Atlassian 2025-26: Revenue +20%, 120% NRR, FY24-27 20% CAGR
FY25 (Jun year-end) revenue $5.22B (+20%); GAAP op income -$130M; NI -$257M; GAAP EPS -$0.98 (vs -$1.16 FY24). FCF $1.42B (flat YoY in absolute terms; ~27% margin). Q4 FY25: record number of deals >$1M ACV (+2x YoY); Teamwork Collection (TWC) strong momentum exceeding expectations; partnered with Google Cloud for cloud transformation + advanced AI solutions; cloud net revenue retention rate 120% — best-in-class in SaaS. Q3 FY25: cloud revenue +25% YoY; Rovo AI integrated into core products; 1.5M+ monthly active AI users; FedRAMP Moderate authorization; Atlassian Government Cloud + Isolated Cloud announced; gross margin 86%. Core apps (Jira, Confluence, Jira Service Management, Loom) growing in line or faster than total. Buyback $779M (+97% YoY). Total debt $1.24B (-1%). FY26 guide: consistent with prior conservative + risk-adjusted approach (macro + enterprise go-to-market evolution); confident in 20% CAGR FY24-FY27; non-GAAP operating margin expected ~500bp difference vs FCF margin over time.
Key takeaways
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120% cloud net revenue retention — best-in-class enterprise SaaS expansion. Atlassian's cloud net revenue retention rate of 120% Q4 FY25 is among the highest in enterprise SaaS globally. NRR of 120% means the average cohort of cloud customers grew their spending by 20% YoY (after churn / contraction / expansion). This drives the structural compounding: every cohort of customers gets bigger over time even if Atlassian adds zero new logos. Combined with strong new logo acquisition + cloud migration tailwind, the math works powerfully.
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Record Q4 deals >$1M ACV (+2x YoY) — enterprise upmarket motion accelerating. Atlassian closed a record number of deals >$1M ACV in Q4 FY25, +2x vs Q4 FY24. This is the cleanest evidence that Atlassian's enterprise upmarket motion (post-2022 reorg + sales investment + enterprise focus) is paying off. Historically dominantly bottom-up / SMB / mid-market, Atlassian has been deliberately moving upmarket via FedRAMP authorization, isolated cloud / sovereign cloud, larger enterprise sales investments, and Teamwork Collection (TWC) bundle pricing. The +2x growth in $1M+ ACV deals validates the enterprise pivot.
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Cloud +25% Q3; FY26 cloud migration momentum continuing — multi-year platform transition tailwind. Cloud revenue grew +25% in Q3 FY25, the latest quarter with explicit disclosure. Cloud is the multi-year platform transition story — Atlassian has been migrating data center / server customers to cloud for 5+ years and the migration cohort continues to add cloud revenue YoY. Management explicitly noted "Migration to cloud is expected to contribute more to cloud revenue growth in FY '26 and '27." Multi-year migration tailwind on top of organic cloud growth.
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Rovo AI: 1.5M+ monthly active users; multi-product integration; AI agents thesis. Atlassian's Rovo AI platform reached 1.5M+ monthly active users by Q3 FY25. Rovo is integrated across core products (Jira, Confluence, Jira Service Management) for: (a) intelligent search, (b) AI agents that automate task management, (c) AI-assisted ticket resolution, (d) Confluence content generation. AI agents represent a multi-year monetization opportunity beyond core seat licenses — usage-based pricing + agent execution fees + premium AI features all create incremental ARPU.
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FY27 20% CAGR commitment — multi-year compounding visibility. Management remains confident in 20% compounded annual revenue growth from FY24 through FY27. From FY24 revenue $4.36B → FY27 implied ~$7.5B. FY25 $5.22B (+20%) is on the trajectory. Combined with $1.42B FCF margin and continued buyback ($779M FY25, +97%), this represents a multi-year compounding setup with strong cash generation despite GAAP operating losses.
Business
Atlassian Corporation is a leading enterprise team collaboration + DevOps SaaS company, with multi-product portfolio:
- Jira (Core / Software / Service Management) (~50% of revenue): Project management + DevOps + IT service management. Anchor product across software development teams + IT operations + enterprise project management.
- Confluence (~20%): Knowledge management + documentation + wiki + collaboration. Often bundled with Jira.
- Other Products (~30%): Trello (lightweight project management), Bitbucket (Git repository), Loom (video messaging — acquired 2023), Jira Service Management, Compass (developer experience), and others.
- Teamwork Collection (TWC): Bundle pricing across Jira + Confluence + Loom — primary FY25-26 enterprise growth vector.
Strategic moves FY25:
- Cloud NRR 120%
- Record deals >$1M ACV +2x YoY in Q4
- Teamwork Collection bundle launched + strong momentum
- Google Cloud partnership for AI + cloud transformation
- Rovo AI: 1.5M+ MAU; integrated across core products
- FedRAMP Moderate authorization
- Atlassian Government Cloud + Isolated Cloud announced
- Cloud +25% Q3 YoY
- Anu Bharadwaj (President) departure announced (Dec 2025)
- $779M buyback (+97% YoY)
- 20% CAGR FY24-FY27 commitment maintained
FY25 financial performance
| Metric (FY) | Jun-22 | Jun-23 | Jun-24 | Jun-25 |
|---|---|---|---|---|
| Revenue ($B) | 2.80 | 3.53 | 4.36 | 5.22 |
| Revenue YoY | n/a | +26% | +23% | +20% |
| GAAP op income ($M) | 70 | -345 | -117 | -130 |
| GAAP op margin | 2.5% | -9.8% | -2.7% | -2.5% |
| Net income ($M) | -520 | -487 | -301 | -257 |
| Diluted EPS GAAP ($) | -2.05 | -1.90 | -1.16 | -0.98 |
| FCF ($B) | 0.75 | 0.84 | 1.42 | 1.42 |
| FCF margin | 26.8% | 23.8% | 32.4% | 27.1% |
| Capex ($M) | -71 | -26 | -33 | -45 |
| Total debt ($B) | 1.31 | 1.28 | 1.25 | 1.24 |
| Buyback ($M) | 0 | -150 | -395 | -779 |
| Dividends | 0 | 0 | 0 | 0 |
The earnings progression: revenue growth has decelerated modestly (FY23 +26% → FY25 +20%) but remains in the high-growth SaaS bucket. GAAP operating losses persist (-2.5% to -2.7% range FY24-25) reflecting (a) heavy R&D investment in AI / Rovo, (b) enterprise sales investment, (c) stock-based compensation. Non-GAAP operating profitability and FCF margin (27%) tell a different story — Atlassian is structurally profitable on cash basis.
FCF $1.42B FY25 (flat YoY in absolute terms; 27% margin). Buyback $779M (+97% YoY) — meaningful step-up. Total debt minimal at $1.24B.
Capital allocation
- Capex: $-45M FY25 (+35% YoY) — modest given FCF base.
- Dividends: $0 (no dividend; capital return via buyback only).
- Buybacks: $-779M FY25 (+97% YoY).
- Total debt: $1.24B (-1% YoY); minimal leverage.
- FCF: $1.42B FY25 (~27% margin).
- Multi-year capital return shift: Buyback grew from $0 (FY22) to $779M (FY25).
FY26 outlook (per Q4 FY25 call, 2025-08-07)
| FY26 framework | Detail |
|---|---|
| Revenue growth approach | Conservative + risk-adjusted (macro + enterprise GTM evolution risks) |
| FY24-FY27 commitment | 20% compounded annual growth |
| Cloud migration | Greater contribution FY26 + FY27 |
| Teamwork Collection | Key growth vector |
| Non-GAAP op margin vs FCF margin | ~500bp difference over time |
| FCF | Continued strong generation |
Management noted continued execution: enterprise upmarket, Teamwork Collection, AI integration, cloud migration, government cloud, multi-product strategy.
Key risks
Enterprise upmarket execution. Atlassian's enterprise pivot requires continued execution: enterprise sales talent, deal cycles lengthening, RFP / RFI participation, customer success scaling. Any reversal compresses upmarket motion.
Anu Bharadwaj departure. President departure end of December 2025 (after ~12 years) creates leadership transition risk. Multi-year operational continuity from her tenure must be replicated.
AI / Rovo competitive landscape. Microsoft Copilot, Google Workspace AI, Notion AI, ServiceNow AI, Salesforce Einstein, Slack AI all compete. Multi-year AI feature differentiation + monetization required.
Cloud migration completion timing. Multi-year migration is well-progressed but not complete. Once fully migrated, growth must come from cloud organic + new logos rather than migration tailwind.
Customer concentration in software development. Atlassian's primary buyer is software engineering / DevOps teams. Any technology / industry slowdown affecting software hiring impacts seat growth.
Stock-based compensation dilution. SBC remains material; share count growth + dilution dynamics matter even with buybacks.
Macro uncertainty. Conservative + risk-adjusted FY26 guidance reflects macro uncertainty. Recession or layoffs in tech industry compress seat counts.
Competitive landscape — multi-product collaboration. Microsoft (Teams + Loop + Planner), Google Workspace, Notion, ClickUp, Asana, Monday.com all compete in subsets of Atlassian's portfolio. Long-term differentiation matters.
Loom integration / monetization. Loom (acquired 2023 for $975M) integration + monetization within Teamwork Collection requires execution.
FedRAMP / Government Cloud expansion. Government / regulated industry expansion requires multi-year compliance investment + sales motion.
Pricing power dynamics. Multi-year pricing increases face customer pushback at some point. Bundle vs unbundle pricing dynamics matter.
Server / data center end-of-life churn. Customers who don't migrate to cloud may churn. End-of-life dynamics through FY26-27 matter.
Currency / FX (USD reporting). Multi-region revenue exposed to FX volatility.
Cybersecurity + data sovereignty. Multi-region + government customers create cybersecurity + data residency requirements.
Buyback dynamics + valuation. Aggressive buyback at premium SaaS multiples carries valuation risk. Multi-year buyback pace + price-discipline matter.
Bottom line
Atlassian FY25 (June year-end) is the multi-segment growth + AI integration + enterprise upmarket year: revenue $5.22B (+20%); GAAP op income -$130M; NI -$257M; GAAP EPS -$0.98 (vs -$1.16 FY24, improving). FCF $1.42B (~27% margin). Cloud NRR 120%. Q4 record deals >$1M ACV +2x YoY. Teamwork Collection strong momentum exceeding expectations. Google Cloud partnership for cloud transformation + AI. Rovo AI 1.5M+ MAU integrated across core products. Cloud +25% Q3. FedRAMP Moderate + Atlassian Government Cloud + Isolated Cloud. Gross margin 86%. Buyback $779M (+97% YoY).
FY26 framework: consistent conservative + risk-adjusted approach (macro + enterprise GTM evolution); confident in 20% CAGR FY24-FY27; cloud migration greater contribution FY26+FY27; Teamwork Collection key growth vector; non-GAAP op margin ~500bp difference vs FCF margin over time.
The risks are real — enterprise upmarket execution, Anu Bharadwaj President departure end of December 2025, AI / Rovo competitive landscape (Microsoft Copilot, Google AI, Notion AI, ServiceNow AI, Salesforce, Slack), cloud migration completion timing, customer concentration in software development, stock-based compensation dilution, macro uncertainty, competitive landscape (Microsoft Teams + Loop, Google Workspace, Notion, ClickUp, Asana, Monday.com), Loom integration / monetization, FedRAMP / Government Cloud expansion execution, pricing power dynamics, server / data center end-of-life churn, currency / FX, cybersecurity + data sovereignty, buyback valuation discipline.
But the structural thesis (leading enterprise team collaboration + DevOps SaaS + Jira / Confluence / Jira Service Management / Loom / Trello + cloud NRR 120% + Teamwork Collection bundle + Rovo AI 1.5M+ MAU + FedRAMP Moderate + Government Cloud + Isolated Cloud + 86% gross margin + cloud +25% + record $1M+ ACV deals +2x + $1.42B FCF (27% margin) + 20% CAGR FY24-FY27 + Google Cloud partnership + multi-year cloud migration tailwind + buyback $779M (+97%)) is intact and FY25 confirms.
Quality enterprise SaaS + AI compounder mid-cycle, with multi-product platform + cloud NRR 120% + Rovo AI integration + Teamwork Collection + enterprise upmarket motion + cloud migration tailwind + Government Cloud expansion + multi-year FCF generation + $779M buyback. The FY25 +20% revenue + 120% cloud NRR + record $1M+ ACV deals +2x + Rovo AI 1.5M+ MAU + Cloud +25% Q3 + Teamwork Collection momentum + Google Cloud partnership + 86% gross margin + 27% FCF margin + 20% CAGR FY24-FY27 commitment + buyback +97% creates one of the cleaner enterprise SaaS + AI compounding setups for investors seeking exposure to Jira ecosystem + AI agents + enterprise upmarket + cloud migration + multi-year FCF. The conservative FY26 framework + cloud migration tailwind + Rovo AI optionality + Teamwork Collection bundle + Government Cloud + multi-year FCF + buyback discipline provides multiple paths to outperformance over a multi-year horizon. Enterprise GTM evolution + AI competitive landscape + macro uncertainty + leadership transition (Anu) remain ongoing risks, but the multi-product diversification + 120% cloud NRR + Rovo AI + cloud migration + 27% FCF margin support continued compounding through cycles.
Citations
- Atlassian Corporation FY25 (Jun year-end) Form 10-K (filed August 2025, SEC EDGAR).
- TEAM Q4 FY25 earnings call, 2025-08-07 — FY25 revenue $5.22B (+20%); FCF $1.42B; cloud NRR 120%; record number of deals >$1M ACV in Q4 (+2x YoY); Teamwork Collection (TWC) strong momentum exceeding expectations; partnered with Google Cloud for cloud transformation + advanced AI solutions; core apps (Jira, Confluence, Jira Service Management, Loom) growing in line or faster than total; Anu Bharadwaj transitioning away from President role at end of December (after ~12 years); FY26 guidance consistent with prior conservative + risk-adjusted approach; confident in 20% compounded annual growth FY24-FY27; non-GAAP op margin expected ~500bp difference vs FCF margin over time; Teamwork Collection key growth vector; cloud migration greater contribution FY26 + FY27.
- TEAM Q3 FY25 earnings call, 2025-05-01 — Q3 revenue $1.4B; cloud revenue +25% YoY; Team '25 conference launched next evolution of Atlassian System of Work; Rovo AI integrated into core products; 1.5M+ monthly AI users; FedRAMP Moderate authorization; Atlassian Government Cloud + Isolated Cloud announced; gross margin 86% (price increases + premium edition upsell + engineering-driven cloud infrastructure efficiency).
- TEAM Q2 / Q1 FY25 earnings calls — supporting cloud transition + Teamwork Collection + Rovo AI ramp progression.
- Internal financial_statements view (consolidated annual + cash flow + capital structure).