Atlassian Reports Q4 Revenue Growth of 28% to $1.8 Billion

On Thursday, Atlassian (NASDAQ: TEAM ) discussed fourth-quarter financial results during its earnings call. The full transcript is provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

2 billion. The company achieved a record quarter in terms of large deals, with significant growth in customers with $3 million and $5 million ARR, increasing over 50% and 70% year on year, respectively. Atlassian highlighted the success of its strategic initiatives including AI and the Teamwork Graph, which is being leveraged by over 80% of Fortune 500 companies, contributing to significant ARR growth. 8 billion, and they maintained a GAAP operating margin of 12%.

Future outlook is cautiously optimistic, with a subscription ARR growth guidance of 18% for FY27, reflecting a prudent approach due to macroeconomic uncertainties. Operational efficiencies and disciplined hiring were emphasized as key factors in maintaining margins despite increased AI usage. Management noted the strength of their enterprise go-to-market strategies and the growing importance of the Teamwork Graph and AI in customer engagements. The call conveyed a positive sentiment with a focus on continued investment in AI and strategic partnerships to drive future growth.

Full Transcript OPERATOR Good afternoon and thank you for joining Atlassian earnings conference call for the fourth quarter of fiscal year 2026. As a reminder, this conference call is being recorded and will be available for replay on the Investor Relations section of Atlassian's website. Following this call. I will now hand the call over to Martin Lamb, Atlassian's Head of Investor Relations.

Martin Lamb, Head of Investor Relations Welcome to Atlassian's fourth quarter fiscal year 2026 earnings call. Thank you for joining us today. On the call with me today we have Atlassian CEO and Co—Founder Mike Cannon—Brookes and Chief Financial Officer James Chung. Earlier today we published the shareholder letter and press release with our financial results and commentary for our fourth quarter of fiscal year 2026.

The shareholder letter is available on the Investor Relations section of our website where you will also find other earnings—related materials including the earnings press release and supplemental investor data sheet. As always, our shareholder letter contains management's insight and commentary for the quarter. So during the call today we'll have brief opening remarks and then focus our time on Q&A. This call will include forward—looking statements.

Forward—looking statements involve 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 and we undertake no obligation to update or revise such statements should they change or cease to be current.

Further information on these and other factors that could affect our business performance and financial results is included in filings we make with the Securities and Exchange Commission from time to time, including the section titled Risk Factors in our most recently filed annual and quarterly reports. During today's call we will also discuss non—GAAP financial metrics. These non—GAAP financial measures are in addition to and are not a substitute for or superior to measures of financial performance prepared in accordance with GAAP.

A reconciliation between GAAP and non—GAAP financial measures is available in our shareholder letter, earnings release, and investor data sheet on the Investor Relations section of our website. We'd like to allow as many of you to participate in Q&A as possible. Out of respect for others on the call, we'll take one question at a time. With that, I'll turn the call over to Mike for opening remarks.

Mike Cannon-Brookes, CEO and Co—Founder Thank you all for joining us today. As you've already read in our shareholder letter, Q4 was another outstanding quarter, capping off an incredible fiscal year for Atlassian. 8 billion. 2 billion as growth accelerated again, up 31% year over year.

8 billion. We delivered a GAAP operating margin of 12%. We're firing across all of our strategic priorities — enterprise, the system of work, and AI — all while driving durable, profitable growth in the enterprise. We had an all—time record quarter at the $1 million level, the $3 million level, and the $5 million level of deals, with our $3 million ARR customers growing over 50% year on year and our $5 million ARR customers growing over 70%.

In the Atlassian system of work, leading enterprises like Google Cloud are using our platform to power the way their teams collaborate, and in AI, Rovo is now used by over 80% of the Fortune 500. , customers using Rovo, continue to grow their ARR at more than twice the rate of non—adopters. When we think about what AI is doing for Atlassian, the results speak for themselves. Customers are getting real value from the AI embedded directly into their workflows, and it's translating into direct growth in our business.

Customers are committing more deeply to the Atlassian platform because of the value delivered. We're seeing longer customer commitments, larger deals, stronger seat expansion, great cross—sell momentum, and higher NRR. Last quarter we recognized customers like Nvidia and ResMed at Team 26 for how they're putting the Atlassian platform to work in the AI era to drive their businesses using the Teamwork Graph. The reason customers like these and many more are getting so much value from Atlassian comes down to a key structural advantage, and that advantage is context.

We believe models will keep improving and organizations will hire that intelligence by the token. But context — their internal knowledge, experience, and memory — is much harder for organizations to build, and it cannot be hired. With the Teamwork Graph, we have 25 years of deep data about work that's enabled us to build one of the best context graphs that exists for enterprise knowledge, now spanning over 200 billion objects and connections. For agents grounded in the Teamwork Graph, organizations can see up to 44% more accurate answers while consuming 48% fewer tokens.

In short, it enables customers to get results from their AI that are cheaper, better, and faster. Context is a clear compounding differentiator. I shared more on this in my investor Loom. As you've read in our shareholder letter, we're executing well on our long—term strategy from a position of strength, and we're seeing this play out each quarter in our strong results.

The best is truly yet to come for Atlassian. With that, I'll pass the call to the operator for Q&A. OPERATOR We will now begin the question and answer session. If you have a question, please press star followed by the one on your phone.

If you'd like to withdraw from the queue, please press star followed by the two. Your first question comes from Adam Wood from Morgan Stanley. Please go ahead. Adam Wood, Analyst at Morgan Stanley Hi, thanks so much for taking the question, and congratulations on an amazingly strong end to the year.

I just wanted to ask about the subscription ARR framework. Obviously it's a kind of newer framework to us and you again had another great end to the year at 23% growth. For the fiscal year 27 guide, it's down to 18. , and how much of it is around prudence around the macro and continued scaling of the enterprise go—to—market engine, please?

Thank you. James Chung, Chief Financial Officer Thanks, Adam, for the question, and welcome to the coverage. First, I would highlight that we're really pleased to see the strength that we saw in the quarter, printing ARR growth, subscription ARR growth of 23% year over year. When it comes to the guide, we'll continue to take a thoughtful and prudent approach here, really balancing the momentum that we're seeing in the business, the demand signals that we're getting from our customers, with the uncertainty as you look out in the macro environment, fiscal policy, and geopolitical landscape.

And as you mentioned, this is the first time we'll be issuing ARR guidance for the full fiscal year. We're also still early in the fiscal year here, so taking a bit more of a prudent approach in the second half of FY27. It's also worth noting that in FY26 the ARR year—over—year growth rate benefited by approximately 1 point from the acquisition of DX at the close of November in 2025 — that's our fiscal Q2 — and so we'll be lapping that acquisition and the healthy acceleration that we saw in the second half of FY26. And of course, we're going to continue to scale our enterprise go—to—market sales motion as we unlock the opportunities that we see in front of us.

All up, we feel really good about the state of the business here, coming off a quarter where RPO landed at 44% year on year and NRR was north of 120%. So here we're just taking a balanced and prudent approach to the guide. Adam Wood, Analyst at Morgan Stanley Very helpful, thank you. S.

Bancorp. Please go ahead. S. Bancorp Hey guys, thanks for taking the question, and congrats from me as well on another blowout quarter.

You've been highlighting that the Teamwork Graph is driving a 44% improvement in task efficiency and a 48% reduction in token usage. Can you elaborate on how these gains are showing up in your customers' deployments and how they're influencing customer conversations, buying behavior, and overall sales cycle dynamics? Mike Cannon-Brookes, CEO and Co—Founder Hi Alan. Sure, I can take that one.

I can tell you I've met more than 60 customers over the last six weeks in five different countries around the world, and the Teamwork Graph and AI come up in every single conversation I've had. You can see from our results those customers are continuing to expand their use of the Teamwork Collection, either upgrading if they're buying single applications or adding to the seats as they move into more of their knowledge workers and across the organization. And AI and the Teamwork Graph are one of the top two reasons quoted by our customers for their reason to upgrade to the Cloud and to upgrade to the Teamwork Collection.

Now the question is why and where those results come from. Our applications have a lot of connections to other applications around their world, whether that's their CRM system or their documentation and knowledge systems. We have for about eight years been building the Teamwork Graph as the best way to get answers across all of those applications for their users or for their agents, which increasingly ask a lot of questions in a very short period of time.

The quality of those answers is directly related to the queryability of our graph, the density of that graph — so the amount of information and the connections we have between it — the quality of the social and collaboration graph, the people information that we have, and fundamentally the breadth of information, the number of contexts you have. We outlined a little bit of this in the shareholder letter and there's a number of videos that show direct examples of where that gain comes from.

Fundamentally, the better answers — the quality of information across all those applications we can give to your agents — the fewer tokens they consume and the less time it takes them to get to an equivalent quality answer. Customers are seeing that. It's based on all of the structured and unstructured workflows we have from those customers over the last 25 years. And for all those customers that are adopting the Teamwork Collection and the Teamwork Graph coming inside that, I frequently get asked, do I have to buy the Teamwork Graph?

And the answer is, no, you already have it. I can often go and say, you have 150 million objects and connections in your Teamwork Graph today. And they're like, I do. And then we can do live demos.

We can show them in real time their own graph, how it works, using the CLI. It's an amazingly powerful story, especially in an age where all of the customers are asking about token costs and AI spend. It's an incredibly powerful story about how we can actually connect their organizational knowledge — their history — directly to those AI agents, and give them cost and performance — better quality answers and cheaper answers. So it's a very powerful story, one we've been building for a long time and very customer—resonant in all those conversations.

OPERATOR Your next question comes from Ryan McWilliams from Wells Fargo. Please go ahead. Ryan McWilliams, Analyst Hey, thanks for the question, James. Love to hear about the components of what drove cloud strength in the fourth quarter beyond the guidance, like was it more customer seat additions or more Teamwork Collection?

And as you thought about approaching this full-year cloud, God, in this uncertain environment, were there any changes to guidance philosophy overall? Thanks. James Chung, Chief Financial Officer Yeah, thanks, Ryan. No, the philosophy remains, really remains the same here and, you know, on the cloud revenue drivers here on the $49 million beat.

Maybe I'll start with the fact that, you know, and highlight the fact that the DC migrations to cloud were really in line with expectations and not a contributor to the $49 million beat. It's progressing well and in line with our expectations for FY26, contributing approximately mid- to high-single digits to the cloud growth revenue. So the two primary drivers here of the outperformance were really the cross-sell and seat expansion that we were seeing, similar to what we saw in Q3 on the cross-sell side. You know, we continue to see strong uptake in our collections across Service Collection and Teamwork Collection.

Service Collection revenue growth accelerated in Q4, just a strong signal of the adoption that we're seeing and that Mike mentioned a little bit earlier here. You know, in fact we're seeing over 3x increase in agentic automations in Service Collection as customers are continuing to deploy more agents beyond IT teams in HR and legal and finance and marketing teams. So again, also great to see the recognition here, being named a leader in Gartner's Magic Quadrant for conversational AI platforms for employee services. You know, we also continue to see a lot of strong performance on the Teamwork Collection side.

That's a good reminder that, you know, Teamwork Collection is still the best vehicle for customers to adopt and unleash AI on the Atlassian platform. You know, this is where customers are upgrading to increased Rovo credits, giving customers what they want in terms of the predictability as well as the ability to really load balance those tokens across their organizations. And we're seeing that drive our strong ARPU uplift here as well. So, you know, really I think what this shows is that customers are consolidating their collaboration stack onto the Atlassian platform, you know, recognizing the value that the teamwork graph really brings here.

And we do see that in the results with Teamwork customers having four to five times more paid seats per instance than standalone Jira or Confluence customers. OPERATOR Thank you. Your next question comes from Kyle Cuested from evs. Please go ahead.

Kyle Cuested, Analyst Thanks, James. A number of software stocks this week have been clocked on weaker-than-expected margin performance as their AI use goes up and their AI mix goes up. And yet I'm looking at the Atlassian results and your margins, despite you guys also experiencing an uptick in AI usage, holding in there very well and I'm wondering if you can explain that difference, what you guys might be doing. Cost structure might be different.

That might be helpful. Thank you. James Chung, Chief Financial Officer Start with that again on the margin guide here. As Mike and I stated back in the Q3 shareholder letter, you know, we're committed to driving durable, profitable growth here and a positive GAAP operating margin target for FY27 really sets us on that path to accelerate and expand GAAP profitability over time.

And, you know, in terms of drivers, look, the big part of that is disciplined hiring approach, right? We talked about that, as well as reallocating resources against some of the biggest opportunities and ROI that we see right now, as well as moderating the stock-based compensation here. You know, at the same time, you know, we're going to continue to judiciously invest in AI and scale our enterprise sales motion where we do see a lot of customer demand right now and our ability to really kind of capture that sustained opportunity in front of us. 5% GAAP operating margin for FY27 as we continue to focus on driving that profitability and growing that over time.

Mike Cannon-Brookes, CEO and Co—Founder Yeah, look, Kyle, I can add on from the gross margin and the COGS side.