Is Atlassian Stock Halal?

How much of Atlassian’s revenue comes from haram?

Atlassian provides various software products and tools that assist teams in collaborating and managing work and projects remotely.

Atlassian’s products include Trello, Jira, Confluence, and Bitbucket. 

The company earns its revenue from the following segments:

  • Subscription:

Includes fees earned from subscription-based arrangements for providing customers the right to use its software in a cloud-based infrastructure provided by Atlassian. 

  • Maintenance:

Includes fees earned from providing customers unspecified future updates, upgrades and enhancements, and technical product support for perpetual license products.

  • Perpetual License:

Includes sales of licenses to new customers and additional licenses to existing customers.

  • Other:

Includes fees received for sales of third-party apps in the Atlassian Marketplace and revenue generated from technical account management, consulting, and training services.

The contributions from each of Atlassian’s revenue segments in their 2021 annual report were as follows:

Practical Islamic Finance concludes:

None of Atlassian’s revenue comes from anything inherently haram.

Does Atlassian rely on interest to operate?

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What is Atlassian’s Environmental, Social, and Governance (ESG) impact?

Environment

In 2020, Atlassian achieved 100% renewable energy use to run its operations.

Social

Atlassian has been partnered with Room to Read for over ten years, reaching more than 258,000 beneficiaries and donating more than $10 million.

Atlassian has an impressively high Glassdoor rating of 4.6 out of 5.0 from over 1,000 current and previous employees compared to a 3.3 average for all other Glassdoor rated companies.

Governance

No notable governance highlights.

Practical Islamic Finance concludes: 

Atlassian has a net positive ESG impact.

Comfort Rating

From Atlassian’s business, financial, and ESG reviews, Practical Islamic Finance rates Atlassian stock as: 

Questionable to invest in from a halal perspective.

Justification for our rating

Atlassian doesn’t have consistently high usage of interest but recently reported an uptick in their interest expense which put it above our comfort limit for Interest Expense / Total Expense of 5%. We will check on this number next quarter to see if this uptick was a one-time event or indicative of a more long-lasting reliance on interest.

Sources

Atlassian 20-F 

FISCAL YEAR 2020 Sustainability Report 

Atlassian Reviews 

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