Atlassian (TEAM) investor relations material

Business momentum and growth drivers

• Achieved strong Q4 and full-year results, with five consecutive quarters of cloud acceleration driven by paid seat expansion and cross-sell, especially through Teamwork Collection and Service Collection.

• Significant seat expansion observed across both software developers and knowledge workers, with about two-thirds of Jira and 70% of Confluence users being non-developers.

• Service Collection ARR surpassed $1 billion, growing over 30% year-over-year, with more than 60% of use cases outside IT, and accelerated further in Q4.

• Rovo AI adoption and agentic automations in Service Collection tripled over six months, enhancing workflow efficiency and customer value.

• Customers using Rovo or MCP server grow ARR at twice the rate of non-users, highlighting the platform's mission criticality.

Financial performance and margin outlook

• Delivered GAAP profitability in Q4 with strong operating margins; guiding to 4.5% GAAP operating margin for fiscal 2027, up from flat in fiscal 2026.

• Non-GAAP margins benefited from ASC 606 changes due to data center product end-of-life, but compensation mix shifts will create headwinds in fiscal 2027.

• Focus remains on expanding GAAP operating margins and achieving durable, profitable growth.

Subscription ARR and revenue model evolution

• Introduced subscription ARR to provide a clearer view of business health amid cloud transition and ASC 606 accounting changes.

• Subscription ARR grew 23% year-over-year in the latest quarter; initial guidance for fiscal 2027 is 18% growth.

• Quarter-to-quarter ARR variability attributed to enterprise sales evolution, compensation changes, and cloud migration dynamics.