Group 1 - The article discusses the positive outlook for Atlassian (NASDAQ: TEAM), with a previous rating of "buy" based on the belief that the company will achieve its $10 billion revenue target by FY29 [1] - The author highlights the involvement of Amrita, who leads a family office fund focused on sustainable, growth-driven companies, indicating a trend towards investments that maximize shareholder equity [1] - Amrita's background includes experience in high-growth supply-chain start-ups and venture capital, emphasizing her expertise in maximizing returns and user acquisition strategies during the pandemic [1] Group 2 - The article mentions that Amrita's newsletter, The Pragmatic Optimist, has gained recognition as a top finance newsletter, reflecting a growing interest in accessible financial literacy [1] - The focus on democratizing financial literacy suggests a shift in the investment landscape towards more inclusive and understandable financial strategies [1]

Group 1 - The Q2 earnings season is revealing a trend of declining investor confidence amid a volatile 2025 [1] - Gary Alexander has extensive experience in technology sectors, contributing insights that shape industry themes [1] Group 2 - The article emphasizes the importance of understanding market dynamics and investor sentiment during earnings reports [1]

Core Insights - Atlassian (TEAM) reported strong fiscal Q4 2025 results, with non-GAAP earnings per share of 98 cents, exceeding the Zacks Consensus Estimate by 18.1% and reflecting a 48.5% increase from the previous year [1][2] Financial Performance - Fiscal Q4 revenues increased by 22% year over year to $1.38 billion, surpassing the Zacks Consensus Estimate by 2.3%, driven by growth in Atlassian Government Cloud and AI adoption [2][4] - Subscription revenues rose 22.8% year over year to $1.31 billion, while Other revenues increased by 14.5% to $71.8 million [3] - Cloud revenues reached $927.7 million, up 25.7% year over year, and Data Center revenues rose 16.6% to $380.8 million [4] - Non-GAAP gross profit increased by 25.1% year over year to $1.18 billion, with a gross margin of 85.3%, up 190 basis points from the prior year [5] Operating Metrics - Non-GAAP operating income grew by 51% year over year to $335.9 million, with an operating margin improvement of 460 basis points to 24.3% [5] - The company generated $375.3 million in operating cash flow and $360.3 million in free cash flow during the quarter [6] Future Guidance - For Q1 fiscal 2026, Atlassian projects revenues between $1.395 billion and $1.403 billion, with a non-GAAP gross margin of 84.5% and an operating margin of 20.5% [7] - For fiscal 2026, the company expects revenue growth of 18% year over year, with a projected gross margin of 85.5% and an operating margin of 24% [8]

Core Insights - Atlassian reported $1.38 billion in revenue for the quarter ended June 2025, marking a year-over-year increase of 22.3% [1] - The earnings per share (EPS) for the same period was $0.98, up from $0.66 a year ago, representing a significant improvement [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.35 billion by 2.25%, while the EPS surpassed the consensus estimate of $0.83 by 18.07% [1] Financial Performance Metrics - The number of customers reached 300,000, slightly below the two-analyst average estimate of 309,244 [4] - Subscription revenues totaled $1.31 billion, exceeding the eight-analyst average estimate of $1.29 billion, with a year-over-year change of 22.8% [4] - Other revenues amounted to $71.81 million, surpassing the average estimate of $66.66 million, reflecting a year-over-year increase of 14.5% [4] - Cloud revenues were reported at $927.73 million, exceeding the estimated $906.32 million, with a year-over-year growth of 25.7% [4] - Data Center revenues reached $380.78 million, slightly above the estimated $379.45 million, showing a year-over-year increase of 16.6% [4] - Marketplace and other revenues were $75.84 million, exceeding the six-analyst average estimate of $65.53 million, representing a year-over-year change of 13.3% [4] Stock Performance - Atlassian's shares have returned -16% over the past month, contrasting with the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Atlassian reported quarterly earnings of $0.98 per share, exceeding the Zacks Consensus Estimate of $0.83 per share, and showing an increase from $0.66 per share a year ago, indicating a strong performance in the latest quarter [1][2]. Financial Performance - The company achieved revenues of $1.38 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.25%, and up from $1.13 billion year-over-year [2]. - Over the last four quarters, Atlassian has consistently exceeded consensus EPS estimates, achieving this four times [2]. Stock Performance - Atlassian shares have declined approximately 23.8% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [3]. - The current Zacks Rank for Atlassian is 3 (Hold), indicating that the stock is expected to perform in line with the market in the near future [6]. Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.90 on revenues of $1.4 billion, while the estimate for the current fiscal year is $4.11 on revenues of $6.1 billion [7]. - The trend of earnings estimate revisions for Atlassian was mixed prior to the earnings release, which may change following the latest results [6]. Industry Context - The Internet - Software industry, to which Atlassian belongs, is currently ranked in the top 28% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8].

Financial Data and Key Metrics Changes - Atlassian closed FY 2025 with revenue exceeding $5.2 billion and free cash flow of over $1.4 billion, achieving a balanced rule of 40 plus performance [8] - Free cash flow for the quarter was $360 million, down 13% year over year, primarily due to strong collections in the prior year [25][26] - The remaining performance metrics indicate a strong foundation for future growth, with a cloud net revenue retention rate of 120% [9] Business Line Data and Key Metrics Changes - The Teamwork platform now serves over 300,000 customers, with significant growth in enterprise sales and a record number of deals over $1 million in annual contract value (ACV) [8][9] - The AI Now user base reached 2.3 million, reflecting a 50% increase from the previous quarter [9] - Core applications such as Jira, Confluence, and Jira Service Management are growing in line or faster than total company revenue, indicating strong demand [11] Market Data and Key Metrics Changes - The company reported a 38% year-over-year increase in the remaining performance obligation (RPO) balance, reaching $3.3 billion, with 74% expected to be recognized as revenue in the next twelve months [42][43] - Data center to cloud migrations increased by 60% year over year, showcasing strong customer commitment to the cloud platform [42][69] Company Strategy and Development Direction - Atlassian is focusing on serving enterprise customers, delivering AI innovations, and enhancing collaboration through its system of work [9][11] - The partnership with Google Cloud is a significant step in Atlassian's multi-cloud strategy, aimed at accelerating cloud transformation and AI solution delivery [10] - The company is committed to long-term growth, with a target of 20% compounded annual growth from FY 2024 through FY 2027 [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain growth despite macroeconomic uncertainties, emphasizing the importance of AI and enterprise transformations [33][34] - The management team highlighted that they are not seeing any negative impacts from the integration of code-generating AI tools on their product usage [16][21] - The company anticipates continued strong performance in the enterprise segment, with a robust pipeline of large deals and ongoing improvements in customer success operations [67][72] Other Important Information - Anu, the President of Atlassian, will transition away from her role in December after nearly twelve years, with management expressing gratitude for her contributions [11][12] - The company is investing heavily in R&D and sales to support its strategic priorities, which include enterprise cloud, AI, and system of work [100] Q&A Session Summary Question: Concerns about tool generation tools and developer roles - Management clarified that they are not seeing any negative impact on growth rates or adoption rates of their technical products despite market concerns [16][21] Question: Free cash flow trajectory for 2026 - Free cash flow for FY 2025 was flat at around $1.4 billion, with expectations for correlation to non-GAAP operating income trends moving forward [25][27] Question: Potential inflection points for revenue growth - Management highlighted multiple growth levers, including paid seat expansion, cross-sell, upsell, and new customer growth, with AI providing additional opportunities [33][34] Question: Guidance for data center segment growth - Management noted that Q1 guidance reflects a seasonal decline due to a smaller expiration base and headwinds from prior programmatic changes [76][78] Question: Driving wall-to-wall deployments in enterprises - Management emphasized ongoing consolidation efforts and the growth of business user segments as key strategies to increase penetration in non-technical roles [80][82]

Financial Data and Key Metrics Changes - Atlassian reported over $5.2 billion in revenue and over $1.4 billion in free cash flow for FY 2025, achieving a balanced rule of 40 plus performance [6][10] - Free cash flow for the quarter was $360 million, down 13% year over year, primarily due to strong collections in the prior year [24][25] - The company achieved a cloud net revenue retention rate of 120% [7] Business Line Data and Key Metrics Changes - The Teamwork platform now serves over 300,000 customers, with significant growth in AI usage, reaching 2.3 million AI users, a 50% increase from the previous quarter [6][7] - Core applications such as Jira, Confluence, and Jira Service Management are growing in line or faster than total company revenue [10] - The Teamwork collection has exceeded expectations since its launch, contributing to strong revenue growth [10] Market Data and Key Metrics Changes - Atlassian's enterprise sales teams executed a record number of deals greater than $1 million in annual contract value (ACV), more than doubling year over year [6][10] - Data center to cloud migrations increased by 60% year over year, indicating strong customer commitment to the cloud platform [42][69] Company Strategy and Development Direction - The company is focusing on serving the enterprise, delivering AI innovations, and connecting teams through the Atlassian system of work [7][10] - A partnership with Google Cloud aims to enhance the AI-powered Teamwork platform and accelerate cloud transformation [8][10] - Atlassian is committed to a long-term growth strategy, targeting a compounded annual growth rate of 20% from FY 2024 to FY 2027 [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve long-term growth targets despite macroeconomic uncertainties [33][34] - The company sees AI as a significant tailwind for business growth, with expectations of increased software creation and collaboration [20][21] - Management highlighted the importance of customer-centric processes and partnerships to drive enterprise growth [71][72] Other Important Information - Anu, the President of Atlassian, will transition away from her role in December after nearly twelve years [10][11] - The company is investing heavily in R&D and sales to support its strategic priorities [101][102] Q&A Session Summary Question: Concerns about tool generation tools and developer roles - Management stated that they are not seeing any negative impact on growth rates or adoption from the integration of code-generating AI tools, and user growth remains healthy [15][16] Question: Free cash flow trajectory for 2026 - Free cash flow for FY 2025 was flat at $1.4 billion, with expectations that cash flow will correlate with non-GAAP operating income trends moving forward [24][25][26] Question: Potential inflection points for revenue growth - Management highlighted multiple growth levers, including paid seat expansion, cross-sell, upsell, and new customer growth, with AI opening up additional opportunities [33][34] Question: Guidance for data center segment growth - Management explained that Q1 guidance reflects a smaller expiration base and headwinds from prior programmatic changes, leading to a cautious outlook [78][79] Question: Driving wall-to-wall deployments in enterprises - Management emphasized ongoing consolidation efforts and the growth of business user segments, indicating strong momentum in expanding usage across non-technical roles [81][84]

Core Insights - Atlassian reported strong Q4 FY2025 earnings with revenue growth, a significant non-GAAP earnings beat, and expanding margins [1] - The company continues to focus on cloud services and artificial intelligence (AI) initiatives to drive growth and innovation [4][5] Financial Performance - Q4 FY2025 GAAP revenue reached $1,384 million, surpassing analyst expectations of $1,356 million [1] - Non-GAAP earnings per share (EPS) was $0.98, exceeding the $0.83 estimate, marking a 48.5% increase from $0.66 in Q4 FY2024 [2] - Operating margin (Non-GAAP) improved to 24%, up 4 percentage points from 20% in the previous year [2] - Free cash flow (Non-GAAP) was $360 million, down 12.8% from $413 million in Q4 FY2024 [2] Revenue Breakdown - Subscription revenue grew by 22.9% year over year to $1,313 million, driven by cloud and Data Center services [2][5] - Cloud revenue reached $927.7 million, a 25.7% increase year over year, contributing 67% of overall GAAP revenue [5][7] - The customer base expanded to over 300,000 organizations, with more than 80% of the Fortune 500 as clients [6] Strategic Focus - Atlassian's growth strategy emphasizes product-led initiatives, R&D investment, and AI integration [4] - AI features, particularly the Rovo AI assistant, gained traction with 2.3 million monthly active users, up from 1.5 million in the previous quarter [9] - The company is focusing on product bundling and strategic partnerships, including an expanded relationship with Google Cloud [10][11] Future Outlook - For Q1 FY2026, Atlassian expects total revenue between $1,395 million and $1,403 million, with cloud revenue projected to grow about 22.5% year over year [12] - For FY2026, overall revenue growth is anticipated at approximately 18%, with cloud revenue expected to increase around 21% [12]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Atlassian reported strong financial performance for both the fourth quarter and the full fiscal year 2025, with total revenue reaching **$1.38 billion** for the quarter (up **22% YoY**) and **$5.2 billion** for the full year (up **20% YoY**), demonstrating improved non-GAAP profitability and generating over **$1.4 billion** in free cash flow [Fourth Quarter Fiscal Year 2025 Financial Highlights](index=1&type=section&id=Fourth%20Quarter%20Fiscal%20Year%202025%20Financial%20Highlights) Q4 FY2025 Key Financial Metrics | Metric | Q4 FY2025 | Q4 FY2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $1,384.3M | $1,131.6M | +22% | | Subscription Revenue | $1,312.5M | $1,068.9M | +23% | | **GAAP Operating Margin** | (2%) | (6%) | +4 p.p. | | **Non-GAAP Operating Margin** | 24% | 20% | +4 p.p. | | **GAAP Net Loss per Share** | $(0.09) | $(0.76) | Improved | | **Non-GAAP Net Income per Share** | $0.98 | $0.66 | +48% | | **Free Cash Flow** | $360.3M | $413.2M | -13% | [Fiscal Year 2025 Financial Highlights](index=2&type=section&id=Fiscal%20Year%202025%20Financial%20Highlights) Full Year FY2025 Key Financial Metrics | Metric | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $5.2B | $4.4B | +20% | | **GAAP Operating Margin** | (3%) | (3%) | Flat | | **Non-GAAP Operating Margin** | 25% | 23% | +2 p.p. | | **GAAP Net Loss per Share** | $(0.98) | $(1.16) | Improved | | **Non-GAAP Net Income per Share** | $3.68 | $2.93 | +26% | | **Free Cash Flow** | $1,415.5M | $1,415.6M | Flat | [Business and Operational Highlights](index=2&type=section&id=Recent%20Business%20Highlights) Atlassian achieved significant operational milestones, including expanding its strategic partnership with Google Cloud to enhance AI capabilities and cloud transformation, receiving leadership recognition from Forrester, and introducing new AI-powered tools like 'Talent' and 'Rovo Dev Agent', while growing customers with over **$10,000** in Cloud ARR by **13%** year-over-year - Expanded strategic partnership with Google Cloud to integrate Atlassian's AI-powered platform with Google's AI-optimized infrastructure, advancing its multi-cloud strategy[6](index=6&type=chunk) - Recognized as a Leader in 'The Forrester Wave™' for both Value Stream Management Solutions and DevOps Platforms in Q2 2025[6](index=6&type=chunk) - Introduced new AI-powered tools, including the general availability of the 'Talent' workforce planning app and 'Rovo Dev Agent' in the Command Line Interface (CLI) to accelerate developer workflows[6](index=6&type=chunk) - The number of customers with over **$10,000** in Cloud Annualized Recurring Revenue (ARR) grew to **51,978**, a **13%** increase year-over-year[6](index=6&type=chunk) [Management Changes](index=3&type=section&id=President%20Departure) Atlassian announced the departure of President Anu Bharadwaj, effective December 31, 2025, after nearly **12 years** of instrumental leadership in the company's cloud and platform strategy - President Anu Bharadwaj will be departing Atlassian on December 31, 2025, after a nearly **12-year** tenure where she held key leadership positions including Head of Product and COO[8](index=8&type=chunk) [Financial Outlook (Fiscal Year 2026)](index=3&type=section&id=Financial%20Targets) Atlassian projects a positive fiscal year 2026 outlook with total revenue growth of approximately **18.0%** and Cloud revenue growth of around **21.0%**, anticipating a non-GAAP operating margin of **24.0%** [First Quarter Fiscal Year 2026 Targets](index=3&type=section&id=First%20Quarter%20Fiscal%20Year%202026) Q1 FY2026 Guidance | Metric | Guidance Range / Value | | :--- | :--- | | **Total Revenue** | $1,395M - $1,403M | | Cloud Revenue Growth (YoY) | ~22.5% | | Data Center Revenue Growth (YoY) | ~8.0% | | **GAAP Gross Margin** | ~82.5% | | **Non-GAAP Gross Margin** | ~84.5% | | **GAAP Operating Margin** | ~(5.5%) | | **Non-GAAP Operating Margin** | ~20.5% | [Full Fiscal Year 2026 Targets](index=3&type=section&id=Fiscal%20Year%202026) Full Year FY2026 Guidance | Metric | Guidance Value | | :--- | :--- | | **Total Revenue Growth (YoY)** | ~18.0% | | Cloud Revenue Growth (YoY) | ~21.0% | | Data Center Revenue Growth (YoY) | ~12.5% | | **GAAP Gross Margin** | ~83.5% | | **Non-GAAP Gross Margin** | ~85.5% | | **GAAP Operating Margin** | ~(2.5%) | | **Non-GAAP Operating Margin** | ~24.0% | [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents Atlassian's detailed unaudited consolidated financial statements, including Statements of Operations, Balance Sheets, and Cash Flows for the fourth quarter and full fiscal year ended June 30, 2025, along with comparative data and revenue breakdown by deployment option [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) FY2025 vs. FY2024 Statement of Operations Summary (GAAP) | Metric (in thousands) | Fiscal Year 2025 | Fiscal Year 2024 | | :--- | :--- | :--- | | **Total Revenues** | $5,215,304 | $4,358,603 | | **Gross Profit** | $4,320,453 | $3,555,108 | | **Operating Loss** | $(130,392) | $(117,077) | | **Net Loss** | $(256,687) | $(300,519) | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Balance Sheet Summary (as of June 30) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Cash and Marketable Securities** | $2,937,142 | $2,338,903 | | **Total Assets** | $6,041,970 | $5,212,133 | | **Total Liabilities** | $4,696,316 | $4,179,282 | | **Total Stockholders' Equity** | $1,345,654 | $1,032,851 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) FY2025 vs. FY2024 Cash Flow Summary | Metric (in thousands) | Fiscal Year 2025 | Fiscal Year 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $1,460,393 | $1,448,159 | | **Net cash used in investing activities** | $(342,322) | $(963,746) | | **Net cash used in financing activities** | $(782,582) | $(408,217) | | **Net increase in cash** | $335,640 | $74,207 | [Revenues by Deployment Options](index=10&type=section&id=Revenues%20by%20Deployment%20Options) FY2025 Revenue by Deployment Option (in thousands) | Deployment Option | Fiscal Year 2025 | Fiscal Year 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Cloud** | $3,447,427 | $2,698,899 | +27.7% | | **Data Center** | $1,467,167 | $1,208,498 | +21.4% | | **Marketplace and other** | $300,710 | $273,561 | +9.9% | | **Server** | $0 | $177,645 | -100% | | **Total Revenues** | **$5,215,304** | **$4,358,603** | **+19.7%** | [Reconciliation of GAAP to Non-GAAP Measures](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section details reconciliations of GAAP to non-GAAP financial measures, highlighting adjustments for stock-based compensation and amortization of acquired intangible assets, to clarify performance evaluation metrics for both historical results and future targets [Reconciliation of Historical GAAP to Non-GAAP Results](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Results) FY2025 GAAP to Non-GAAP Reconciliation Summary | Metric (in thousands) | GAAP | Non-GAAP | Key Adjustments (Stock-Based Comp, Amortization) | | :--- | :--- | :--- | :--- | | **Gross Profit** | $4,320,453 | $4,443,978 | +$123,525 | | **Operating (Loss)/Income** | $(130,392) | $1,287,347 | +$1,417,739 | | **Net (Loss)/Income** | $(256,687) | $975,945 | +$1,232,632 (net of tax adjustments) | [Reconciliation of GAAP to Non-GAAP Financial Targets](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Targets) Q1 FY2026 Margin Guidance Reconciliation | Metric | GAAP Target | Adjustments | Non-GAAP Target | | :--- | :--- | :--- | :--- | | **Gross Margin** | 82.5% | +2.0% | 84.5% | | **Operating Margin** | (5.5%) | +26.0% | 20.5% | Full Year FY2026 Margin Guidance Reconciliation | Metric | GAAP Target | Adjustments | Non-GAAP Target | | :--- | :--- | :--- | :--- | | **Gross Margin** | 83.5% | +2.0% | 85.5% | | **Operating Margin** | (2.5%) | +26.5% | 24.0% |

Core Insights - MDA Space Ltd. has been selected by the Canadian Space Agency to conduct an early-phase study for Canada's proposed Lunar Utility Vehicle (LUV) [1][3] Group 1: Project Overview - The study aims to define the LUV mission concept and technology development plan, focusing on mission architecture, technology options, and risk assessments [3] - This initiative follows a successful autonomous lunar surface demonstration by MDA Space at the Canadian Space Agency in December 2024 [3] Group 2: Collaborative Efforts - The project involves collaboration with the Centre de Technologies Avancées BRP – Université de Sherbrooke and the University of Toronto Institute for Aerospace Studies, combining expertise in space systems, vehicle development, and advanced autonomy algorithms [2][5] - MDA Space will integrate MDA SKYMAKER™, a suite of scalable and modular space robotics, to enable autonomous mobility solutions on the lunar surface [4] Group 3: Leadership Statements - The CEO of MDA Space emphasized the importance of this study in shaping Canada's role in lunar exploration and supporting long-term human presence on the Moon [5] - The General Manager of CTA highlighted their expertise in designing rugged vehicles for extreme environments, applicable to lunar mobility challenges [5] - A representative from UTIAS noted the necessity of technical ingenuity and collaboration for developing advanced autonomy in lunar vehicles [5] Group 4: Company Background - MDA Space is a leader in the global space industry with over 55 years of experience, involved in more than 450 missions, and specializes in robotics, satellite systems, and geointelligence [6]