Atlassian Corporation Class A Common Stock The KeyBanc Technology Leadership Forum 2026

Yeah. No, thanks for having me, Jason. Yeah, we're really pleased with the strong Q4 results to end our fiscal 2026. I think what you're seeing is customers really value and understand the value of the overall Atlassian platform with the Teamwork Graph, which is a living contextual layer underlying the platform, as well as our overall system of work, a basically living system of record and system of work to actually drive those workflows with four organizations. To Jason's point, we had a really strong quarter on the cloud side of things, and that outperformance was really driven by two things. It's actually consistent with what we saw in Q3, so it's good to see that consistency carry through, but it's driven by strong upgrades in cross-sell to our Teamwork Collection, which is basically customers being able to purchase the entire Atlassian platform. Primarily for additional Rovo credits.

You get 10x the amount of Rovo credits with the Teamwork Collection, so customers are upgrading for that additional AI capability, as well as cross-sell motion into our Service Collection. So that was really great to see. All the while, we're starting to continue to see strong seat expansion across our core products of Jira and Confluence, which I think highlights the importance of collaboration and teamwork and coordination in this AI era. We've talked about, for quite some time, in the AI era, the need to track, manage, plan, and all your work across your organization. That doesn't change, and I think you're starting to see that continue to play out with the strong cross-sell momentum, AI purchasing on Teamwork Collection, with that strong seat expansion on our core products of Jira and Confluence.

I think it's notable that the strong seat expansion was across both software development and knowledge workers. So at our investor forum, we recently shared about two-thirds of users on Jira and over two-thirds, more like 70%, on Confluence, are knowledge workers and non-software developers. That trend continued across this quarter where that net new seat expansion happened across both those vectors, so that continues to be really healthy across both segments.

Sure. Actually, I would point you to probably GAAP operating margins. I think that is where we are increasingly focused. We have talked about one of our strategic priorities along with enterprise AI in our system of work is to drive durable, profitable growth. Part of that is to accelerate our path to GAAP profitability and expand on GAAP operating margins over time. I think you actually saw that in this past quarter, where we delivered GAAP profitability in Q4 and had strong GAAP operating margins. For next fiscal year, we are guiding to 4.5% GAAP operating margins, which is an expansion relative to how we ended fiscal 2026, which was basically flat or 0% operating margin. That is great to see that progress and reflective of the discipline that we are having on that side as we charge and accelerate that path towards GAAP profitability and margin expansion.

I think you are quoting non-GAAP operating margins, and there are a couple different dynamics for you to consider on the non-GAAP side of things. Earlier in fiscal 2026, we announced the end of life of our data center product. With that comes pretty significant ASC 606 changes where we are recognizing more upfront revenue on the sales of our data center subscriptions, and that drove approximately 4 points of margin benefit in fiscal 2026. So we are recognizing significantly more upfront. That basically fell to the bottom line immediately. It is just all timing of revenue recognition, and so that was a tailwind to fiscal 2026 non-GAAP operating margin by about 4 points.

I think if you compare that to fiscal 2027 and kind of normalize for those effects, plus I spoke earlier about trying to be more disciplined, not only from a headcount perspective, but also how we think and issue equity to our employees. So we are changing the compensation mix between cash and equity for certain employees, and certain roles, and that presents a 3-point headwind on fiscal 2027 non-GAAP operating margins. Again, it is just moving compensation mix between cash and equity. So normalizing for those two effects, you actually see non-GAAP operating margins increase. Again, it is a lot of moving pieces, so I actually would probably steer you more towards the GAAP operating margin expansion that I pointed to because that is simpler. It just helps you kind of cut through the noise, and GAAP is frankly where we are focused now as a company.

Yeah. I think it's important to note, as I mentioned earlier, that that strong seat expansion or strong seat growth that we saw endure in Confluence is actually across both software development and importantly, non-software development or the knowledge workers. Teams like HR, marketing, legal, finance, saw really good traction there, and that continues to be an area of focus as we focus on penetrating more of the enterprise customers that we have and reaching and serving more of those users. On the software development side, I think it's an indication of ability to create software now with AI is becoming greater than ever, and you're seeing that ability for companies to become software companies.

Whether you're a traditional non-tech company, now all of these companies have to drive more digital transformation, create more software, create more digital services as part of their overall strategy, and AI's lowering that cost. You're able to drive a lot more software development. Now, the next part of that challenge is how do you actually make all this increased software move in the direction for value for your customers or for the enterprise's customers? That requires a different level of coordination, right? A lot of the AI capabilities we've seen to date have been focused on personal productivity or individual productivity. Our ticker symbol is TEAM. We've always been focused on teamwork. How do you, again, mentioned earlier, coordinate across your organization?

How do you manage, track, and plan work to make sure that we're all moving in unison towards the organization's strategic goals and delivering value to your customers? Because that's actually what ultimately matters as opposed to, again, all these disparate individual tracks happening. I think that highlights what you're seeing play out.