Atlassian Corporation Q1 FY2026 earnings call

• Total revenue in Q1 FY 2026 grew 21% Y/Y to $1.4 billion. • Cloud revenue grew 26% Y/Y to $998 million, and RPO accelerated to 42% Y/Y to $3.3 billion. • Over 300,000 customers, including Databricks, Expedia, etc., rely on Atlassian's AI-enabled cloud platform. • Over 3.5 million monthly active users of AI capabilities, up over 50% since last quarter. • Teamwork collection drove double-digit percentage increase in users and upgrades since launch. • Showcased innovation at Team '25 Europe event in Barcelona with AI at the center.

No detailed product segment financial performance with revenue contribution % provided in the transcript. Key financials: Total revenue in Q1 grew 21% year-over-year to $1.4 billion; cloud revenue grew 26% year-over-year to $998 million; RPO accelerated to 42% year-over-year to $3.3 billion.

• Adjusted full-year outlook due to stronger-than-expected cloud migrations from data center. Cloud revenue guidance adjusted with migrations contributing mid- to high single-digit percentage to cloud revenue growth in FY '2026. • Other organic growth drivers remain conservative and risk-adjusted. • Reaffirmed long-term 20% CAGR growth rate.

• Variability in the pace of cloud migrations quarter-to-quarter. • Enterprise concerns around governance, controls, auditability, traceability, permissions with AI technology.

Q: Keith Weiss inquired about the full year revenue guide and moving parts.

A: Joe Binz explained that stronger-than-expected cloud migrations from data center impact revenue recognition, leading to a 0.5 point decline in organic revenue growth outlook, while Mike Cannon-Brookes reiterated increased migrations are good for Atlassian and customers.

Q: Kasthuri Rangan asked about the cloud migration playbook.

A: Mike Cannon-Brookes talked about positive partner and customer reaction, experience with migrations, and confidence in continuing to help customers migrate to cloud.

Q: Arjun Bhatia asked about the data center end-of-life decision and migration timeline.

A: Mike Cannon-Brookes stated they're ready for migrations now, with Joe Binz adding migrations will accelerate in '28-'29 as customers have time to migrate before data center end-of-life in March 2029.

Q: Ryan MacWilliams inquired about AI across software solutions.

A: Mike Cannon-Brookes discussed Atlassian's AI capabilities, integration of Jira and other tools, and how AI is used in customer workflows.

Q: Aleksandr Zukin asked about product adoption trends.

A: Mike Cannon-Brookes talked about cohort analysis of customers using AI coding tools, their expansion rates, and AI interactions and tokens processed.

Q: Gregg Moskowitz asked about cohort size and growth outlook.

A: Mike Cannon-Brookes discussed cohort relevance, and Joe Binz stated the business outlook for FY '2026 is stronger than 90 days ago.

Q: Fatima Boolani asked about consumption pricing and AI monetization.

A: Mike Cannon-Brookes discussed consumption-based pricing options and AI's impact on monetization through customer adoption of Teamwork collection and AI features.

Q: Raimo Lenschow asked about M&A vs build.

A: Mike Cannon-Brookes talked about Atlassian's M&A philosophy, examples like Loom, and the browser company acquisition rationale.

Q: Robert Oliver asked about partner network preparedness.

A: Mike Cannon-Brookes discussed the partner network's role, execution, and contribution to migrations.

Q: Brent Thill asked about go-to-market and Joe's transition.

A: Mike Cannon-Brookes talked about go-to-market execution under Brian Duffy, and Joe Binz explained his transition timing reasons.

Q: DJ Hynes asked about non-migration cloud business.

A: Joe Binz clarified cloud revenue outlook is raised due to stronger migrations, with other organic drivers remaining conservative.