The Zhitong Finance App learned that Atlassian (TEAM.US) used a brilliant financial report to dispel the “AI replacement” haze that enveloped this collaborative software developer in one fell swoop. For the fourth quarter of fiscal year 2026 ending June 30, Atlassian's adjusted earnings per share for the quarter reached $1.87, significantly better than analysts' general expectations of $1.50; total revenue surged 28% year over year to reach $1.77 billion, significantly exceeding market expectations of $1.66 billion.
The core driving force behind this impressive earnings report is cloud transformation. Cloud business revenue reached 1.21 billion US dollars during the quarter, and the year-on-year growth rate accelerated to 31%, making it the strongest driver of overall revenue growth. Meanwhile, the data center business recorded revenue of US$461.9 million, which was also higher than analysts' estimates of US$414.6 million.
The company also showed strong momentum in terms of profit quality and future reserves. The adjusted operating margin for the quarter expanded sharply from 24% in the same period last year to 36%. By the end of the quarter, annual subscription recurring revenue (ARR) increased 23% to US$6.61 billion; as a “reservoir” to measure future revenue, remaining performance obligations (RPO) surged 44% year over year to US$4.82 billion.
After the results were announced, the company's stock price once surged 39% after the market on Thursday EST. If the increase continues to regular trading, it will record its biggest one-day increase since listing in 2015 and push the market value to soar by more than $10 billion. As of night trading, the stock had risen about 32%.
Companies set records with big deals, and AI products double monthly activity
This sharp rise in stock prices can be described as a long time of trouble for Atlassian. Prior to the release of the earnings report, the company's stock price had a cumulative decline of about 32% this year, and the decline in the past 12 months reached 35.6%, mainly due to deep market fears about “SaaSPocalypse” (that is, artificial intelligence will completely disrupt the business model of software service providers). This financial report uses strong growth data to show that not only is Atlassian not being marginalized by AI, but is using AI capabilities and cloud barriers to build a deeper competitive moat, successfully retaining global enterprise customers who are experiencing the pain of AI transformation.
Atlassian co-founder and CEO Mike Cannon-Brooks said in a shareholder letter that customers are “voting with their wallets” to double their bets on Atlassian by signing larger, longer contracts.
According to financial data, Atlassian signed the largest enterprise-level deal in the company's history this quarter. The other party is one of the world's largest consumer technology companies. Among high-end customer groups, the number of annual contracts worth over $1 million, $3 million, and $5 million all set quarterly records. Among them, the number of customers with an annual contract value of more than 3 million US dollars increased by more than 50% year over year, while the growth rate of customers over 5 million US dollars was astonishingly over 70%.
In the much-publicized field of AI, Atlassian has also shown its muscles. Cannon-Brooks revealed that the number of monthly active users of the company's MCP server and AI tools such as TeamWork Graph CLI has broken the 1 million mark, more than doubling the month-on-month increase from the previous quarter. This marks Atlassian's strategy for deeply integrating AI into its core products (such as Jira, Confluence, and Trello), and is beginning to be widely recognized by developers and enterprise users.
Cannon-Brooks said, “The fourth quarter brought another impressive report card to a successful conclusion to an excellent fiscal year. We are making full efforts in the three strategic priorities of enterprise business, AI, and work systems, while achieving sustainable profit growth.”
Looking ahead, Atlassian has optimistic expectations for the upcoming new fiscal year. For the first quarter of fiscal year 2027, the company expects revenue to be between US$1.705 billion and US$1,715 billion, and the median value in this range easily surpassed analysts' expectations of US$1.67 billion.
For the entire 2027 fiscal year, management expects total revenue to grow by about 13%, with cloud business revenue expected to continue its strong trend and achieve growth of about 25.5%; while data center business revenue is expected to drop by about 17% as customers continue to migrate to the cloud. ARR subscriptions are expected to grow around 18% for the full year.
To further demonstrate his firm confidence in the company's long-term value, $8.4 billion CEO Mike Cannon-Brooks announced plans to buy up to $250 million of the company's shares on the open market.