US Market News
2 months ago
Atlassian Announces Third Quarter Fiscal Year 2026 ResultsApril 30, 2026 4:05 PM
Business Wire
Revenue of $1,787 million, up 32% year-over-year
Cloud revenue of $1,132 million, up 29% year-over-year
Remaining performance obligations of $3,996 million, up 37% year-over-year
GAAP operating margin of (3)% and non-GAAP operating margin of 34%
Atlassian Corporation (NASDAQ: TEAM), a leading provider of team collaboration and productivity software, today announced financial results for its third quarter ended March 31, 2026. A shareholder letter was posted on the Investor Relations section of Atlassian’s website at https://investors.atlassian.com.
“Our strong Q3 results show the power of our strategy in action, with total revenue growing 32% year-over-year to $1.8 billion, as customers sign bigger, longer-term commitments, and connect their teams and workflows on our AI-powered platform,” said Mike Cannon-Brookes, Atlassian’s CEO and co-Founder. “Service Collection eclipsed $1 billion in ARR, and is growing over 30% year-over-year, as it continues to take share and reinforce our conviction in the long-term growth opportunity of the Atlassian System of Work.”
“Cloud revenue growth accelerated to 29% year-over-year as customers deepen their engagement with our System of Work through continued strong seat expansion in Jira and adoption of Teamwork Collection for its increased AI capabilities,” said James Chuong, Atlassian's CFO. “The momentum across our three strategic priorities of Enterprise, AI, and the System of Work continues to build, and I’m excited about the significant opportunity ahead to drive durable, profitable growth as we scale.”
Third Quarter Fiscal Year 2026 Financial Highlights:
On a GAAP basis, Atlassian reported:
Revenue: Total revenue was $1,787.0 million for the third quarter of fiscal year 2026, up 32% from $1,356.7 million for the third quarter of fiscal year 2025.
Operating Loss and Operating Margin: Operating loss was $56.3 million for the third quarter of fiscal year 2026, compared with operating loss of $12.5 million for the third quarter of fiscal year 2025. Operating margin was (3%) for the third quarter of fiscal year 2026, compared with (1%) for the third quarter of fiscal year 2025. Operating loss for the third quarter of fiscal year 2026 includes restructuring charges of $223.8 million associated with rebalancing resources and consolidating leases, which negatively impacted operating margin by 12%.
Net Loss and Net Loss Per Diluted Share: Net loss was $98.4 million for the third quarter of fiscal year 2026, compared with net loss of $70.8 million for the third quarter of fiscal year 2025. Net loss per diluted share was $0.38 for the third quarter of fiscal year 2026, compared with net loss per diluted share of $0.27 for the third quarter of fiscal year 2025. Net loss for the third quarter of fiscal year 2026 includes restructuring charges, net income tax effect, totaling $223.1 million which increased net loss per diluted share by $0.85, net of tax effects.
Balance Sheet: Cash and cash equivalents at the end of the third quarter of fiscal year 2026 totaled $1.1 billion.
On a non-GAAP basis, Atlassian reported:
Operating Income and Operating Margin: Operating income was $607.2 million for the third quarter of fiscal year 2026, compared with operating income of $348.3 million for the third quarter of fiscal year 2025. Operating margin was 34% for the third quarter of fiscal year 2026, compared with 26% for the third quarter of fiscal year 2025.
Net Income and Net Income Per Diluted Share: Net income was $456.5 million for the third quarter of fiscal year 2026, compared with net income of $261.5 million for the third quarter of fiscal year 2025. Net income per diluted share was $1.75 for the third quarter of fiscal year 2026, compared with net income per diluted share of $0.97 for the third quarter of fiscal year 2025.
Free Cash Flow: Cash flow from operations was $567.5 million and free cash flow was $561.3 million for the third quarter of fiscal year 2026. Free cash flow margin for the third quarter of fiscal year 2026 was 31%.
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:
Agent Orchestration in Jira: Atlassian introduced agents in Jira, making it the place to orchestrate work across humans and AI agents. Teams can assign work directly to Rovo and third-party AI agents in Jira, iterate with agents in comments, and embed agents directly into workflows. Agent activity is captured alongside task history with full permissions, audit trails, and admin governance. Atlassian’s open toolchain approach lets teams orchestrate MCP-enabled third-party agents into Jira alongside Rovo agents, keeping all agent-driven work visible and coordinated in one system.
Expanded MCP Gallery: Atlassian launched a growing list of partners that allow Rovo agents to securely plug into popular third-party apps, including Amplitude, Box, Canva, Figma, GitHub, Intercom, and New Relic, tapping into skills from each app without leaving Rovo. These MCP-powered skills help customers standardize more workflows, by giving Rovo agents the ability to pull live data and take actions across tools, combining with Atlassian’s Teamwork Graph to deliver richer, more connected answers directly in Jira and Confluence.
Rovo Dev in Jira: Atlassian launched Rovo Dev in Jira, enabling developers to delegate routine tasks—from security fixes and migrations to feature-flag cleanups—to a context-aware AI agent. Teams stay in control, choosing what to delegate to agents and approving every change before it ships, while freeing up capacity for higher-impact work and faster delivery.
Remix in Confluence: Atlassian introduced Remix, a new AI-powered capability in Confluence that enables teams to convert pages into visual formats such as charts, infographics, and presentations. New MCP integrations with Lovable, Replit, and Gamma extend Confluence content into external tools, allowing customers to create versatile visual stories while preserving the context of the supporting text.
AI Innovation in Service Collection: Atlassian introduced more advanced AI-powered capabilities to its Service Collection. Rovo Service, now generally available, is a human-supervised AI agent that plans and executes employee support workflows such as ticket resolution and HR onboarding - automatically routing, answering, and acting across systems by pulling context from existing knowledge, past tickets, and company policies. In addition, new Proactive AIOps capabilities draw on the depth of context from Atlassian’s Teamwork Graph to help detect potential incidents earlier by filtering alert noise and assess change risk by analyzing change data and providing risk scoring.
Expanded Partnership with Google Cloud to Power Agentic AI: Atlassian strengthened its strategic partnership with Google Cloud by adding Gemini 3 Flash to its open, multi-model AI strategy and extending its agentic AI capabilities – enabling advanced reasoning and multimodal features for Rovo at enterprise scale. By bringing deeper integrations between Rovo, Google Workspace, and Gemini Enterprise, joint customers can access AI agents directly in the tools where they already work, plan, and collaborate on projects.
Customers with >$10,000 in Cloud ARR: Atlassian ended its third quarter of fiscal year 2026 with 55,913 customers with greater than $10,000 in Cloud annualized recurring revenue (Cloud ARR), an increase of 10% year-over-year.
Atlassian Recognized in Leading U.S. Workplace Culture Awards:
Fortune 100 Best Companies to Work For 2026: Atlassian was recognized for the eighth consecutive year, as one of Fortune’s 100 Best Companies to work for. This achievement reflects the commitment to workplace culture, employee satisfaction and globally distributed workplace practices which provides a supportive, engaging environment for teams.
Forbes America’s Best Employers for Company Culture 2026: Atlassian was recognized as a company that creates an environment where employees feel recognized for their efforts and connected to their colleagues and company mission, leading to higher engagement, productivity, and long-term retention.
Financial Targets:
Atlassian is providing its financial targets as follows:
Fourth Quarter Fiscal Year 2026:
Total revenue is expected to be in the range of $1,653 million to $1,661 million.
Cloud revenue growth year-over-year is expected to be approximately 25.5%.
Data Center revenue growth year-over-year is expected to be approximately 8.5%.
Marketplace and other revenue growth year-over-year is expected to be approximately 6.5%.
Gross margin is expected to be approximately 85.5% on a GAAP basis and approximately 88.0% on a non-GAAP basis.
Operating margin is expected to be approximately 4.5% on a GAAP basis and approximately 30.5% on a non-GAAP basis.
Fiscal Year 2026:
Total revenue growth year-over-year is expected to be approximately 24.0%.
Cloud revenue growth year-over-year is expected to be approximately 26.5%.
Data Center revenue growth year-over-year is expected to be approximately 21.5%.
Marketplace and other revenue growth year-over-year is expected to be approximately 6.5%.
Gross margin is expected to be approximately 84.5% on a GAAP basis and approximately 88.0% on a non-GAAP basis.
Operating margin is expected to be approximately (2.0%) on a GAAP basis and approximately 29.0% on a non-GAAP basis.
For additional commentary regarding financial targets, please see Atlassian’s third quarter fiscal year 2026 shareholder letter dated April 30, 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:
When: Thursday, April 30, 2026 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 85% 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, size and term of sales agreements, company culture, strategic priorities, partnerships, 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.
Atlassian Corporation
Condensed Consolidated Statements of Operations
(U.S. $ and shares in thousands, except per share data)
(unaudited)
Three Months Ended March 31,
Nine Months Ended March 31,
2026
2025
2026
2025
Revenues:
Subscription
$
1,698,885
$
1,272,876
$
4,581,043
$
3,618,072
Other
88,086
83,840
224,796
212,888
Total revenues
1,786,971
1,356,716
4,805,839
3,830,960
Cost of revenues (1) (2)
262,762
219,675
758,377
660,426
Gross profit
1,524,209
1,137,041
4,047,462
3,170,534
Operating expenses:
Research and development (1) (2)
926,954
685,320
2,509,437
1,968,634
Marketing and sales (1) (2)
439,029
295,832
1,151,890
820,119
General and administrative (1)
214,510
168,345
586,503
483,694
Total operating expenses
1,580,493
1,149,497
4,247,830
3,272,447
Operating loss
(56,284
)
(12,456
)
(200,368
)
(101,913
)
Other income (expense), net
(4,923
)
(14,861
)
331
(42,292
)
Interest income
12,554
27,767
60,464
81,917
Interest expense
(14,141
)
(7,804
)
(35,302
)
(22,413
)
Loss before income taxes
(62,794
)
(7,354
)
(174,875
)
(84,701
)
Provision for income taxes
(35,595
)
(63,453
)
(18,029
)
(148,083
)
Net loss
$
(98,389
)
$
(70,807
)
$
(192,904
)
$
(232,784
)
Net loss per share attributable to Class A and Class B common stockholders:
Basic
$
(0.38
)
$
(0.27
)
$
(0.73
)
$
(0.89
)
Diluted
$
(0.38
)
$
(0.27
)
$
(0.73
)
$
(0.89
)
Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders:
Basic
260,965
262,671
262,606
261,423
Diluted
260,965
262,671
262,606
261,423
(1) Amounts include stock-based compensation as follows:
Three Months Ended March 31,
Nine Months Ended March 31,
2026
2025
2026
2025
Cost of revenues
$
17,697
$
20,980
$
57,749
$
62,225
Research and development
291,014
240,847
862,373
694,570
Marketing and sales
53,123
43,071
152,612
122,323
General and administrative
46,501
41,944
139,352
132,600
(2) Amounts include amortization of acquired intangible assets, as follows:
Three Months Ended March 31,
Nine Months Ended March 31,
2026
2025
2026
2025
Cost of revenues
$
24,683
$
10,131
$
54,393
$
30,377
Research and development
94
94
281
281
Marketing and sales
6,564
3,672
15,670
11,017
Atlassian Corporation
Condensed Consolidated Balance Sheets
(U.S. $ in thousands)
(unaudited)
March 31, 2026
June 30, 2025
Assets
Current assets:
Cash and cash equivalents
$
1,136,342
$
2,512,874
Marketable securities
—
424,268
Accounts receivable, net
907,439
778,302
Prepaid expenses and other current assets
289,903
175,793
Total current assets
2,333,684
3,891,237
Non-current assets:
Property and equipment, net
75,612
105,118
Operating lease right-of-use assets
119,676
169,127
Strategic investments
210,908
221,942
Intangible assets, net
463,457
244,840
Goodwill
2,303,393
1,304,445
Deferred tax assets
15,312
3,762
Other non-current assets
128,881
101,499
Total assets
$
5,650,923
$
6,041,970
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
207,734
$
222,092
Accrued expenses and other current liabilities
816,261
681,601
Deferred revenue, current portion
2,250,863
2,227,002
Operating lease liabilities, current portion
48,197
50,164
Total current liabilities
3,323,055
3,180,859
Non-current liabilities:
Deferred revenue, net of current portion
160,781
254,252
Operating lease liabilities, net of current portion
205,740
201,483
Long-term debt
989,081
987,684
Deferred tax liabilities
24,259
23,881
Other non-current liabilities
68,979
48,157
Total liabilities
4,771,895
4,696,316
Stockholders’ equity
Common stock
3
3
Additional paid-in capital
6,786,376
5,574,290
Accumulated other comprehensive income (loss)
(12,285
)
13,226
Accumulated deficit
(5,895,066
)
(4,241,865
)
Total stockholders’ equity
879,028
1,345,654
Total liabilities and stockholders’ equity
$
5,650,923
$
6,041,970
Atlassian Corporation
Condensed Consolidated Statements of Cash Flows
(U.S. $ in thousands)
(unaudited)
Three Months Ended March 31,
Nine Months Ended March 31,
2026
2025
2026
2025
Cash flows from operating activities:
Net loss
$
(98,389
)
$
(70,807
)
$
(192,904
)
$
(232,784
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
41,284
23,178
101,238
69,154
Stock-based compensation
408,335
346,842
1,212,086
1,011,718
Impairment charges for leases and leasehold improvements
53,643
—
80,316
—
Deferred income taxes
11,138
1,746
(37,570
)
(1,183
)
Amortization of interest rate swap contracts
—
(6,337
)
(7,163
)
(20,357
)
Net loss (gain) on strategic investments
1,691
6,643
(22,280
)
24,546
Net foreign currency loss (gain)
5,322
(5,169
)
6,649
(7,750
)
Other
(160
)
(264
)
(80
)
(241
)
Changes in operating assets and liabilities, net of business combinations:
Accounts receivable, net
4,260
53,770
(121,769
)
(13,955
)
Prepaid expenses and other assets
1,118
(294
)
(135,141
)
(65,967
)
Accounts payable
(23,922
)
(93
)
(13,564
)
14,626
Accrued expenses and other liabilities
182,992
131,508
100,932
53,804
Deferred revenue
(19,837
)
171,958
(96,756
)
253,467
Net cash provided by operating activities
567,475
652,681
873,994
1,085,078
Cash flows from investing activities:
Business combinations, net of cash acquired
—
(994
)
(1,228,875
)
(5,969
)
Purchases of property and equipment
(6,211
)
(14,366
)
(29,612
)
(29,853
)
Purchases of strategic investments
(2,250
)
(1,100
)
(7,250
)
(26,650
)
Purchases of marketable securities
—
(116,716
)
(67,259
)
(277,039
)
Proceeds from maturities of marketable securities
59,016
53,584
144,125
125,212
Proceeds from sales of marketable securities
352,093
1,998
352,093
1,998
Proceeds from sales of strategic investments
1,493
624
36,333
4,937
Net cash provided by (used in) investing activities
404,141
(76,970
)
(800,445
)
(207,364
)
Cash flows from financing activities:
Repurchases of Class A Common Stock
(990,945
)
(134,305
)
(1,441,191
)
(387,156
)
Other
—
—
—
(3,143
)
Net cash used in financing activities
(990,945
)
(134,305
)
(1,441,191
)
(390,299
)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash
(2,549
)
1,783
(9,301
)
(3,709
)
Net increase (decrease) in cash, cash equivalents, and restricted cash
(21,878
)
443,189
(1,376,943
)
483,706
Cash, cash equivalents, and restricted cash at beginning of period
1,158,697
2,218,639
2,513,762
2,178,122
Cash, cash equivalents, and restricted cash at end of period
$
1,136,819
$
2,661,828
$
1,136,819
$
2,661,828
Atlassian Corporation
Revenues by Deployment Options
(U.S. $ in thousands)
(unaudited)
Three Months Ended March 31,
Nine Months Ended March 31,
2026
2025
2026
2025
Cloud
$
1,132,436
$
880,429
$
3,197,171
$
2,519,697
Data Center
560,733
388,516
1,368,997
1,086,391
Marketplace and other (1)
93,802
87,771
239,671
224,872
Total revenues
$
1,786,971
$
1,356,716
$
4,805,839
$
3,830,960
(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 third quarter ended March 31, 2026, the Company incurred restructuring charges associated with rebalancing of its resources and consolidating leases to accelerate its path to GAAP profitability, self-fund further investment in AI and enterprise sales, and reorganize its teams to move with more focus and speed around the Atlassian System of Work.
A summary of the restructuring charges for the three months ended March 31, 2026 by major activity type is as follows:
Severance and Other
Termination Benefits
Lease Consolidation
Total
Cost of revenue
$
16,747
$
4,281
$
21,028
Research and development
104,972
23,548
128,520
Marketing and sales
24,423
18,267
42,690
General and administrative
24,025
7,568
31,593
Total
$
170,167
$
53,664
$
223,831
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 March 31,
Nine Months Ended March 31,
2026
2025
2026
2025
Gross profit
GAAP gross profit
$
1,524,209
$
1,137,041
$
4,047,462
$
3,170,534
Plus: Stock-based compensation
17,697
20,980
56,317
62,225
Plus: Amortization of acquired intangible assets
24,683
10,131
54,393
30,377
Plus: Restructuring charges (3)
21,028
—
52,620
—
Non-GAAP gross profit
$
1,587,617
$
1,168,152
$
4,210,792
$
3,263,136
Gross margin
GAAP gross margin
85
%
84
%
85
%
83
%
Plus: Stock-based compensation
1
2
1
2
Plus: Amortization of acquired intangible assets
2
—
1
—
Plus: Restructuring charges (3)
1
—
1
—
Non-GAAP gross margin
89
%
86
%
88
%
85
%
Operating income
GAAP operating loss
$
(56,284
)
$
(12,456
)
$
(200,368
)
$
(101,913
)
Plus: Stock-based compensation
408,335
346,842
1,210,654
1,011,718
Plus: Amortization of acquired intangible assets
31,341
13,897
70,344
41,675
Plus: Restructuring charges (3)
223,831
—
279,509
—
Non-GAAP operating income
$
607,223
$
348,283
$
1,360,139
$
951,480
Operating margin
GAAP operating margin
(3
%)
(1
%)
(4
%)
(3
%)
Plus: Stock-based compensation
23
26
25
27
Plus: Amortization of acquired intangible assets
2
1
1
1
Plus: Restructuring charges (3)
12
—
6
—
Non-GAAP operating margin
34
%
26
%
28
%
25
%
Net income
GAAP net loss
$
(98,389
)
$
(70,807
)
$
(192,904
)
$
(232,784
)
Plus: Stock-based compensation
408,335
346,842
1,210,654
1,011,718
Plus: Amortization of acquired intangible assets
31,341
13,897
70,344
41,675
Plus: Restructuring charges (3)
223,831
—
279,509
—
Less: Income tax adjustments (1)
(108,576
)
(28,427
)
(314,523
)
(103,777
)
Non-GAAP net income
$
456,542
$
261,505
$
1,053,080
$
716,832
Net income per share
GAAP net loss per share - diluted
$
(0.38
)
$
(0.27
)
$
(0.73
)
$
(0.89
)
Plus: Stock-based compensation
1.56
1.29
4.60
3.82
Plus: Amortization of acquired intangible assets
0.12
0.05
0.27
0.16
Plus: Restructuring charges (3)
0.86
—
1.06
—
Less: Income tax adjustments (1)
(0.41
)
(0.10
)
(1.20
)
(0.39
)
Non-GAAP net income per share - diluted
$
1.75
$
0.97
$
4.00
$
2.70
Weighted-average diluted shares outstanding
Weighted-average shares used in computing diluted GAAP net loss per share
260,965
262,671
262,606
261,423
Plus: Dilution from dilutive securities (2)
252
5,959
646
3,601
Weighted-average shares used in computing diluted non-GAAP net income per share
261,217
268,630
263,252
265,024
Free cash flow
GAAP net cash provided by operating activities
$
567,475
$
652,681
$
873,994
$
1,085,078
Less: Capital expenditures
(6,211
)
(14,366
)
(29,612
)
(29,853
)
Free cash flow
$
561,264
$
638,315
$
844,382
$
1,055,225
(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 nine months ended March 31, 2026 and 2025, because the effect would have been anti-dilutive.
(3) Restructuring charges include stock-based compensation expense related to the rebalancing of resources for the nine months ended March 31, 2026.
Atlassian Corporation
Reconciliation of GAAP to Non-GAAP Financial Targets
Three Months Ending
June 30, 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
4.5%
Plus: Stock-based compensation
24.0
Plus: Amortization of acquired intangible assets
2.0
Non-GAAP operating margin
30.5%
Fiscal Year Ending
June 30, 2026
GAAP gross margin
84.5%
Plus: Stock-based compensation
1.5
Plus: Restructuring charges
0.8
Plus: Amortization of acquired intangible assets
1.2
Non-GAAP gross margin
88.0%
GAAP operating margin
(2.0%)
Plus: Stock-based compensation
25.0
Plus: Restructuring charges
4.4
Plus: Amortization of acquired intangible assets
1.6
Non-GAAP operating margin
29.0%
View source version on businesswire.com: https://www.businesswire.com/news/home/20260430534706/en/
Investor Relations Contact
Martin Lam
IR@atlassian.com
Media Contact
Marie-Claire Maple
press@atlassian.com
Original: Atlassian Announces Third Quarter Fiscal Year 2026 Results
US Market News
5 months ago
Atlassian Announces Second Quarter Fiscal Year 2026 ResultsFebruary 5, 2026 4:02 PM
Business Wire
Revenue of $1,586 million, up 23% year-over-year
Cloud revenue of $1,067 million, up 26% year-over-year
Remaining performance obligations of $3,814 million, up 44% year-over-year
GAAP operating margin of (3)% and non-GAAP operating margin of 27%
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:
Revenue: Total revenue was $1,586.3 million for the second quarter of fiscal year 2026, up 23% from $1,286.5 million for the second quarter of fiscal year 2025.
Operating Loss and Operating Margin: Operating loss was $47.7 million for the second quarter of fiscal year 2026, compared with operating loss of $57.5 million for the second quarter of fiscal year 2025. Operating margin was (3%) for the second quarter of fiscal year 2026, compared with (4%) for the second quarter of fiscal year 2025.
Net Loss and Net Loss Per Diluted Share: Net loss was $42.6 million for the second quarter of fiscal year 2026, compared with net loss of $38.2 million for the second quarter of fiscal year 2025. Net loss per diluted share was $0.16 for the second quarter of fiscal year 2026, compared with net loss per diluted share of $0.15 for the second quarter of fiscal year 2025.
Balance Sheet: Cash and cash equivalents plus marketable securities at the end of the second quarter of fiscal year 2026 totaled $1.6 billion.
On a non-GAAP basis, Atlassian reported:
Operating Income and Operating Margin: Operating income was $430.2 million for the second quarter of fiscal year 2026, compared with operating income of $335.1 million for the second quarter of fiscal year 2025. Operating margin was 27% for the second quarter of fiscal year 2026, compared with 26% for the second quarter of fiscal year 2025.
Net Income and Net Income Per Diluted Share: Net income was $320.9 million for the second quarter of fiscal year 2026, compared with net income of $255.6 million for the second quarter of fiscal year 2025. Net income per diluted share was $1.22 for the second quarter of fiscal year 2026, compared with net income per diluted share of $0.96 for the second quarter of fiscal year 2025.
Free Cash Flow: Cash flow from operations was $177.8 million and free cash flow was $168.5 million for the second quarter of fiscal year 2026. Free cash flow margin for the second quarter of fiscal year 2026 was 11%.
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:
A Leader in the 2025 Gartner® Magic Quadrant™ for Marketing Work Management Platforms: Atlassian was recognized as a Leader in the 2025 Gartner Magic Quadrant for Marketing Work Management Platforms1 for the second consecutive year, and received the highest placement in Completeness of Vision. Atlassian’s Marketing Work Management solution is delivered through its Teamwork Collection, which includes Jira, Confluence, Loom, and Rovo, allowing marketing teams to collaborate seamlessly, unleash creativity, and partner with AI agents to power workflows.
A Leader in the 2025 Gartner® Magic Quadrant™ for Collaborative Work Management: Atlassian was recognized as a Leader in the 2025 Gartner Magic Quadrant for Collaborative Work Management2. Atlassian’s AI-powered system of work, delivered through its Teamwork Collection, connects work, knowledge, and goals—bringing together technical and business teams to standardize execution, strengthen productivity, and drive continuous improvement across the enterprise. Leading global organizations trust Teamwork Collection to execute faster, align teams, and deliver better outcomes at scale—while preparing for the future of work.
A Leader in The Forrester Wave™: Enterprise Service Management Platforms, Q4 2025: Atlassian was recognized as a Leader in The Forrester Wave: Enterprise Service Management Platforms3. Atlassian’s AI-powered Service Collection, consisting of Jira Service Management, Customer Service Management, Assets, and Rovo, connects development, IT, and business teams across the enterprise to deliver exceptional service experiences. Today, more than 65,000 organizations, including more than half of the Fortune 500, rely on Jira Service Management to enable faster collaboration and resolution for their teams and customers.
Customers with >$10,000 in Cloud ARR: Atlassian ended its second quarter of fiscal year 2026 with 55,369 customers with greater than $10,000 in Cloud annualized recurring revenue (Cloud ARR), an increase of 12% year-over-year.
Recognized on the Forbes World’s Best Employers 2025 List: Atlassian was recognized on the Forbes World’s Best Employers 2025 - Top Companies To Work For list. This achievement highlights Atlassian’s commitment to fostering an innovative and collaborative culture that drives technological advancement and delivers outstanding value to customers, partners, and employees.
Board of Directors Update: Atlassian appointed Anil Sabharwal to its Board of Directors. Anil is Vice President of Product at Google and has held various senior leadership roles at the company for 17 years. Anil is a seasoned technology entrepreneur and innovator with a deep understanding of both technology and its long-term value creation. He brings significant experience building beloved products such as Google Photos, Google Chrome, Google Drive, and more. Anil’s extensive technology experience will be invaluable as Atlassian continues to power human-AI collaboration for millions of users worldwide.
____________________
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
Gartner does not endorse any company, vendor, product or service depicted in its publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner publications consist of the opinions of Gartner’s business and technology insights organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this publication, 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 and MAGIC QUADRANT are trademarks of Gartner, Inc. and its affiliates.
3 Forrester does not endorse any company, product, brand, or service included in its research publications and does not advise any person to select the products or services of any company or brand based on the ratings included in such publications. Information is based on the best available resources. Opinions reflect judgment at the time and are subject to change. For more information, read about Forrester’s objectivity at http://www.forrester.com/about-us/objectivity/.
Financial Targets:
Atlassian is providing its financial targets as follows:
Third Quarter Fiscal Year 2026:
Total revenue is expected to be in the range of $1,689 million to $1,697 million.
Cloud revenue growth year-over-year is expected to be approximately 23.0%.
Data Center revenue growth year-over-year is expected to be approximately 33.5%.
Marketplace and other revenue growth year-over-year is expected to be approximately 5.0%.
Gross margin is expected to be approximately 85.5% on a GAAP basis and approximately 88.0% on a non-GAAP basis.
Operating margin is expected to be approximately 0.0% on a GAAP basis and approximately 27.5% on a non-GAAP basis.
Fiscal Year 2026:
Total revenue growth year-over-year is expected to be approximately 22.0%.
Cloud revenue growth year-over-year is expected to be approximately 24.3%.
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 6.0%.
Gross margin is expected to be approximately 84.0% on a GAAP basis and approximately 87.0% on a non-GAAP basis.
Operating margin is expected to be approximately (3.0%) on a GAAP basis and approximately 25.5% on a non-GAAP basis.
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:
When: Thursday, February 5, 2026 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 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:
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.
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%
View source version on businesswire.com: https://www.businesswire.com/news/home/20260205386782/en/
Investor Relations Contact
Martin Lam
IR@atlassian.com
Media Contact
Marie-Claire Maple
press@atlassian.com
Original: Atlassian Announces Second Quarter Fiscal Year 2026 Results
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