UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
 
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
 
For the quarter ended March 31, 2020
 
Commission File Number 001-37651

Atlassian Corporation Plc
(Translation of registrant’s name into English)
 
Exchange House
Primrose Street
London EC2A 2EG
c/o Herbert Smith Freehills LLP
(Address of principal executive office)


Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:
Form 20-F x Form 40-F ¨
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):¨
 





QUARTERLY REPORT
TABLE OF CONTENTS
 
 

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ATLASSIAN CORPORATION PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. $ and shares in thousands, except per share data)
(unaudited)
  Three Months Ended March 31,Nine Months Ended March 31,
 Notes2020201920202019
Revenues:     
Subscription $244,155  $166,468  $673,934  $453,033  
Maintenance 119,628  98,862  346,576  288,759  
Perpetual license 21,002  23,152  74,797  70,769  
Other 26,797  20,788  88,390  62,980  
Total revenues11411,582  309,270  1,183,697  875,541  
Cost of revenues (1) (2) 70,655  54,189  198,695  149,156  
Gross profit 340,927  255,081  985,002  726,385  
Operating expenses: 
Research and development (1) (2) 204,148  153,069  552,450  408,813  
Marketing and sales (1) (2) 84,485  70,544  221,791  191,756  
General and administrative (1) 72,214  59,025  193,395  156,734  
Total operating expenses 360,847  282,638  967,636  757,303  
Operating (loss) income (19,920) (27,557) 17,366  (30,918) 
Other non-operating (expense) income, net(141,701) (173,324) 44,748  (377,980) 
Finance income 7,199  9,303  24,411  24,228  
Finance costs (12,435) (10,103) (37,126) (30,024) 
(Loss) income before income tax benefit (expense) (166,857) (201,681) 49,399  (414,694) 
Income tax benefit (expense)58,032  (1,163) (14,830) 14,590  
Net (loss) income $(158,825) $(202,844) $34,569  $(400,104) 
Net (loss) income per share attributable to ordinary shareholders: 
Basic13$(0.65) $(0.85) $0.14  $(1.68) 
Diluted13$(0.65) $(0.85) $0.14  $(1.68) 
Weighted-average shares outstanding used to compute net (loss) income per share attributable to ordinary shareholders: 
Basic13245,504  239,410  244,161  237,778  
Diluted13245,504  239,410  251,255  237,778  

(1)Amounts include share-based payment expense, as follows:
Cost of revenues$5,535  $4,871  $14,654  $12,156  
Research and development57,071  42,222  151,988  102,044  
Marketing and sales11,397  10,979  32,902  28,590  
General and administrative13,519  14,674  35,712  38,840  

(2)Amounts include amortization of acquired intangible assets, as follows:
Cost of revenues$6,645  $7,068  $24,306  $19,479  
Research and development41  19  124  40  
Marketing and sales2,900  5,716  10,511  25,072  
The above consolidated statements of operations should be read in conjunction with the accompanying notes.
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ATLASSIAN CORPORATION PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(U.S. $ in thousands)
(unaudited)
  Three Months Ended March 31,Nine Months Ended March 31,
 Notes2020201920202019
Net (loss) income  $(158,825) $(202,844) $34,569  $(400,104) 
Items that will not be reclassified to profit or loss in subsequent periods:
Net change in unrealized gain on investments classified at fair value through other comprehensive income326,180  —  6,802  672  
Income tax effect(5,800) —  (1,379) —  
Other comprehensive income for items that will not be reclassified to profit or loss, net of tax20,380  —  5,423  672  
Items that will be reclassified to profit or loss in subsequent periods:
Foreign currency translation adjustment(4,182) (270) (4,763) (348) 
Net change in unrealized gain on investments classified at fair value through other comprehensive income196  348  662  763  
Net (loss) gain on derivative instruments3(20,565) 3,529  (16,866) 520  
Income tax effect (9) (1,059) (1,222) (156) 
Other comprehensive (loss) income after tax that will be reclassified to profit or loss in subsequent periods(24,560) 2,548  (22,189) 779  
Other comprehensive (loss) income (4,180) 2,548  (16,766) 1,451  
Total comprehensive (loss) income, net of tax $(163,005) $(200,296) $17,803  $(398,653) 

The above consolidated statements of comprehensive (loss) income should be read in conjunction with the accompanying notes.
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ATLASSIAN CORPORATION PLC
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(U.S. $ in thousands)
NotesMarch 31, 2020June 30, 2019
(unaudited)
Assets
Current assets:
Cash and cash equivalents10$1,338,193  $1,268,441  
Short-term investments3733,612  445,046  
Trade receivables693,710  82,525  
Tax receivables1,784  707  
Derivative assets3, 12245,601  215,156  
Prepaid expenses and other current assets45,470  30,236  
Total current assets2,458,370  2,042,111  
Non-current assets:
Property and equipment, net785,038  81,459  
Deferred tax assets19,639  17,084  
Goodwill8632,779  608,907  
Intangible assets, net8131,934  150,975  
Right-of-use assets, net2225,985  —  
Other non-current assets1087,212  76,722  
Total non-current assets1,182,587  935,147  
Total assets$3,640,957  $2,977,258  
Liabilities
Current liabilities:
Trade and other payables10$179,739  $159,487  
Tax liabilities14,300  11,703  
Provisions9,721  8,983  
Deferred revenue547,518  440,954  
Lease obligations234,659  —  
Derivative liabilities3858,447  855,005  
Current portion of exchangeable senior notes, net12880,120  853,576  
Total current liabilities2,524,504  2,329,708  
Non-current liabilities:
Deferred tax liabilities16,020  13,872  
Provisions7,221  6,082  
Deferred revenue35,638  27,866  
Lease obligations2235,974  —  
Other non-current liabilities1,441  34,263  
Total non-current liabilities296,294  82,083  
Total liabilities2,820,798  2,411,791  
Equity
Share capital24,629  24,199  
Share premium459,590  458,166  
Other capital reserves1,051,796  816,660  
Other components of equity15,313  32,079  
Accumulated deficit(731,169) (765,637) 
Total equity820,159  565,467  
Total liabilities and equity$3,640,957  $2,977,258  

The above consolidated statements of financial position should be read in conjunction with the accompanying notes.
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ATLASSIAN CORPORATION PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(U.S. $ in thousands)
(unaudited)
Other components of equity
NotesShare capitalShare premiumOther capital reservesCash flow hedge reserveForeign currency translation reserveInvestments at fair value through other comprehensive income reserveAccumulated deficitTotal equity
Balance as of June 30, 2019$24,199  $458,166  $816,660  $(2,547) $4,372  $30,254  $(765,637) $565,467  
Net income—  —  —  —  —  —  34,569  34,569  
Other comprehensive (loss) income, net of tax—  —  —  (17,958) (4,763) 5,955  —  (16,766) 
Total comprehensive (loss) income, net of tax—  —  —  (17,958) (4,763) 5,955  34,569  17,803  
Issuance of ordinary shares upon exercise of share options61  1,424  —  —  —  —  —  1,485  
Vesting of early exercised shares57  —  (25) —  —  —  —  32  
Issuance of ordinary shares for settlement of restricted share units (RSUs)312  —  (312) —  —  —  —  —  
Share-based payment—  —  235,256  —  —  —  —  235,256  
Tax benefit from share plans—  —  217  —  —  —  —  217  
Cumulative effect of applying new accounting pronouncement2—  —  —  —  —  —  (101) (101) 
430  1,424  235,136  —  —  —  (101) 236,889  
Balance as of March 31, 2020$24,629  $459,590  $1,051,796  $(20,505) $(391) $36,209  $(731,169) $820,159  

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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ATLASSIAN CORPORATION PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
(U.S. $ in thousands)
(unaudited)
Other components of equity
Share capitalShare premiumOther capital reservesCash flow hedge reserveForeign currency translation reserveInvestments at fair value through other comprehensive income reserveAccumulated deficitTotal Equity
*As Adjusted
Balance as of June 30, 2018$23,531  $454,766  $557,100  $(3,624) $4,407  $(844) $(128,016) $907,320  
Net loss—  —  —  —  —  —  (400,104) (400,104) 
Other comprehensive income (loss), net of tax—  —  —  364  (348) 1,435  —  1,451  
Total comprehensive income (loss), net of tax—  —  —  364  (348) 1,435  (400,104) (398,653) 
Issuance of ordinary shares upon exercise of share options120  2,709  —  —  —  —  —  2,829  
Vesting of early exercised shares51   —  —  —  —  —  57  
Issuance of ordinary shares for settlement of restricted share units (RSUs)325  —  (325) —  —  —  —  —  
Share-based payment—  —  181,645  —  —  —  —  181,645  
Tax benefit from share plans—  —  320  —  —  —  —  320  
496  2,715  181,640  —  —  —  —  184,851  
Balance as of March 31, 2019$24,027  $457,481  $738,740  $(3,260) $4,059  $591  $(528,120) $693,518  
* As adjusted to reflect the impact of the full retrospective adoption of IFRS 15, Revenue from Contracts with Customers (“IFRS 15”). We adopted IFRS 15 on July 1, 2018.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

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ATLASSIAN CORPORATION PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. $ in thousands)
(unaudited)
 Three Months Ended March 31,Nine Months Ended March 31,
2020201920202019
Operating activities   
(Loss) income before income tax benefit (expense) $(166,857) $(201,681) $49,399  $(414,694) 
Adjustments to reconcile (loss) income before income tax benefit (expense) to net cash provided by operating activities: 
Depreciation and amortization14,738  16,303  49,148  54,403  
Depreciation of right-of-use assets8,945  —  26,172  —  
Net unrealized loss (gain) on investments—   —  (46) 
(Gain) loss on sale of investments and disposal of other assets(591)  (855) (2,345) 
Net unrealized foreign currency gain(4,119) (742) (3,173) (634) 
Share-based payment expense 87,522  72,746  235,256  181,630  
Net unrealized loss (gain) on exchange derivative and capped call transactions141,783  172,582  (46,743) 377,587  
Amortization of debt discount and issuance cost8,955  8,535  26,545  25,301  
Interest income(7,200) (9,417) (24,411) (24,228) 
Interest expense 3,482  1,568  10,581  4,723  
Changes in assets and liabilities: 
Trade receivables 29,902  7,513  (11,211) (15,627) 
Prepaid expenses and other assets (1,224) 4,046  (7,594) (13,161) 
Trade and other payables, provisions and other non-current liabilities 30,961  38,231  25,452  56,205  
Deferred revenue 4,958  16,201  113,737  88,946  
Interest received 8,146  8,235  24,416  21,956  
(Income tax paid) tax refunds received, net (3,088) (872) (15,850) 8,600  
Net cash provided by operating activities 156,313  133,251  450,869  348,616  
Investing activities 
Business combinations, net of cash acquired —  —  (37,983) (263,554) 
Purchases of intangible assets—  —  —  (850) 
Purchases of property and equipment(6,742) (6,106) (19,865) (24,629) 
Proceeds from sales of property, equipment and intangible assets—  —  —  3,721  
Purchases of investments (364,603) (158,258) (951,481) (352,647) 
Proceeds from maturities of investments 232,239  131,669  425,257  317,583  
Proceeds from sales of investments95,680  3,070  237,641  8,742  
Increase in restricted cash—  —  —  (552) 
Net cash used in investing activities (43,426) (29,625) (346,431) (312,186) 
Financing activities 
Proceeds from exercise of share options 499  1,125  1,485  2,829  
Payment of exchangeable senior notes issuance costs—  —  —  (410) 
Payments of lease obligations(9,308) —  (26,335) —  
Interest paid  —  —  (3,125) (3,194) 
Repayment of exchangeable senior notes (2) —  (2) —  
Net cash (used in) provided by financing activities (8,811) 1,125  (27,977) (775) 
Effect of exchange rate changes on cash and cash equivalents (5,608) (56) (6,709) (710) 
Net increase in cash and cash equivalents 98,468  104,695  69,752  34,945  
Cash and cash equivalents at beginning of period1,239,725  1,340,589  1,268,441  1,410,339  
Cash and cash equivalents at end of period$1,338,193  $1,445,284  $1,338,193  $1,445,284  

The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.
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ATLASSIAN CORPORATION PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




(unaudited)
1. Corporate Information
Atlassian Corporation Plc (the “Company”) is a public company limited by shares, incorporated and registered in the United Kingdom. The registered office of the Company and its subsidiaries (collectively, “Atlassian,” the “Group,” “our,” or “we”) is located at Exchange House, Primrose Street, London EC2A 2EG, c/o Herbert Smith Freehills LLP.
We design, develop, license and maintain software and provision software hosting services to help teams organize, discuss and complete their work. Our primary products include Jira Software, targeting software teams, and Jira Core, targeting other business teams (collectively, “Jira”), Confluence for team content creation and sharing, Trello for capturing and adding structure to fluid, fast-forming work for teams, Bitbucket for team code sharing and management, Jira Service Desk for team service and support applications, Opsgenie for incident management, and Jira Align for enterprise agile planning.
2. Summary of Significant Accounting Policies
Basis of preparation
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the Group’s accounting policies, which are in accordance with International Financial Reporting Standards (“IFRS”), and in compliance with International Accounting Standard (“IAS”) 34. Our accounting policies apply standards issued by the International Accounting Standards Board (“IASB”) and related interpretations issued by the IFRS Interpretations Committee (“IFRS IC”). The consolidated financial statements have been prepared on a historical cost basis, except for debt and equity financial assets and derivative financial instruments that have been measured at fair value.
Certain information and disclosures normally included in the notes to annual financial statements have been condensed or omitted. We believe that the condensed information and disclosures made are adequate and that the information gives a true and fair view. The information included in this quarterly report on Form 6-K should be read in conjunction with the Group’s audited consolidated financial statements and accompanying notes included in the Group’s annual report on Form 20-F for the year ended June 30, 2019, which was filed with the Securities and Exchange Commission (“SEC”) on August 23, 2019.
All amounts included in the unaudited interim consolidated financial statements are reported in thousands of U.S. dollars (U.S. $ in thousands) except where otherwise stated. Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
The accompanying consolidated statements of financial position as of March 31, 2020, the consolidated statements of operations, comprehensive (loss) income and cash flows for the three and nine months ended March 31, 2020 and 2019, and the consolidated statements of changes in equity for the nine months ended March 31, 2020 and 2019, and related footnote information are unaudited. The consolidated statement of financial position as of June 30, 2019 was derived from the audited consolidated financial statements included in the Group’s annual report on Form 20-F. The unaudited interim consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements except for the adoption of IFRS 16, Leases, as described below and, in the opinion of management, reflect all adjustments, necessary to present fairly the Group’s financial position as of March 31, 2020, and the results of operations and cash flows for the three and nine months ended March 31, 2020 and 2019. The results of the three and nine months ended March 31, 2020 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year.




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Use of estimates
The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgments and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgments and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the result of which forms the basis of the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions and may materially affect the financial results or the financial position reported in future periods.
In January 2020, the World Health Organization (“WHO”) declared a novel coronavirus (“COVID-19”) a Public Health Emergency of International Concern, and a pandemic in March 2020. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the consolidated financial statements for the period ended March 31, 2020. As events continue to evolve and additional information becomes available, our assumptions and estimates may change materially in future periods.
New Standards, Interpretations and Amendments Adopted in Fiscal Year 2020
IFRS 16, Leases (“IFRS 16”)
In January 2016, the IASB issued IFRS 16, which supersedes the previous leases standard, IAS 17, Leases (“IAS 17”), and related interpretations. The standard introduced a single lessee accounting model and requires a lessee to recognize leases on its statement of financial position, represented by right-of-use assets and lease obligations. We adopted IFRS 16 as of July 1, 2019, using the modified retrospective method and, therefore, the comparatives for fiscal year 2019 have not been restated.
We applied IFRS 16 using the following practical expedients permitted under the new standard:

The use of a single discount rate to a portfolio of leases with reasonably similar characteristics;
Reliance on previous assessments on whether leases are onerous;
The exclusion from recognition of right-of-use assets or lease obligations for leases of low value or for leases with a term ending within 12 months as of July 1, 2019; and,
The exclusion of initial direct costs for the measurement of the right-of-use asset as of July 1, 2019.

On adoption of IFRS 16, we recognized lease obligations in relation to leases which had previously been classified as ‘operating leases’ under the principles of IAS 17. These liabilities were measured at the present value of the remaining lease payments, discounted using our incremental borrowing rate as of July 1, 2019. The weighted-average incremental borrowing rate applied to the lease obligations on July 1, 2019 was 2.91%.

The following table presents the reconciliation of our operating lease commitments disclosed as of June 30, 2019 to our lease obligations recognized as of July 1, 2019:
July 1, 2019
(U.S. $ in thousands)
Operating lease commitments disclosed as of June 30, 2019$330,848  
Less: Short-term leases recognized on a straight-line basis as expense(1,756) 
Undiscounted lease commitments, excluding short-term leases$329,092  
Discounted using incremental borrowing rate and recognized as lease obligations as of July 1, 2019$285,973  
Lease obligations, current$29,787  
Lease obligations, non-current256,186  
Total lease obligations$285,973  

The associated right-of-use assets for our leases were measured at the amount equal to the lease obligation, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized on our consolidated statement of financial position as of June 30, 2019. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application.
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        The adoption of IFRS 16 affected the following items on our consolidated statement of financial position as of July 1, 2019:

Prepaid expenses and other current assets – increased by $9.5 million
Right-of-use assets, net – increased by $241.4 million
Property and equipment, net – decreased by $1.2 million
Other non-current assets – increased by $0.9 million
Trade and other payables – decreased by $1.4 million
Lease obligations, current – increased by $29.8 million
Other non-current liabilities – decreased by $33.8 million
Lease obligations, non-current – increased by $256.2 million

The net impact on accumulated deficit as of July 1, 2019 was an increase of $0.1 million.

Updated significant accounting policies

There have been no changes to our critical accounting policies and estimates described in the Group’s annual report on Form 20-F for the year ended June 30, 2019, filed with the SEC on August 23, 2019. The accounting policy for leases was updated as a result of adopting IFRS 16.

We lease various offices in several countries including Australia, India, Japan, the Netherlands, the Philippines, the United States, and Turkey under non-cancellable leases. Lease terms are negotiated on an individual basis, expiring between 1 to 10 years.

Until the fiscal year ending June 30, 2019, our leases were classified as operating leases and payments made under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of the lease. With the adoption of IFRS 16, these operating leases are recognized as a right-of-use asset with a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Lease obligations

At the commencement date of our leases, we recognize lease obligations measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable. In calculating the present value of lease payments, we use our incremental borrowing rate at the lease commencement date, being the rate that we would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. After the commencement date, the amount of lease obligations is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease obligations is remeasured if there is a modification, a change in the lease term or a change in the in-substance fixed lease payments.

Right-of-use assets

We recognize right-of-use assets at the commencement date of the lease, the date the underlying asset is available for use. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease obligations. The cost of right-of-use assets includes the amount of lease obligations recognized, initial direct costs incurred, estimated restoration costs, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the lease term. Right-of-use assets are subject to impairment.

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Short-term leases and leases of low-value assets

We apply the short-term lease recognition exemption for our short-term leases and leases of low-value assets. Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis over the lease term as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets are comprised of office equipment.

Judgment in determining the lease term of contracts with renewal options

We determine the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. We have the option under some of our leases to lease the assets for additional terms. We apply judgment in evaluating whether it is reasonably certain to exercise the option to renew. We consider all relevant factors that create an economic incentive for us to exercise the renewal. After the commencement date, we reassess the lease term if there is a significant event or change in circumstances that is within our control and affects our ability to exercise, or not to exercise, the option to renew. We do not include the renewal options for our office leases as a part of the lease terms at lease commencement due to the length of our office leases and our changing facilities needs.

The following table presents the carrying amounts of our right-of-use assets and lease obligations and the movements during the nine months ended March 31, 2020:

 Office Leases
 Right-of-Use AssetsLease Obligations
 (U.S. $ in thousands)
As of July 1, 2019$241,421  $285,973  
Additions13,669  13,340  
Disposals(2,388) (2,388) 
Depreciation expense(26,172) —  
Interest expense—  5,865  
Payments—  (26,335) 
Effect of change in exchange rates(545) (5,822) 
As of March 31, 2020$225,985  $270,633  
Lease obligations, current$34,659  
Lease obligations, non-current235,974  
Total lease obligations, as of March 31, 2020$270,633  
We recognized rent expense from short-term leases of $0.2 million and $1.9 million during the three and nine months ended March 31, 2020, respectively. There is no material impact on other comprehensive income and basic and diluted earnings per share from the adoption of IFRS 16.

As of March 31, 2020, we have entered into leases that have not yet commenced with future lease payments of $93.5 million, that are not yet recorded on our consolidated statements of financial position. These leases will commence between 2020 and 2022 with non-cancelable lease terms of 2 to 12 years.

IFRIC Interpretations (“IFRIC”) 23, Uncertainty over Income Tax Treatments

On June 7, 2017, the IFRS IC issued IFRIC 23, which clarifies how the recognition and measurement requirements of IAS 12, Income Taxes, are applied where there is uncertainty over income tax treatments. IFRIC 23 applies to all aspects of income tax accounting where there is an uncertainty regarding the treatment of an item, including taxable profit or loss, the tax bases of assets and liabilities, and tax losses and credits. This interpretation became effective for annual periods beginning on, or after January 1, 2019 and did not have a significant impact on our consolidated financial statements.
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3. Financial Instruments Investments
As of March 31, 2020, the Group’s investments consisted of the following:
 Amortized CostUnrealized GainsUnrealized LossesFair Value
 (U.S. $ in thousands)
Debt Investments   
Marketable debt securities:
    U.S. treasury securities$280,475  $2,543  $(1) $283,017  
    Agency securities40,413  398  —  40,811  
    Certificates of deposit and time deposits20,610  —  —  20,610  
    Commercial paper54,365  —  —  54,365  
    Corporate debt securities337,224  340  (2,119) 335,445  
    Municipal securities2,700  11  —  2,711  
Total debt investments$735,787  $3,292  $(2,120) $736,959  
Equity Investments
Marketable equity securities$20,270  $45,464  $—  $65,734  
Non-marketable equity securities3,750  —  —  3,750  
Total equity investments$24,020  $45,464  $—  $69,484  
Total investments$759,807  $48,756  $(2,120) $806,443  
As of March 31, 2020, the Group had $733.6 million of investments which were classified as short-term investments on the Group’s consolidated statement of financial position. Additionally, the Group had marketable equity securities totaling $65.7 million, non-marketable equity securities in privately held companies totaling $3.8 million, and certificates of deposit and time deposits totaling $3.3 million all of which were classified as long-term and were included in other non-current assets on the Group’s consolidated statement of financial position.
As of June 30, 2019, the Group’s investments consisted of the following:

 Amortized CostUnrealized GainsUnrealized LossesFair Value
 (U.S. $ in thousands)
Debt Investments
Marketable debt securities:
U.S. treasury securities$101,563  $203  $(7) $101,759  
Agency securities26,936  33  (3) 26,966  
Certificates of deposit and time deposits24,126  —  —  24,126  
Commercial paper94,035  —  —  94,035  
Corporate debt securities201,552  292  (24) 201,820  
Total debt investments$448,212  $528  $(34) $448,706  
Equity Investments
Marketable equity securities$20,270  $38,662  $—  $58,932  
Non-marketable equity securities3,000  —  —  3,000  
Total equity investments$23,270  $38,662  $—  $61,932  
Total investments$471,482  $39,190  $(34) $510,638  

        As of June 30, 2019, the Group had $445.0 million of investments which were classified as short-term investments on the Group’s consolidated statement of financial position. Additionally, the Group had marketable equity securities totaling $58.9 million, non-marketable equity securities in privately held companies totaling $3.0 million, and certificates of deposit and time deposits totaling $3.7 million, all of which were classified as long-term and were included in other non-current assets on the Group’s consolidated statement of financial position.
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The table below summarizes the Group’s debt investments by remaining contractual maturity:
As of
 March 31, 2020June 30, 2019
 (U.S. $ in thousands)
Recorded as follows:   
Due in one year or less$380,763  $442,964  
Due after one year356,196  5,742  
Total debt investments$736,959  $448,706  

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Fair value measurements
The following table presents the Group’s financial instruments measured and recognized at fair value as of March 31, 2020, by level within the fair value hierarchy:
Level 1Level 2Level 3Total
(U.S. $ in thousands)
Description
Assets measured at fair value
Cash and cash equivalents:
Money market funds$717,361  $—  $—  $717,361  
U.S. treasury securities—  600  —  600  
Agency securities—  10,684  —  10,684  
Commercial paper—  85,672  —  85,672  
Corporate debt securities—  14,732  —  14,732  
Municipal securities—  1,502  —  1,502  
Short-term Investments:
U.S. treasury securities—  283,017  —  283,017  
Agency securities—  40,811  —  40,811  
Certificates of deposit and time deposits—  17,263  —  17,263  
Commercial paper—  54,365  —  54,365  
Corporate debt securities—  335,445  —  335,445  
Municipal securities—  2,711  —  2,711  
Current derivative assets:
Derivative assets - hedging—  539  —  539  
Derivative assets - capped call transactions—  —  245,062  245,062  
Non-current derivative assets:
Derivative assets - hedging—  90  —  90  
Other non-current assets:
Certificates of deposit and time deposits—  3,347  —  3,347  
Marketable equity securities65,734  —  —  65,734  
Non-marketable equity securities—  —  3,750  3,750  
Total assets measured at fair value$783,095  $850,778  $248,812  $1,882,685  
Liabilities measured at fair value    
Current derivative liabilities:
Derivative liabilities - hedging$—  $23,600  $—  $23,600  
Derivative liabilities - exchangeable feature of Notes—  —  834,847  834,847  
Non-current derivative liabilities:
Derivative liabilities - hedging—  1,441  —  1,441  
Total liabilities measured at fair value$—  $25,041  $834,847  $859,888  
Liabilities for which fair value is disclosed
      Exchangeable senior notes $—  $1,790,460  $—  $1,790,460  
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There were no transfers between levels during the three and nine months ended March 31, 2020.
The following table presents the Group’s financial instruments measured and recognized at fair value as of June 30, 2019, by level within the fair value hierarchy:
Level 1Level 2Level 3Total
(U.S. $ in thousands)
Description
Assets measured at fair value
Cash and cash equivalents:
Money market funds$593,696  $—  $—  $593,696  
U.S. treasury securities—  6,996  —  6,996  
Agency securities—  8,084  —  8,084  
Certificates of deposit and time deposits—  9,844  —  9,844  
Commercial paper—  67,327  —  67,327  
Corporate debt securities—  7,560  —  7,560  
Short-term Investments:
U.S. treasury securities—  101,759  —  101,759  
Agency securities—  26,966  —  26,966  
Certificates of deposit and time deposits—  20,466  —  20,466  
Commercial paper—  94,035  —  94,035  
Corporate debt securities—  201,820  —  201,820  
Current derivative assets:<