Atlassian beats revenue and earnings forecasts in Q1 2026

Key takeaways

Atlassian reports 21 percent revenue growth in first quarter of 2026 driven by strong cloud expansion and rising AI adoption

Key takeaways

Atlassian reports 21 percent revenue growth in first quarter of 2026 driven by strong cloud expansion and rising AI adoption

Atlassian reported first-quarter fiscal year 2026 results that exceeded analyst expectations in both revenue and earnings. The company’s revenue reached 1.43 billion USD, representing a 21 percent year-over-year increase and surpassing the forecast of 1.40 billion USD. Adjusted earnings per share came in at 1.04 USD, significantly above the consensus of 0.84 USD. The cloud segment showed the strongest growth, generating 998 million USD in revenue, up 26 percent year-over-year and accounting for approximately 70 percent of total revenue. Adoption of the company’s artificial intelligence tools was equally impressive, with monthly active users reaching 3.5 million, a 50 percent increase quarter-over-quarter, positioning Atlassian increasingly as a strategic AI platform for enterprise customers.

Key financial highlights:

Total revenue: 1.43 billion USD (+21 percent year-over-year)
Adjusted earnings per share (EPS non-GAAP): 1.04 USD (consensus 0.84 USD)
Cloud revenue: 998 million USD (+26 percent year-over-year)
Non-GAAP operating income: 322.7 million USD
GAAP operating income: loss of 96.3 million USD (including 55.7 million USD in restructuring costs)
Revenue guidance for Q2 FY2026: 1.535–1.543 billion USD (analyst forecast 1.51 billion USD)

The company achieved a significant operational turnaround, moving from a 32 million USD operating loss in the same quarter last year to 322.7 million USD in non-GAAP operating income. GAAP results still showed an operating loss of 96.3 million USD, primarily due to 55.7 million USD in restructuring costs. Management projects second-quarter fiscal year 2026 revenue between 1.535 and 1.543 billion USD, exceeding the market expectation of 1.51 billion USD, and announced a new 2.5 billion USD share repurchase program, continuing the previous 1.5 billion USD authorization. It is noteworthy that the CEO sold 1.25 million USD worth of shares under a pre-arranged 10b5-1 plan just prior to the earnings release, which may raise questions but does not alter the company’s long-term outlook.

The market reaction was positive, with the stock rising nearly 8 percent following the results, reflecting investor confidence in Atlassian’s cloud strategy and AI growth. For retail investors, it is important to monitor the stability of cloud revenue, continued adoption of AI tools, and the impact of the share repurchase program on the stock price. Key risks include ongoing GAAP operating losses, potential stock price volatility due to CEO share sales, and heavy reliance on cloud and AI revenue, which could be affected by slower enterprise migration or regulatory developments in artificial intelligence.

Source: xStation5

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Atlassian beats revenue and earnings forecasts in Q1 2026

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