Atlassian Q4 2026 Earnings Report

Atlassian EPS Results

• Actual EPS: $1.87
• Consensus EPS: $1.50
• Beat/Miss: Beat by +$0.37
• One Year Ago EPS: $0.98

Atlassian Revenue Results

• Actual Revenue: $1.77 billion
• Expected Revenue: $1.66 billion
• Beat/Miss: Beat by +$103.78 million
• YoY Revenue Growth: +27.60%

Atlassian Announcement Details

• Quarter: Q4 2026
• Date: 8/7/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 5:00PM ET

Atlassian (NASDAQ:TEAM) is a software company headquartered in Sydney, Australia, best known for developing collaboration, project management and software development tools. Founded in 2002 by Mike Cannon-Brookes and Scott Farquhar, Atlassian grew from a small engineering-focused team into a publicly traded company after its initial public offering in 2015. The company serves a global customer base that spans small teams to large enterprises across technology, financial services, government and other sectors.

Atlassian’s product portfolio centers on tools designed to help teams plan, build and support software and business processes. Flagship products include Jira for issue and project tracking, Confluence for team content and knowledge management, Trello for visual project boards, and Bitbucket for source code management. The company also offers operations- and incident-management products such as Opsgenie and Statuspage, as well as on-premises and enterprise-ready offerings under its Data Center line. Atlassian distributes its software through a mix of cloud subscriptions, self-managed deployments, and an ecosystem marketplace of third‑party apps and integrations.

Over its history Atlassian has expanded both organically and through strategic acquisitions to broaden its capabilities and address adjacent use cases. The company emphasizes developer and IT workflows while increasingly positioning its tools for general business collaboration. As a publicly traded, globally distributed business, Atlassian maintains regional offices and engineering centers internationally and continues to invest in cloud services, platform extensibility and ecosystem partnerships to support customers worldwide.

Atlassian Q4 2026 Earnings Call Transcript

Key Takeaways

• Strong FY26 performance: Revenue grew 28% to $1.8 billion, cloud revenue increased 31% to $1.2 billion, RPO rose 44% to $4.8 billion, and GAAP operating margin reached 12%.
• Enterprise momentum accelerated: Atlassian reported record bookings at the $1 million, $3 million, and $5 million deal levels, with customers generating more than $3 million in ARR growing over 50% year over year and those above $5 million growing over 70%.
• AI and platform adoption are driving expansion: Rovo is used by more than 80% of Fortune 500 companies, Rovo-assisted actions increased 50% sequentially, and customers adopting Rovo are growing ARR at more than twice the rate of non-adopters. Cross-selling the Teamwork and Service Collections and seat expansion were key cloud-growth drivers.
• FY27 guidance reflects increased caution: Subscription ARR growth is expected to slow to 18%, compared with 23% in Q4, due partly to lapping the DX acquisition and strong second-half FY26 growth, as well as uncertainty around macroeconomic, fiscal-policy, and geopolitical conditions.
• Profitability is expected to improve: Management guided to a 4.5% GAAP operating margin for FY27, citing disciplined hiring, resource reallocation, moderating stock-based compensation, and improved AI infrastructure efficiency while continuing to invest in AI and enterprise sales.

Presentation

[Operator]

Good afternoon. Thank you for joining Atlassian's 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 Lam, Atlassian's Head of Investor Relations.

[Martin Lam, Head of Investor Relations at Atlassian]

Welcome to Atlassian's fourth quarterfiscal 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 Chuong. Earlier today, we published a 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 insight and commentary for the quarter. 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.

[Martin Lam, Head of Investor Relations at Atlassian]

If any of 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. 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.

[Martin Lam, Head of Investor Relations at Atlassian]

These non-GAAP financial measures are in addition to, 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 at Atlassian]

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. Total revenue grew 28% to $1.8 billion. Cloud revenue surged to $1.2 billion as growth accelerated again, up 31% year-over-year. RPO grew 44% year-over-year to $4.8 billion, and 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%.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

In the Atlassian system of work, leading enterprises like Google Cloud are using our platform to power the way their teams collaborate. In AI, Rovo is now used by over 80% of the Fortune 500. Rovo-assisted actions grew 50% over the prior quarter. Rovo adopters, that is customers using Rovo, continue to grow their ARR at more than 2x 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. 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 ARR.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

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. That advantage is context. We believe models will keep improving, organizations will hire that intelligence by the token. 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.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

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 to get customers 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. 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.

[Adam Wood, Analyst at Morgan Stanley]

Hi. Thanks so much for taking the question. Congratulations on an amazingly strong end to the year. I just wanted to ask about the Subscription ARR framework. Obviously, it's a newer framework to us. You again had another great end to the year with 23% growth. The fiscal year 2027 guide is down to 18%. Could you maybe just help us out around the difference between cloud and data center within that? How much of this is some moderation around new seats, seat expansion, et cetera? How much of it is around prudence around the macro and continued scaling of the enterprise go-to-market engine, please? Thank you.

[James Chuong, CFO at Atlassian]

Thanks, Adam, for the question. 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, sub-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. 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 that second half of FY 2027.

[James Chuong, CFO at Atlassian]

It's also worth noting that in FY 2026, 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. We'll be lapping that DX acquisition and the healthy acceleration that we saw in the second half of FY 2026. Of course, we're going to still continue to scale our enterprise go-to-market sales motion as we unlock the opportunities that we see in front of us. All up, feel really good about the state of the business here. Coming off a quarter where RPO landed at 44% year-on-year, NRR was north of 120%. Here, just taking a balanced and prudent approach to the guide.

[Adam Wood, Analyst at Morgan Stanley]

That's very helpful. Thank you.

[Operator]

Your next question comes from Allan Verkhovski from U.S. Bancorp. Please go ahead.

[Allan Verkhovski, Analyst at U.S. Bancorp]

Hey, guys. Thanks for taking the question. 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 at Atlassian]

Hi, Allan. Sure. I can take that one. Look, I can tell you I've met more than 60 customers over the last six weeks in five different countries around the world. 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 to it if they're buying single applications or adding to the seats as they move into more of their knowledge workers and across the organization. AI and the Teamwork Graph is one of the biggest reasons. It's 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. The question is why and where those results come from.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

Our applications have a lot of connections to other applications around their world, right? Whether that's their CRM system, whether that's their documentation 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 query ability 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.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

We outlined a little bit of this in the shareholder letter. 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 less 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.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

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?" 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." They're like, "I do?" 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 a cost and performance, better quality answers and cheaper answers.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

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 MacWilliams from Wells Fargo. Please go ahead.

[Ryan MacWilliams, Analyst at Wells Fargo]

Hey, thanks for taking the question. For James, I would love to hear about the components of what drove cloud strength in the fourth quarter beyond the guidance. Was it more customer seat additions or more Teamwork Collection? As you thought about approaching this full-year cloud guide in this uncertain environment, were there any changes to guidance philosophy overall? Thanks.

[James Chuong, CFO at Atlassian]

No, the philosophy really remains the same here. On the cloud revenue drivers here on the $49 million beat, maybe I will start with the fact that, 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 is progressing well and in line with our expectations for FY 2026, contributing approximately mid to high single digits to the cloud growth revenue. 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, we continue to see strong uptake in our collections across Service Collection and Teamwork Collection. Service Collection revenue growth accelerated in Q4.

[James Chuong, CFO at Atlassian]

Just a strong signal of the AI adoption that we are seeing and that Mike mentioned a little bit earlier here. In fact, we are 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. Also great to see the recognition here, being named a leader in Gartner's Magic Quadrant for Conversational AI Platforms for Employee Services. We also continue to see a lot of strong performance on the Teamwork Collection side. As a good reminder that Teamwork Collection is still the best vehicle for customers to adopt and unleash AI on the Atlassian platform.

[James Chuong, CFO at Atlassian]

This is where customers are upgrading to increased Rovo credits. It is giving customers what they want in terms of the predictability as well as the ability to really load balance those tokens across their organizations. We're seeing that drive our strong ARPU uplift here as well. Really, I think what this shows is that the customers are consolidating their collaboration stack onto the Atlassian platform, recognizing the value that the Teamwork Graph really brings here. We do see that in the results with Teamwork customers having four to five times more paid seats, for instance, than standalone Jira or Confluence customers.

[Ryan MacWilliams, Analyst at Wells Fargo]

Thanks for color. Thank you.

[Operator]

Your next question comes from Karl Keirstead from UBS. Please go ahead.

[Karl Keirstead, Analyst at UBS]

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. 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. 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 Chuong, CFO at Atlassian]

Start with that. On the margin guide here, as Mike and I stated back in the Q3 shareholder letter, we're committed to driving durable, profitable growth here and a positive GAAP operating margin target for FY 2027. Really sets us on that path to accelerate and expand GAAP profitability over time. In terms of drivers, look, the big part of that is disciplined hiring approach, right? We talked about that, as well as reallocating resources. Some of the biggest opportunities in ROI that we see right now, as well as moderating the stock-based compensation here. At the same time, 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 capture that sustained opportunity in front of us.

[James Chuong, CFO at Atlassian]

That goes to really help inform the 6.5% GAAP operating margin guide for Q1 and the 4.5% GAAP operating margin for FY 2027 as we continue to focus on driving that profitability and growing that over time.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

Look, Karl, I can add on from the gross margin and the COGS side. I would say it's a classic Atlassian story of being thoughtful and long-term thinking, long-term orientation. We've talked for three years now around our AI gateway and how we think about AI. We've been blending multiple models for a multi-year period, and we're getting really, really good at it. It's a non-trivial challenge. I give a huge shout-out to all of our R&D teams who've been working on that cost-to-serve question for a long time in terms of getting the best quality at the best price and the best speed.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

People want fast answers from their AI across Teamwork Graph, across our enterprise search architecture, which is now the best in the world in terms of giving you answers across your knowledge estate, whether that's to a person, a human, or whether that's to an agent or something querying in that manner from an AI perspective. Our ability to blend models, our ability to manage traffic costs over time is truly phenomenal. We get better at it every quarter, and you can see that we had a huge continued growth in AI usage. Rovo-assisted actions are up 50% quarter-on-quarter. We've continued to do that and focus on the durable, profitable growth that we've talked about for a while now. It's a huge credit to everyone in the Atlassian team to be able to do that. It's a lot of hard work.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

It's a lot of long-term thinking about the architecture that we've built underneath our AI to be able to give those answers in an incredibly competitive value way to our customers as well. Not only do we give them the best answers, we give them the best answers at an incredible price, which is a part of the reason you're seeing the growth in the Service Collection, the growth in the Teamwork Collection. Again, as James mentioned, Service Collection again accelerating, AI being a huge driver of that service space. Again, hitting record numbers for customer conversions from legacy service providers, et cetera. You see that with our MCP calls as well, as an example. That's also non-trivial to serve cheaply, to manage that over time.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

MCP calls were up 400% in the quarter, with barely a blip in people actually using the applications through the web or through a mobile client. Really happy at where we sit from a technological perspective of being able to deliver this, and more improvements to come.

[Karl Keirstead, Analyst at UBS]

Got it. Thank you both.

[Operator]

Your next question comes from Gregg Moskowitz from Mizuho. Please go ahead, Gregg.

[Gregg Moskowitz, Analyst at Mizuho]

All right, great. Thank you. Congratulations on another tremendous result. It does seem that the Teamwork Graph, the functional improvements to Rovo, some of the other innovations to Jira, JSM, et cetera, are really resonating with your customers. In terms of my question, we've seen some market data that have indicated somewhat of a resurgence in developer hiring. Does that align with what you're seeing and hearing across your clients? Secondly, how does the rate of total paid seat expansion this quarter, spanning technical users and knowledge workers, how does that compare to what you've been seeing in recent periods? Thank you.

[James Chuong, CFO at Atlassian]

Hey, thanks, Gregg. I can start with that and maybe throw it over to Mike. To Ryan's question a little bit earlier about some of the cloud outperformance drivers that we saw, I talked about the cross-sell side of it, we are seeing customers continue to go wall to wall with Atlassian here and continue to adopt higher editions and move towards Teamwork Collection, Service Collection. I think importantly, we're seeing that growth in Teamwork Collection while also seeing continued strong seat expansion in our core Jira and Confluence offerings here. This expansion is broad-based. Recall that roughly two-thirds of users across Jira and Confluence are knowledge workers. These are non-software development teams, really sitting in HR, legal, finance, and really speaks to that diversified user base that we're seeing here.

[James Chuong, CFO at Atlassian]

I think this growth does demonstrate that in AI-driven world, the need for collaboration at the enterprise scale, tracking, planning, managing work, it's actually increasing. Atlassian is a mission-critical platform here helping our customers orchestrate their teams, their agents, their workflows to really unlock that value in AI and driving real ROI and real outcomes here. That really was the other primary driver of the outperformance that we saw in cloud, including the cross-sell that I talked about a little bit earlier.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

Look, I can talk about it from a developer or engineering front in a number of different angles, Gregg. I know we've talked about this before. We've been long on record. You can look at the receipts. I think there's going to be more developers in the world in five years' time than there are today. The cost of building technology is going down. The amount of technology we're going to build is going to go up. I believe that will continue to be a good trend. We've said this for a number of years. Those are the signals we see in our customers. The ability to grow that is huge. I think secondly, the number of people building technology that we don't necessarily call developers is also growing.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

We're seeing people in finance and in HR and in marketing using a lot of these tools to build technology of various different forms. Again, we see that in our MCP server usage and our CLI usage coming across the board in lots of different functional areas, not just inside the engineering fraternity, and I think that's really important. From our perspective, again, the system of work is about helping companies to connect their technology teams with their business teams, to have a single platform that allows both sides of the organization in a technology-driven organization, an organization where software is their key competitive advantage. It doesn't make them a technology company. They can be a bank, an insurance company, a healthcare company, a university. There are lots of companies for whom many organizations in the world, technology is their key competitive advantage.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

I believe that is a big growth cycle that we are continuing to participate in. Our strength is in connecting the technology team to the business team. I do believe that the developer hiring will continue to grow, as we see in our customer signals.

[Gregg Moskowitz, Analyst at Mizuho]

Very helpful. Thank you.

[Operator]

Your next question comes from DJ Hynes from Canaccord. Please go ahead.

[DJ Hynes, Analyst at Canaccord]

Hey, thank you, guys. Congrats on a nice quarter. Mike, you gave us some data points around Rovo and the customers who have adopted complete more of Jira work, they create more Confluence content, they grow ARR twice as fast. How do you separate kind of the incremental impact of Rovo from the possibility that your most engaged customers are simply the earliest adopters? I'm trying to think about the durability of those trends as we get further along into the Rovo penetration story.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

Hi, DJ. Let me think about how to answer that one. I would say we see signals that is only going to be a durable trend. I don't think it's anything to do with early adopters, to be honest. This is a technology that's been adopted incredibly fast. Again, over 80% of the Fortune 500 are using Rovo. All of the customer meetings that I walk into, and it's a lot, they have Rovo usage, AI usage. They're looking to expand their usage. They're looking to understand. This is a massive sort of super cycle, right? They are customers inevitably trying to work out, how can I apply AI and Smarts and the Teamwork Graph and agents to this workflow or that workflow.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

Structured workflows like in a Jira or a Service Collection, or unstructured workflows like Loom and Confluence and Trello other areas where they have unstructured workflow that they believe they can make more efficient or importantly, higher quality, right? The results of that workflow can be better than they were before. I don't see that as being an early adopter problem. I see it in every single customer I walk into. They're all learning, adopting, moving, and trying. What they're also seeing is the quality of Rovo is incredibly high, right? It outperforms almost every chat tool on the market across their data. The more they connect into the Teamwork Graph, the better those results get because of our context, because of a lot of great work in R&D. I don't think these are sort of early adopter challenges.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

I think it's a signal of the more people lean in, the better results they get, the better value they feel like they're getting. They're then expanding across more of their business teams, more areas of their organization or understanding that when they add Strategy Collection or they add DX or they add the Service Collection. The platform, the Teamwork Graph they've built just compounds in value for them. One of the reasons Service Collection continues to grow so strongly is because of the compounding effect between the Teamwork Collection and the Service Collection.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

That's a really important thing for them to understand. I think as we've shown in our addressable market figures of $14 billion within the existing customer base without changing any products or pricing, etcetera, there is a huge amount of upside opportunity still for us to go out and capture. That's our challenge to do on a weekly basis.

[DJ Hynes, Analyst at Canaccord]

Thank you.

[Operator]

Your next question comes from Koji Ikeda from Bank of America. Please go ahead.

[Koji Ikeda, Analyst at Bank of America]

Hey, guys. Thanks so much for taking my question. I wanted to ask about kind of the long-term strategy here. Clearly the long-term Atlassian share gain thesis is really hinged on owning the enterprise context. What evidence are you hearing or seeing from your customers, especially the largest ones that you have, that even if they increasingly centralize context inside other AI data layers, the Atlassian Teamwork Graph is still the moat versus potentially becoming a feature? Thank you.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

Hi, Koji. Look, I can talk to that one. I think context is obviously very hard to build. This is a non-trivial problem. It's a unique differentiator that we have. We continue to improve on. We made massive improvements in the last quarter in the Teamwork Graph. The quality of connectors and the information that we have, how we continue to correlate, cross-reference, and infer across that data. For example, skills we can now infer in the talent app inside the Strategy Collection across all the information in the Teamwork Graph in which we're inferring the skills and AI nativity of your employees, for example. The quality of our chat results is up markedly in the last quarter and was already at all-time highs. We're seeing that in a number of true fans of chat growing up and up and up, right?

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

The quality of our search, the semantic indexing of code that we showed. There is a lot of hard work to continue to do to make that context, to make the Teamwork Graph better and better every quarter. We have more coming. Team '26 Europe is in October in Amsterdam. No doubt there will be further improvements shown there. I don't think it's as simple as every organization will have one graph and we're done. I think most organizations will have three to five large-scale knowledge graphs, and we intend to be one of those three. We believe we have a significant advantage at the moment and continue to invest, as James said, in our AI and R&D teams to continue to make that accessible and to make that value and quality continue to improve.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

The Teamwork Graph, importantly, we opened up at Team '26 U.S., which is a really important step with our MCP server, with our command line unifier, so CLI. The ability to put the Teamwork Graph to access its information in any agentic harness that you're using, other chat applications, agents running on other platforms, is really important. This is about being an interconnected part of a customer's technology estate. It's about the Atlassian platform being a strategic piece in the puzzle of how it is that they run their business. I think that integration is a really important point. We're seeing that the reason we talk about the MCP server, MCP and CLI users in the quarter passing 1 million now. We don't know where that puts us in a world scale, but I think it's one of the biggest MCP servers that exist.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

More than doubling in the quarter is because of people getting to the Teamwork Graph, getting to that context from their agents wherever they're deployed. Again, we also signed and increased our partnerships with all of the foundational labs during the quarter we released Cursor and Claude and GitHub agents within Jira to, again, bring those agents into our interfaces so you can use them as natively as possible, so that we are part of the network of tools that help, an integral part, a strategic part of the network of tools that help those companies to do what they need to do. I think the Teamwork Graph has incredible long-term promise, and we continue to invest heavily to ensure that it remains the best source of context that enterprise can get.

[Koji Ikeda, Analyst at Bank of America]

Thanks so much.

[Operator]

Your next question comes from Alex Zukin from Wolfe Research. Please go ahead, Alex.

[Alex Zukin, Analyst at Wolfe Research]

Yeah. Hey, guys. Thanks for taking my question. Just a few. I guess, if you had to think about what really happened this quarter that seemingly unlocked and unblocked the enterprise motion, because it did seem like there was a meaningful inflection in large deal activity and consequently your RPOs. It'd be just great to get maybe an extra lens on what was the unlock or the unblock that you saw?

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

Thanks, Alex. I would say the most important thing is there was no unblock. I would say this is a continued delivery of the activity we've seen over the last two quarters, three quarters, four quarters. We've talked for three or four years about how we continue to improve our enterprise motion. That is on a technology side, compliance. We shipped HIPAA compliance, for example, for Rovo during the quarter. The enterprise group is doing a fantastic job on a technology side about making these tools, technologies, applications, collections available to companies at scale, at incredible scale now in the cloud, in different geographies with different compliance requirements. Technology-wise, we're doing a great job.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

We've continued to improve over the last few years the human side of our enterprise connectivity as we become more of a strategic partner, from sales to customer success to all of the groups that have to interact with our customers at the enterprise level. We've continued to do a better and better job every week for the last multiple years, and you see those results coming through. The customer adoption is a continued trend, right? The RPO acceleration that we have seen, again, is about customers simply understanding our platform, seeing more value across multiple collections in the strategic platform sense of Atlassian, and then signing hence longer deals, larger deals, and then expanding their footprint. That's why you see the strong NRR numbers and the strong RPO numbers. The most important thing I would say is it's not a singular unlock.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

It is many years of hard work, continual work across lots of areas of the business, behind a deep belief in the strength we have in the enterprise segment. James? Excellent.

[James Chuong, CFO at Atlassian]

Just maybe to add to that, I just do want to reiterate what Mike said, that it's not an overnight thing. We got sort of similar questions last quarter about Service Collection when we had announced the billion-dollar ARR growing north of 30% year-on-year. Those are quarters and years of investments that we're making here. If you take a look at the enterprise go-to-market motion that we're continuing to evolve here, we really are still early stages when you think about the fact that we're in 85% of the Fortune 500, but really that only represents roughly 10% or so of our total revenue. There's still a lot of headroom there. Mike shared some of these stats a little bit earlier, but our $3 million cohort, that's 164 customers, growing 50% year-over-year.

[James Chuong, CFO at Atlassian]

Our $5 million and greater cohort of customers, that's 69, and that's growing 70% year-over-year. Again, on a base of $6.6 billion of ARR, it really just highlights how early we are here in terms of the opportunity.

[Alex Zukin, Analyst at Wolfe Research]

Overnight success, three years in the making. I guess, maybe just on the initial ARR guide, James, I think it implies roughly flat organic net new ARR in fiscal 2027. You said you're reflecting the same level of prudence that Atlassian has used historically in its outlook. Is there anything different exiting fiscal 2026 that increases the confidence in those numbers given some of those dynamics that you guys just went over? Maybe just help level set that a little bit.

[James Chuong, CFO at Atlassian]

Yeah. No. Again, I'll just say, again, we're really pleased with the momentum that we're carrying into FY 2027. Again, subs-ARR growth of 23%, RPO growth of 44% year-over-year. We do really feel good about the state of the business and the healthy, broad-based customer demand signals that we're seeing. As I mentioned a little bit earlier, worth noting, the FY 2026 ARR year-over-year growth rate did benefit from approximately a point from the DX acquisition. When it comes to that initial guide of 18% for subs-growth for FY 2027, again, taking a balanced and thoughtful approach here. It's still early in the year here, so just adding a bit more prudence to that second half of FY 2027. Hopefully, that gives you some color there.

[Alex Zukin, Analyst at Wolfe Research]

Thank you, guys.

[James Chuong, CFO at Atlassian]

Yep.

[Operator]

Your next question comes from Rob Owens from Piper Sandler. Please go ahead. Is Rob on the line? We will move to our next--

[Rob Owens, Analyst at Piper Sandler]

Sorry about that.

[Operator]

-- question instead.

[Rob Owens, Analyst at Piper Sandler]

Hello?

[Operator]

Please go ahead.

[Rob Owens, Analyst at Piper Sandler]

Hello, can you hear me? Yeah, my apologies. The question was around increased Rovo credits with customers and how that's helping drive strong ARPU uplift. I'm just curious, at what point might we start to contemplate a more consumptive element to the model? Within the Rovo install base of customers using it, can you give us any increased color on how often they're coming back? Have you seen multiple increases and just what that's doing to ARPU overall? Thanks.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

Hi, Rob. Look, as we said, we continue to see a great increase in Rovo-assisted actions, which is probably a rough proxy for credit usage. It's not directly linear, the 50% quarter-on-quarter growth gives you a sense of the customer adoption of Rovo across the areas. Secondly, as we've said, the Teamwork Collection with approximately 10x as many Rovo credits included is a great motivator, inducement for upgrade in terms of hitting those limits and looking at upgrading the Teamwork Collection, both in terms of moving to the Teamwork Collection, but also expanding the number of seats, the breadth of deployment. Again, as we talked about, as they see the Teamwork Graph working in multiple different types of teams, you see seat increases, right? Which is, again, driving that ARPU number if you're looking at a really macro level that is happening there.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

We have a series of consumptive elements today. We continue to work on how we judiciously and prudently roll out consumption-based offerings. We talked about both the direct consumption-based offering for overages. Secondly, the Flex model, which we continue to work on to allow customers to opt in to the entire Atlassian platform with a sort of dollar-based commitment that they can use across various different collections and consumptive elements in a singular package. Both of which are early in their cycle, hold great promise for the future, as always, we maintain our long-term thinking position and working through there. Right now, the simplest thing I would say is that the Teamwork Collection and the Service Collection are the vehicles for AI monetization, right? Customers adopting those, driving the usage within those.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

That is, as we've said, that's the vehicle to measure AI monetization and adoption, both are going very, very strongly.

[Operator]

Thank you. That concludes our question-and-answer session. I will now turn the call over to Mike for closing remarks.

[Mike Cannon-Brookes, CEO and Co-founder at Atlassian]

Look, thank you everyone for joining the call today. As always, we appreciate the thoughtful questions and continued support. A huge shout-out to everyone across the Atlassian team. Another great quarter into the books and continued long-term thinking and hard work to deliver for our customers. I hope to see as many of those customers and as many of you on the investment community at Team '26 Europe, which is coming up in October. Other than that, have a kick-ass day

Participants

Executives

• Martin Lam, Head of Investor Relations
• Mike Cannon-Brookes, CEO and Co-founder

Analysts

• Adam Wood, Analyst at Morgan Stanley
• James Chuong, CFO at Atlassian
• Allan Verkhovski, Analyst at U.S. Bancorp
• Ryan MacWilliams, Analyst at Wells Fargo
• Karl Keirstead, Analyst at UBS
• Gregg Moskowitz, Analyst at Mizuho
• DJ Hynes, Analyst at Canaccord
• Koji Ikeda, Analyst at Bank of America
• Alex Zukin, Analyst at Wolfe Research
• Rob Owens, Analyst at Piper Sandler