Atlassian Conference Highlights AI-Led Cloud Growth, Expanding Enterprise Demand

AI is driving Atlassian’s cloud momentum: Customers are upgrading to the Teamwork Collection for expanded Rovo AI capabilities, while seat growth continues among developers and knowledge workers across departments such as HR, marketing, legal and finance. Enterprise and service-management expansion is accelerating: Service Collection surpassed $1 billion in ARR, with more than 60% of use cases now outside IT. Remaining performance obligations rose 44% year over year, and customers spending over $3 million annually increased by more than 50%. Atlassian is emphasizing sustainable profitability and clearer growth metrics: The company guided for a 4.5% GAAP operating margin in fiscal 2027 and introduced subscription ARR, which grew 23% year over year, to reduce noise from the transition away from data-center products toward cloud subscriptions. Atlassian NASDAQ: TEAM said its cloud business momentum continued through the fourth quarter of fiscal 2026, supported by customer upgrades, cross-selling activity and expanding paid seats across both software development and non-technical teams. Speaking at a KeyBanc conference, Martin Lam, Atlassian’s head of investor relations, said cloud outperformance was driven by upgrades to the company’s Teamwork Collection and cross-sell activity into its Service Collection. Customers upgrading to Teamwork Collection receive 10 times the number of Rovo AI credits, which Lam said has become a primary driver of adoption. Atlassian Just Pulled Off the Software Comeback Wall Street Wanted “Customers are upgrading for that additional AI capability,” Lam said, adding that the company also saw continued seat expansion in Jira and Confluence. Seat Growth Extends Beyond Developers Lam said the company’s seat expansion spanned both software developers and knowledge workers, including teams in human resources, marketing, legal and finance. Atlassian previously disclosed that roughly two-thirds of Jira users and about 70% of Confluence users are knowledge workers or non-software developers. Atlassian’s AI Pivot Is Starting to Challenge Wall Street’s Bear Case He said artificial intelligence is lowering the cost of software development and enabling more businesses to develop digital products and services. However, the resulting growth in work also increases the need for coordination across organizations, Lam said. Atlassian’s platform is designed to help companies manage, track and plan work across teams, according to Lam. He pointed to the Teamwork Graph, a contextual layer within the platform that connects information, workflows, tools and people. Lam said the Teamwork Graph can improve AI results by providing context from products including Jira and Confluence. He said Atlassian has found the technology delivers 48% more efficient token usage and 44% better results, as it reduces the need for AI systems to search broadly across an organization without contextual relationships. Profitability Focus Shifts Toward GAAP Metrics On margins, Lam said Atlassian is increasingly focused on GAAP operating margins as part of its effort to deliver “durable, profitable growth.” The company reported GAAP profitability in the fourth quarter and guided for fiscal 2027 GAAP operating margin of 4.5%, compared with approximately flat GAAP operating margin at the end of fiscal 2026. Lam said non-GAAP comparisons are affected by several accounting and compensation-related factors. The end of life for Atlassian’s data center product created changes under ASC 606 revenue recognition rules, producing about a four-point benefit to fiscal 2026 non-GAAP.