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:
- Revenue: Total revenue was $1,432.6 million for the first quarter of fiscal year 2026, up 21% from $1,187.8 million for the first quarter of fiscal year 2025.
- Operating Loss and Operating Margin: Operating loss was $96.3 million for the first quarter of fiscal year 2026, compared with operating loss of $32.0 million for the first quarter of fiscal year 2025. Operating margin was (7%) for the first quarter of fiscal year 2026, compared with (3%) for the first quarter of fiscal year 2025. Operating loss for the first quarter of fiscal year 2026 includes restructuring charges of $55.7 million which negatively impacted operating margin by 4%.
- Net Loss and Net Loss Per Diluted Share: Net loss was $51.9 million for the first quarter of fiscal year 2026, compared with net loss of $123.8 million for the first quarter of fiscal year 2025. Net loss per diluted share was $0.20 for the first quarter of fiscal year 2026, compared with net loss per diluted share of $0.48 for the first quarter of fiscal year 2025. Net loss per diluted share for the first quarter of fiscal year 2026 includes restructuring charges of $55.7 million which increased net loss per diluted share by $0.21, before related income tax impacts.
- Balance Sheet: Cash and cash equivalents plus marketable securities at the end of the first quarter of fiscal year 2026 totaled $2.8 billion.
On a non-GAAP basis, Atlassian reported:
- Operating Income and Operating Margin: Operating income was $322.7 million for the first quarter of fiscal year 2026, compared with operating income of $268.1 million for the first quarter of fiscal year 2025. Operating margin was 23% for the first quarter of fiscal years 2026 and 2025.
- Net Income and Net Income Per Diluted Share: Net income was $275.7 million for the first quarter of fiscal year 2026, compared with net income of $199.7 million for the first quarter of fiscal year 2025. Net income per diluted share was $1.04 for the first quarter of fiscal year 2026, compared with net income per diluted share of $0.77 for the first quarter of fiscal year 2025.
- Free Cash Flow: Cash flow from operations was $128.7 million and free cash flow was $114.6 million for the first quarter of fiscal year 2026. Free cash flow margin for the first quarter of fiscal year 2026 was 8%.
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:
- Atlassian Ascend: Atlassian announced Atlassian Ascend, a new initiative to support its customers’ journey to the Cloud, and plans to end-of-life its Data Center products. Atlassian Ascend pushes forward Atlassian’s cloud-first strategy and enables customers to realize faster time to value, reduce costs, and take advantage of AI-enabled teamwork capabilities. In order to ensure a seamless transition, Atlassian will wind down support for its Data Center products through a phased approach over the coming years and offer an extended maintenance period for certain customers.
- The Browser Company of New York Acquisition: Atlassian acquired The Browser Company of New York, the company behind the Dia and Arc browsers. Together, the companies intend to reimagine the browser for knowledge work in the AI era. Optimized for SaaS applications, packed with AI skills, and built with trust and security in mind, Dia will help to connect the dots between apps, tabs, and tasks – to redefine how work gets done.
- DX Acquisition: Atlassian entered into a definitive agreement to acquire DX, an engineering intelligence platform that allows enterprises to understand how their AI investments are helping engineering teams accelerate and improve their work. Atlassian intends to integrate DX into its recently launched Software Collection to provide engineering leaders with the insights they need to make data-driven decisions and drive greater impact.
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Team’25 Europe: Thousands of customers and partners attended Atlassian’s sold-out event in Barcelona to learn about the latest product announcements and innovations, including:
- Rovo Dev: Atlassian launched Rovo Dev into general availability. Underpinned by the rich data of the Teamwork Graph, Rovo Dev brings together business context, documentation, tickets, and code history from Atlassian and third-party tools, serving as an AI teammate that reduces friction and improves code quality.
- Software Collection: Atlassian launched its Software Collection into general availability. Software Collection is an AI-native software development lifecycle suite that brings together AI-powered tools like Rovo Dev, Bitbucket, Bitbucket Pipelines, and Compass to improve productivity and accelerate delivery.
- Service Collection: Atlassian launched Service Collection into general availability. Service Collection unites Jira Service Management, Atlassian’s recently launched Customer Service Management app, Assets, and Rovo agents into an AI-powered solution that empowers organizations to efficiently deliver exceptional service experiences to both their employees and customers at scale.
- A Leader in the 2025 Gartner® Magic Quadrant™ for DevOps Platforms: Atlassian was recognized as a Leader in the 2025 Gartner Magic Quadrant for DevOps Platforms1 for a third consecutive year, and received the highest placement in Ability to Execute and furthest placement in Completeness of Vision. Atlassian offers a unified AI-powered DevOps platform, including apps like Jira and Rovo, supported by the Teamwork Graph to bring technology and business teams together to deliver innovation at scale.
- Recognized on Fortune’s Future 50 List: Atlassian was recognized on Fortune’s The Future 50 List for 2025, which recognizes the companies most likely to adapt, succeed, and expand in the face of technological and economic shifts. This achievement underscores Atlassian’s dedication to nurturing an innovative, collaborative, and adaptable culture that facilitates technological progress and delivers exceptional value to customers, partners, and employees.
- Customers with >$10,000 in Cloud ARR: Atlassian ended its first quarter of fiscal year 2026 with 53,017 customers with greater than $10,000 in Cloud annualized recurring revenue (Cloud ARR), an increase of 13% year-over-year.
- Board of Directors Update: Atlassian appointed Jason Warner to its Board of Directors. Jason is the co-founder and co-Chief Executive Officer of poolside, a frontier AI lab that is pursuing artificial general intelligence. Prior to founding poolside, Jason was a Managing Director at Redpoint Ventures and previously served as the Chief Technology Officer of GitHub. Jason is a seasoned technology executive who brings a visionary approach to AI and developer tools, which will be invaluable in supporting Atlassian as it continues to pursue its mission of unleashing the potential of every team.
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:
- Total revenue is expected to be in the range of $1,535 million to $1,543 million.
- Cloud revenue growth year-over-year is expected to be approximately 22.5%.
- Data Center revenue growth year-over-year is expected to be approximately 17.0%.
- Marketplace and other revenue growth year-over-year is expected to be approximately 2.0%.
- Gross margin is expected to be approximately 85.0% on a GAAP basis and approximately 87.0% on a non-GAAP basis.
- Operating margin is expected to be approximately (5.0%) on a GAAP basis and approximately 24.5% on a non-GAAP basis.
Fiscal Year 2026:
- Total revenue growth year-over-year is expected to be approximately 20.8%.
- Cloud revenue growth year-over-year is expected to be approximately 22.5%.
- Data Center revenue growth year-over-year is expected to be approximately 20.0%.
- Marketplace and other revenue growth year-over-year is expected to be approximately 5.0%.
- Gross margin is expected to be approximately 84.0% on a GAAP basis and approximately 86.5% on a non-GAAP basis.
- Operating margin is expected to be approximately (2.0%) on a GAAP basis and approximately 25.5% on a non-GAAP basis.
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:
- When: Thursday, October 30, 2025 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).
- Webcast: A live webcast of the call can be accessed from the Investor Relations section of Atlassian’s website at https://investors.atlassian.com. Following the call, a replay will be available on the same website.
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 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:
- Non-GAAP gross profit and non-GAAP gross margin. Excludes expenses related to stock-based compensation, amortization of acquired intangible assets, and restructuring charges.
- Non-GAAP operating income and non-GAAP operating margin. Excludes expenses related to stock-based compensation, amortization of acquired intangible assets, and restructuring charges.
- Non-GAAP net income and non-GAAP net income per diluted share. Excludes expenses related to stock-based compensation, amortization of acquired intangible assets, restructuring charges, and the related income tax adjustments of these items.
- Free cash flow. Free cash flow is defined as net cash provided by operating activities less capital expenditures, which consists of purchases of property and equipment.
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.
