Atlassian Announces First Quarter Fiscal Year 2026 Results
TEAM Anywhere/SAN FRANCISCO--( BUSINESS WIRE)--Atlassian Corporation (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its first quarter ended September 30, 2025. A shareholder letter was posted on the Investor Relations section of Atlassian’s website at https://investors.atlassian.com.
“Our relentless pace of AI innovation is driving results as we grew Cloud revenue in Q1 to $998 million, up 26% year-over-year, and surpassed 3.5 million monthly active users of our AI capabilities, up 50% quarter-over-quarter,” said Mike Cannon-Brookes, Atlassian’s CEO and co-Founder. “Our customers are choosing us as their strategic AI platform - not only for the innovation we’re shipping - but for the enterprise security, governance, and permissioning, underpinned by our Teamwork Graph and powering the business processes and workflows of over 300,000 customers. With Rovo’s AI capabilities at the center, we’re enabling all teams to unleash enterprise knowledge at scale.”
“We’re off to a solid start in FY26, with strong enterprise sales execution and migration momentum driving total revenue to over $1.4 billion, up 21% year-over-year, and RPO to $3.3 billion, up 42% year-over-year in Q1,” said Joe Binz, Atlassian’s CFO. “The investments we are making across our strategic priorities of enterprise, AI, and System of Work are delivering great progress and position us well to drive durable long-term growth and profitability.”
First Quarter Fiscal Year 2026 Financial Highlights:
On a GAAP basis, Atlassian reported:
On a non-GAAP basis, Atlassian reported:
A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below, under the heading “About Non-GAAP Financial Measures.”
Recent Business Highlights:
Share Repurchase Program:
In October 2025, Atlassian’s Board of Directors authorized a new share repurchase program for up to $2.5 billion of Class A Common Stock, to commence following the completion of the $1.5 billion program previously authorized in September 2024. Under the program, which is designed to opportunistically return capital to shareholders, Atlassian may repurchase shares in the open market and enter into structured agreements with third parties.
Leadership Updates:
Atlassian announced that Tamar Yehoshua will join Atlassian as Chief Product and AI Officer, effective November 17, 2025. Tamar brings exceptional experience to Atlassian as a seasoned product leader who has led product strategy at scale. Tamar joins us from Glean, where she served as President of Product and Technology. She previously served as Chief Product Officer at Slack and as a VP leading product and engineering teams for Google Search.
Additionally, Atlassian announced that Joe Binz will retire as Chief Financial Officer, effective June 30, 2026. We have mutually decided that the time is right for a thoughtful transition, and we have initiated a search for our next Chief Financial Officer. We are grateful for Joe’s nearly four years at Atlassian, where he shepherded Atlassian through a transformational period from Server to Cloud, helped scale our enterprise business, and built a world-class finance organization.
Financial Targets:
The following financial targets for the second quarter of fiscal year 2026 and fiscal year 2026 include the impact of the Data Center end-of-life announcement on the timing of Data Center revenue recognition and the acquisition of The Browser Company of New York, which closed on October 20, 2025.
Atlassian is providing its financial targets as follows:
Second Quarter Fiscal Year 2026:
Fiscal Year 2026:
For additional commentary regarding financial targets, please see Atlassian’s first quarter fiscal year 2026 shareholder letter dated October 30, 2025.
With respect to Atlassian’s expectations under “Financial Targets” above, a reconciliation of GAAP to non-GAAP gross margin and operating margin has been provided in the financial statement tables included in this press release.
Shareholder Letter and Webcast Details:
A detailed shareholder letter is available on the Investor Relations section of Atlassian’s website at https://investors.atlassian.com. Atlassian will host a webcast to answer questions today:
Atlassian has used, and will continue to use, its Investor Relations website at https://investors.atlassian.com as a means of making material information public and for complying with its disclosure obligations.
____________________
1 Gartner, Magic Quadrant for DevOps Platforms, Keith Mann, George Spafford, Bill Holz, Thomas Murphy, 22 September 2025. Gartner does not endorse any vendor, product or service depicted in its research publications and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. The Gartner content described herein (the “Gartner Content”) represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and is not a representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this Press Release), and the opinions expressed in the Gartner Content are subject to change without notice. GARTNER is a registered trademark and service mark of Gartner and Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved.
About Atlassian
Atlassian unleashes the potential of every team. A recognized leader in software development, work management, and enterprise service management software, Atlassian enables enterprises to connect their business and technology teams with an AI-powered system of work that unlocks productivity at scale. Atlassian’s collaboration software powers over 80% of the Fortune 500 and 300,000+ customers worldwide - including NASA, Rivian, Deutsche Bank, United Airlines, and Bosch - who rely on our solutions to drive work forward.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. In some cases, you can identify these statements by forward-looking words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “should,” “estimate,” “further,” or “continue,” and similar expressions or variations, but these words are not the exclusive means for identifying such statements. All statements other than statements of historical fact could be deemed forward looking, including but not limited to risks and uncertainties related to statements about our platform, offerings and capabilities and planned offerings and capabilities, investments, System of Work, AI solutions and innovation, customers, company culture, Atlassian Ascend initiative, strategic acquisitions, strategic priorities, leadership transitions, share repurchase program, anticipated growth, outlook and results, and our financial targets such as total revenue, Cloud, Data Center, and Marketplace and other revenue, and GAAP and non-GAAP financial measures including gross margin and operating margin.
We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.
The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management’s beliefs and assumptions only as of the date such statements are made. Further information on these and other factors that could affect our financial results is included in filings we make with the Securities and Exchange Commission (the “SEC”) from time to time, including the section titled “Risk Factors” in our most recently filed Forms 10-K and 10-Q, as well as those that may be updated in our future filings with the SEC. These documents are available on the SEC Filings section of the Investor Relations section of our website at https://investors.atlassian.com.
About Non-GAAP Financial Measures
In addition to the measures presented in our condensed consolidated financial statements, we regularly review other measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”), defined as non-GAAP financial measures by the SEC, to evaluate our business, measure our performance, identify trends, prepare financial forecasts and make strategic decisions. The key measures we consider are non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share and free cash flow (collectively, the “Non-GAAP Financial Measures”). These Non-GAAP Financial Measures, which may be different from similarly titled non-GAAP measures used by other companies, provide supplemental information regarding our operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or that occur relatively infrequently and/or that management considers to be unrelated to our core operations. Management believes that tracking and presenting these Non-GAAP Financial Measures provides management, our board of directors, investors and the analyst community with the ability to better evaluate matters such as: our ongoing core operations, including comparisons between periods and against other companies in our industry; our ability to generate cash to service our debt and fund our operations; and the underlying business trends that are affecting our performance.
Our Non-GAAP Financial Measures include:
We understand that although these Non-GAAP Financial Measures are frequently used by investors and the analyst community in their evaluation of our financial performance, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. We compensate for such limitations by reconciling these Non-GAAP Financial Measures to the most comparable GAAP financial measures. We encourage you to review the tables in this press release titled “Reconciliation of GAAP to Non-GAAP Results” and “Reconciliation of GAAP to Non-GAAP Financial Targets” that present such reconciliations.
Customers with >$10,000 in Cloud ARR
We define the number of customers with Cloud ARR greater than $10,000 at the end of any particular period as the number of organizations with unique domains with an active Cloud subscription for two or more seats and greater than $10,000 in Cloud ARR.
We define Cloud ARR as the annualized recurring revenue run-rate of Cloud subscription agreements at a point in time. We calculate Cloud ARR by taking the Cloud monthly recurring revenue (“Cloud MRR”) run-rate and multiplying it by 12. Cloud MRR for each month is calculated by aggregating monthly recurring revenue from committed contractual amounts at a point in time. Cloud ARR and Cloud MRR should be viewed independently of revenue and do not represent our revenue under GAAP, as they are operational metrics that can be affected by contract start and end dates and renewal rates.
Atlassian Corporation
Condensed Consolidated Statements of Operations
(U.S. $ and shares in thousands, except per share data)
(unaudited)
Three Months Ended September 30,
2025
2024
Revenues:
Subscription
$
1,374,502
$
1,131,948
Other
58,051
55,833
Total revenues
1,432,553
1,187,781
Cost of revenues (1) (2)
257,924
217,624
Gross profit
1,174,629
970,157
Operating expenses:
Research and development (1) (2)
755,994
603,101
Marketing and sales (1) (2)
336,427
252,393
General and administrative (1)
178,545
146,641
Total operating expenses
1,270,966
1,002,135
Operating loss
(96,337
)
(31,978
)
Other income (expense), net
18,804
(19,432
)
Interest income
29,845
28,564
Interest expense
(8,636
)
(7,318
)
Loss before income taxes
(56,324
)
(30,164
)
Provision for (benefit from) income taxes
(4,454
)
93,605
Net loss
$
(51,870
)
$
(123,769
)
Net loss per share attributable to Class A and Class B common stockholders:
Basic
$
(0.20
)
$
(0.48
)
Diluted
$
(0.20
)
$
(0.48
)
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders:
Basic
262,991
260,477
Diluted
262,991
260,477
(1) Amounts include stock-based compensation as follows:
Three Months Ended September 30,
2025
2024
Cost of revenues
$
19,931
$
18,214
Research and development
246,494
193,445
Marketing and sales
43,984
35,992
General and administrative
40,718
38,495
(2) Amounts include amortization of acquired intangible assets, as follows:
Three Months Ended September 30,
2025
2024
Cost of revenues
$
9,957
$
10,116
Research and development
94
94
Marketing and sales
3,599
3,672
Atlassian Corporation
Condensed Consolidated Balance Sheets
(U.S. $ in thousands)
(unaudited)
September 30, 2025
June 30, 2025
Assets
Current assets:
Cash and cash equivalents
$
2,322,360
$
2,512,874
Marketable securities
456,040
424,268
Accounts receivable, net
536,863
778,302
Prepaid expenses and other current assets
311,857
175,793
Total current assets
3,627,120
3,891,237
Non-current assets:
Property and equipment, net
99,711
105,118
Operating lease right-of-use assets
134,610
169,127
Strategic investments
204,066
221,942
Intangible assets, net
235,890
244,840
Goodwill
1,318,028
1,304,445
Deferred tax assets
3,632
3,762
Other non-current assets
97,443
101,499
Total assets
$
5,720,500
$
6,041,970
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
195,313
$
222,092
Accrued expenses and other current liabilities
562,329
681,601
Deferred revenue, current portion
2,064,083
2,227,002
Operating lease liabilities, current portion
49,050
50,164
Total current liabilities
2,870,775
3,180,859
Non-current liabilities:
Deferred revenue, net of current portion
217,073
254,252
Operating lease liabilities, net of current portion
188,573
201,483
Long-term debt
988,143
987,684
Deferred tax liabilities
23,726
23,881
Other non-current liabilities
53,274
48,157
Total liabilities
4,341,564
4,696,316
Stockholders’ equity
Common stock
3
3
Additional paid-in capital
5,925,417
5,574,290
Accumulated other comprehensive income (loss)
(2,814
)
13,226
Accumulated deficit
(4,543,670
)
(4,241,865
)
Total stockholders’ equity
1,378,936
1,345,654
Total liabilities and stockholders’ equity
$
5,720,500
$
6,041,970
Atlassian Corporation
Condensed Consolidated Statements of Cash Flows
(U.S. $ in thousands)
(unaudited)
Three Months Ended September 30,
2025
2024
Cash flows from operating activities:
Net loss
$
(51,870
)
$
(123,769
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
24,333
22,827
Stock-based compensation
351,127
286,146
Impairment charges for leases and leasehold improvements
26,673
—
Deferred income taxes
(80
)
(768
)
Amortization of interest rate swap contracts
(5,552
)
(7,155
)
Net loss (gain) on strategic investments
(26,526
)
15,292
Net foreign currency loss
1,831
3,040
Other
168
991
Changes in operating assets and liabilities, net of business combinations:
Accounts receivable, net
241,361
144,030
Prepaid expenses and other assets
(92,680
)
(39,914
)
Accounts payable
(24,957
)
(10,144
)
Accrued expenses and other liabilities
(115,016
)
(108,168
)
Deferred revenue
(200,097
)
(101,916
)
Net cash provided by operating activities
128,715
80,492
Cash flows from investing activities:
Business combinations, net of cash acquired
(15,698
)
(4,975
)
Purchases of property and equipment
(14,112
)
(6,151
)
Purchases of strategic investments
—
(14,050
)
Purchases of marketable securities
(62,763
)
(43,704
)
Proceeds from maturities of marketable securities
31,887
46,148
Proceeds from sales of strategic investments
—
4,042
Net cash used in investing activities
(60,686
)
(18,690
)
Cash flows from financing activities:
Repurchases of Class A Common Stock
(252,807
)
(183,610
)
Other
—
(3,143
)
Net cash used in financing activities
(252,807
)
(186,753
)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
(5,929
)
3,564
Net decrease in cash, cash equivalents, and restricted cash
(190,707
)
(121,387
)
Cash, cash equivalents, and restricted cash at beginning of period
2,513,762
2,178,122
Cash, cash equivalents, and restricted cash at end of period
$
2,323,055
$
2,056,735
Atlassian Corporation
Revenues by Deployment Options
(U.S. $ in thousands)
(unaudited)
Three Months Ended September 30,
2025
2024
Cloud
$
997,708
$
792,306
Data Center
372,648
335,594
Marketplace and other (1)
62,197
59,881
Total revenues
$
1,432,553
$
1,187,781
(1) Included in Marketplace and other is premier support revenue. Premier support consists of subscription-based arrangements for a higher level of support across different deployment options. Premier support is recognized as Subscription revenue on the condensed consolidated statements of operations as the services are delivered over the term of the arrangement.
Restructuring Charges
(U.S. $ in thousands)
(unaudited)
During the first quarter of fiscal year 2026, Atlassian incurred charges associated with reducing capacity in its customer support organization and consolidating a lease to optimize its real estate footprint. A summary of these restructuring charges for the three months ended September 30, 2025 by major activity type is as follows:
Severance and
Other Termination
Benefits
Stock-based
Compensation
Lease
Consolidation
Total
Cost of revenue
$
27,794
$
1,432
$
2,366
$
31,592
Research and development
—
—
12,102
12,102
Marketing and sales
—
—
8,154
8,154
General and administrative
95
—
3,735
3,830
Total
$
27,889
$
1,432
$
26,357
$
55,678
Atlassian Corporation
Reconciliation of GAAP to Non-GAAP Results
(U.S. $ and shares in thousands, except percentage and per share data)
(unaudited)
Three Months Ended September 30,
2025
2024
Gross profit
GAAP gross profit
$
1,174,629
$
970,157
Plus: Stock-based compensation
18,499
18,214
Plus: Amortization of acquired intangible assets
9,957
10,116
Plus: Restructuring charges (3)
31,592
—
Non-GAAP gross profit
$
1,234,677
$
998,487
Gross margin
GAAP gross margin
82
%
82
%
Plus: Stock-based compensation
1
1
Plus: Amortization of acquired intangible assets
1
1
Plus: Restructuring charges (3)
2
—
Non-GAAP gross margin
86
%
84
%
Operating income
GAAP operating loss
$
(96,337
)
$
(31,978
)
Plus: Stock-based compensation
349,695
286,146
Plus: Amortization of acquired intangible assets
13,650
13,882
Plus: Restructuring charges (3)
55,678
—
Non-GAAP operating income
$
322,686
$
268,050
Operating margin
GAAP operating margin
(7
%)
(3
%)
Plus: Stock-based compensation
25
25
Plus: Amortization of acquired intangible assets
1
1
Plus: Restructuring charges (3)
4
—
Non-GAAP operating margin
23
%
23
%
Net income
GAAP net loss
$
(51,870
)
$
(123,769
)
Plus: Stock-based compensation
349,695
286,146
Plus: Amortization of acquired intangible assets
13,650
13,882
Plus: Restructuring charges (3)
55,678
—
Less: Income tax adjustments (1)
(91,502
)
23,441
Non-GAAP net income
$
275,651
$
199,700
Net income per share
GAAP net loss per share - diluted
$
(0.20
)
$
(0.48
)
Plus: Stock-based compensation
1.33
1.11
Plus: Amortization of acquired intangible assets
0.05
0.05
Plus: Restructuring charges (3)
0.21
—
Less: Income tax adjustments (1)
(0.35
)
0.09
Non-GAAP net income per share - diluted
$
1.04
$
0.77
Weighted-average diluted shares outstanding
Weighted-average shares used in computing diluted GAAP net loss per share
262,991
260,477
Plus: Dilution from dilutive securities (2)
1,323
298
Weighted-average shares used in computing diluted non-GAAP net income per share
264,314
260,775
Free cash flow
GAAP net cash provided by operating activities
$
128,715
$
80,492
Less: Capital expenditures
(14,112
)
(6,151
)
Free cash flow
$
114,603
$
74,341
(1) We utilize a fixed long-term projected non-GAAP tax rate in our computation of the non-GAAP income tax adjustments in order to provide better consistency across interim reporting periods. In projecting this long-term non-GAAP tax rate, we utilized a three-year financial projection that excludes the direct and indirect income tax effects of the other non-GAAP adjustments reflected above. Additionally, we considered our current operating structure and other factors such as our existing tax positions in various jurisdictions and key legislation in major jurisdictions where we operate. For fiscal years 2026 and 2025, we determined the projected non-GAAP tax rate to be 24% and 26%, respectively. This fixed long-term projected non-GAAP tax rate eliminates the effects of non-recurring and period specific items which can vary in size and frequency. Examples of the non-recurring and period-specific items include, but are not limited to, changes in the valuation allowance related to deferred tax assets, effects resulting from acquisitions, and unusual or infrequently occurring items. We will periodically re-evaluate this long-term rate, as necessary, for significant events. The rate could be subject to change for a variety of reasons, for example, significant changes in the geographic earnings mix or fundamental tax law changes in major jurisdictions where we operate.
(2) The effects of these dilutive securities were not included in the GAAP calculation of diluted net loss per share for the three months ended September 30, 2025 and 2024, because the effect would have been anti-dilutive.
(3) Restructuring charges include stock-based compensation expense related to the rebalancing of resources for the three months ended September 30, 2025.
Reconciliation of GAAP to Non-GAAP Financial Targets
Three Months Ending
December 31, 2025
GAAP gross margin
85.0%
Plus: Stock-based compensation
1.0
Plus: Amortization of acquired intangible assets
1.0
Non-GAAP gross margin
87.0%
GAAP operating margin
(5.0%)
Plus: Stock-based compensation
28.0
Plus: Amortization of acquired intangible assets
1.5
Non-GAAP operating margin
24.5%
Fiscal Year Ending
June 30, 2026
GAAP gross margin
84.0%
Plus: Stock-based compensation
1.0
Plus: Amortization of acquired intangible assets
1.0
Plus: Restructuring Charges
0.5
Non-GAAP gross margin
86.5%
GAAP operating margin
(2.0%)
Plus: Stock-based compensation
25.5
Plus: Amortization of acquired intangible assets
1.0
Plus: Restructuring Charges
1.0
Non-GAAP operating margin
25.5%