Atlassian’s fourth quarter was marked by strong year-over-year growth and a revenue performance that exceeded Wall Street’s expectations. Despite these results, the market reacted negatively, with shares trading down after the announcement. Management attributed the robust quarter to accelerated adoption of its AI-powered Teamwork Collection, record numbers of large enterprise deals, and broader seat expansion across both technology and business teams. CEO Michael Cannon-Brookes emphasized that AI features were a primary reason customers upgraded to cloud offerings, noting, "AI is the best thing to happen to Atlassian, and the results we are seeing today are no accident."
Is now the time to buy TEAM? Find out in our full research report (it’s free for active Edge members).
Atlassian (TEAM) Q4 CY2025 Highlights:
- Revenue: $1.59 billion vs analyst estimates of $1.54 billion (23.3% year-on-year growth, 2.8% beat)
- Adjusted EPS: $1.22 vs analyst estimates of $1.14 (6.6% beat)
- Adjusted Operating Income: $430.2 million vs analyst estimates of $379.7 million (27.1% margin, 13.3% beat)
- Revenue Guidance for Q1 CY2026 is $1.69 billion at the midpoint, above analyst estimates of $1.64 billion
- Operating Margin: -3%, up from -4.5% in the same quarter last year
- Billings: $1.74 billion at quarter end, up 18.1% year on year
- Market Capitalization: $22.94 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Atlassian’s Q4 Earnings Call
- Rob Oliver (Baird) asked how customer conversations were evolving and whether AI was shifting decision-making. CEO Michael Cannon-Brookes said discussions are increasingly strategic, with AI features directly influencing upgrades and long-term commitments.
- Sanjit Singh (Morgan Stanley) questioned the sustainability of seat-based pricing versus consumption-based models. Cannon-Brookes responded that predictable pricing remains preferred, but hybrid options are also offered to balance value and costs.
- Gregg Moskowitz (Mizuho) asked about competition from Anthropic’s CoWork as an alternative to Jira. Cannon-Brookes described Anthropic as a partner and noted differentiation through Atlassian’s Teamwork graph and integration philosophy.
- Karl Keirstead (UBS) inquired about the ability to offset expected declines in the data center business with cloud growth. CFO Joe Binz affirmed confidence in long-term cloud revenue targets, citing large market opportunities and differentiated AI offerings.
- Jason Celino (KeyBanc Capital Markets) asked about the pace and impact of migration from data center to cloud. Binz reported healthy migration trends, contributing mid- to high single-digit growth to cloud revenue.
Catalysts in Upcoming Quarters
Over the coming quarters, the StockStory team will monitor (1) the pace of enterprise adoption and large deal closures, (2) sustained growth in seat expansion among non-technology business users, and (3) the impact of ongoing cloud migrations on overall revenue growth. Additionally, we will pay close attention to the evolution of Atlassian’s pricing strategies and continued integration of AI capabilities, as these factors will be critical for maintaining competitive differentiation and long-term profitability.
Atlassian currently trades at $87.03, down from $98.41 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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