Financial Data and Key Metrics Changes - Total revenue for Q1 2026 was $1,560 million, up 1% year over year, exceeding the midpoint of guidance [21] - Excluding the divested spot business, total revenue increased by 3% year on year [21] - Q1 hybrid cloud revenue was $1,400 million, also up 1% year over year [21] - Product revenue decreased by 2% year over year to $654 million [21] - Public cloud revenue increased by 1% year over year to $161 million, and excluding spot, it was up 18% year over year [21] - Q1 consolidated gross margin improved by 1.6 percentage points sequentially to 71.1% [23] - Operating profit was $400 million with an operating margin of 25.7% [25] - Diluted EPS was $1.55, aligned with expectations [25] Business Line Data and Key Metrics Changes - All flash array revenue grew 6% year over year to $893 million, with an annualized run rate of $3,600 million [8] - Professional services revenue grew 18% year over year to $97 million, driven by Keystone, which was up approximately 80% compared to the same period last year [21] - Recurring support business maintained a gross margin of 92.3% [23] - Public cloud gross margin was 80.1%, up 80 basis points sequentially and nine percentage points year over year [24] Market Data and Key Metrics Changes - Strong performance in The Americas enterprise offset declines in the U.S. Public sector and EMEA [5] - The company secured approximately 125 AI infrastructure and data lake modernization deals across various geographies and industries in Q1 [15] - The emerging enterprise AI market is driving urgency among customers to modernize data infrastructure [6] Company Strategy and Development Direction - The company is focused on helping customers modernize their data infrastructure and advance cloud transformations [5] - The strategy includes enhancing profitability and free cash flow while delivering value to customers and shareholders [27] - The company aims to capitalize on growing opportunities in the enterprise AI sector [18] Management's Comments on Operating Environment and Future Outlook - Management noted some macro-related spending caution but emphasized strong demand for AI solutions [6] - The company expects revenue for Q2 to be $1,690 million, implying 2% growth year over year at the midpoint [26] - Full year guidance for fiscal year 2026 remains between $6,625 million and $6,875 million, reflecting 3% growth year over year [27] Other Important Information - The company ended Q1 with $4,530 million in deferred revenue, up 9% year over year [22] - Cash flow from operations reached a record $673 million in Q1 [25] - The company redeemed senior notes due in June 2025 for $757 million [25] Q&A Session Summary Question: All flash revenue growth has decelerated from double digits to just 5%. What is driving this? - Management indicated that softness in the U.S. Public sector and EMEA contributed to lower growth, but they anticipate improvement for the rest of the year [34][36] Question: What is the outlook for enterprise AI adoption? - Management reported strong momentum with over 125 AI wins in Q1, indicating a shift from proof of concept to production [40] Question: How does the availability of 128 terabyte QLC based NAND impact search solutions for AI applications? - Management stated that they have a broad range of NAND technologies available and do not feel gated by any specific technology [44] Question: What is the competitive landscape for all flash storage? - Management expressed confidence in their competitive position despite challenges in certain markets, noting that high-performance flash outgrew capacity flash year on year [110] Question: Can you elaborate on the gross margin guidance for public cloud business? - Management explained that improvements in gross margin are driven by depreciation roll-off and increased software content in revenue [57]

Summary of Atlassian (TEAM) FY Conference Call - June 04, 2025 Company Overview - **Company**: Atlassian - **Industry**: Software Development and Collaboration Tools Key Points Leadership and Background - Brian Duffy, the Chief Revenue Officer (CRO), joined Atlassian on January 1, 2025, after nearly 20 years at SAP, where he led the European business and launched the RISE business for cloud ERP [2][4][5]. Go-to-Market Strategy - Atlassian has a unique product-led growth model, with 85% of Fortune 500 companies as customers, contributing approximately 10% of revenue [9][10]. - The company plans to enhance its enterprise sales motion, currently having over 500 customers paying more than $1 million annually, with a goal to hire more sales personnel [10][11]. - The focus will be on value engineering to demonstrate the savings and value provided to customers rather than just the number of licenses sold [11]. Ecosystem and Customer Engagement - Atlassian emphasizes the importance of its ecosystem, which significantly contributes to its business, and plans to invest further in it [12]. - The company has 330,000 customers, with a strong relationship built on product trust, allowing for expansion into new buyer segments within existing accounts [13][20]. Product Bundling and Sales Motion - The introduction of the Teamwork Collection aims to simplify purchasing for customers and expand sales opportunities beyond IT departments to roles like CFOs and CHROs [16][19][24]. - The Teamwork Collection includes core products like Jira, Confluence, and Loom, with expectations of increased inquiries and demand following its launch [26]. AI Integration - Atlassian views AI as a tailwind for its business, enhancing developer productivity and project management through tools like Jira and Confluence [30][32]. - The company launched rovo.ai, which has 1.5 million monthly active users, focusing on customer adoption and productivity gains [43][44]. Jira Service Management (JSM) - JSM is a key growth driver, with $600 million in annual recurring revenue (ARR). Atlassian plans to invest heavily in JSM, particularly in the mid-market segment where it has a competitive pricing advantage [48][50][52]. - The strategy includes focusing on regions like Southern Europe, Latin America, and Asia, where pricing pressures favor Atlassian's offerings [51][52]. Market Position and Future Outlook - Atlassian is positioned to leverage its existing customer base and expand its footprint through strategic sales initiatives and product bundling [22][24]. - The company anticipates continued seat growth and increased utilization of its solutions as it addresses both technical and non-technical users [34][36][41]. Additional Insights - Atlassian's approach to customer relationships is rooted in a product-led growth strategy, where customers initially engage through self-service models [20]. - The company is committed to long-term strategies that involve integrating AI into its sales processes and enhancing customer success initiatives [44][47].