Atlassian Corporation

Atlassian reported total revenue growth of 24% to $1.8 billion, Cloud revenue growth of 31% to $1.3 billion, and subscription ARR growth of 23% to $6.8 billion. GAAP operating margin was 11%, free cash flow was $463 million, and free cash flow margin was 26%; free cash flow increased 304% year over year. RPO grew 44% year over year to $4.7 billion. Management said Data Center migrations to Cloud contributed approximately mid- to high single digits to Cloud revenue growth in the quarter, and that some hybrid deployments shifted revenue between Data Center and Cloud. For the next quarter and full year, James Chuong said Atlassian is taking a prudent approach, balancing business momentum with macro uncertainty, tougher second-half comparisons, the DX acquisition lap, and ongoing enterprise GTM investment; he also said the company is not assuming any meaningful UBP revenue in FY27.

Mike Cannon-Brookes framed the quarter as a strong start to fiscal 2027 and emphasized execution across enterprise, AI, and the system of work. He said customers are bringing more people, agents, and workflows onto the platform, and pointed to large enterprise expansions, strong seat growth, and rising AI usage as evidence that the strategy is working. His tone was highly confident and expansive, especially around Jira, Confluence, Rovo, the Teamwork Graph, and AMP as long-term drivers.

James Chuong focused on the financial mechanics behind the quarter and the guide. He said Cloud revenue was helped by Data Center-to-Cloud migration demand, but hybrid deployments split revenue between the two segments, and he described the Q1 Data Center beat as timing-related under ASC 606. He also said the company is being prudent because of macro uncertainty, fiscal policy, geopolitical factors, tougher comps in the second half, and the continued buildout of enterprise sales capacity; on monetization, he said Atlassian is not assuming meaningful usage-based pricing revenue in FY27.

Analysts pressed on why Data Center remained strong even as customers appear to be migrating to Cloud, and management said the largest, most complex customers are still in multiyear migration journeys and increasingly view Cloud as the destination. Questions also focused on the apparent deceleration in the Cloud guide and the lighter flow-through of the quarterly beat; James said the outlook reflects prudence, tougher comps, macro uncertainty, and timing effects from Data Center migrations and ASC 606. On AMP, Teamwork Graph, and Rovo pricing, Mike argued Atlassian’s AI context and collaboration layer is differentiated and that Teamwork Collection and Service Collection are the main monetization vehicles, while usage-based pricing is mainly about aligning value rather than being a near-term revenue driver.