01—Abstract
Summary
Summary of the 10-Q filed October 31, 2025. Cited figures are marked; the original filing is the authoritative source.
Atlassian Corporation's 10-Q for the quarter ended September 30, 2025 shows total revenues of $1,432,553 thousanda, up 21% from $1,187,781 thousand a year earlier, with subscription revenue of $1,374,502 thousand (up 21%).
Cloud revenue reached $997,708 thousandb (up 26%), while Data Center revenue was $372,648 thousand (up 11%). Operating loss widened to $96,337 thousand from $31,978 thousand, and net loss was $51,870 thousand, compared with a net loss of $123,769 thousand in the prior-year quarter. The operating loss includes restructuring charges of $55,678 thousand, tied to a rebalancing of resources that eliminated certain roles and to the exit of certain leased office floors.
On a non-GAAP basis, the filing reports operating income of $322,686 thousandc and free cash flow of $114,603 thousand, versus $74,341 thousand a year earlier. The balance sheet remains liquid, with cash and cash equivalents of $2,322,360 thousand and marketable securities of $456,040 thousand as of September 30, 2025, against long-term debt of $988,143 thousand consisting of two $500,000 thousand senior notes. Deferred revenue declined to $2,281,156 thousand in total from $2,481,254 thousand at the start of the quarter.
During the quarter the company repurchased about 1.4 million Class A shares for $249.9 milliond, and in October 2025 its board authorized a new $2.5 billion repurchase program. Subsequent events include the October 20, 2025 acquisition of The Browser Company of New York for approximately $610 million, and a pending acquisition of A Software Company (DX) for approximately $1.0 billion. The company also announced an end-of-life plan for its Data Center offering: term licenses will stop being sold to new customers in March 2026, to existing customers in March 2028, and maintenance and support will end in March 2029.
The filing notes that the transition could affect purchasing patterns and quarterly results. Management expects the remaining performance obligations of about $3.3 billion to be about 74% recognized over the next 12 months.
02—Key points
Key Highlights
- Total revenues of $1,432,553 thousand rose 21% year over year, led by Cloud revenue of $997,708 thousand, up 26%.
- Operating loss was $96,337 thousand versus $31,978 thousand a year earlier, including $55,678 thousand of restructuring charges.
- Net loss narrowed to $51,870 thousand from $123,769 thousand, helped by a $26,526 thousand net gain on strategic investments and a $98,059 thousand decrease in income tax provision.
- Non-GAAP operating income was $322,686 thousand, and free cash flow was $114,603 thousand, up from $74,341 thousand.
- Cash and cash equivalents were $2,322,360 thousand, with long-term debt of $988,143 thousand from two $500 million senior notes.
- Data Center end-of-life plan: no new term licenses from March 2026, no expansions to existing customers from March 2028, and maintenance ending March 2029.
- Subsequent to quarter-end, the company acquired The Browser Company of New York for approximately $610 million and announced a $2.5 billion repurchase program; a pending acquisition of DX is expected at approximately $1.0 billion.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2026, Atlassian lost $0.04.
- Revenue$1.43B100.0%
- Cost of revenue−$257.9M18.0%
- Gross profit$1.17B82.0%
- Operating costs−$1.27B88.7%
- Operating income−$96.3M6.7%
- Interest, other & tax$44.5M3.1%
- Net income−$51.9M3.6%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed October 31, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.43B$1.19B | +20.6% |
| Cost of Revenue | $257.92M$217.62M | +18.5% |
| Gross Profit | $1.17B$970.16M | +21.1% |
| R&D Expenses | $755.99M$603.10M | +25.4% |
| Operating Expenses | $1.27B$1.00B | +26.8% |
| Operating Income | -$96.34M-$31.98M | −201.3% |
| Net Income | -$51.87M-$123.77M | +58.1% |
| EPS (Basic) | $-0.20$-0.48 | +58.3% |
| EPS (Diluted) | $-0.20$-0.48 | +58.3% |
| Shares Outstanding (Basic) | 262.99M260.48M | +1.0% |
| Shares Outstanding (Diluted) | 262.99M260.48M | +1.0% |
05—Questions
Frequently Asked Questions
Why did the operating loss increase despite revenue growth of 21%?
Total operating expenses rose to $1,270,966 thousand from $1,002,135 thousand, with research and development up 25%, marketing and sales up 33%, and general and administrative up 22%. The filing attributes much of the increase to compensation expense, including stock-based compensation, and to restructuring charges of $55,678 thousand recorded across cost of revenues and operating expense lines.
How is the Data Center end-of-life plan expected to affect the business?
The filing states that the company will stop selling new Data Center term licenses beginning March 2026, stop selling term licenses and expansions to existing customers in March 2028, and end maintenance and support in March 2029, subject to limited exceptions. The filing says this may affect purchasing patterns, quarterly results, and guidance, and that the company expects to offer migration incentives similar to those used in its Server migration.
What drove the improvement in net loss?
Net loss improved to $51,870 thousand from $123,769 thousand. The filing attributes the change largely to a benefit from income taxes of $4,454 thousand versus a provision of $93,605 thousand a year earlier, and to other income of $18,804 thousand compared with an expense of $19,432 thousand, which reflected unrealized gains on public equity investments and a smaller share of loss from an equity method investment.
What is the company's liquidity and capital return position?
As of September 30, 2025, cash and cash equivalents were $2,322,360 thousand and marketable securities were $456,040 thousand. The company repurchased shares for $249,935 thousand during the quarter, with $921.3 million remaining under the 2024 Repurchase Program, and in October 2025 authorized a new $2.5 billion program. The filing states that existing cash, operating cash flow, and the undrawn $750 million revolving credit facility should meet cash needs for at least the next 12 months.
What acquisitions are pending or completed after the quarter?
On October 20, 2025, the company acquired The Browser Company of New York for approximately $610 million, of which about $488.3 million was paid in cash from existing balances. In September 2025, it agreed to acquire A Software Company (DX) for approximately $1.0 billion, inclusive of DX's cash, with the transaction expected to close in the second quarter of fiscal year 2026 subject to regulatory approvals.
06—Continue