Atlassian Corporation (TEAM) Earnings

metirFinance

Sep 2026upcoming

Next quarter

Reports Oct 29, 2026.

Consensus is $0.26 EPS for Sep 2026 across 6 estimates, ranging $0.20 to $0.35.

TEAM Jun 2026

Reported Aug 6, 2026

: 103.13%
: +35.31%

: $0.32
: $0.65
: —
: —

Highlights

Revenue: Q4 revenue was $1.766 billion, up 28% year over year but down from $1.79 billion in Q3 FY2026.
EPS: Reported EPS was $0.65 versus consensus of $0.32, a 103.13% upside surprise; the earnings release separately reports GAAP diluted EPS of $0.55.
Cloud momentum: Cloud revenue rose 31% year over year to $1.213 billion, representing approximately 69% of quarterly revenue.
Recurring growth: Subscription ARR increased 23% year over year to $6.606 billion, while remaining performance obligations rose 44% to $4.817 billion.
Profitability: Atlassian delivered its first clear quarterly GAAP operating profit in the supplied periods, with $211 million of operating income and a 12% margin versus a $28 million loss and negative 2% margin a year ago.
Cash generation: Q4 operating cash flow was $479 million and free cash flow was $475 million, equal to a 27% free-cash-flow margin.
AI distribution: The MCP server and Teamwork Graph CLI exceeded one million monthly active users, more than doubling in one quarter and giving third-party agents permissioned access to Atlassian context.
FY2027 reset: Management targets approximately 13% total revenue growth and 18% Subscription ARR growth in FY2027, with Cloud growth of 25.5% but Data Center revenue declining 17%.
Capital allocation: Atlassian repurchased $359 million of stock in Q4 and $1.8 billion in FY2026; CEO Mike Cannon-Brookes also plans to purchase up to $250 million of shares.

Analysis

Atlassian closed FY2026 with a strong top-line quarter and a sharp profitability step-up. Q4 revenue of $1.766 billion grew 28% year over year from $1.384 billion, although it was modestly below the $1.79 billion recorded in Q3. Reported EPS of $0.65 compared with consensus of $0.32, a 103.13% surprise; the press release reports GAAP diluted EPS of $0.55. GAAP operating income reached $211 million, versus a $28 million loss a year ago and losses of $56 million in Q3 and $48 million in Q2. Non-GAAP operating margin expanded to 36% from 24% a year ago.

The defining feature of the print was the combination of sustained cloud adoption and better cost leverage. Cloud revenue accelerated to 31% growth, while ARR reached $6.606 billion and RPO grew 44%, supported by enterprise commitments and the platform’s AI positioning. Cash generation was also substantial, with $475 million of Q4 free cash flow. The forward setup is more measured: FY2027 guidance calls for 13% revenue growth and 18% ARR growth, with Data Center declining 17% as Atlassian winds down the offering. That transition, along with rising cloud and AI infrastructure costs, is reflected in the expected FY2027 non-GAAP operating margin of 25%, down from 30% in FY2026.

Cloud and recurring revenue

Cloud remained the central growth engine, while the recurring revenue indicators pointed to durable enterprise commitments.

Cloud: Q4 Cloud revenue was $1.213 billion, up 31% year over year from $928 million, while FY2026 Cloud revenue reached $4.411 billion, up 28%.
ARR: Subscription ARR was $6.606 billion at June 30, up 23% from $5.382 billion a year earlier. Customers with more than $10,000 of Cloud ARR increased to 57,334 from 51,978.
Commitments: RPO rose 44% year over year to $4.817 billion, faster than revenue and consistent with longer-duration enterprise commitments.
Mix: Data Center revenue was $462 million in Q4, up 21% year over year, but the company no longer sells Data Center products to new customers and plans to stop selling term-license expansions to existing customers in March 2028.

AI platform adoption

Management framed Atlassian’s AI opportunity around the Teamwork Graph: a permissioned context layer that connects Atlassian and third-party work data for human and software agents.

Integration usage: The MCP server and Teamwork Graph CLI surpassed one million monthly active users, more than doubling in a single quarter and becoming Atlassian’s fastest-growing integration surface.
Product expansion: Jira added agentic development capabilities spanning specifications, coding-agent assignments, session monitoring, engineering automation and AI-cost measurement.
Enterprise controls: Isolated Cloud became generally available, alongside advanced AI administration controls and expanded HIPAA coverage for Rovo, addressing security and governance requirements for regulated customers.
Monetisation: Atlassian is making Rovo available at no additional cost to many customers, including Premium, Enterprise and standard-edition users, so the near-term thesis is usage, retention and platform expansion rather than a separately disclosed AI revenue stream.

Profitability and cash flow

The quarter marked a material change in reported profitability, though the gap between GAAP and adjusted earnings remains large.

GAAP: Operating income was $211 million, or a 12% margin, compared with a $28 million loss and negative 2% margin in Q4 FY2025. Net income was $139 million versus a $24 million loss a year ago.
Non-GAAP: Operating income increased to $636 million from $336 million, lifting the margin to 36% from 24%. Non-GAAP diluted EPS was $1.87 versus $0.98.
Cash: Operating cash flow was $479 million and free cash flow was $475 million, up from $375 million and $360 million, respectively, in Q4 FY2025.
Adjustments: Q4 stock-based compensation was $394 million, compared with $351 million a year ago. FY2026 stock-based compensation totaled $1.607 billion, helping explain the substantial GAAP-to-non-GAAP earnings difference.

FY2027 outlook

The FY2027 targets imply a meaningful deceleration from FY2026’s 26% revenue growth and 23% ARR growth, as Data Center declines and cloud economics absorb continued infrastructure and AI investment.

Growth: Management expects FY2027 total revenue growth of approximately 13%, Subscription ARR growth of 18% and Cloud revenue growth of 25.5%.
Deployment mix: Data Center revenue is expected to decline approximately 17%, while Marketplace and other revenue is expected to grow 12%.
Margins: FY2027 GAAP operating margin is targeted at 4.5%, versus approximately 0% in FY2026, while non-GAAP operating margin is expected to fall to 25% from 30%.
Near term: Q1 FY2027 revenue is expected at $1.705 billion to $1.715 billion, with Cloud growth of approximately 28.5% and Data Center revenue down approximately 4%.

Restructuring and capital allocation

Atlassian paired its operating improvement with a major FY2026 restructuring and aggressive share repurchases, while redirecting resources toward AI and enterprise sales.

Restructuring: The company eliminated roles affecting approximately 10% of its workforce and recorded $285.4 million of FY2026 restructuring charges, including $203.9 million of severance and $80.0 million of lease-related impairment.
Acquisitions: FY2026 investing cash outflow included $1.229 billion for acquisitions, primarily reflecting the purchases of The Browser Company and DX; DX contributed a $138 million developed-technology intangible asset and had total purchase consideration of $720.4 million.
Repurchases: Atlassian bought back $1.8 billion of Class A shares during FY2026, including $359 million in Q4, leaving approximately $1.9 billion available under the repurchase authorization at year-end.
Liquidity: Cash and cash equivalents were $1.240 billion at June 30, against approximately $990 million of long-term debt; the company also had no borrowings under its $750 million revolving credit facility.

Atlassian Corporation

Peers