Key Highlights

● Quarterly revenue was $1,766.5 million, up 28% from $1,384.3 million.

● Cloud revenue grew 31% to $1,213.5 million.

● GAAP operating profit was $210.7 million, against a $28.5 million loss.

● Fiscal 2026 revenue rose 26% to $6,572.3 million.

Cloud growth and a GAAP operating profit

Atlassian Corporation (NASDAQ:TEAM) announced fourth-quarter and fiscal 2026 results on 6 August 2026, reporting quarterly revenue of $1,766.5 million, up 28% from $1,384.3 million. Cloud revenue grew 31% to $1,213.5 million, and the company recorded a GAAP operating profit of $210.7 million, a 12% margin, compared with a GAAP operating loss of $28.5 million a year earlier.

Business and sector

Atlassian develops collaboration and work-management software for software, IT and business teams. Its products include Jira, Confluence and Jira Service Management, and it sells them through a cloud subscription model and through Data Center, a self-managed offering for customers that run the software on their own infrastructure. The company reports that it has more than 350,000 customers worldwide.

The sector is being reshaped by artificial intelligence. Chief executive Mike Cannon-Brookes said that in the AI era context is the edge, but it is hard to build and cannot be hired, pointing to the company's strategy of using shared work data to power AI features. The company said its MCP server and Teamwork Graph command-line interface had passed 1 million monthly active users.

Latest reported results

Data Center revenue in the fourth quarter was $461.9 million, which is about 21% higher than a year earlier, a growth rate calculated from the reported figures. Non-GAAP operating income was $636.3 million, a 36% margin. Net income was $139.1 million, or $0.55 per diluted share, while non-GAAP net income was $473.1 million, or $1.87 per share. Free cash flow was $474.7 million, a 27% margin.

For fiscal 2026, revenue rose 26% to $6,572.3 million, including cloud revenue of $4,410.6 million. Operating income was $10.4 million, and the company reported a net loss of $53.8 million, or $0.21 per share. Non-GAAP operating income was $1,996.5 million and free cash flow was $1,319.1 million. Subscription annual recurring revenue was $6,606 million, up 23%, and remaining performance obligations were $4,817 million, up 44%.

Financial performance and industry context

For the first quarter of fiscal 2027, Atlassian guides to revenue of $1,705 million to $1,715 million, with cloud revenue growth of about 28.5% and Data Center revenue down about 4%. For the full year, it expects total revenue growth of about 13%, cloud growth of about 25.5% and subscription ARR growth of about 18%, with Data Center revenue falling about 17%.

Chief financial officer James Chuong said the company achieved GAAP profitability, with a 12% operating margin in the fourth quarter. The guidance, however, points to a GAAP operating margin of about 4.5% for fiscal 2027, compared with a non-GAAP margin of about 25%, so the gap between the two measures remains wide.

Risks and uncertainties

The planned decline in Data Center revenue reflects customers moving to the cloud, a transition that supports long-term recurring revenue but lowers near-term total growth. Competition from large software suppliers and AI-native tools could affect pricing and seat growth, and AI features may raise cloud delivery costs.

Share-based compensation is a significant difference between GAAP and non-GAAP profit, and the full-year net loss shows that sustained GAAP profitability is not yet established. Macroeconomic conditions affecting technology hiring may reduce the number of seats customers need, which links Atlassian's growth to the employment plans of its customers.

First-quarter guidance and the GAAP margin

The next scheduled event is the first-quarter fiscal 2027 report, where revenue can be compared with the guided range of $1,705 million to $1,715 million. Readers may follow cloud growth, the pace of Data Center decline, free cash flow margins, adoption of AI products, the evolution of GAAP operating margin against the roughly 6.5% guided for the first quarter, and any change in customer growth, as well as management commentary on AI pricing.