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]

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]