01—Abstract
Summary
Summary of the 8-K filed February 5, 2026. Cited figures are marked; the original filing is the authoritative source.
Atlassian Corporation (NASDAQ: TEAM) furnished this Form 8-K under Item 2.02 to report results for its second quarter of fiscal year 2026, the quarter ended December 31, 2025, along with a shareholder letter.
Total revenue was $1,586.3 milliona, up 23% from $1,286.5 million a year earlier. Cloud revenue was $1,067.0 million, up 26%, and remaining performance obligations reached $3.8 billion, up 44% year-over-year. GAAP operating loss was $47.7 million (operating margin of (3%)), while non-GAAP operating income was $430.2 million (27% margin).
GAAP net loss was $42.6 millionb, or $0.16 per diluted share, compared with a $0.15 loss a year earlier. Free cash flow was $168.5 million, compared with $342.6 million in the prior-year quarter, and the company attributed the decline primarily to timing of cash collections and tax payments. Management raised its fiscal 2026 total revenue growth outlook to approximately 22.0% and its Cloud revenue growth outlook to approximately 24.3%, citing the DX acquisition, which the shareholder letter says contributed roughly one percentage point to Cloud growth.
The company expects GAAP operating margin of approximately (3.0%) and non-GAAP operating margin of approximately 25.5% for fiscal 2026. Atlassian also said it plans to accelerate share repurchases in the second half of fiscal 2026 relative to the first half, and that in January alone it repurchased more shares than in all of Q2. Cash and cash equivalents plus marketable securities totaled $1.6 billionc at quarter end, and long-term debt was $988.6 million.
The filing also reports that the company completed acquisitions of DX and The Browser Company of New York during the quarter, which contributed to higher operating expenses and headcount, which rose to 14,626. GAAP operating expenses increased 25%d year-over-year.
Anil Sabharwal was appointed to the Board of Directors. The information in this Item 2.02 is furnished rather than filed for purposes of Section 18 of the Exchange Act.
02—Key points
Key Highlights
- Total revenue of $1,586.3 million, up 23% year-over-year; Cloud revenue of $1,067.0 million, up 26%, marking the company's first $1 billion Cloud revenue quarter.
- Remaining performance obligations of $3.8 billion, up 44% year-over-year; current RPO grew 30% to $2.7 billion.
- GAAP operating loss of $47.7 million (operating margin of (3%)) versus a $57.5 million loss a year earlier; non-GAAP operating income of $430.2 million (27% margin).
- GAAP net loss of $42.6 million, or $(0.16) per diluted share; non-GAAP net income of $320.9 million, or $1.22 per diluted share.
- Free cash flow of $168.5 million, down from $342.6 million, which the company attributed primarily to cash collection and tax payment timing.
- Raised FY2026 total revenue growth outlook to approximately 22.0% and Cloud revenue growth outlook to approximately 24.3%; GAAP operating margin guided to approximately (3.0%) and non-GAAP to approximately 25.5%.
- Plans to accelerate share repurchases in H2 FY2026 relative to H1; Cloud net revenue retention rate cited as 120%+ in the shareholder letter.
03—Questions
Frequently Asked Questions
How did Atlassian's revenue and Cloud growth perform in the quarter?
Total revenue was $1,586.3 million, up 23% from $1,286.5 million. Cloud revenue was $1,067.0 million, up 26% from $847.0 million in the prior-year quarter's comparable period... specifically $846.96 million, and Data Center revenue was $435.6 million. The shareholder letter attributes Cloud growth to paid seat expansion, Data Center to Cloud migrations, cross-sell, and higher ARPU, with DX contributing approximately 75 basis points.
What did the company guide for fiscal 2026?
Management raised its total revenue growth outlook to approximately 22.0% and Cloud revenue growth outlook to approximately 24.3%. Data Center revenue growth is expected to be approximately 20.0% and Marketplace and other approximately 6.0%. GAAP gross margin is guided to approximately 84.0% and non-GAAP to approximately 87.0%, with GAAP operating margin of approximately (3.0%) and non-GAAP operating margin of approximately 25.5%.
Why did free cash flow decline sharply?
Free cash flow was $168.5 million compared with $342.6 million a year earlier. The company said the decline was driven primarily by timing differences in cash collections and tax payments, as well as higher severance and acquisition-related payments. Management expects significantly higher free cash flow margin in the second half than in the first half.
What acquisitions affected the quarter?
The shareholder letter states that the acquisitions of DX, which closed on November 10, 2025, and The Browser Company of New York, both closed in the quarter. The company said they contributed to higher operating expenses and headcount, which reached 14,626 at quarter end, an increase of 537 from the prior quarter.
What capital return actions did the company announce?
Atlassian said it plans to accelerate share repurchases in the second half of fiscal 2026 relative to the first half and that in January alone it repurchased more shares than in all of Q2. Repurchases of Class A Common Stock were $197.4 million in the quarter. The company also noted that the founders will pause their selling plans that have been in place since the IPO.
04—Continue