AI not only failed to replace, but instead became a catalyst! Atlassian (TEAM.US) revenue surges 28%, record-breaking large orders and millions of monthly active users ignite stock price

According to Zhitong Financial APP, Atlassian (TEAM.US) dispelled the "AI replacement" concerns surrounding this collaboration software developer with an impressive financial report. For the fourth quarter of fiscal year 2026 ending June 30, Atlassian reported adjusted earnings per share of $1.87, far exceeding the consensus analyst expectation of $1.50; total revenue surged 28% year-over-year to $1.77 billion, significantly ahead of market expectations of $1.66 billion.

The core engine behind this strong earnings report is the company’s cloud transformation. Cloud revenue for the quarter reached $1.21 billion, accelerating to a 31% year-over-year increase, making it the key driver of overall revenue growth. Meanwhile, data center revenue came in at $461.9 million, also surpassing analyst estimates of $414.6 million.

In terms of profitability and future reserves, the company also posted strong momentum. Adjusted operating margin expanded sharply to 36%, up from 24% the same period last year. By quarter end, subscription Annual Recurring Revenue (ARR) grew 23% to $6.61 billion; as a “reservoir” for measuring future income, Remaining Performance Obligations (RPO) jumped 44% year-over-year to $4.82 billion.

After the earnings release, the company’s stock price soared as much as 39% in after-hours trading Thursday Eastern Time. If maintained in regular trading, it would mark the largest single-day gain since Atlassian’s 2015 IPO and boost the market value by over $10 billion. As of the after-hours session, the stock was up about 32%.

Record-breaking Enterprise Deals, AI Product Monthly Actives Double

This stock surge was a welcome relief for Atlassian. Prior to this financial report, its share price had fallen about 32% year-to-date, and dropped 35.6% over the past 12 months, mainly due to intense market fears of a “SaaSpocalypse” (the idea that artificial intelligence will dramatically disrupt software service provider business models). But the robust growth data in this report demonstrate that Atlassian not only hasn’t been marginalized by AI, but is leveraging AI capabilities and cloud barriers to build a deeper competitive moat and successfully retain global enterprise clients navigating their own AI transitions.

Atlassian co-founder and CEO Mike Cannon-Brookes said in a shareholder letter that customers are “voting with their wallets” by signing larger and longer-term contracts, doubling down on Atlassian.

Earnings data show that this quarter, Atlassian signed the largest enterprise deal in the company’s history, with the counterparty being one of the world’s largest consumer technology companies. Among top-tier customers, the number of deals with annual contract value exceeding $1 million, $3 million, and $5 million all set single-quarter records. Notably, the number of customers with annual contracts over $3 million grew more than 50% year-over-year, and those over $5 million grew a staggering 70% or more.

In the closely watched AI field, Atlassian also showed its strength. Cannon-Brookes revealed that monthly active users for the company’s MCP server and Teamwork Graph CLI AI tools have surpassed the 1 million mark, more than doubling from the previous quarter. This signifies that Atlassian’s strategy of deeply integrating AI into its core products (such as Jira, Confluence, and Trello) is gaining broad recognition from developers and enterprise users alike.

Cannon-Brookes stated: “We delivered another strong performance in the fourth quarter, closing out an outstanding fiscal year. We’re making comprehensive progress in the three strategic priorities of enterprise, AI, and work systems, while also achieving sustainable profit growth.”

Looking ahead, Atlassian gave an optimistic outlook for the coming fiscal year. For the first quarter of fiscal year 2027, the company expects revenue between $1.705 billion and $1.715 billion, with the midpoint easily surpassing the analyst consensus of $1.67 billion.

For the full fiscal year 2027, management expects total revenue to grow about 13%, with cloud business revenue maintaining robust momentum at around 25.5% growth; as customers continue migrating to the cloud, data center business revenue is expected to decline about 17%. Full-year subscription ARR is expected to grow about 18%.

Further highlighting his strong confidence in Atlassian’s long-term value, CEO Mike Cannon-Brookes, with a net worth of $8.4 billion, announced plans to purchase up to $250 million of company stock on the open market.