Atlassian Corporation TEAM

The business

Atlassian sells the software that software and IT teams run on: Jira, the near-default issue and project tracker; Confluence, the knowledge workspace; Jira Service Management, the IT and enterprise service desk; plus Trello, Bitbucket, Compass, Opsgenie, and the AI layer Rovo. Customers buy per-seat cloud subscriptions, then add seats and cross-sell across the suite through a low-friction land-and-expand motion, supplemented by a third-party app marketplace. The engine is cloud subscription: License and Service revenue was $4.93B of FY25's $5.22B, roughly 95% of the total, and cloud is the fastest-growing slice within it, with Jira Service Management the standout large product, having crossed $1 billion in annual recurring revenue while growing above 30%.

The thing the financials do not show is the AI question and the control structure. Atlassian is GAAP-unprofitable because of heavy stock-based compensation and research spending, yet it throws off about $1.4 billion of free cash flow, so it is firmly profitable on a cash basis. Bulls are paying for Rovo, where AI usage is compounding fast and customers adopting it expand spend faster than those who do not, with no sign yet of seat compression; bears point to the risk that if AI agents do more engineering and IT work, demand for seat-priced software could eventually shrink. The company is founder-controlled, with Michael Cannon-Brookes holding super-voting shares. What changed in the most recent quarter, reported May 1, is the reacceleration: Q3 FY2026 revenue reached $1.8B, up about 32% year over year, with the cloud migration off server, cross-sell, and early AI monetization all contributing, which lifted the stock off a deeply depressed base.