Atlassian (NASDAQ:TEAM) Announces Earnings Results, Beats Expectations By $0.26 EPS

Atlassian (NASDAQ:TEAM) announced its quarterly earnings results on Thursday. The technology company reported $1.65 earnings per share for the quarter, topping analysts’ consensus estimates of $1.39 by $0.26, FiscalAI reports. Atlassian had a negative net margin of 0.82% and a positive return on equity of 20.99%. The company had revenue of $1.77 billion for the quarter, compared to analysts’ expectations of $1.71 billion. During the same period last year, the firm posted $1.04 earnings per share. The business’s quarterly revenue was up 23.7% compared to the same quarter last year.

Here are the key takeaways from Atlassian’s conference call:

• Atlassian reported a strong start to FY2027: revenue rose 24% to $1.8 billion, cloud revenue grew 31%, and free cash flow increased 304% year over year to $463 million, a 26% margin.
• Enterprise demand and customer commitments strengthened, with remaining performance obligations up 44% to $4.7 billion and customers spending more than $1 million annually growing well over 30%. The Teamwork Collection reached more than 3,000 customers, while the Service Collection surpassed 70,000 customers and continued to grow ARR by more than 30%.
• Management highlighted growing AI adoption and positioned the Teamwork Graph and Rovo as drivers of customer expansion: more than 87% of enterprise cloud customers use Rovo, and deep Rovo adopters grow ARR more than twice as fast as light users. The company said its main AI monetization path is through product collections and expanded usage, not near-term usage-based pricing revenue.
• Management’s outlook reflects expected cloud growth deceleration, tougher comparisons in the second half, and uncertainty around macroeconomic and geopolitical conditions. Hybrid migration deals shifted some revenue toward Data Center and away from cloud in the quarter; management said usage-based pricing is not expected to generate meaningful revenue in FY2027.

Atlassian Price Performance

Shares of NASDAQ TEAM opened at $153.68 on Friday. The stock’s 50-day moving average is $196.05 and its two-hundred day moving average is $119.57. The company has a market cap of $38.90 billion, a price-to-earnings ratio of 426.90, a price-to-earnings-growth ratio of 19.95 and a beta of 1.16. The company has a debt-to-equity ratio of 0.93, a current ratio of 0.78 and a quick ratio of 0.78. Atlassian has a 1-year low of $56.01 and a 1-year high of $229.96.

Insider Buying and Selling at Atlassian

In related news, CAO Gene Liu sold 1,125 shares of the firm’s stock in a transaction on Wednesday, August 19th. The shares were sold at an average price of $175.00, for a total transaction of $196,875.00. Following the completion of the sale, the chief accounting officer directly owned 56,807 shares of the company’s stock, valued at approximately $9,941,225. This trade represents a 1.94% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CRO Brian Duffy sold 7,617 shares of the business’s stock in a transaction on Friday, August 14th. The stock was sold at an average price of $163.00, for a total value of $1,241,571.00. Following the transaction, the executive owned 220,074 shares of the company’s stock, valued at $35,872,062. This trade represents a 3.35% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders sold 22,475 shares of company stock worth $3,822,643. Insiders own 37.63% of the company’s stock.

Key Headlines Impacting Atlassian

Here are the key news stories impacting Atlassian this week:

• Positive Sentiment: Fiscal Q1 revenue rose 23.7% year over year to $1.77 billion, while adjusted EPS of $1.65 topped the $1.39 consensus. Cloud revenue grew 30.5%, and the company reported stronger margins and free cash flow. Atlassian Q1 results
• Positive Sentiment: AI-related adoption showed momentum: Teamwork Collection customers grew sevenfold year over year, and remaining performance obligations increased 44%. Atlassian also guided to $7.5 billion in FY2027 revenue, above the $7.4 billion consensus. Q1 earnings call highlights
• Positive Sentiment: Piper Sandler raised its price target to $190 and kept an “overweight” rating, signaling continued optimism despite the post-earnings concerns. Piper Sandler target update
• Negative Sentiment: The main concern is deceleration: Atlassian expects next-quarter cloud growth of 27%, below Q1’s 30.5%, and increased its full-year cloud growth outlook only modestly, from 25.5% to 26%. Management cited timing-related Data Center revenue effects, dampening the impact of the quarterly beat. Cloud growth outlook
• Negative Sentiment: Several firms cut price targets, including Truist ($250 to $200), Wells Fargo ($270 to $200), and Oppenheimer ($275 to $240), though they maintained positive ratings. These reductions underscore investor concerns about growth expectations after the results. Truist rating update

Wall Street Analysts Forecast Growth

A number of brokerages have recently commented on TEAM. Guggenheim set a $280.00 target price on shares of Atlassian in a report on Friday. Cantor Fitzgerald lifted their target price on Atlassian from $220.00 to $252.00 and gave the company an “overweight” rating in a report on Monday, November 2nd. Bank of America lifted their price target on shares of Atlassian from $175.00 to $210.00 and gave the stock a “buy” rating in a report on Monday, August 31st. Wells Fargo & Company dropped their target price on Atlassian from $270.00 to $200.00 and set an “overweight” rating on the stock in a report on Friday. Finally, Royal Bank Of Canada lifted their price target on Atlassian from $215.00 to $235.00 and gave the company an “outperform” rating in a report on Monday, October 12th. Twenty-four equities research analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the company’s stock. According to MarketBeat, Atlassian presently has an average rating of “Moderate Buy” and an average price target of $210.96.

Atlassian Company Profile

Atlassian Corporation develops collaboration and productivity software for software, IT and business teams. Its products help organizations plan and track work, manage software development and support services, and share information across teams.

Its product portfolio includes Jira for project and issue tracking, Confluence for team documentation and collaboration, Jira Service Management for IT and other service teams, Trello for visual work management, and Bitbucket for code collaboration.