Atlassian Announces First Quarter Fiscal Year 2027 Results
Atlassian Corp (TEAM) filed an SEC Form 8-K — Results of Operations and Financial Condition. Atlassian Announces First Quarter Fiscal Year 2027 Results Revenue of $1,772 million, up 24% year-over-year Cloud revenue of $1,302 million, up 31% year-over-year Subscription ARR of $6,812 million, up 23% year-over-year Remaining performance obligations of $4,746 million , up 44
How this was made
The 30-second read
Why it matters
Earnings beat and margin expansion suggest strong operational performance and may drive the stock higher.
Market read
First‑hand earnings data provides fresh material for traders to act on, likely influencing TEAM's price action.
What to watch
Potential headwinds from macro slowdown or increased competition in AI collaboration space.
Revenue of $1,772 million, up 24% year-over-year; Cloud revenue of $1,302 million, up 31% year-over-year; Subscription ARR of $6,812 million, up 23% year-over-year; GAAP operating margin of 11% and non-GAAP operating margin of 32%.
Revenue, Cloud revenue, Subscription ARR, and remaining performance obligations all grew year-over-year, while GAAP operating income turned positive and both GAAP and non-GAAP operating margins expanded.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $1.77B | – | 24% |
| Subscription revenueGAAP | $1.70B | – | – |
| Other revenueGAAP | $74.33M | – | – |
| Cost of revenuesGAAP | $261.9M | – | – |
| Gross profitGAAP | $1.51B | – | – |
| Gross marginGAAP | 85% | – | – |
| Gross profitnon-GAAP | $1.55B | – | – |
| Gross marginnon-GAAP | 87% | – | – |
| Research and development expenseGAAP | $758.9M | – | – |
| Marketing and sales expenseGAAP | $390.4M | – | – |
| General and administrative expenseGAAP | $172.2M | – | – |
| Total operating expensesGAAP | $1.32B | – | – |
| Operating income (loss)GAAP | $188.8M | – | – |
| Operating marginGAAP | 11% | – | – |
| Operating incomenon-GAAP | $575.8M | – | – |
| Operating marginnon-GAAP | 32% | – | – |
| Other income (expense), netGAAP | −$16.48M | – | – |
| Interest incomeGAAP | $12.08M | – | – |
| Interest expenseGAAP | −$14.20M | – | – |
| Income before income taxesGAAP | $170.2M | – | – |
| Provision for (benefit from) income taxesGAAP | $79.47M | – | – |
| Net income (loss)GAAP | $90.72M | – | – |
| Diluted net income (loss) per shareGAAP | $ 0.35 | – | – |
| Basic net income (loss) per shareGAAP | $ 0.36 | – | – |
| Net incomenon-GAAP | $423.5M | – | – |
| Diluted net income per sharenon-GAAP | $ 1.65 | – | – |
| Cash flow from operationsGAAP | $468.5M | – | – |
| Free cash flownon-GAAP | $462.6M | – | – |
| Free cash flow marginnon-GAAP | 26% | – | – |
| Subscription ARRother | $6.81B | – | 23% |
| Remaining performance obligationsother | $4.75B | – | 44% |
| Cash and cash equivalentsGAAP | $1.12B | – | – |
| Long-term debtGAAP | $990.0M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| CloudCloud revenue growth was reported alongside momentum across Atlassian's Enterprise, AI, and System of Work strategic priorities. | $1.30B | – | 31% |
| Data CenterData Center is a deployment option reported in the company's revenues by deployment options table. | $390.7M | – | – |
| Marketplace and otherMarketplace and other includes premier support revenue. | $78.98M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Second Quarter Fiscal Year 2027 and Fiscal Year 2027 outlook
- RevenueSecond Quarter Fiscal Year 2027: $1,825 million to $1,835 million. Fiscal Year 2027: Total revenue growth year-over-year is expected to be approximately 13.75%.
- Gross marginSecond Quarter Fiscal Year 2027: approximately 84.5% on a GAAP basis and approximately 86.5% on a non-GAAP basis. Fiscal Year 2027: approximately 84.5% on a GAAP basis and approximately 86.5% on a non-GAAP basis.
- NoteSecond Quarter Fiscal Year 2027: Cloud revenue growth year-over-year is expected to be approximately 27.0%.
- NoteSecond Quarter Fiscal Year 2027: Data Center revenue growth year-over-year is expected to decline approximately (14.0%).
- NoteSecond Quarter Fiscal Year 2027: Marketplace and other revenue growth year-over-year is expected to be approximately 20.0%.
- NoteSecond Quarter Fiscal Year 2027: Operating margin is expected to be approximately 4.5% on a GAAP basis and approximately 26.0% on a non-GAAP basis.
- NoteFiscal Year 2027: Subscription ARR growth year-over-year is expected to be approximately 18.5%.
- NoteFiscal Year 2027: Cloud revenue growth year-over-year is expected to be approximately 26.0%.
- NoteFiscal Year 2027: Data Center revenue growth year-over-year is expected to decline approximately (16.0%).
- NoteFiscal Year 2027: Marketplace and other revenue growth year-over-year is expected to be approximately 15.0%.
- NoteFiscal Year 2027: Operating margin is expected to be approximately 5.0% on a GAAP basis and approximately 25.5% on a non-GAAP basis.
Capital returns
- Repurchases of Class A Common Stock: $ (588,010) (U.S. $ in thousands).
What drove it
- Cloud revenue was $ 1,302,462 (U.S. $ in thousands), with reported growth of 31% year-over-year.
- Subscription ARR was $6,812 million, up 23% year-over-year.
- Remaining performance obligations were $4,746 million, up 44% year-over-year.
- Service Collection had over $1 billion in ARR growing north of 30% year-over-year and expanded to more than 70,000 customers.
- Teamwork Collection customers were up 7x year-over-year.
- Atlassian reported seat growth exceeding 40% year-over-year in competitive displacements.
- The Atlassian MCP Server had over 2 million monthly users and more than 15 million daily tool calls.
Concerns
- Data Center revenue growth is expected to decline approximately (14.0%) in the second quarter of fiscal year 2027 and approximately (16.0%) for fiscal year 2027.
- Second-quarter GAAP operating margin is targeted at approximately 4.5%, compared with 11% in the first quarter of fiscal year 2027.
- Second-quarter non-GAAP operating margin is targeted at approximately 26.0%, compared with 32% in the first quarter of fiscal year 2027.
- Cash and cash equivalents were $ 1,120,504 (U.S. $ in thousands) as of September 30, 2026, compared with $ 1,239,512 (U.S. $ in thousands) as of June 30, 2026.
What to watch
- Execution against second-quarter total revenue guidance of $1,825 million to $1,835 million.
- Cloud revenue growth against the approximately 27.0% second-quarter target and approximately 26.0% fiscal-year target.
- The magnitude of the guided Data Center revenue decline.
- Subscription ARR growth against the approximately 18.5% fiscal-year target.
- Whether GAAP and non-GAAP operating margins track the approximately 4.5% and approximately 26.0% second-quarter targets.
- The pace of Service Collection expansion, enterprise AI adoption, and Teamwork Collection customer growth.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $ 1,120,504 (U.S. $ in thousands), compared with $ 1,239,512 (U.S. $ in thousands) as of June 30, 2026.
- Long-term debt as of September 30, 2026: $ 990,045 (U.S. $ in thousands), compared with $ 989,560 (U.S. $ in thousands) as of June 30, 2026.
- Net cash provided by operating activities: $ 468,530 (U.S. $ in thousands), compared with $ 128,715 (U.S. $ in thousands).
- Purchases of property and equipment: $ (5,976) (U.S. $ in thousands), compared with $ (14,112) (U.S. $ in thousands).
- Net decrease in cash, cash equivalents, and restricted cash: $ (127,844) (U.S. $ in thousands).
Analysis
Atlassian opened fiscal 2027 with broad reported growth. Total revenues were $ 1,772,150 (U.S. $ in thousands), compared with $ 1,432,553 (U.S. $ in thousands), and the company reported 24% year-over-year growth. Cloud revenue was $ 1,302,462 (U.S. $ in thousands), with reported growth of 31% year-over-year. Subscription ARR reached $6,812 million, up 23% year-over-year, while remaining performance obligations reached $4,746 million, up 44% year-over-year.
The period also showed a substantial improvement in reported profitability. GAAP operating income was $ 188,793 (U.S. $ in thousands), compared with a GAAP operating loss of $ (96,337) (U.S. $ in thousands), and GAAP operating margin was 11%, compared with (7%). Non-GAAP operating income was $ 575,819 (U.S. $ in thousands), compared with $ 322,686 (U.S. $ in thousands), while non-GAAP operating margin rose to 32% from 23%. GAAP net income was $ 90,721 (U.S. $ in thousands), compared with a net loss of $ (51,870) (U.S. $ in thousands).
Gross-margin performance improved as well. GAAP gross margin was 85%, compared with 82%, and non-GAAP gross margin was 87%, compared with 86%. Research and development expense was $ 758,882 (U.S. $ in thousands), marketing and sales expense was $ 390,367 (U.S. $ in thousands), and total operating expenses were $ 1,321,439 (U.S. $ in thousands). The non-GAAP reconciliation identifies stock-based compensation of $ 356,487 (U.S. $ in thousands) as the largest adjustment to GAAP operating income.
Cash generation was strong in the quarter. Net cash provided by operating activities was $ 468,530 (U.S. $ in thousands), compared with $ 128,715 (U.S. $ in thousands), and free cash flow was $ 462,554 (U.S. $ in thousands), compared with $ 114,603 (U.S. $ in thousands). The company repurchased $ (588,010) (U.S. $ in thousands) of Class A common stock. Cash and cash equivalents were $ 1,120,504 (U.S. $ in thousands) at September 30, 2026, while long-term debt was $ 990,045 (U.S. $ in thousands).
The outlook calls for second-quarter revenue of $1,825 million to $1,835 million, Cloud revenue growth of approximately 27.0%, and GAAP and non-GAAP operating margins of approximately 4.5% and approximately 26.0%. For fiscal year 2027, Atlassian expects approximately 18.5% Subscription ARR growth, approximately 13.75% total revenue growth, and approximately 26.0% Cloud revenue growth. The guide also calls for Data Center revenue growth to decline approximately (14.0%) in the second quarter and approximately (16.0%) for the full year.
Management, verbatim
Q1 was a strong start to fiscal 2027, with RPO up 44% and Teamwork Collection customers up 7x year-over-year.
Mike Cannon-Brookes, CEO and Co‑Founder
Subscription ARR grew 23% year-over-year and Cloud revenue grew 31% year-over-year, carrying forward our strong momentum across our strategic priorities of Enterprise, AI, and the System of Work.
James Chuong, CFO
We paired that growth with continued operational discipline, expanding GAAP operating margin to 11% while generating $463 million in free cash flow, reflecting our commitment to durable, profitable growth.
James Chuong, CFO
Not in the filing
stated, not guessed- Previous-period outlook was not provided, so comparison of reported results with prior guidance is unavailable.
- GAAP effective tax rate was not reported.
- Second-quarter and fiscal-year operating expense guidance was not reported.
- Second-quarter and fiscal-year tax-rate guidance was not reported.
- Dividend information was not reported.
- Prior-quarter income-statement comparison figures were not reported.
- Prior-year Subscription ARR dollar value was not reported.
- Prior-year remaining performance obligations dollar value was not reported.
- Prior-year free cash flow margin was not reported.
- Year-over-year percentage changes for Data Center and Marketplace and other revenue were not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Atlassian (NASDAQ: TEAM) announced its first quarter FY2027 results via an SEC Form 8‑K filing.
Ticker impact
Atlassian reported Q1 FY2027 revenue up 24% YoY, GAAP margin 11% and net income $91M, a fresh earnings disclosure.
upward pressure as the market prices in the earnings beat and improved margins
Revenue and profit growth exceed prior year, margins expanded, and free cash flow is robust, supporting a positive price move.
Market effects
Boosts outlook for enterprise software and AI-enabled collaboration tools.
Positive for US tech sector and broader market sentiment.
Reinforces demand for AI-driven productivity platforms worldwide.
Counterpoint
If guidance falls short of market expectations, the rally could be short-lived.
Key entities
- ExecutiveMike Cannon‑Brookes
CEO and Co‑Founder of Atlassian, quoted on AI strategy.
- ExecutiveJames Chuong
CFO of Atlassian, provided financial highlights.
