- Atlassian reported Q1 FY2026 revenue of $1.432B, up 21% year over year, driven by cloud revenue growth of 26% to $998M and a robust backlog (RPO) growth of 42% to $3.3B, underscoring the company’s AI-enabled cloud platform and Teamwork-enabled ecosystem as key value levers. Management highlighted AI’s central role in accelerating cloud adoption and customer workflows, with AI-enabled capabilities reaching over 3.5 million monthly active users across the platform.
- While top-line momentum is strong and the AI/enterprise/“system of work” strategy remains intact, profitability in the quarter remained negative (EBITDA -$96.3M; net income -$51.9M; EPS -$0.20), reflecting continued investments in AI, cloud capabilities, and migration-related mix effects. The gross margin was solid at ~82%, reflecting product resilience even as the company funds growth initiatives. Management reaffirmed a long-term 20% CAGR, with cloud/migration tailwinds positioned to drive the next leg of growth.
- For FY2026 guidance, Atlassian raised its cloud-revenue outlook to about 22.5% YoY, and noted migrations would contribute a mid- to high-single-digit percentage to cloud revenue growth in the back half of the year. A data-center end-of-life tailwind is expected to shift some revenue recognition timing from DC to cloud, prompting a modest 0.5 percentage-point drag to the organic growth outlook outside migrations. The company also emphasized its expanding partner network and recent M&A activity (e.g., Loom) as accelerants for go-to-market and platform expansion. Investors should monitor migration cadence, RPO progression, and the monetization pathway for AI-enabled offerings as primary drivers of the next phase of growth.