Background: Atlassian is the Aussie-founded software company behind workplace tools like Jira and Confluence, plus newer additions like Trello, Loom and The Browser Company. Together, these products are designed to help teams plan, track and collaborate more effectively.

What happened: Atlassian delivered a solid quarter, with revenue jumping 23% year on year to $1.6 billion USD and management lifting full-year revenue guidance. But the market wasn’t impressed. Shares fell another 5% as investors worried that AI could start eating into traditional software models. Zoom out and the picture looks tougher, with Atlassian’s share price down nearly 70% over the past year.

What else: To signal confidence, founders Mike Cannon-Brookes and Scott Farquhar have paused their long-running share sale plans. That move may calm investors, but it doesn’t help employees whose equity-based pay is now sitting well below its strike price.

What's the key learning?

💡Equity looks generous when a stock is flying, but it can look pretty brutal when it’s not. Tech workers often trade higher cash salaries for shares or options, betting on future upside.

💡When a share price falls below an option’s strike price, that equity is “out of the money”. That means employees have no incentive to exercise options if they would be paying more than the market value.

💡With Atlassian’s shares down around 70% over the past year, many employees who sacrificed cash pay for equity are feeling the downside, which can hurt morale and make retention much harder.