Atlassian Corporation (TEAM) Earnings

metirFinance

Dec 2026upcoming

Next quarter

Expected to report Feb 4, 2027 — estimated from last year’s reporting date.

Consensus is $0.09 EPS for Dec 2026 across 7 estimates, ranging -$0.05 to $0.22.

TEAM Sep 2026

Reported Nov 5, 2026 · after the close

: 87.50%
: -16.15%

: $0.24
: $0.45
: —
: $1.77B

Reported results

: $1.77B; from $1.43B
: 85.22%; from 82.00%
: $188.79M; from -$96.34M
: 10.65%; from -6.72%
: $90.72M; from -$51.87M
: $0.35; from -$0.20

Highlights

Revenue growth: Q1 FY2027 revenue was $1.772 billion, up 24% year over year but about 1% below Q3 FY2026’s $1.79 billion; subscription revenue also grew 24%, to $1.698 billion.
Cloud momentum: Cloud revenue increased 31% year over year to $1.302 billion, while Data Center revenue grew 5% to $391 million and Marketplace and other revenue rose 27% to $79 million.
Forward indicators: Subscription ARR reached $6.812 billion, up 23%, and remaining performance obligations were $4.746 billion, up 44%; about 66% of RPO is expected to be recognized in the next 12 months.
Profitability: GAAP operating income was $189 million, an 11% margin, versus a $96 million operating loss a year earlier. Non-GAAP operating margin expanded to 32% from 23%; the measures exclude $356 million of stock-based compensation in the quarter.
Cash generation: Free cash flow was $463 million, or 26% of revenue, versus $115 million a year ago; operating cash flow was $469 million, up from $129 million.
AI and collections: Teamwork Collection customers grew 7x year over year. Service Collection passed 70,000 customers and $1 billion in ARR, growing at more than 30%.
Outlook: Q2 revenue guidance is $1.825–$1.835 billion, with Cloud growth expected to moderate to about 27%. For FY2027, Atlassian targets 13.75% revenue growth and 26% Cloud growth, and expects Data Center revenue to decline 16%.
Share repurchases: Atlassian repurchased 3.3 million shares for about $581 million during the quarter; $1.3 billion remained under its $2.5 billion authorization at September 30.

Analysis

Atlassian’s first quarter was defined by solid recurring-revenue growth, a sharp improvement in reported profitability and cash generation, and a substantial backlog—alongside guidance that points to slower growth ahead. Revenue of $1.772 billion rose 24% from $1.433 billion a year ago, though it was about 1% below Q3 FY2026’s $1.79 billion. Cloud remained the main engine, growing 31% to $1.302 billion; Data Center still increased 5%, despite the planned product wind-down. Subscription ARR grew 23% to $6.812 billion and RPO rose 44% to $4.746 billion, supporting the forward-growth picture.

GAAP operating income swung to $189 million from a $96 million loss a year earlier, lifting operating margin to 11%; non-GAAP margin expanded to 32% from 23%. GAAP diluted EPS was $0.35, versus a $0.20 loss a year earlier, while non-GAAP diluted EPS was $1.65. Separately, the supplied consensus data reports EPS of $0.45 against $0.24 expected, an 87.5% beat; that reported figure differs from the release’s GAAP and non-GAAP EPS measures. Free cash flow increased to $463 million from $115 million. The forward signal is more measured: Q2 Cloud growth is guided to about 27%, and FY2027 revenue growth to 13.75%, below this quarter’s 24% pace, with Data Center revenue expected to contract.

Cloud and recurring growth

Revenue mix: Total revenue rose 24% to $1.772 billion. Subscription revenue increased 24% to $1.698 billion, largely from paid-seat expansion, cross-selling and price increases; over 90% of quarterly revenue came from customer accounts already in place by June 30, 2026.
Deployment trends: Cloud revenue grew 31% to $1.302 billion and accounted for most of the year-over-year revenue increase. Data Center revenue rose 5% to $391 million, while Marketplace and other revenue grew 27% to $79 million.
Contracted demand: Subscription ARR increased 23% to $6.812 billion. RPO reached $4.746 billion, up 44%; Atlassian expects to recognize approximately 66% over the next 12 months.

Operating leverage and cash

GAAP improvement: Gross margin increased to 85% from 82%, and operating margin moved to 11% from negative 7%. Operating income was $189 million versus a $96 million loss a year ago; net income was $91 million versus a $52 million loss.
Adjusted profitability: Non-GAAP operating income rose to $576 million from $323 million, with margin expanding to 32% from 23%. The reconciliation adds back $356 million of stock-based compensation and $31 million of acquired-intangible amortization; those adjustments help explain the large gap to GAAP results.
Cash conversion: Free cash flow was $463 million, up from $115 million, on $469 million of operating cash flow and only $6 million of capital expenditures. The filing attributes the operating cash-flow increase primarily to higher customer cash receipts, partially offset by increased payments to vendors and employees.

AI and service collections

Collections adoption: Teamwork Collection customers grew 7x year over year. Service Collection exceeded 70,000 customers and $1 billion in ARR, growing at more than 30%; seat growth in competitive displacements exceeded 40%.
Agent platform: Atlassian introduced AMP, positioning agents as identifiable, permission-governed teammates working within shared team context and workflows. Its rebuilt MCP server offers more than 220 tools and, for the same Jira and Confluence work, uses 25% fewer tokens than the prior version; the company cited more than 2 million monthly users and 15 million daily tool calls.
Enterprise enablement: The company highlighted agent-governance controls and an expanded OpenAI partnership, and plans to submit Rovo for FedRAMP Moderate authorization by June 2027. These initiatives broaden the platform’s enterprise AI proposition, though the release provides no separate AI revenue contribution.

Guidance and transition

Second quarter: Revenue is forecast at $1.825–$1.835 billion. Cloud growth is expected to be about 27% year over year, while Data Center revenue is expected to decline 14%; GAAP and non-GAAP operating margins are guided to 4.5% and 26%, respectively.
Fiscal 2027: Atlassian targets revenue growth of 13.75%, Subscription ARR growth of about 18.5%, and Cloud revenue growth of 26%; Data Center revenue is expected to fall 16%. The outlook implies moderation from Q1’s 24% reported revenue growth and 31% Cloud growth.
Data Center sunset: Atlassian stopped selling term licenses to new customers in March 2026, plans to stop sales and expansions to existing customers in March 2028, and expects to end most maintenance and support in March 2029. The transition remains a headwind to the on-premises business even as Cloud expands.

Capital allocation

Repurchases: Atlassian retired about 3.3 million Class A shares for approximately $581 million, at an average $174.10 per share; $1.3 billion remained available under the $2.5 billion program.
Liquidity: Cash and cash equivalents were $1.121 billion at quarter-end, down from $1.240 billion at June 30. The company also had $990 million of long-term notes and no borrowings on its $750 million revolving credit facility.

Atlassian Corporation

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