Financial Data and Key Metrics Changes - Total revenue for Q1 FY2026 grew 21% year-over-year to $1.4 billion [5] - Cloud revenue increased by 26% year-over-year to $998 million [5] - Remaining Performance Obligations (RPO) accelerated by 42% year-over-year to $3.3 billion [5] Business Line Data and Key Metrics Changes - The Teamwork Collection has driven a double-digit percentage increase in users and upgrades to higher-value additions [6][7] - Over 3.5 million monthly active users of AI capabilities, up over 50% since last quarter [6] Market Data and Key Metrics Changes - Over 300,000 customers, including major companies like Databricks and Ford, are utilizing Atlassian's AI-enabled cloud platform [5] - The company has seen significant cloud migrations from data center, positively impacting revenue recognition timing [12] Company Strategy and Development Direction - The company is focusing on enterprise, AI, and the system of work as strategic priorities [5] - The transition from data center to cloud is being managed thoughtfully, with a strong emphasis on customer readiness and partner engagement [19][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver against long-term growth targets, reiterating a 20% CAGR growth rate [14][45] - The management highlighted the importance of AI in driving demand for cloud offerings and enhancing customer collaboration [6][8] Other Important Information - The company is committed to maintaining a conservative and risk-adjusted outlook for organic growth drivers outside of migrations [12] - The management emphasized the importance of governance and controls in AI technology for enterprise customers [44] Q&A Session Summary Question: Clarification on total revenue guidance for the full year - Management explained that stronger-than-expected cloud migrations from data center positively impacted the business, but revenue recognition timing differences led to a slight decline in organic revenue growth outlook [11][12] Question: Insights on cloud migration playbook - Management shared that the partner and customer reactions to cloud migration have been positive, and they have learned valuable lessons from past migrations [18][19] Question: Update on go-to-market strategy and changes - Management noted that the go-to-market team is executing well, with significant progress in signing large deals across various sectors [66] Question: Impact of AI on customer engagement and product adoption - Management highlighted that customers using AI coding tools are expanding their paid seats on Jira at a faster rate than those who are not [36][37] Question: Clarification on cloud revenue guidance - Management confirmed that the increase in cloud revenue outlook is primarily due to stronger migration performance and outperformance in Q1 [72]

Financial Performance - Total revenue for Q1 FY26 was $1,433 million, representing a 21% increase year-over-year[1] - The company reported a net loss of $51.9 million, with a net loss per diluted share of $0.20, which includes restructuring charges of $55.7 million[3] - Total revenues for the three months ended September 30, 2025, were $1,432,553, a 20.6% increase from $1,187,781 in the same period of 2024[27] - Subscription revenue reached $1,374,502, up from $1,131,948, reflecting a growth of 21.4% year-over-year[27] - The net loss for the quarter was $51,870, an improvement from a net loss of $123,769 in the same quarter of 2024[27] - Operating loss for the quarter was $96,337, compared to an operating loss of $31,978 in the same period last year[27] - Non-GAAP net income for Q3 2025 was $275,651, compared to $199,700 in Q3 2024, marking a 38% increase[38] - GAAP net loss per share for Q3 2025 improved to $(0.20) from $(0.48) in Q3 2024[38] - Non-GAAP net income per share for Q3 2025 was $1.04, up from $0.77 in Q3 2024, representing a 35% increase[38] Cloud Revenue - Cloud revenue reached $998 million, up 26% year-over-year, with over 3.5 million monthly active users of AI capabilities, a 50% increase quarter-over-quarter[2] - Cloud revenue was $997,708, representing a 25.9% increase compared to $792,306 in the prior year[34] - Atlassian ended Q1 FY26 with 53,017 customers generating over $10,000 in Cloud annualized recurring revenue, a 13% increase year-over-year[6] - Financial targets for Q2 FY26 include total revenue expected between $1,535 million and $1,543 million, with Cloud revenue growth projected at approximately 22.5%[10] Cash Flow and Margins - Cash flow from operations was $129 million, and free cash flow was $115 million, with a free cash flow margin of 8%[3] - Free cash flow for the quarter was $128,715, compared to $80,492 in the same quarter of 2024, indicating a significant increase[32] - Free cash flow for Q3 2025 was $114,603, significantly higher than $74,341 in Q3 2024, indicating a 54% rise[38] - Non-GAAP gross margin for Q3 2025 was 86%, up from 84% in Q3 2024[38] Acquisitions and Product Development - Atlassian announced the acquisition of The Browser Company of New York to enhance its AI capabilities and reimagine the browser for knowledge work[6] - The company launched Atlassian Ascend to support customers' transition to the Cloud and plans to phase out Data Center products[6] Restructuring and Liabilities - The company incurred restructuring charges totaling $55,678 during the quarter, primarily related to severance and lease consolidation[36] - Total current assets decreased to $3,627,120 from $3,891,237 as of June 30, 2025[30] - Total liabilities decreased to $4,341,564 from $4,696,316 as of June 30, 2025[30] Operating Margins - GAAP operating margin was (7%), while non-GAAP operating margin stood at 23%[3] - GAAP operating loss for Q3 2025 was $(96,337), compared to $(31,978) in Q3 2024[38] - Non-GAAP operating income for Q3 2025 was $322,686, an increase from $268,050 in Q3 2024, reflecting a 20% growth[38]

Core Insights - Atlassian Corporation (NASDAQ:TEAM) is recognized as a leading AI stock on Wall Street, with Canaccord Genuity maintaining a Buy rating and a price target of $230.00, highlighting its strong market position and strategic initiatives [1][3] - The company is transitioning Data Center customers to Cloud deployments, which is expected to lead to pricing increases and expansion into larger enterprise markets [1][3] - Recent acquisitions are set to enhance Atlassian's platform value proposition and promote greater AI adoption, supported by new consumption-based pricing terms [2][3] Strategic Positioning - The firm expresses a bullish outlook on Atlassian, citing its favorable strategic positioning following recent acquisitions and its near-historically low valuation [3] - Atlassian is a global software company that designs, develops, licenses, and maintains a variety of software products worldwide, indicating a broad market presence [3]

Core Insights - Atlassian (TEAM) is set to report its first-quarter fiscal 2026 results on October 30, with projected revenues between $1.395 billion and $1.403 billion, indicating a year-over-year growth of 17.8% [1][10] Revenue Estimates - The Zacks Consensus Estimate for revenues is $1.40 billion, aligning with Atlassian's projections [1] - Cloud deployment revenues are estimated at $969.1 million, reflecting a 22.3% increase year-over-year, while Data Center deployment revenues are expected to grow 7.9% to $362.2 million [4][10] Earnings Expectations - The consensus estimate for earnings per share has been revised upward to 83 cents, compared to 77 cents in the same quarter last year [2] - Atlassian has consistently surpassed the Zacks Consensus Estimate in the past four quarters, with an average surprise of 19.9% [2] Growth Drivers - The strong adoption of cloud-based offerings and the trend towards digitalization and hybrid work models are expected to positively impact Atlassian's performance [3] - Demand for key products like Jira Software and Confluence Cloud, along with advanced solutions such as Jira Product Discovery Premium, is anticipated to drive growth [5] - The integration of AI features into collaboration software and a partnership with Google Cloud are likely to enhance revenue [6] Challenges - Despite strong demand, Atlassian's performance may be tempered by a soft IT spending environment and macroeconomic challenges, including high interest rates and inflation [7][10]

Core Thesis - Atlassian Corporation is viewed positively due to its foundational role in enterprise collaboration software and its strategic pivot towards AI and video collaboration, despite recent stock declines and competitive pressures [1][5]. Company Overview - Atlassian Corporation, founded in 2002, has established itself as a key player in enterprise collaboration with products like Jira and Confluence, utilized by over 300,000 companies including major clients such as NASA, Netflix, and Spotify [2][3]. - The company's stock was trading at $168.71 as of October 21st, with a forward P/E ratio of 34.01 [1]. Market Position and Challenges - Despite its central role, Atlassian's stock has dropped over 30% year-to-date due to margin pressures, cautious guidance, and increased competition from companies like Microsoft, GitLab, and newer platforms such as Monday.com and Asana [2]. - The company's product-led growth strategy has created a high-switching-cost ecosystem, but this competitive moat is currently being challenged [3]. Strategic Initiatives - Atlassian is implementing a strategic pivot focused on artificial intelligence, video collaboration, and enterprise expansion, including the development of the AI agent Rovo and the acquisition of Loom for video integration [4]. - The company reported $1.36 billion in quarterly revenue, with cloud revenue increasing by 25% year-over-year, and generated $638 million in free cash flow despite GAAP losses due to strategic investments [4]. Investment Opportunity - The investment thesis suggests that Atlassian's AI-driven transformation could unlock new competitive advantages and accelerate growth, presenting a compelling long-term opportunity for investors at the current share price [5].

Core Insights - Atlassian Corporation has completed the acquisition of The Browser Company of New York Inc., which is known for its Dia and Arc browsers [1] - The objective of this acquisition is to reimagine the browser for knowledge work in the AI era, targeting hundreds of millions of knowledge workers who rely on browsers for their work [1] Company Summary - Atlassian Corporation is a leading provider of team collaboration and productivity software [1] - The Browser Company of New York Inc. is recognized for developing innovative web browsers [1] Industry Context - The acquisition highlights a strategic move to enhance browser capabilities specifically for knowledge work, indicating a shift in how productivity tools are being developed in response to advancements in AI [1]

Core Viewpoint - Atlassian Corporation (NASDAQ:TEAM) is identified as a strong investment opportunity with over 50% upside potential, supported by a Buy rating and a price target of $235 set by Mizuho Securities analyst Gregg Moskowitz [1]. Group 1: Company Overview - Atlassian Corporation specializes in team collaboration and productivity software, offering products such as Jira Software, Confluence, Jira Service Management, and Loom [3]. Group 2: Recent Developments - On September 18, Atlassian Corporation announced a definitive agreement to acquire DX, a leader in engineering intelligence, aiming to enhance enterprises' understanding of AI investments and improve engineering team productivity [2].

Group 1: Artisan Mid Cap Fund Performance - Artisan Mid Cap Fund's Investor Class fund ARTMX returned 8.80%, Advisor Class fund APDMX also posted a return of 8.80%, and Institutional Class fund APHMX returned 8.83% in Q3 2025, significantly outperforming the Russell Midcap Growth Index which returned 2.78% [1] - The strong performance was primarily driven by holdings in the health care sector [1] Group 2: Atlassian Corporation Overview - Atlassian Corporation (NASDAQ:TEAM) is recognized as a leading collaboration software provider, with a one-month return of -9.22% and a 52-week gain of 17.42% [2] - As of October 14, 2025, Atlassian's stock closed at $156.37 per share, with a market capitalization of $41.021 billion [2] Group 3: Artisan Mid Cap Fund's Position on Atlassian - Artisan Mid Cap Fund decided to exit its position in Atlassian due to concerns over its cloud revenue growth decelerating to 26% year-over-year and the challenges posed by its seat-based pricing model [3] - The fund expressed that Atlassian needs to transition from a traditional SaaS model to a usage-based or value-based monetization approach, but this shift lacks strong valuation support unless executed effectively [3] - The evolving perspective on SaaS fundamentals and the belief that significant upside is unlikely until Atlassian's AI investments yield substantial revenue contributed to the decision to exit [3] Group 4: Hedge Fund Interest in Atlassian - At the end of Q2 2025, 64 hedge fund portfolios held Atlassian Corporation, a decrease from 82 in the previous quarter [4] - While Atlassian is acknowledged for its potential, the focus has shifted towards certain AI stocks that are perceived to offer greater upside potential and lower downside risk [4]

Core Insights - RIT Capital Partners holds $30,403,742 worth of Atlassian Corporation (NASDAQ:TEAM) shares, representing 3.81% of its portfolio, indicating significant investment interest in the company [1] - Wells Fargo initiated coverage of Atlassian Corporation with an "Overweight" rating and a price target of $216, suggesting a positive outlook for the stock [2] Growth Drivers - Key growth drivers for Atlassian include expanding cloud adoption, AI integration, and strong positioning within enterprises, which are expected to enhance long-term revenue visibility [3] - The ongoing shift to the cloud and robust cross-sell potential across products like Jira, Trello, and Confluence are also highlighted as factors contributing to growth [3] Competitive Edge - Atlassian is viewed as a "control tower" in AI-driven development and collaboration, reinforcing its competitive advantage in the market [4] - The company is actively enhancing its AI capabilities and platform intelligence, evidenced by its recent acquisitions, including a $1 billion purchase of engineering intelligence company DX and a $610 million acquisition of The Browser Co. [4] Company Overview - Atlassian Corporation specializes in the design and sale of collaboration and project management software, positioning itself as a key player in the software industry [5]

Our first shareholder agreement did have actually in there that if we couldn't agree on something, we'd go to a game of scissors, paper, rock, best of three. We never got into any bigger disagreements when that shareholder agreement was actually governing the company. Don't worry, it's a large public company that's no longer in the bylaws, but it was for probably well over a decade.I think we look, we've disagreed over acquisitions. We've disagreed over strategic directions, etc. I've always lived by the ma ...