Atlassian Corporation - Class A
Q2 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: −2.07%.
Did TEAM Beat Earnings? Q2 2026 Results
Atlassian closed out a strong second fiscal quarter of 2026, beating on both the top and bottom lines as accelerating enterprise demand and a landmark Cloud milestone underscored the company's growth trajectory. Non-GAAP EPS came in at $1.22, topping the $1.14 consensus estimate by 6.62%, while revenue of $1.59 billion grew 23.3% year-over-year and cleared analyst expectations by 2.74%, driven in large part by Atlassian's first-ever $1.07 billion Cloud revenue quarter. Enterprise momentum was particularly notable, with the number of deals exceeding $1 million in annual contract value nearly doubling year-over-year and remaining performance obligations surging 44% to $3.81 billion, reflecting deepening long-term customer commitments. Non-GAAP operating margin held at 27%, up one percentage point year-over-year. Looking ahead, management raised its full-year FY26 revenue growth outlook to approximately 22%, and guided Q3 revenue to $1.69 billion to $1.70 billion, while also signaling plans to accelerate share repurchases in the second half at roughly two to three times the first-half pace.
- Cloud revenue grew 26% YoY to first-ever $1 billion Cloud revenue quarter
- RPO up 44% YoY to $3.8 billion reflecting deepening enterprise commitments
- Record number of $1M+ ACV deals, up nearly 2x YoY
- Cloud net revenue retention rate above 120%, ticking up for third consecutive quarter
- Paid seat expansion, cross-sell, and customer retention exceeded expectations
- Revenue growth driven by paid seat expansion, higher ARPU, and cross-sell of additional products
- Data Center EOL revenue recognition impact and price increases drove Data Center growth
- DX acquisition contributed approximately 75 basis points to Cloud revenue growth
“We closed out Q2 with incredible momentum across the Atlassian platform and achieved some impressive milestones along the way. We delivered our first-ever $1 billion Cloud revenue quarter, which grew 26% year-over-year, crossed 350,000 customers, and Rovo surpassed 5 million monthly active users.”
Atlassian CEO, on the earnings call
Forward Guidance & Outlook
For Q3 FY26, Atlassian expects total revenue of $1,689-$1,697 million, Cloud revenue growth of approximately 23.0% YoY, Data Center revenue growth of approximately 33.5% YoY, and Marketplace and other revenue growth of approximately 5.0% YoY. Q3 GAAP gross margin is expected at approximately 85.5% and non-GAAP gross margin at approximately 88.0%. Q3 GAAP operating margin is expected at approximately 0.0% and non-GAAP operating margin at approximately 27.5%. For full-year FY26, the company raised its total revenue growth outlook to approximately 22.0% YoY, Cloud revenue growth to approximately 24.3% (with DX contributing approximately 1 percentage point), Data Center revenue growth of approximately 20.0%, and Marketplace and other revenue growth of approximately 6.0%. FY26 GAAP gross margin is expected at approximately 84.0% and non-GAAP gross margin at approximately 87.0%. FY26 GAAP operating margin is expected at approximately (3.0%) and non-GAAP operating margin at approximately 25.5%. Management expects significantly higher free cash flow margin in H2 relative to H1. The company plans to accelerate share repurchases in H2 at roughly 2-3x the H1 pace, and co-founders will pause their selling plans. Data Center revenue growth is expected to meaningfully decelerate in FY27 as the EOL revenue recognition benefit laps.
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Figures from SEC filings and company reports. Not investment advice.