Our Q1 FY26 letter to shareholders

From the CEO

We had an incredible Q1 at Atlassian. Total revenue grew to $1.4 billion, up 21% year-over-year (YoY). Our strong execution powered Cloud revenue of $998 million (up 26% YoY), and accelerated RPO to $3.3 billion (up 42% YoY). These achievements are the direct result of the amazing headway we’re making across our three top priorities of Enterprise, AI, and System of Work.

The use of our AI capabilities continues to rise at a rapid clip, as customers realize the differentiated value of the Atlassian platform. It starts with our Teamwork Graph, which now tracks more than 100 billion objects and relationships – connecting people, work, and context across the enterprise – enabling smarter automation, deeper insights, and unmatched productivity gains for our customers. We combine this with the enterprise-grade permissioning, compliance, and governance that’s built into our platform – trusted by over 300,000 customers, including over 80% of the Fortune 500, to unleash the potential of their teams.

We now have over 3.5 million monthly active users (MAU) of our AI capabilities, once again up 50% quarter-over-quarter, and growing by the day. What’s more, we analyzed a cohort of Atlassian customers and found that those using AI code generation tools like GitHub Copilot, Claude Code, Cursor, and Replit expand their paid seats on Jira at a rate that’s approximately 5% higher than those who don’t – even when Rovo Dev is excluded – demonstrating the mission-critical role we play in powering teamwork, business processes, and workflows across all teams in the AI era.

AI is directly driving demand for our cloud offerings. Customers are looking to unlock the full capabilities of our AI-powered cloud platform, directly resulting in strong migrations from Data Center to Cloud (up more than 2x over the prior year), and catalyzing upgrades to Teamwork Collection, which continue to exceed our early expectations. This comes through in our strong Q1 Cloud results and gives us the confidence to raise our Cloud revenue outlook for the year.

And, after years of thoughtfully building out our cloud platform, we made the strategic decision to announce the end of life of our Data Center offering and introduce ‘Atlassian Ascend’ to help our customers upgrade to Cloud over the coming years. Our cloud platform is critical to ensuring all of our customers can enjoy a cloud-first experience like Ford, Expedia, NetApp, and Databricks. Hundreds of customers like Wells Fargo chose to migrate to Atlassian’s cloud platform this quarter in order to unlock new capabilities to drive productivity and innovation across their organization.

With AI woven into every layer of Teamwork Collection – from automating workflows and surfacing insights to enabling intelligent agents that accelerate productivity – AI is not just an add-on, but the engine powering modern teamwork. Today, 50% of users of our core products are from business teams, and the hundreds of Teamwork Collection deals closed during Q1 give us confidence it’s driving further wall-to-wall adoption across HR, marketing, legal, finance, and other business teams within our customer base. While Teamwork Collection hasn’t even been in the market for two full quarters, we’re seeing great results, including strong edition upgrades, a double-digit percentage increase in users, and consistent consolidation from competitor tools.

Alongside another quarter of great execution across R&D and GTM, we also acquired The Browser Company and entered into a definitive agreement to acquire DX – two very different but strategic plays for Atlassian (more on these below).

We achieved a lot in Q1, and amongst it all, we continue to play to our strengths: being long-term focused and making hard decisions, while playing offense when opportunities present themselves. Our decision to go all-in on Cloud by sunsetting our Data Center offering, our launch of multiple new Collections at Team ’25 Europe, our increasing AI capabilities delivering 50% quarter-on-quarter growth in AI MAU, our recent acquisition announcements, and our incredible momentum across migrations are a culmination of thoughtful planning and strategic decisions focused on our future success.

No slowing down now. We’re poised to ascend to greater heights.

Ascending into the Cloud

Early customer feedback on our Atlassian Ascend program has been overwhelmingly positive. With all the innovation in AI we’ve been delivering in cloud, customers have been looking to make the upgrade, and this program helps them jumpstart their migration planning and bring them ever closer to unlocking the AI-powered potential of their teams on the Atlassian cloud platform.

Years of meticulous planning for this moment are paying off now. Guided by our core value of “Don’t #@!% the customer” and our experience sunsetting our Server offerings, we are confident that now is the time to accelerate our customers’ journey to the cloud. Along with our amazing global partners, we will upgrade our remaining customers to the cloud over the coming years. Atlassian Ascend includes migration programs, trials, incentives, FastShift, and other key resources to support every customer’s needs. And these programs are already yielding results. Through strong partnerships between our engineering and support teams, nearly half a million users have accelerated their migration journey to cloud over the past year through the initial pilot of the FastShift program.

Alongside Atlassian Ascend, we announced a number of key enterprise-grade platform updates to help customers plan their journey to cloud, including Atlassian Isolated Cloud Early Access, and Atlassian Government Cloud General Availability. We also updated our cloud roadmap to include scaling Confluence to 250k users, and FedRAMP® High and IL5 compliance standards. 

Since migrating 30k seats from Data Center to Cloud, Expedia Group is tapping into AI-powered collaboration with the Atlassian cloud platform.

Attacking AI opportunities

Rovo

At Team ‘25 Europe, we announced the rollout of Rovo across Standard editions and its inclusion across all Atlassian apps and Collections, making Rovo truly central to the Atlassian cloud platform. 

In the last six months, Rovo agents have helped automate 2.4 million workflow automations across our customer base. This incredible rate of adoption is a testament to the differentiated experience it creates for our customers, the steady drumbeat of innovation and improvements from our R&D muscle, and the strategic AI partnerships we are forming. Last quarter, we announced our Google Cloud and Anthropic partnerships, and since then, we launched AI partnerships with leading vendors across our markets, from business teams (like Databricks, Box, Figma, Canva, Hubspot and Mistral) to software teams (like Cursor, OpenAI, Github, Lovable and Cognition) to IT and operations teams (like New Relic, Dynatrace and BigPanda).

This has resulted in an improved AI experience. Today, Rovo Search powers over 3 million users worldwide, making it one of the world’s most widely used enterprise search engines. Over 78% of those users say Rovo is better than any search experience they have had in the past. Since January, we have made more than a 20% improvement in search relevance, alongside a 35% improvement in search performance. And what’s more, when we surveyed customers at Team ’25 Europe, 74% of respondents said they expect to increase usage of Atlassian products in their organization due to their use of Gen AI tools.

🚀 AI acquisitions

Over the past two decades, we have always operated with a long-term focus. We look to position ourselves so that we can agilely take advantage of opportunities when they present themselves. This approach has suited us and our customers well.

Loom is another great example of our strategic, long-term approach across AI acquisitions. Since its acquisition two years ago, Loom has more than doubled to become a $100+ million ARR standalone business (not counting any contribution from its inclusion in Teamwork Collection). This growth is fueled by its AI-enabled editions, which are growing >100% YoY as customers look to take advantage of AI-powered capabilities such as AI editing, AI content generation, and AI meeting transcription. Over the last year, Loom users have created over 100 million videos and meeting recordings, driving massive efficiency gains and seamless knowledge sharing at scale for our customers. What’s more, all this unstructured data adds valuable context to our Teamwork Graph, enabling Rovo agents to push work forward.

We are once again focused on the long term in making a bold bet with our acquisition of The Browser Company and further strengthening one of our core businesses with our intent to acquire DX.

Both deals are really exciting in very different contexts.

The Browser Company of New York

The Browser Company means a big swing into a new market for us – the AI browser. We are at a pivotal moment where AI is reshaping knowledge work, and the browser is evolving into the central operating system for this transformation. One billion knowledge workers spend eight or more hours each day in their browser – using web-based SaaS applications to get their work done. But traditional browsers aren’t curated to this audience; they are built for the masses: your mom and dad, your teenager, or your tradie when they’re off the tools (so to speak).

The Dia browser is built for enterprises for the AI era. It is thoughtfully designed, seamlessly integrates with your work applications, and is equipped with memory and skills to connect SaaS apps, tabs, and tasks, and streamline knowledge work. Combined with our enterprise-grade security, Dia will protect company data and address the growing need for secure tools in an Al-dominated landscape.  

The Browser Company brings the expertise of building beloved browsers – which combined with our 20+ years of understanding knowledge worker needs – makes for an incredibly exciting opportunity to supercharge our System of Work.

DX

When it comes to DX, this proposed acquisition supports another important audience, software teams, who are increasingly evolving how they work with AI. As the demand for engineering intelligence grows, DX has quickly established itself as a market-leading product, with customers like Pfizer, Pinterest, and Xero. With over 300 customers, bringing DX into the fold will mean many cross-sell opportunities to our huge customer base. And with the current adoption of engineering intelligence at Fortune 500 companies currently at 15% and projected to reach 60% by 2028, we expect a high interest from CIOs and CTOs of our largest enterprise customers.

The DX deal only strengthens our position with software teams. Atlassian was named a Leader in the 2025 Gartner® Magic Quadrant™ for DevOps platforms² for the third year in a row, with the highest and furthest placement for its Ability to Execute and Completeness of Vision. As we work to integrate DX into the Atlassian platform, we’ll combine their DevEx Cloud and Data Cloud with Atlassian apps, enhancing our overall value proposition by accelerating delivery and improving tracking of developer productivity for leadership teams.

It’s important to note that despite both deals, our previously communicated non-GAAP operating margin target of 25%+ for fiscal year 2027 remains unchanged. 

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We’re infusing AI into every part of our platform. This isn’t limited to just Rovo. Specific AI capabilities are built into each collection, creating unique experiences tailored for the teams they serve.

We’ve made a lot of headway here, particularly across Service, Software and Teamwork collections.

Service Collection:

Atlassian’s newest collection, Service Collection, empowers teams to deliver exceptional, AI-driven service experiences to employees and customers through the Atlassian System of Work. It includes three core apps: Jira Service Management, Assets, and Customer Service Management, along with Rovo. Today, over 65,000 customers, including 50% of the Fortune 500, are leveraging Jira Service Management. Many of these customers are switching from legacy ITSM solutions, like The Warehouse Group, which realized a 14x faster implementation time and approximately 25% lower total cost of ownership since making the switch to Jira Service Management.

At Team ’25 Europe, customers like BMG, Arvato Systems, Flutter Entertainment, Elkjøp Nordic, and FanDuel shared how they use apps in Service Collection to improve onboarding, IT operations, support, and scale cloud services.

We’re playing offense by building an AI-native Customer Service Management offering that takes advantage of AI-driven market disruption, connecting frontline teams with their counterparts in development, operations, and business teams. Business success relies on building the best products and services faster than the competition. And now, thanks to AI, products can be shipped faster than ever, which means customer demands for uptime, availability, and performance have never been higher. And globally distributed workforces? Their expectations for the employee experience have changed, too. Enter: Service Collection.

Software Collection:

Our newly announced Software Collection helps engineering orgs deliver high-quality software, fast. It improves productivity, culture, and quality with the AI-enabled system for every software team. It includes four core apps: Dev Productivity + Dev Experience, Bitbucket Source Code Management, Bitbucket Pipelines, Compass, with DX coming soon, along with Rovo for developers in the form of Rovo Dev.

Rovo Dev has launched as a separate SKU and is now generally available for planning, coding, reviews, and automating repetitive work at scale. Rovo Dev accelerates the software development life cycle by removing friction, improving code quality, and keeping developers in flow.

AI results are only as good as the data behind them, and one of the significant advantages Atlassian has is context. All this contextual data is what has allowed Rovo Dev to achieve the number one ranking on SWE-Bench, an industry benchmark for real-world software engineering tasks. Internally, we’ve seen a 45% improvement in pull request (PR) cycle time where Rovo Dev is used, and 51% of potential security vulnerabilities at Atlassian are now automatically resolved with Rovo Dev, which has allowed us to cut our issue cycle time by 42%. And customers in our beta program have been able to use the Rovo Dev review agent to shorten their PR cycle times by 32%.

Teamwork Collection:

Teamwork Collection is the foundation of Atlassian’s System of Work, providing a unified, AI-native collaboration experience that helps teams plan, communicate, and deliver work at scale. It includes three core apps: Jira, Confluence, and Loom, along with Rovo.

Teamwork Collection customers like Applied Systems, Wendy’s, and KPN are gaining a set of new AI capabilities to help their teams work together, faster, smarter, and with AI. Customers can now assign work to agents in Jira, allowing technology and business users alike to assign Jira work items to 1st-party or 3rd-party AI agents like Canva, Cursor, Databricks, and GitHub, to complete work on their behalf. Additionally, Rovo now supports project management skills in Jira, creating Jira work items automatically from a project brief document, suggesting updates for work items, and keeping the project tidy by deleting duplicate items and archiving old ones.

AI continues to be a huge reason customers upgrade to Teamwork Collection. Customers are seeing the value of Atlassian’s differentiation when it comes to AI – our opinionated Teamwork Graph, along with enterprise-grade permissioning, compliance, and governance that’s built directly into our platform, creating an unmatched experience for day-to-day work.

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Leadership Updates

We are thrilled to announce that Tamar Yehoshua will join Atlassian as Chief Product and AI Officer on November 17, 2025. Tamar brings exceptional experience to Atlassian as a seasoned product leader who has led product strategy at scale. Tamar joins us from Glean, where she served as President of Product and Technology. Prior to this, Tamar was the Chief Product Officer at Slack and a VP leading product and engineering teams for Google Search.

We can’t wait for Tamar to join us in the most exciting phase of growth yet for Atlassian.

Additionally, as Joe Binz approaches four years as CFO at Atlassian, he will be retiring. We have mutually decided that the right time for Joe to transition out of the company is at the end of the fiscal year, June 30, 2026. We are grateful for Joe’s time at Atlassian, where he shepherded the company through a transformational period from Server to Cloud, helped scale our enterprise business, and built a world-class finance organization. We have initiated a search for our next Chief Financial Officer.

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Everything we’ve delivered this quarter is a culmination of careful planning and bold decisions to relentlessly innovate across our entire cloud platform. When you look across the Atlassian portfolio, you’ll see we’ve push, push, pushed in every area of it, with sensible thoughtfulness to sustain strong growth.

So, here’s to a great quarter of execution. We’ve done the work. The opportunity is ours. Let’s go

^{1- Taken from Team ’25 Europe, “Putting AI to work with the Atlassian Cloud Platform”}

^{2- Gartner, Magic Quadrant for DevOps Platforms, Keith Mann, George Spafford, Bill Holz, Thomas Murphy, 22 September 2025. Gartner does not endorse any vendor, product or service depicted in its research publications and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. The Gartner content described herein (the “Gartner Content”) represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. (“Gartner”), and is not a representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this Shareholder Letter), and the opinions expressed in the Gartner Content are subject to change without notice.
GARTNER is a registered trademark and service mark of Gartner and Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved.}

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