Atlassian Returns to Profit, Forecasts Growth Slowdown
The software maker projected fiscal-2027 revenue growth of about 13%, half the past year’s pace.
Atlassian (TEAM), the workplace-software maker, returned to a quarterly profit as cloud sales accelerated and operating margins widened.
The profit marked an inflection after restructuring costs weighed on the prior period, though slowing overall revenue growth and a softer outlook tempered the shift. Remaining performance obligations rose 44% to $4.817 billion, accelerating from 37% growth in the third quarter and increasing $821 million sequentially.
Fourth-quarter revenue rose 28% from a year earlier to $1.766 billion, easing from 32% growth in the prior quarter. Revenue slipped about 1.2% sequentially. Atlassian earned $139 million, or $0.55 a share, compared with a loss of $24 million, or $0.09 a share, a year earlier.
Cloud revenue increased 31% to $1.213 billion, accelerating from 29% growth in the third quarter and cementing cloud as Atlassian’s largest and fastest-growing deployment option. Data Center revenue rose about 21% to $461.9 million, while Marketplace and other revenue increased about 20% to $91.1 million.
GAAP operating margin reached 12%, compared with negative 3% in the third quarter and negative 2% a year earlier. The $223.8 million restructuring charge that reduced the prior quarter’s margin by 12 percentage points didn’t recur. Non-GAAP operating margin widened to 36% from 34% sequentially, though free-cash-flow margin contracted to 27% from 31%.
For fiscal 2026, revenue rose 26% to $6.572 billion and Atlassian recorded $10 million of operating income after a $130 million loss the previous year. The company incurred $279.5 million of restructuring charges during the year following its announced reduction of roughly 1,600 employees, or 10% of its workforce.
Atlassian expects fiscal-2027 revenue growth of about 13% and Subscription ARR growth of about 18%, down from 23% at the end of fiscal 2026. Cloud revenue is projected to grow about 25.5%, while Data Center revenue is expected to decline 17%, reversing its fourth-quarter expansion.
First-quarter revenue is expected at $1.705 billion to $1.715 billion, implying a sequential decline of roughly 3% to 3.5%, while the guided GAAP operating margin of 6.5% is below the fourth quarter’s 12%. Against that reset, Chief Executive Mike Cannon-Brookes intends to establish a trading plan for up to $250 million of open-market purchases of Atlassian shares.