Atlassian has positively surprised investors with a quarter that clearly outperformed expectations. Its cloud business, in particular, saw another strong surge, while profitability also improved significantly. The results caused the software provider’s stock to surge by more than 30 percent in after-hours trading.
For the fourth quarter of fiscal year 2026, Atlassian reported revenue of $1.77 billion, up 28 percent from a year earlier. Adjusted earnings per share came in at $1.87, compared to analysts’ average estimate of $1.50. Revenue also came in well above market expectations, according to SiliconANGLE.
The cloud division was once again the main driver of growth. Revenue from cloud subscriptions rose by 31 percent to $1.21 billion. With this, Atlassian appears to be leaving the growth slowdown from earlier in this fiscal year behind. In February, the company was still anticipating cloud growth of approximately 23 percent.
Data center products also performed well. Revenue in this segment increased by 21 percent to nearly $462 million, although Atlassian expects this revenue to decline in the coming years as more customers migrate to the cloud.
Annual recurring revenue (ARR) from subscriptions grew to $6.61 billion, an increase of 23 percent. In addition, the value of contracts already signed but not yet fully recognized increased by 44 percent to $4.82 billion. According to CFO James Chuong, companies are investing more and more heavily in the Atlassian platform. The company also signed a record number of contracts with an annual value of at least $1 million.
From loss to profit
In addition to revenue growth, margins also improved significantly. Operating income came in at $211 million, compared to a loss of $28 million a year earlier. Net income totaled $139 million, whereas a net loss of $24 million was recorded during the same period last year.
For the full 2026 fiscal year, revenue rose by 26 percent to $6.57 billion. Although Atlassian reported a modest net loss of $54 million for the full year according to its official financial statements, this represents a clear improvement over the $257 million loss a year earlier.
AI features are gaining ground
The company also saw a sharp increase in the use of its AI platforms. The number of monthly users of the Model Context Protocol (MCP) server and the Teamwork Graph command-line tool doubled to more than one million. The number of MCP calls was even more than four times higher than in the previous quarter.
Rovo, Atlassian’s AI assistant, is also gaining ground. According to the company, more than 80 percent of Fortune 500 organizations now use the solution. The number of AI-powered actions within Rovo increased by more than 50 percent in a single quarter.
Co-founder and CEO Mike Cannon-Brookes states that the knowledge accumulated within the platform constitutes a significant competitive advantage. He notes that, thanks to 25 years of collaboration and project data, customers have a rich context that enables AI agents to collaborate more effectively and execute complex workflows.
Positive outlook
Forecasts for the new fiscal year also exceeded analysts’ expectations. For the first quarter, Atlassian anticipates revenue between $1.705 and $1.715 billion, whereas the market had projected approximately $1.665 billion.
For the full 2027 fiscal year, the company expects revenue growth of approximately 13 percent. Cloud revenue is projected to rise by about 25.5 percent, while annual recurring subscription revenue is expected to grow by 18 percent. According to Atlassian, revenue from Data Center products will, in fact, decline by approximately 17 percent.
At the same time, the company announced that co-founder Cannon-Brookes intends to purchase up to $250 million worth of Atlassian shares through a pre-determined trading plan. In addition, Atlassian strengthened its management team with the appointment of Ken Exner as Chief Product Officer for the enterprise and emerging divisions. Exner previously worked at Amazon Web Services and Elastic, among others.