Atlassian (NASDAQ:TEAM) Posts Earnings Results, Beats Expectations By $0.37 EPS

Atlassian (NASDAQ:TEAM) posted its quarterly earnings results on Thursday. The technology company reported $1.87 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.50 by $0.37, FiscalAI reports. Atlassian had a positive return on equity of 20.07% and a negative net margin of 0.82%.The business had revenue of $1.77 billion during the quarter, compared to analyst estimates of $1.66 billion. During the same period in the prior year, the business earned $0.98 earnings per share. The business’s revenue was up 27.6% compared to the same quarter last year.

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

• Strong FY26 performance: Revenue grew 28% to $1.8 billion, cloud revenue increased 31% to $1.2 billion, RPO rose 44% to $4.8 billion, and GAAP operating margin reached 12%.
• Enterprise momentum accelerated: Atlassian reported record bookings at the $1 million, $3 million, and $5 million deal levels, with customers generating more than $3 million in ARR growing over 50% year over year and those above $5 million growing over 70%.
• AI and platform adoption are driving expansion: Rovo is used by more than 80% of Fortune 500 companies, Rovo-assisted actions increased 50% sequentially, and customers adopting Rovo are growing ARR at more than twice the rate of non-adopters. Cross-selling the Teamwork and Service Collections and seat expansion were key cloud-growth drivers.
• FY27 guidance reflects increased caution: Subscription ARR growth is expected to slow to 18%, compared with 23% in Q4, due partly to lapping the DX acquisition and strong second-half FY26 growth, as well as uncertainty around macroeconomic, fiscal-policy, and geopolitical conditions.
• Profitability is expected to improve: Management guided to a 4.5% GAAP operating margin for FY27, citing disciplined hiring, resource reallocation, moderating stock-based compensation, and improved AI infrastructure efficiency while continuing to invest in AI and enterprise sales.

Atlassian Trading Up 35.3%

Shares of NASDAQ TEAM traded up $38.90 during mid-day trading on Friday, reaching $149.07. 20,075,247 shares of the company’s stock were exchanged, compared to its average volume of 4,196,062. The company’s 50-day moving average is $93.01 and its 200-day moving average is $86.92. The company has a debt-to-equity ratio of 1.13, a quick ratio of 0.70 and a current ratio of 0.70. The firm has a market capitalization of $37.83 billion, a price-to-earnings ratio of -784.58, a PEG ratio of 7.91 and a beta of 1.05. Atlassian has a 52-week low of $56.01 and a 52-week high of $184.00.

Insider Activity

In other Atlassian news, CFO James Chuong sold 8,838 shares of Atlassian stock in a transaction dated Tuesday, May 19th. The shares were sold at an average price of $87.75, for a total transaction of $775,534.50. Following the completion of the sale, the chief financial officer directly owned 288,272 shares in the company, valued at $25,295,868. This trade represents a 2.97% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CRO Brian Duffy sold 3,000 shares of the business’s stock in a transaction that occurred on Friday, June 12th. The shares were sold at an average price of $89.71, for a total transaction of $269,130.00. Following the completion of the sale, the executive directly owned 227,691 shares in the company, valued at $20,426,159.61. This trade represents a 1.30% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 20,041 shares of company stock worth $1,801,069. 36.66% of the stock is owned by insiders.

Institutional Trading of Atlassian

Institutional investors have recently added to or reduced their stakes in the stock. Garton & Associates Financial Advisors LLC purchased a new position in shares of Atlassian during the fourth quarter worth $32,000. Litman Gregory Wealth Management LLC purchased a new stake in shares of Atlassian in the 4th quarter valued at $42,000. Summit Securities Group LLC acquired a new position in Atlassian during the 4th quarter worth about $42,000. Geneos Wealth Management Inc. lifted its stake in Atlassian by 447.2% during the 1st quarter. Geneos Wealth Management Inc. now owns 197 shares of the technology company’s stock worth $42,000 after acquiring an additional 161 shares in the last quarter. Finally, State of Wyoming boosted its holdings in Atlassian by 59.7% during the 2nd quarter. State of Wyoming now owns 444 shares of the technology company’s stock valued at $90,000 after acquiring an additional 166 shares during the period. Institutional investors and hedge funds own 94.45% of the company’s stock.

Key Stories Impacting Atlassian

Here are the key news stories impacting Atlassian this week:

• Positive Sentiment: Results exceeded expectations: Atlassian reported adjusted earnings of $1.87 per share, versus the $1.50 consensus estimate, while revenue rose 27.6% year over year to $1.77 billion, ahead of the $1.66 billion forecast. Atlassian beats quarterly estimates on strong cloud demand
• Positive Sentiment: Cloud and enterprise momentum supported the rally: Cloud revenue grew 31% to $1.21 billion, Data Center revenue topped estimates, and the company cited record large enterprise contracts, strong subscription demand and rising adoption of its AI-powered Rovo platform. TEAM Q4 Earnings Call Highlights AI and Enterprise Momentum
• Positive Sentiment: Fiscal 2027 guidance was viewed favorably: Management’s cloud revenue outlook exceeded expectations, and first-quarter revenue guidance of approximately $1.7 billion was above or in line with consensus, reinforcing confidence in continued growth. Atlassian earnings beat drives 30% stock surge
• Positive Sentiment: Analyst support strengthened: Bank of America upgraded TEAM to Buy with a $175 target, while BMO raised its target to $175 and Oppenheimer lifted its target to $200 with an Outperform rating. Unusually heavy call-option activity also reflected bullish near-term positioning.
• Neutral Sentiment: Atlassian’s results were interpreted as a potential turning point for software stocks broadly, suggesting investors may again be rewarding solid fundamentals despite AI-disruption concerns. Software Stocks Trade Like It’s 2022 After Atlassian Leads Earnings Rally
• Negative Sentiment: The company still faces external uncertainty, and the sharp rebound leaves TEAM trading near the upper end of its recent range, increasing the risk of profit-taking if cloud growth or AI adoption slows.

Analyst Upgrades and Downgrades

TEAM has been the topic of a number of recent research reports. Citigroup lowered their price objective on Atlassian from $160.00 to $110.00 and set a “buy” rating on the stock in a research note on Friday, May 1st. Truist Financial raised their target price on Atlassian from $100.00 to $160.00 and gave the stock a “buy” rating in a research note on Friday. Wall Street Zen cut shares of Atlassian from a “strong-buy” rating to a “buy” rating in a research report on Saturday, May 30th. Canaccord Genuity Group dropped their price objective on shares of Atlassian from $185.00 to $150.00 and set a “buy” rating for the company in a report on Wednesday, April 15th. Finally, BTIG Research raised their price objective on shares of Atlassian from $130.00 to $180.00 and gave the stock a “buy” rating in a research report on Friday. Twenty-three analysts have rated the stock with a Buy rating, five have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, Atlassian presently has a consensus rating of “Moderate Buy” and an average target price of $172.88.

About Atlassian

Atlassian Corporation Plc is a software company headquartered in Sydney, Australia, best known for developing collaboration, project management and software development tools. Founded in 2002 by Mike Cannon-Brookes and Scott Farquhar, Atlassian grew from a small engineering-focused team into a publicly traded company after its initial public offering in 2015. The company serves a global customer base that spans small teams to large enterprises across technology, financial services, government and other sectors.

Atlassian’s product portfolio centers on tools designed to help teams plan, build and support software and business processes.