Atlassian delivers strong Q1, ups outlook

Atlassian reported strong first quarter results, delivered revenue growth of 24% and said, "enterprise AI has hit an inflection point."

The company reported first quarter net income of $91 million, or 35 cents a share, on revenue of $1.77 billion, up 24% from a year ago. Non-GAAP earnings for the quarter were $1.65 a share.

Wall Street was looking for non-GAAP earnings of $1.43 a share on revenue of $1.17 billion.

Atlassian CEO Mike Cannon-Brookes said, "model power is table stakes. The advantage goes to platforms that bring people and AI agents together with shared context, deep collaboration, and confidence in the outcome." He added that Atlassian's Teamwork Graph is providing AI agents needed context to execute.

In a shareholder letter, Cannon-Brookes said:

"The more of our apps customers adopt, from one to multiple to a full Collection, the richer the context the Teamwork Graph builds across their teams. A richer Teamwork Graph powers more valuable AI, and more value in AI brings more work onto the platform, opening up more opportunities to expand across our customer base. Each turn of the flywheel builds on the last, driving durable, profitable growth."

The company said that customers are increasingly bringing their teams, agents and workflows to Atlassian.

By the numbers:

• Atlassian said its Service Collection of apps has more than $1 billion in annual recurring revenue with 30% growth.
• Service Collection now has more than 70,000 customers.
• The Teamwork Collection set of apps has grown its customer base 7x from a year ago to 3,000.
• The Teamwork Graph maps more than 250 million objects and relationships, up from 150 million six months ago.
• Cloud revenue in the quarter was up 31% from a year ago.
• The company ended the quarter with $1.12 billion in cash and equivalents.

As for the outlook, Atlassian said second quarter revenue will be between $1.825 billion to $1.835 billon with cloud revenue growth of 27%.

For fiscal 2027, Atlassian is projecting revenue growth of 13.75% with cloud revenue growth of 26%.