Atlassian's Revenue Growth Cools to 24% After Two Faster Quarters

The Tip Desk · November 6, 2026 · 2 min read

Remaining performance obligations were $4,746 million, up 44% year-over-year, as the company posted $1,772 million of first-quarter fiscal 2027 revenue.

Atlassian Corporation (TEAM), a provider of AI-powered collaboration and team productivity software, reported first-quarter fiscal 2027 revenue of $1,772 million, up 24% from a year earlier, a slower pace than the 28% increase in the prior quarter and the 32% increase two quarters earlier.

Cloud revenue was $1,302 million, up 31% year-over-year, matching the cloud growth rate the company reported in the immediately preceding quarter. Subscription ARR was $6,812 million, up 23%, the same year-over-year rate as the prior quarter. Remaining performance obligations were $4,746 million, up 44%, also matching the prior quarter’s RPO growth rate.

On a GAAP basis the company swung to operating income of $189 million and an 11% operating margin, from an operating loss of $96 million and a (7)% margin a year earlier. GAAP net income was $91 million, or $0.35 a share, versus a net loss of $52 million, or $0.20 a share, a year earlier. Non-GAAP operating income was $576 million and non-GAAP operating margin was 32%. Non-GAAP net income was $423 million, or $1.65 a share.

GAAP gross margin was 85% and non-GAAP gross margin was 87%. Free cash flow was $463 million, a 26% free-cash-flow margin, versus $115 million a year earlier. Cash and cash equivalents were $1,121 million at quarter-end.

Data Center revenue was $391 million. Marketplace and other revenue was $79 million. Subscription revenue was $1,698 million.

Service Collection surpassed 70,000 customers, with more than $1 billion in ARR growing north of 30% year-over-year. The company said seat growth exceeded 40% year-over-year in competitive displacements. Chief Executive Mike Cannon-Brookes said Teamwork Collection customers were up 7 times year-over-year.

Atlassian said it introduced Agentic Multiplayer Protocol, a rebuilt MCP server covering 220-plus tools, and an expanded partnership with OpenAI. It also said it intends to accelerate its IL5 submission to July 2028, with FedRAMP High following in January 2029, and entered a OneGov agreement with the U.S. General Services Administration.

For the second quarter of fiscal 2027, Atlassian expects total revenue of $1,825 million to $1,835 million, cloud revenue growth of about 27.0%, Data Center revenue growth of about (14.0%), and Marketplace and other revenue growth of about 20.0%. GAAP operating margin is expected at about 4.5% and non-GAAP operating margin at about 26.0%.

For fiscal 2027, the company expects subscription ARR growth of about 18.5%, total revenue growth of about 13.75%, cloud revenue growth of about 26.0%, Data Center revenue growth of about (16.0%), and Marketplace and other revenue growth of about 15.0%. GAAP operating margin is expected at about 5.0% and non-GAAP operating margin at about 25.5%.