Atlassian (NASDAQ:TEAM) Announces Quarterly Earnings Results, Beats Estimates By $0.42 EPS

Key Points

• Atlassian topped expectations with Q3 non‑GAAP EPS of $1.75 (vs. $1.33 est.) and $1.79 billion in revenue, roughly a 32% year‑over‑year increase.
• Strong cloud and AI momentum — cloud revenue exceeded $1.1 billion (+29% YoY), Rovo/AI adoption is driving fast user and credit growth, and customers using Rovo are roughly doubling ARR growth versus non‑users, supporting enterprise expansion and NRR >120%.
• Caution on timing and volatility — Q3 outperformance included about $50 million of pulled‑forward Data Center license revenue that may distort FY2027 comparability, and insider selling plus mixed analyst targets leave the stock exposed to near‑term swings.

Atlassian (NASDAQ:TEAM - Get Free Report) issued its earnings results on Thursday. The technology company reported $1.75 earnings per share for the quarter, topping the consensus estimate of $1.33 by $0.42, FiscalAI reports. The company had revenue of $1.79 billion during the quarter, compared to the consensus estimate of $1.70 billion. Atlassian had a negative net margin of 3.29% and a negative return on equity of 6.33%. Atlassian's quarterly revenue was up 31.7% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $0.97 EPS.

Here are the key takeaways from Atlassian's conference call:

• Strong Q3 financials — total revenue grew 32% year-over-year to $1.8 billion, cloud revenue surpassed $1.1 billion (+29% YoY), and RPO rose 13% to $4 billion, signaling continued growth momentum.
• Rapid AI adoption — Rovo added millions of monthly active users, AI credit usage is growing >20% month-over-month, and customers using Rovo are growing ARR at roughly twice the rate of non-users, contributing to cloud outperformance and expansion.
• Enterprise traction and share gains — Atlassian reported its largest-ever quarter for competitive displacements (notably in Service Collection), the Service Collection passed $1 billion ARR, and NRR remains north of 120%, reflecting strong retention and cross-sell.
• Data Center revenue lumpiness — Q3 outperformance included approximately $50 million of upfront term license revenue pulled forward after the Data Center end-of-life announcement and a pricing change, creating timing distortions that could pressure FY2027 comparability.
• Pricing and profitability stance — Atlassian says it will remain customer-led on seat-based and consumption meters, reinvest in AI and enterprise while pursuing durable, profitable growth, and will provide enhanced ARR disclosures at Team '26 to clarify timing effects.

Atlassian Trading Down 2.7%

Atlassian stock traded down $1.90 during midday trading on Thursday, reaching $68.59. The stock had a trading volume of 8,283,412 shares, compared to its average volume of 7,493,602. The company has a quick ratio of 0.89, a current ratio of 0.89 and a debt-to-equity ratio of 0.62. Atlassian has a 52-week low of $56.01 and a 52-week high of $242.00. The firm has a market cap of $18.09 billion, a price-to-earnings ratio of -95.26 and a beta of 0.99. The company has a fifty day moving average of $70.97 and a 200 day moving average of $118.12.

Insider Buying and Selling

In related news, CTO Rajeev Bashyam Rajan sold 3,072 shares of the stock in a transaction dated Thursday, February 19th. The shares were sold at an average price of $81.35, for a total value of $249,907.20. Following the sale, the chief technology officer directly owned 212,916 shares of the company's stock, valued at $17,320,716.60. This represents a 1.42% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director Scott Farquhar sold 7,665 shares of the stock in a transaction dated Friday, February 6th. The stock was sold at an average price of $94.81, for a total transaction of $726,718.65. Following the completion of the sale, the director directly owned 275,940 shares in the company, valued at $26,161,871.40. This trade represents a 2.70% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 67,333 shares of company stock worth $7,165,373 over the last three months. 36.66% of the stock is currently owned by company insiders.

Institutional Trading of Atlassian

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. AQR Capital Management LLC raised its position in Atlassian by 291.4% in the 4th quarter. AQR Capital Management LLC now owns 7,749,694 shares of the technology company's stock worth $1,256,535,000 after purchasing an additional 5,769,788 shares during the period. Morgan Stanley grew its stake in Atlassian by 52.4% in the 4th quarter. Morgan Stanley now owns 4,822,007 shares of the technology company's stock worth $781,841,000 after acquiring an additional 1,657,309 shares in the last quarter. State Street Corp grew its stake in Atlassian by 3.3% in the 4th quarter. State Street Corp now owns 3,995,100 shares of the technology company's stock worth $647,766,000 after acquiring an additional 127,105 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its stake in Atlassian by 18.7% in the 3rd quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 2,867,886 shares of the technology company's stock worth $458,001,000 after acquiring an additional 451,706 shares in the last quarter. Finally, Nuveen LLC grew its stake in Atlassian by 58.8% in the 4th quarter. Nuveen LLC now owns 2,159,971 shares of the technology company's stock worth $350,218,000 after acquiring an additional 800,090 shares in the last quarter. 94.45% of the stock is owned by hedge funds and other institutional investors.

Trending Headlines about Atlassian

Here are the key news stories impacting Atlassian this week:

• Positive Sentiment: Q3 results beat on both top and bottom lines: revenue of ~$1.79B (≈+32% YoY) and non-GAAP EPS $1.75, both ahead of Street estimates — the core catalyst for the post-earnings rally. Atlassian Announces Third Quarter Fiscal Year 2026 Results
• Positive Sentiment: Management raised its full-year revenue outlook, citing momentum from AI-driven features and stronger enterprise sales (and continued cloud/data-center migration), which supports a higher growth trajectory and margin improvement expectations. Atlassian lifts annual revenue forecast as AI features, enterprise sales boost growth
• Positive Sentiment: Market reaction: multiple reports show shares jumped sharply in extended trading (double-digit gains) after the beat and raised guidance — a direct short-term upward driver for the stock. Atlassian NASDAQ: TEAM Beats Q1 CY2026 Sales Expectations, Stock Jumps 13.6%
• Neutral Sentiment: Company posted the shareholder letter/press release and updated metrics on the investor site — useful for detailed modeling (product-level growth, cloud vs. server, margin assumptions). Atlassian Investor Relations
• Neutral Sentiment: Partner ecosystem development: Spin.AI’s acquisition of Revyz highlights strengthened third-party backup/security tooling for Jira/Confluence, which could improve enterprise retention and upsell over time. Spin.AI Revyz Deal Highlights Atlassian Ecosystem’s Role In Enterprise Security
• Negative Sentiment: Some sell-side activity: at least one reported price-target cut (example: to $146.60), indicating analysts remain mixed on sustainable valuation despite the beat. That could cap upside once the immediate enthusiasm fades. Atlassian (TEAM) price target decreased by 12.87% to 146.60
• Negative Sentiment: Recent multi-month share weakness: analysts and commentary note a sharp 90-day decline before the rebound — investors should weigh short-term momentum against prior volatility and longer-term execution risk. Evaluating Atlassian (TEAM) After A Sharp 90 Day Share Price Decline And Recent Rebound

Analyst Ratings Changes

TEAM has been the topic of several research analyst reports. Mizuho decreased their price target on shares of Atlassian from $185.00 to $145.00 and set an "outperform" rating on the stock in a research note on Tuesday, April 14th. Zacks Research upgraded shares of Atlassian from a "strong sell" rating to a "hold" rating in a research note on Monday, April 6th. BNP Paribas Exane initiated coverage on shares of Atlassian in a research note on Monday, March 16th. They issued an "outperform" rating and a $95.00 price target on the stock. KeyCorp decreased their price target on shares of Atlassian from $170.00 to $130.00 and set an "overweight" rating on the stock in a research note on Wednesday, April 1st. Finally, TD Cowen decreased their price target on shares of Atlassian from $140.00 to $85.00 and set a "hold" rating on the stock in a research note on Thursday, April 16th. Nineteen analysts have rated the stock with a Buy rating, six have given a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, Atlassian presently has a consensus rating of "Moderate Buy" and an average price target of $152.22.

About Atlassian

Atlassian Corporation Plc 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.

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