Atlassian Corporation Class A Common Stock 2026 Q4 Earnings Call

Welcome to Atlassian's fourth quarter FY 2026 earnings call. Thank you for joining us today. On the call with me today, we have Atlassian CEO and Co-founder, Mike Cannon-Brookes, and Chief Financial Officer, James Chuong. Earlier today, we published a shareholder letter and press release with our financial results and commentary for our fourth quarter of FY 2026. The shareholder letter is available on the investor relations section of our website, where you will also find other earnings-related materials, including the earnings press release and supplemental investor data sheet. As always, our shareholder letter contains management insight and commentary for the quarter. During the call today, we'll have brief opening remarks and then focus our time on Q&A. This call will include forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, and assumptions.

If any of such risks or uncertainties materialize, or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management's beliefs and assumptions only as of the date such statements are made. We undertake no obligation to update or revise such statements should they change or cease to be current. Further information on these and other factors that could affect our business performance and financial results is included in filings we make with the Securities and Exchange Commission from time to time, including the section titled Risk Factors in our most recently filed annual and quarterly reports. During today's call, we will also discuss non-GAAP financial metrics.

These non-GAAP financial measures are in addition to, are not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP financial measures is available in our shareholder letter, earnings release, and investor data sheet on the investor relations section of our website. We'd like to allow as many of you to participate in Q&A as possible. Out of respect for others on the call, we'll take one question at a time. With that, I'll turn the call over to Mike for opening remarks.

Thank you all for joining us today. As you've already read in our shareholder letter, Q4 was another outstanding quarter, capping off an incredible fiscal year for Atlassian. Total revenue grew 28% to $1.8 billion. Cloud revenue surged to $1.2 billion as growth accelerated again, up 31% year-over-year. RPO grew 44% year-over-year to $4.8 billion, and we delivered a GAAP operating margin of 12%. We're firing across all of our strategic priorities, enterprise, the system of work, and AI, all while driving durable, profitable growth. In the enterprise, we had an all-time record quarter at the $1 million level, the $3 million level, and the $5 million level of deals. With our $3 million ARR customers growing over 50% year-on-year, and our $5 million ARR customers growing over 70%.

In the Atlassian system of work, leading enterprises like Google Cloud are using our platform to power the way their teams collaborate. In AI, Rovo is now used by over 80% of the Fortune 500. Rovo-assisted actions grew 50% over the prior quarter, Rovo adopters, that is customers using Rovo, continue to grow their ARR at more than twice the rate of non-adopters. When we think about what AI is doing for Atlassian, the results speak for themselves. Customers are getting real value from the AI embedded directly into their workflows, it's translating into direct growth in our business. Customers are committing more deeply to the Atlassian platform because of the value delivered. We're seeing longer customer commitments, larger deals, stronger seat expansion, great cross-sell momentum, and higher NRR.

Last quarter, we recognized customers like Nvidia and ResMed at Team '26 for how they're putting the Atlassian platform to work in the AI era to drive their businesses using the Teamwork Graph. The reason customers like these and many more are getting so much value from Atlassian comes down to a key structural advantage, that advantage is context. We believe models will keep improving, organizations will hire that intelligence by the token. Context, their internal knowledge, experience, and memory is much harder for organizations to build, it cannot be hired. With the Teamwork Graph, we have 25 years of deep data about work. That's enabled us to build one of the best context graphs that exists for enterprise knowledge, now spanning over 200 billion objects and connections.

For agents grounded in the Teamwork Graph, organizations can see up to 44% more accurate answers while consuming 48% fewer tokens. In short, it enables to get customers results from their AI that are cheaper, better, and faster. Context is a clear compounding differentiator. I shared more on this in my investor Loom. As you've read in our shareholder letter, we're executing well on our long-term strategy from a position of strength, we're seeing this play out each quarter in our strong results. The best is truly yet to come for Atlassian. With that, I'll pass the call to the operator for Q&A We will now begin the question and answer session.

Thank you. Thanks, Adam, for the question.

Welcome to the coverage. First, I would highlight that we're really pleased to see the strength that we saw in the quarter printing ARR growth, sub-ARR growth of 23% year-over-year. When it comes to the guide, we'll continue to take a thoughtful and prudent approach here, really balancing the momentum that we're seeing in the business, the demand signals that we're getting from our customers with the uncertainty as you look out in the macro environment, fiscal policy and geopolitical landscape. As you mentioned, this is the first time we'll be issuing ARR guidance for the full fiscal year. We're also still early in the fiscal year here, so taking a bit more of a prudent approach in that second half of FY 2027.

It's also worth noting that in FY 2026, the ARR year-over-year growth rate benefited by approximately one point from the acquisition of DX at the close of November in 2025. That's our fiscal Q2. We'll be lapping that DX acquisition and the healthy acceleration that we saw in the second half of FY 2026. Of course, we're going to still continue to scale our enterprise go-to-market sales motion as we unlock the opportunities that we see in front of us. All up, feel really good about the state of the business here. Coming off a quarter where RPO landed at 44% year-on-year, NRR was north of 120%. Here, just taking a balanced and prudent approach to the guide.