Summary
Atlassian closed fiscal 2026 with total revenue of $1.77 billion in the June quarter, up 27.6% from the prior-year quarter, and full-year revenue of $6.57 billion, up 26.0%. The GAAP bottom line swung to profit. Operating income was $210.72 million for the quarter, against an operating loss of $28.48 million a year earlier, and net income reached $139.08 million versus a net loss of $23.90 million. For the full fiscal year, operating income was $10.36 million against an operating loss of $130.39 million, and the net loss narrowed to $53.83 million from $256.69 million. Diluted loss per share for the fiscal year was $0.21, a narrower loss than $0.98 a year earlier. GAAP gross margin was 86.5% in the quarter, up from the prior-year quarter, and GAAP operating margin reached 11.9%, a swing to positive from the prior-year quarter.
Non-GAAP results show the same direction. Non-GAAP operating income was $636 million in the quarter at a 36% operating margin, versus $336 million and 24% a year earlier. Cloud revenue growth accelerated to 31% year over year. Subscription ARR stood at $6,606 million as of June 30, 2026, up 23% from $5,382 million a year earlier. Remaining performance obligations were $4.80 billion, up 45.5%, and deferred revenue rose 7.3% to $2.66 billion. Management ties the RPO growth to a larger base of multi-year agreements.
Enterprise demand carried the quarter. Atlassian booked its largest quarter ever for $1 million, $3 million and $5 million plus ACV deals, signed the biggest enterprise deal in its history with one of the world's largest consumer technology companies, and grew customers with more than $3 million in ARR by over 50% year over year and those above $5 million by more than 70%. Customers with more than $10,000 in Cloud ARR totaled 57,334 as of June 30, 2026, up from 51,978 a year earlier, and that group accounts for over 85% of total Cloud ARR. More than 80% of the Fortune 500 now use Rovo, Rovo assisted actions rose over 50% quarter over quarter, and adopters complete 20% more Jira work items and create or edit 25% more Confluence pages than non-adopters. Their ARR grows more than twice as fast. Monthly active users of the MCP server and the Teamwork Graph CLI topped 1 million, more than doubling in the quarter, with MCP calls up more than 400% from the prior quarter.
Cash generation was strong in the quarter and softer over the year. Operating cash flow was $479.14 million in the quarter, up 27.7%, while fiscal year operating cash flow fell 7.3% to $1.35 billion. Free cash flow, a separate non-GAAP measure, was $475 million for the quarter at a 27% margin and $1,319 million for the fiscal year. Capital expenditures were $4.45 million in the quarter, down 70.3%. Buybacks absorbed cash, with 4.6 million shares repurchased in the quarter for $348 million and 19.1 million shares for $1.8 billion over the year at an average price of $94.31, cutting total share count by approximately 4%. About $1.9 billion remains authorized. Restructuring tied to the fiscal 2026 plans, including a cut affecting approximately 10% of the workforce, totaled $285.4 million, with $203.9 million of severance and other termination benefits and $80.0 million of lease impairment charges.
Guidance for the September quarter points to revenue of $1,705 million to $1,715 million, Cloud growth of about 28.5%, a Data Center decline of about 4.0%, GAAP gross margin of about 85.0% and non-GAAP gross margin of about 87.0%, plus GAAP operating margin of about 6.5% against non-GAAP operating margin of about 28.5%. For the full fiscal year 2027, the targets are total revenue growth of about 13.0%, Cloud growth of about 25.5%, a Data Center decline of about 17.0%, Subscription ARR growth of about 18.0%, GAAP gross margin of about 84.5% and non-GAAP gross margin of about 86.5%, plus GAAP operating margin of about 4.5% and non-GAAP operating margin of about 25.0%. The step down reflects the Data Center end-of-life plan, which stopped new term license sales to new customers in March 2026 and will stop them for existing customers in March 2028. That plan pulled revenue forward into fiscal 2026 and added about 4 percentage points to that year's non-GAAP operating margin. A shift toward more cash compensation is expected to cut fiscal 2027 non-GAAP operating margin by about 3 percentage points. Management points to macroeconomic, fiscal and geopolitical uncertainty, the scaling of the enterprise go-to-market engine, and rising Rovo usage and hosting costs as the main risks.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2026 | Q3 FY2026 | QoQ | Q4 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.77B | $1.79B | -1.1% | $1.38B | +27.6% |
| Gross profit | $1.53B | $1.52B | +0.2% | $1.15B | +32.9% |
| Gross margin | 86.5% | 85.3% | +1.2 pp | 83.1% | +3.4 pp |
| Research & development | $759.8M | $927.0M | -18.0% | $700.7M | +8.4% |
| Sales & marketing | $389.3M | $439.0M | -11.3% | $314.4M | +23.8% |
| General & administrative | $168.2M | $214.5M | -21.6% | $163.3M | +3.0% |
| Total operating expenses | $1.32B | $1.58B | -16.7% | $1.18B | +11.8% |
| Operating income (loss) | $210.7M | -$56.3M | +474.4% | -$28.5M | +839.9% |
| Operating margin | 11.9% | -3.1% | +15.1 pp | -2.1% | +14.0 pp |
| Net income (loss) | $139.1M | -$98.4M | +241.4% | -$23.9M | +681.8% |
| Net margin | 7.9% | -5.5% | +13.4 pp | -1.7% | +9.6 pp |
| Diluted EPS | $0.53 | -$0.38 | +$0.91 | -$0.09 | +$0.62 |
Risks
Atlassian is investing heavily in AI, including making Rovo available at no additional cost to premium, enterprise, and standard edition customers across Jira, Confluence, Jira Service Management, and Teamwork Collection. It expects AI investments to continue to negatively impact operating margins in the near term and may not effectively monetize these offerings, which could offset the significant development and hosting costs.
The company announced plans in September 2025 to end-of-life its Data Center offering via the Atlassian Ascend initiative; as of March 2026 it no longer sells term licenses to new customers and will stop selling term licenses and expansions to existing customers in March 2028, with maintenance support ending in March 2029. The transition may cause purchasing pattern fluctuations, require customer migration incentives, and result in lower near-term Cloud revenue compared with Data Center offerings.
Atlassian faces competition from AI-native companies and emerging startups that use generative AI and large language models as their core architecture, as well as larger competitors with greater resources that may incorporate AI more quickly or successfully. Some customers may also develop or acquire internal AI-assisted collaboration and productivity tools, reducing demand for Atlassian solutions.
Fiscal year 2026 restructuring plans included eliminating approximately 10% of the workforce to accelerate AI and enterprise sales priorities; the company recorded $203.9 million of severance and other termination benefits and $80.0 million of lease-related impairment charges for fiscal year 2026. The reorganizations may disrupt operations and impair the ability to attract and retain employees.
The company experienced key executive departures and hires, including its former President, Chief Financial Officer, and Chief Technology Officer stepping down from executive roles in fiscal year 2026 and new Chief Financial Officer and Chief Product and AI Officer hires in fiscal year 2026. Competition for senior product engineering and AI talent is intense, and failure to retain key personnel could delay new apps, agents, or products.
MD&A states that gross margin is expected to decline slightly in fiscal year 2027 due to the mechanical drag from lapping greater upfront term license revenue recognized in fiscal year 2026, a revenue mix shift from Data Center to Cloud offerings, and increases in cost of revenues to support Cloud customers and their related AI usage.
As Atlassian grows its enterprise sales motion, it faces longer and more complex sales cycles, increased costs, greater competition, and less predictability in closing deals, including extended proof-of-concept evaluations and more complex contract negotiations. Adverse macroeconomic conditions have delayed and may again delay enterprise purchasing decisions.
Global economic and political uncertainty, including tariffs, trade policy changes, government shutdowns, inflationary pressures, and geopolitical instability, may reduce customer IT spending, cause paid seat reductions, elongate sales cycles, and harm collections, particularly for small- and medium-sized customers.
Atlassian derives a majority of its revenue from Jira, Confluence, and Jira Service Management, so market acceptance of these offerings is critical to its success. Demand can be affected by competitive lower-cost alternatives, technological changes, and growth or contraction in its addressable markets.
For fiscal year 2026, over 50% of revenue was derived from channel partners' sales efforts. These partner agreements are generally non-exclusive, partners may cease marketing Atlassian offerings with limited or no notice, and the company faces collection and reputational risks from independent partner activities.
Evolving privacy, AI, cloud sovereignty, and cross-border data transfer regulations, including the EU AI Act, GDPR, and India's Digital Personal Data Protection Act, may increase compliance costs, limit Cloud adoption in regulated sectors, and expose Atlassian to fines and contractual liability.
The majority of Atlassian's customer base is on annual or monthly terms and has no obligation to renew. Retention and expansion may decline due to increased focus on Cloud offerings, packaging and pricing changes including for AI offerings, competition, or macroeconomic pressure, and the low-touch model depends on converting free or starter users to paid customers at high volume.
SaaS KPIs
All quarters →Total customers
Non-GAAP Operating Margin
Free Cash Flow Margin
Free Cash Flow
Customers with >$10,000 in Cloud ARR
Non-GAAP Gross Margin
Remaining performance obligations (RPO)
Summary, forecast, risks and KPIs are extracted from Atlassian Corp's SEC filings for Q4 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.