Summary
Atlassian reported fiscal 2026 third quarter revenue of $1.79 billion, up 31.7% year over year. Gross profit rose 34.1% to $1.52 billion, and gross margin improved to 85.3%, up 1.5 percentage points. The company said gross margin benefited from continued optimization of Cloud infrastructure. GAAP operating loss widened to $56.3 million, and GAAP operating margin fell to negative 3.1%, down 2.2 percentage points. Net loss widened to $98.4 million, or $0.38 per diluted share. Operating cash flow was $567.5 million, down 13.1% year over year.
On a non-GAAP basis, operating income was $607.2 million with a 34% operating margin, up from 26% a year earlier. Non-GAAP net income was $456.5 million, or $1.75 per diluted share. Non-GAAP gross margin was 89%, up from 86%. Non-GAAP operating expenses increased 20% year over year. For the first nine months of fiscal 2026, revenue increased 25.4% to $4.81 billion. The net loss narrowed to $192.9 million, and diluted loss per share narrowed to $0.73. Operating cash flow for the nine months declined 19.5% to $874.0 million.
Capital expenditures fell 56.8% to $6.2 million. Deferred revenue rose 1.8% to $2.41 billion. Remaining performance obligations grew 37.9% to $4.0 billion, driven by continued growth in multi-year agreements. Free cash flow was $561.3 million, down 12%, and free cash flow margin was 31%. The company repurchased 11.8 million shares for $1.0 billion and had $2.2 billion remaining under its repurchase authorization.
Operational metrics showed momentum. Service Collection surpassed $1 billion in ARR and is growing over 30% year over year, with enterprise ARR up over 50%. It serves 65,000+ customers, including over half of the Fortune 500. Customers using Service Collection AI capabilities resolve issues 13% faster and resolve 20% more issues overall. Service Collection drives 50% of agentic automation runs across the platform, which are growing 30% month over month. Teamwork Collection has 1,000+ customers who upgraded, expanding seat counts by 10%+. Teamwork Collection customers use roughly 2x more AI credits per paid user and have 2x more active agents than standalone customers. Rovo customers are growing ARR at about 2x the rate of non-Rovo customers, and AI credit usage is growing more than 20% month over month. MCP use is doubling month over month. Rovo Service is now generally available. Atlassian ended the quarter with 55,913 customers with more than $10,000 in Cloud ARR, up 10%. The company has more than 350,000 customers overall, including over 85% of the Fortune 500, and estimates a $67 billion market opportunity growing 13% annually.
Guidance points to slower growth. Atlassian guides Cloud revenue growth to approximately 25.5%, Data Center to approximately 8.5%, and Marketplace and other to approximately 6.5% for the fourth quarter of fiscal 2026. Full-year fiscal 2026 total revenue growth is expected at approximately 24.0%, with Cloud growth of approximately 26.5% and Data Center growth of approximately 21.5%. Fourth-quarter non-GAAP operating margin is guided to approximately 30.5%, and the full-year non-GAAP operating margin to approximately 29.0%. Management said employee and lease expense savings from the restructuring benefit the fourth-quarter non-GAAP operating margin, and that a portion of those savings will be reinvested in fiscal 2027 in AI and enterprise sales.
Risks include the Data Center end-of-life plan. Management said Data Center revenue growth will meaningfully decelerate in fiscal 2027 as the company laps the end-of-life revenue recognition impact and pull-forward of expansion activity. The plan stops selling term licenses to new customers as of March 2026, stops selling expansions to existing customers in March 2028, and ends maintenance and support in March 2029. Other risks include macroeconomic uncertainty, geopolitical tensions, and the ongoing evolution of the enterprise go-to-market sales motion. The March 2026 restructuring plan is expected to be substantially completed by the end of fiscal year 2026, with $76 million of remaining severance payments expected in the fourth quarter.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2026 | Q2 FY2026 | QoQ | Q3 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.79B | $1.59B | +12.6% | $1.36B | +31.7% |
| Gross profit | $1.52B | $1.35B | +13.0% | $1.14B | +34.1% |
| Gross margin | 85.3% | 85.0% | +0.3 pp | 83.8% | +1.5 pp |
| Research & development | $927.0M | $826.5M | +12.2% | $685.3M | +35.3% |
| Sales & marketing | $439.0M | $376.4M | +16.6% | $295.8M | +48.4% |
| General & administrative | $214.5M | $193.4M | +10.9% | $168.3M | +27.4% |
| Total operating expenses | $1.58B | $1.40B | +13.2% | $1.15B | +37.5% |
| Operating income (loss) | -$56.3M | -$47.7M | -17.9% | -$12.5M | -351.9% |
| Operating margin | -3.1% | -3.0% | -0.1 pp | -0.9% | -2.2 pp |
| Net income (loss) | -$98.4M | -$42.6M | -130.7% | -$70.8M | -39.0% |
| Net margin | -5.5% | -2.7% | -2.8 pp | -5.2% | -0.3 pp |
| Diluted EPS | -$0.38 | -$0.16 | -$0.22 | -$0.27 | -$0.11 |
| Customers | 350,000 | 350,000 | ±0.0% | 300,000 | +16.7% |
Risks
Atlassian is investing heavily in AI and now offers Rovo platform apps at no additional cost to premium, enterprise, and standard edition customers across Jira, Confluence, Jira Service Management, and Teamwork Collection. The filing warns these AI investments are expected to continue to negatively impact operating margins in the near term, and competitors may incorporate AI more quickly or successfully, while reliance on third-party AI models could be disrupted or become more expensive.
The March 2026 Plan (initiated in the third quarter of fiscal 2026) is intended to self-fund AI and enterprise sales investment and optimize operational efficiency. Atlassian recorded total severance and other termination benefits of $198.1 million and stock-based compensation of $1.4 million for the nine months ended March 31, 2026, plus $80.0 million of impairment charges on operating lease right-of-use assets and leasehold improvements, contributing to the operating loss widening to $200.4 million year to date.
The filing discloses that Atlassian's former President, Chief Financial Officer, and Chief Technology Officer stepped down from their respective executive officer roles in the third quarter of fiscal 2026, with a new Chief Financial Officer effective March 2026. Atlassian notes it has no employment agreements requiring executives to remain, and that competition for AI and cloud-experienced personnel is intense.
As part of the Atlassian Ascend initiative announced in September 2025, Atlassian no longer sells term licenses to new Data Center customers as of March 2026, will stop selling term licenses and expansions to existing customers in March 2028, and plans to end maintenance and support in March 2029. The filing warns this may cause Data Center purchasing-pattern fluctuations, discounts that reduce near-term revenue growth, and lower initial-year revenue from Cloud offerings compared to Data Center.
Atlassian is expanding its enterprise sales motion, which it says brings increased costs, longer and more unpredictable multi-phased sales cycles, and greater competition, with enterprise customers often demanding complex configurations and additional integration services before committing.
A majority of Atlassian's revenue is derived from Jira, Confluence, and Jira Service Management, making market acceptance of these apps critical. Additionally, for fiscal year 2025 the company derived over 50% of revenue from channel partners' sales efforts, and at times one solution partner represented more than 10% of total accounts receivable.
Atlassian's results depend on customers renewing subscriptions and expanding purchases, with the majority of its customer base on annual or monthly terms and no renewal obligation. Retention and expansion could decline due to factors including changes to product packaging and pricing of AI offerings and the increased focus on Cloud offerings.
The filing cites continuing global economic and geopolitical volatility, including the war in Ukraine and the Middle East and uncertainty over trade policies, tariffs, or other trade restrictions, which could decrease demand, elongate sales cycles, increase operating costs, and pressure collections from small and medium-sized customers.
Atlassian discloses it has experienced breaches of its security measures in the past, some resulting in unauthorized access to data processed through its products, and warns these risks may be heightened by its remote-first work environment and by building AI into its offerings, which may increase cybersecurity risks and could be used in connection with cyberattacks.
As Cloud offerings become more central, particularly given Data Center end-of-life plans, Atlassian may face additional privacy and sovereignty risks, including emerging EU cloud sovereignty requirements that could disadvantage its Cloud offerings in public sector organizations and regulated industries.
SaaS KPIs
All quarters →Total customers
Non-GAAP Operating Margin
Free Cash Flow Margin
Free Cash Flow
Customers with >$10,000 in Cloud ARR
Remaining performance obligations (RPO)
Summary, forecast, risks and KPIs are extracted from Atlassian Corp's SEC filings for Q3 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.