Atlassian reported total revenue of $1.59 billion for the quarter ended December 31, 2025, a 23% year‑over‑year increase that exceeded the consensus estimate of $1.54 billion by $50 million. Non‑GAAP earnings per share reached $1.22, beating the $1.12 consensus by $0.10 and representing a 9.2% upside to analysts’ expectations.
Cloud revenue grew 26% to $1.07 billion, marking the company’s first quarter in which cloud sales surpassed the $1 billion threshold. Data‑center revenue rose 11% to $372.6 million, a figure that, while lower than some alternative estimates, still reflects a solid 20%‑plus growth in the legacy segment. The mix shift toward higher‑margin cloud services helped lift the non‑GAAP operating margin to 27% from 26% in the same quarter a year earlier, even as the company posted a GAAP operating loss of $47.7 million.
Management highlighted that the AI‑enabled Teamwork Collection and the recent acquisition of DX have accelerated cloud adoption, contributing to the record‑high cloud revenue. The company also noted that its remaining performance obligations (RPO) climbed to $3.8 billion, up 44% year‑over‑year, and that the platform’s monthly active users (Rovo) surpassed 5 million, underscoring strong customer engagement.
Looking ahead, Atlassian guided for Q3 FY2026 revenue of $1.69 billion to $1.70 billion, above the $1.65 billion consensus estimate, and reaffirmed a full‑year revenue growth outlook of roughly 22%. The guidance reflects confidence in continued cloud momentum while acknowledging a projected slowdown in cloud revenue growth to about 23% in the next quarter.
CEO Mike Cannon‑Brookes said the quarter “closed out with incredible momentum across the Atlassian platform” and that the company’s AI initiatives were “transforming the way work gets done.” CFO Joe Binz added that the company’s investments in enterprise, AI, and the system of work were “yielding results and deeper, long‑term customer commitments.”
Investor sentiment was tempered by concerns that the company’s cloud revenue growth is expected to decelerate from 26% in the current quarter to roughly 23% in Q3, a change that has prompted a cautious market reaction despite the earnings beat.
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