate in our computation of the non-GAAP income tax adjustments in order to provide better consistency across interim reporting periods. In projecting this long-term non-GAAP tax rate, we utilized a three-year financial projection that excludes the direct and indirect income tax effects of the other non-GAAP adjustments reflected above. Additionally, we considered our current operating structure and other factors such as our existing tax positions in various jurisdictions and key legislation in major jurisdictions where we operate. For fiscal years 2026 and 2025, we determined the projected non-GAAP tax rate to be 24% and 26%, respectively. This fixed long-term projected non-GAAP tax rate eliminates the effects of non-recurring and period-specific items which can vary in size and frequency. Examples of the non-recurring and period specific items include, but are not limited to, changes in the valuation allowance related to deferred tax assets, effects resulting from acquisitions, and unusual or infrequently occurring items. We will periodically re-evaluate this long-term rate, as necessary, for significant events. The rate could be subject to change for a variety of reasons, for example, significant changes in the geographic earnings mix or fundamental tax law changes in major jurisdictions where we operate.

Current wording

(2) We utilize a fixed long-term projected non-GAAP tax rate in our computation of the non-GAAP income tax adjustments in order to provide better consistency across interim reporting periods. In projecting this long-term non-GAAP tax rate, we utilized a three-year financial projection that excludes the direct and indirect income tax effects of the other non-GAAP adjustments reflected above. Additionally, we considered our current operating structure and other factors such as our existing tax positions in various jurisdictions and key legislation in major jurisdictions where we operate. For fiscal years 2027 and 2026, we determined the projected non-GAAP tax rate to be 24%. This fixed long-term projected non-GAAP tax rate eliminates the effects of non-recurring and period-specific items which can vary in size and frequency. Examples of the non-recurring and period specific items include, but are not limited to, changes in the valuation allowance related to deferred tax assets, effects resulting from acquisitions, and unusual or infrequently occurring items. We will periodically re-evaluate this long-term rate, as necessary, for significant events. The rate could be subject to change for a variety of reasons, for example, significant changes in the geographic earnings mix or fundamental tax law changes in major jurisdictions where we operate.

Previous wording

(2) The effects of these dilutive securities were not included in the GAAP calculation of diluted net loss per share for the three and nine months ended March 31, 2026 and March 31, 2025 because the effect would have been anti-dilutive.

Current wording

(3) The effects of these dilutive securities were not included in the GAAP calculation of diluted net loss per share for the three months ended September 30, 2025 because the effect would have been anti-dilutive.