Atlassian — First Quarter Fiscal Year 2027 Earnings Summary

Financial Performance:

• Total revenue was $1,772 million, up 24% year-over-year from $1,433 million in Q1 FY2026.
• Cloud revenue was $1,302 million, up 31% year-over-year.
• Subscription ARR was $6,812 million, up 23% year-over-year.
• Remaining performance obligations (RPO) were $4,746 million, up 44% year-over-year.
• GAAP operating income was $189 million, compared to a GAAP operating loss of $96 million in Q1 FY2026; GAAP operating margin was 11% versus (7%) previously.
• Non-GAAP operating income was $576 million, up from $323 million in Q1 FY2026; non-GAAP operating margin was 32% versus 23% previously.
• GAAP net income was $91 million, compared to a GAAP net loss of $52 million in Q1 FY2026; GAAP net income per diluted share was $0.35 versus a loss of $0.20 previously.
• Non-GAAP net income was $423 million, up from $276 million in Q1 FY2026; non-GAAP net income per diluted share was $1.65 versus $1.04 previously.
• Free cash flow was $463 million, with a free cash flow margin of 26%.
• Cash and cash equivalents totaled $1,121 million at the end of the quarter.
• Long-term debt was $990 million.

Guidance and Future Outlook:

• Q2 FY2027 total revenue is expected to be $1,825 million to $1,835 million.
• Q2 FY2027 Cloud revenue growth is expected to be approximately 27.0% year-over-year.
• Q2 FY2027 Data Center revenue growth is expected to decline approximately 14.0% year-over-year.
• Q2 FY2027 Marketplace and other revenue growth is expected to be approximately 20.0% year-over-year.
• Q2 FY2027 GAAP operating margin is expected to be approximately 4.5%; non-GAAP operating margin is expected to be approximately 26.0%.
• FY2027 Subscription ARR growth is expected to be approximately 18.5% year-over-year.
• FY2027 total revenue growth is expected to be approximately 13.75% year-over-year.
• FY2027 Cloud revenue growth is expected to be approximately 26.0% year-over-year.
• FY2027 Data Center revenue growth is expected to decline approximately 16.0% year-over-year.
• FY2027 Marketplace and other revenue growth is expected to be approximately 15.0% year-over-year.
• FY2027 GAAP operating margin is expected to be approximately 5.0%; non-GAAP operating margin is expected to be approximately 25.5%.

Business Segments and Product Lines:

• Service Collection surpassed 70,000 customers with over $1 billion in ARR, growing north of 30% year-over-year.
• Service Collection seat growth exceeded 40% year-over-year in competitive displacements.
• Teamwork Collection customers grew 7x year-over-year.
• Agentic Multiplayer Protocol (AMP) was introduced to enable human-agent teamwork with distinct agent identities and governed authority.
• The Atlassian MCP Server was redesigned to cover 220+ tools, serving over 2 million monthly users and 15 million daily tool calls.
• New AI-native software development lifecycle capabilities were introduced, including Code Context, Jira Agents Dashboard, and DX AI Measurement.
• The Atlassian Marketplace surpassed $7 billion in lifetime sales with over 2,000 partners and 6,000 apps.

Market and Competitive Landscape:

• Atlassian was named a Leader in the 2026 Gartner Magic Quadrant for Collaborative Work Management for the second consecutive year.
• Atlassian was named a Leader in the 2026 Gartner Magic Quadrant for Marketing Work Management Platforms for the third consecutive year.
• Atlassian was named a Leader in the 2026 IDC MarketScape for AI-Enabled IT Service Management Software.
• The company serves over 350,000 customers worldwide, including over 85% of the Fortune 500.

Risks and Challenges:

• The press release includes standard forward-looking statement disclaimers regarding risks and uncertainties related to platform offerings, AI solutions, anticipated growth, and financial targets, noting that actual results could differ materially.
• Specific risks are detailed in SEC filings (Forms 10-K and 10-Q) under "Risk Factors," which are referenced but not enumerated in the text.

Management Commentary and Tone:

• CEO Mike Cannon-Brookes described Q1 as a "strong start" to fiscal 2027, noting that Enterprise AI has hit an inflection point and that Atlassian is "better positioned" with the Teamwork Graph and AMP.
• CFO James Chuong highlighted "continued operational discipline," citing the expansion of GAAP operating margin and the generation of $463 million in free cash flow as evidence of "durable, profitable growth."
• Management emphasized the strategic priorities of Enterprise, AI, and the System of Work, stating customers are increasingly bringing teams, agents, and workflows onto the platform.

Other Key Points:

• Atlassian accelerated its IL5 submission timeline to July 2028 (six months forward) and plans to submit Rovo for FedRAMP Moderate authorization by June 2027.
• The company entered a new OneGov agreement with the U.S. General Services Administration (GSA) to assist federal agencies in transitioning from Data Center to Atlassian Government Cloud.
• A strategic partnership with OpenAI was expanded to ground frontier intelligence in enterprise context via the Teamwork Graph.
• The company repurchased Class A Common Stock for $588 million in the quarter.
• Atlassian held its largest Team Europe event to date in Amsterdam, showcasing product innovations.