Atlassian Announces Second 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 second quarter ended December 31, 2025. A shareholder letter was posted on the Investor Relations section of Atlassian’s website at https://investors.atlassian.com.
“We closed out Q2 with incredible momentum across the Atlassian platform and achieved some impressive milestones along the way. We delivered our first-ever $1 billion Cloud revenue quarter, which grew 26% year-over-year, crossed 350,000 customers, and Rovo surpassed 5 million monthly active users,” said Mike Cannon-Brookes, Atlassian’s CEO and co-Founder. “Companies from the largest enterprises in the world, to the most innovative startups, rely on the Atlassian platform every day to power workflows across their organizations and unleash teamwork and knowledge at scale.”
“We delivered another strong quarter of enterprise sales and partner execution, which drove total revenue up 23% year-over-year to $1.6 billion, surpassing $6 billion in annual run-rate revenue,” said Joe Binz, Atlassian’s CFO. “With RPO up 44% year-over-year to $3.8 billion, our investments across enterprise, AI and system of work are yielding results and deeper, long-term customer commitments to the Atlassian platform.”
Second 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:
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1 Gartner® Magic Quadrant™ for Marketing Work Management Platforms, Michael McCune, Rachel Dooley, Lacretia Marsh, Amy Jenkins, Kate Fridley, Anja Naski, 1 December 2025
2 Gartner® Magic Quadrant™ for Collaborative Work Management, Nikos Drakos, Joe Mariano, Lacy Lei, Hironori Hayashi, 28 October 2025
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Financial Targets:
Atlassian is providing its financial targets as follows:
Third Quarter Fiscal Year 2026:
Fiscal Year 2026:
For additional commentary regarding financial targets, please see Atlassian’s second quarter fiscal year 2026 shareholder letter dated February 5, 2026.
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.
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 350,000+ 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, strategic priorities, leadership transitions, 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
December 31,
Six Months Ended
December 31,
2025
2024
2025
2024
Revenues:
Subscription
$
1,507,656
$
1,213,248
$
2,882,158
$
2,345,196
Other
78,659
73,215
136,710
129,048
Total revenues
1,586,315
1,286,463
3,018,868
2,474,244
Cost of revenues (1) (2)
237,691
223,127
495,615
440,751
Gross profit
1,348,624
1,063,336
2,523,253
2,033,493
Operating expenses:
Research and development (1) (2)
826,489
680,213
1,582,483
1,283,314
Marketing and sales (1) (2)
376,434
271,894
712,861
524,287
General and administrative (1)
193,448
168,708
371,993
315,349
Total operating expenses
1,396,371
1,120,815
2,667,337
2,122,950
Operating loss
(47,747
)
(57,479
)
(144,084
)
(89,457
)
Other income (expense), net
(13,550
)
(7,999
)
5,254
(27,431
)
Interest income
18,065
25,586
47,910
54,150
Interest expense
(12,525
)
(7,291
)
(21,161
)
(14,609
)
Loss before income taxes
(55,757
)
(47,183
)
(112,081
)
(77,347
)
Provision for (benefit from) income taxes
(13,112
)
(8,975
)
(17,566
)
84,630
Net loss
$
(42,645
)
$
(38,208
)
$
(94,515
)
$
(161,977
)
Net loss per share attributable to Class A and Class B common stockholders:
Basic
$
(0.16
)
$
(0.15
)
$
(0.36
)
$
(0.62
)
Diluted
$
(0.16
)
$
(0.15
)
$
(0.36
)
$
(0.62
)
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders:
Basic
263,828
261,147
263,409
260,812
Diluted
263,828
261,147
263,409
260,812
(1) Amounts include stock-based compensation as follows:
Three Months Ended
December 31,
Six Months Ended
December 31,
2025
2024
2025
2024
Cost of revenues
$
20,121
$
23,031
$
40,052
$
41,245
Research and development
324,865
260,278
571,359
453,723
Marketing and sales
55,505
43,260
99,489
79,252
General and administrative
52,133
52,161
92,851
90,656
(2) Amounts include amortization of acquired intangible assets, as follows:
Three Months Ended
December 31,
Six Months Ended
December 31,
2025
2024
2025
2024
Cost of revenues
$
19,753
$
10,130
$
29,710
$
20,246
Research and development
93
93
187
187
Marketing and sales
5,507
3,673
9,106
7,345
Atlassian Corporation
Condensed Consolidated Balance Sheets
(U.S. $ in thousands)
(unaudited)
December 31, 2025
June 30, 2025
Assets
Current assets:
Cash and cash equivalents
$
1,158,122
$
2,512,874
Marketable securities
407,932
424,268
Accounts receivable, net
911,915
778,302
Prepaid expenses and other current assets
297,437
175,793
Total current assets
2,775,406
3,891,237
Non-current assets:
Property and equipment, net
97,952
105,118
Operating lease right-of-use assets
126,475
169,127
Strategic investments
209,979
221,942
Intangible assets, net
494,959
244,840
Goodwill
2,305,132
1,304,445
Deferred tax assets
25,433
3,762
Other non-current assets
125,045
101,499
Total assets
$
6,160,381
$
6,041,970
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
231,654
$
222,092
Accrued expenses and other current liabilities
603,850
681,601
Deferred revenue, current portion
2,230,427
2,227,002
Operating lease liabilities, current portion
50,696
50,164
Total current liabilities
3,116,627
3,180,859
Non-current liabilities:
Deferred revenue, net of current portion
201,082
254,252
Operating lease liabilities, net of current portion
175,774
201,483
Long-term debt
988,609
987,684
Deferred tax liabilities
23,993
23,881
Other non-current liabilities
63,447
48,157
Total liabilities
4,569,532
4,696,316
Stockholders’ equity
Common stock
3
3
Additional paid-in capital
6,378,041
5,574,290
Accumulated other comprehensive income (loss)
(465
)
13,226
Accumulated deficit
(4,786,730
)
(4,241,865
)
Total stockholders’ equity
1,590,849
1,345,654
Total liabilities and stockholders’ equity
$
6,160,381
$
6,041,970
Atlassian Corporation
Condensed Consolidated Statements of Cash Flows
(U.S. $ in thousands)
(unaudited)
Three Months Ended
December 31,
Six Months Ended
December 31,
2025
2024
2025
2024
Cash flows from operating activities:
Net loss
$
(42,645
)
$
(38,208
)
$
(94,515
)
$
(161,977
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
35,621
23,149
59,954
45,976
Stock-based compensation
452,624
378,730
803,751
664,876
Impairment charges for leases and leasehold improvements
—
—
26,673
—
Deferred income taxes
(48,628
)
(2,161
)
(48,708
)
(2,929
)
Amortization of interest rate swap contracts
(1,611
)
(6,865
)
(7,163
)
(14,020
)
Net loss (gain) on strategic investments
2,555
2,611
(23,971
)
17,903
Net foreign currency loss (gain)
(504
)
(5,621
)
1,327
(2,581
)
Other
(88
)
(968
)
80
23
Changes in operating assets and liabilities, net of business combinations:
Accounts receivable, net
(367,390
)
(211,755
)
(126,029
)
(67,725
)
Prepaid expenses and other assets
(43,578
)
(25,759
)
(136,259
)
(65,673
)
Accounts payable
35,315
24,863
10,358
14,719
Accrued expenses and other liabilities
32,956
30,464
(82,060
)
(77,704
)
Deferred revenue
123,178
183,425
(76,919
)
81,509
Net cash provided by operating activities
177,805
351,905
306,519
432,397
Cash flows from investing activities:
Business combinations, net of cash acquired
(1,213,177
)
—
(1,228,875
)
(4,975
)
Purchases of property and equipment
(9,289
)
(9,336
)
(23,401
)
(15,487
)
Purchases of strategic investments
(5,000
)
(11,500
)
(5,000
)
(25,550
)
Purchases of marketable securities
(4,496
)
(116,619
)
(67,259
)
(160,323
)
Proceeds from maturities of marketable securities
53,222
25,480
85,109
71,628
Proceeds from sales of strategic investments
34,840
271
34,840
4,313
Net cash used in investing activities
(1,143,900
)
(111,704
)
(1,204,586
)
(130,394
)
Cash flows from financing activities:
Repurchases of Class A Common Stock
(197,440
)
(69,241
)
(450,246
)
(252,851
)
Other
—
—
—
(3,143
)
Net cash used in financing activities
(197,440
)
(69,241
)
(450,246
)
(255,994
)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
(823
)
(9,056
)
(6,752
)
(5,492
)
Net increase (decrease) in cash, cash equivalents, and restricted cash
(1,164,358
)
161,904
(1,355,065
)
40,517
Cash, cash equivalents, and restricted cash at beginning of period
2,323,055
2,056,735
2,513,762
2,178,122
Cash, cash equivalents, and restricted cash at end of period
$
1,158,697
$
2,218,639
$
1,158,697
$
2,218,639
Atlassian Corporation
Revenues by Deployment Options
(U.S. $ in thousands)
(unaudited)
Three Months Ended
December 31,
Six Months Ended
December 31,
2025
2024
2025
2024
Cloud
$
1,067,027
$
846,962
$
2,064,735
$
1,639,268
Data Center
435,616
362,281
808,264
697,875
Marketplace and other (1)
83,672
77,220
145,869
137,101
Total revenues
$
1,586,315
$
1,286,463
$
3,018,868
$
2,474,244
(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.
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
December 31,
Six Months Ended
December 31,
2025
2024
2025
2024
Gross profit
GAAP gross profit
$
1,348,624
$
1,063,336
$
2,523,253
$
2,033,493
Plus: Stock-based compensation
20,121
23,031
38,620
41,245
Plus: Amortization of acquired intangible assets
19,753
10,130
29,710
20,246
Plus: Restructuring charges (3)
—
—
31,592
—
Non-GAAP gross profit
$
1,388,498
$
1,096,497
$
2,623,175
$
2,094,984
Gross margin
GAAP gross margin
85
%
83
%
84
%
82
%
Plus: Stock-based compensation
2
1
1
2
Plus: Amortization of acquired intangible assets
1
1
1
1
Plus: Restructuring charges (3)
—
—
1
—
Non-GAAP gross margin
88
%
85
%
87
%
85
%
Operating income
GAAP operating loss
$
(47,747
)
$
(57,479
)
$
(144,084
)
$
(89,457
)
Plus: Stock-based compensation
452,624
378,730
802,319
664,876
Plus: Amortization of acquired intangible assets
25,353
13,896
39,003
27,778
Plus: Restructuring charges (3)
—
—
55,678
—
Non-GAAP operating income
$
430,230
$
335,147
$
752,916
$
603,197
Operating margin
GAAP operating margin
(3
%)
(4
%)
(5
%)
(4
%)
Plus: Stock-based compensation
29
29
27
27
Plus: Amortization of acquired intangible assets
1
1
1
1
Plus: Restructuring charges (3)
—
—
2
—
Non-GAAP operating margin
27
%
26
%
25
%
24
%
Net income
GAAP net loss
$
(42,645
)
$
(38,208
)
$
(94,515
)
$
(161,977
)
Plus: Stock-based compensation
452,624
378,730
802,319
664,876
Plus: Amortization of acquired intangible assets
25,353
13,896
39,003
27,778
Plus: Restructuring charges (3)
—
—
55,678
—
Less: Income tax adjustments (1)
(114,445
)
(98,791
)
(205,947
)
(75,350
)
Non-GAAP net income
$
320,887
$
255,627
$
596,538
$
455,327
Net income per share
GAAP net loss per share - diluted
$
(0.16
)
$
(0.15
)
$
(0.36
)
$
(0.62
)
Plus: Stock-based compensation
1.71
1.43
3.04
2.53
Plus: Amortization of acquired intangible assets
0.10
0.05
0.15
0.11
Plus: Restructuring charges (3)
—
—
0.21
—
Less: Income tax adjustments (1)
(0.43
)
(0.37
)
(0.78
)
(0.29
)
Non-GAAP net income per share - diluted
$
1.22
$
0.96
$
2.26
$
1.73
Weighted-average diluted shares outstanding
Weighted-average shares used in computing diluted GAAP net loss per share
263,828
261,147
263,409
260,812
Plus: Dilution from dilutive securities (2)
364
4,546
843
2,422
Weighted-average shares used in computing diluted non-GAAP net income per share
264,192
265,693
264,252
263,234
Free cash flow
GAAP net cash provided by operating activities
$
177,805
$
351,905
$
306,519
$
432,397
Less: Capital expenditures
(9,289
)
(9,336
)
(23,401
)
(15,487
)
Free cash flow
$
168,516
$
342,569
$
283,118
$
416,910
(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 and six months ended December 31, 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 six months ended December 31, 2025.
Atlassian Corporation
Reconciliation of GAAP to Non-GAAP Financial Targets
Three Months Ending
March 31, 2026
GAAP gross margin
85.5%
Plus: Stock-based compensation
1.0
Plus: Amortization of acquired intangible assets
1.5
Non-GAAP gross margin
88.0%
GAAP operating margin
0.0%
Plus: Stock-based compensation
25.5
Plus: Amortization of acquired intangible assets
2.0
Non-GAAP operating margin
27.5%
Fiscal Year Ending
June 30, 2026
GAAP gross margin
84.0%
Plus: Stock-based compensation
1.2
Plus: Amortization of acquired intangible assets
1.3
Plus: Restructuring Charges
0.5
Non-GAAP gross margin
87.0%
GAAP operating margin
(3.0%)
Plus: Stock-based compensation
26.0
Plus: Amortization of acquired intangible assets
1.5
Plus: Restructuring Charges
1.0
Non-GAAP operating margin
25.5%