01—Abstract
Summary
Summary of the 8-K filed October 30, 2025. Cited figures are marked; the original filing is the authoritative source.
Atlassian Corporation reported first-quarter fiscal 2026 results for the quarter ended September 30, 2025, with total revenue of $1,432.6 milliona, up 21% year-over-year.
Cloud revenue reached $997.7 millionb, up 26%, driven by paid seat expansion, Data Center-to-Cloud migrations, cross-selling, and higher ARPU. Remaining performance obligations (RPO) rose 42% to $3.3 billion, and current RPO grew 30% to $2.4 billion. Profitability was mixed on a GAAP basis: operating loss was $96.3 million (operating margin of (7%)), which included $55.7 million of restructuring charges, and net loss was $51.9 million, or $0.20 per diluted share.
On a non-GAAP basis, operating income was $322.7 millionc (23% margin) and net income was $275.7 million, or $1.04 per diluted share. Cash flow from operations was $128.7 million and free cash flow was $114.6 million, and cash and marketable securities totaled $2.8 billion. Management updated its fiscal 2026 outlook.
Cloud revenue growth is now expected at approximately 22.5%, and total revenue growth at approximately 20.8%, which includes an expected benefit of approximately 3.2 percentage points from the Data Center end-of-life (EOL) revenue recognition impact. The company announced Atlassian Ascend, a program to wind down Data Center products in phases over the coming years and push customers toward Cloud. The Board authorized a new share repurchase program of up to $2.5 billiond, which will begin after the current $1.5 billion program is completed and has no expiration date.
The filing also disclosed that CFO Joe Binz will retire effective June 30, 2026, and that Tamar Yehoshua will join as Chief Product and AI Officer on November 17, 2025. The filing also covers the acquisition of The Browser Company of New York, which closed on October 20, 2025, and a definitive agreement to acquire DX. Management stated that the Browser Company acquisition is expected to be slightly dilutive to fiscal 2026 non-GAAP operating margin, and that its non-GAAP operating margin target of 25%+ for fiscal year 2027 is unchanged.
02—Key points
Key Highlights
- Revenue of $1,432.6 million rose 21% year-over-year, with Cloud revenue of $997.7 million up 26% and Data Center revenue of $372.6 million.
- GAAP operating loss was $96.3 million (margin of (7%)) and net loss was $51.9 million ($0.20 per diluted share), including $55.7 million of restructuring charges.
- Non-GAAP operating income was $322.7 million (23% margin) and non-GAAP net income was $275.7 million ($1.04 per diluted share).
- Cash flow from operations was $128.7 million and free cash flow was $114.6 million; cash and marketable securities totaled $2.8 billion at quarter-end.
- RPO rose 42% to $3.3 billion and current RPO grew 30% to $2.4 billion; customers with more than $10,000 in Cloud ARR reached 53,017, up 13%.
- FY26 outlook raised: Cloud revenue growth of approximately 22.5% and total revenue growth of approximately 20.8%, with GAAP operating margin of approximately (2.0%) and non-GAAP operating margin of approximately 25.5%.
- New $2.5 billion share repurchase authorization, to begin after the current $1.5 billion program, and CFO Joe Binz will retire effective June 30, 2026.
03—Questions
Frequently Asked Questions
Why did Atlassian take restructuring charges, and how did they affect results?
The company incurred restructuring charges of $55.7 million in the quarter related to reducing capacity in its customer support organization and consolidating a lease to optimize its real estate footprint. The filing states these charges reduced GAAP operating margin by 4 percentage points and increased GAAP net loss per diluted share by $0.21 before income tax impacts. They are excluded from non-GAAP results.
What is Atlassian Ascend and how could it affect future revenue?
Atlassian Ascend is a program to support customers moving from Data Center to Cloud. The company plans to end-of-life its Data Center products and wind down support through a phased approach over the coming years, with an extended maintenance period for certain customers. The filing states that Data Center-to-Cloud migrations are expected to drive more ratable Cloud revenue and less revenue recognized at the time of sale, and that the Data Center EOL revenue recognition impact contributed approximately 1.6 percentage points to total revenue growth in the quarter.
What are the new share repurchase plans and their terms?
The Board authorized a program to repurchase up to $2.5 billion of Class A Common Stock, to begin upon completion of the current $1.5 billion program. Repurchases may be made in the open market, through privately negotiated transactions, or other means, including Rule 10b5-1 trading plans. The program has no fixed expiration date, may be suspended or discontinued at any time, and does not obligate the company to buy any specific amount of stock.
What leadership changes were announced?
CFO Joe Binz will retire effective June 30, 2026, under a mutual agreement, and the company has initiated a search for his successor. The filing states the transition was not the result of any disagreement with the company on strategy, operations, financial reporting, or other policies or practices. Tamar Yehoshua, formerly President of Product and Technology at Glean, will join as Chief Product and AI Officer on November 17, 2025.
What are the company's near-term financial targets?
For the second quarter of fiscal 2026, total revenue is expected to be in the range of $1,535 million to $1,543 million, with GAAP operating margin of approximately (5.0%) and non-GAAP operating margin of approximately 24.5%. For fiscal 2026, Cloud revenue growth is expected at approximately 22.5%, Data Center revenue growth at approximately 20.0%, and Marketplace and other revenue growth at approximately 5.0%. The targets include the impact of the Data Center EOL announcement and the acquisition of The Browser Company of New York, which closed on October 20, 2025.
04—Continue