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    TEAM
    Earnings call· Mar 2026(Q3 FY26)

    Atlassian Q3 FY26 earnings call TEAM

    Apr 30, 2026 Source

    Executive summary

    Atlassian Q3 FY26 — Strong Cloud Growth and AI Monetization

    Atlassian delivered a strong quarter driven by robust cloud growth, significant RPO expansion, and increasing AI monetization through its Rovo platform. The company highlighted its Teamwork Graph as a key differentiator, enabling better, cheaper, and faster AI outcomes for customers, leading to record competitive displacements. Management remains focused on durable profitable growth and strategic investments in AI and enterprise.

    Highlights

    5

    • Total revenue grew 32% year-over-year to $1.8 billion.

    • Cloud revenue surpassed $1.1 billion and accelerated to 29% growth year-over-year.

    • Remaining Performance Obligation (RPO) grew 37% year-over-year to $4 billion, or north of 40% when normalized for ASC 606.

    • Customers using Rovo are growing their ARR at roughly 2x the rate of non-Rovo customers.

    • Achieved the largest ever quarter for competitive displacements from a major ITSM provider.

    Concerns

    1

    • Approximately $50 million in data center upfront term license revenue was pulled forward into Q3 FY26 from future periods, creating lumpiness in reported revenue.

    Guidance & targets

    2
    CategoryTargetConfidence
    Cloud growth contribution from DC migrations
    mid- to high single digits
    medium materiality
    Medium
    Data Center expansion
    more muted level
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Cloud
    Cloud revenue surpassed $1.1 billion and accelerated to 29% growth year-over-year.
    		$1.1B29%——
    Service Collection
    Achieved a milestone of passing $1 billion in ARR, driven by strong performance across regions, non-IT use cases, and AI features.
    ARR: $1B
    		————

    Operational metrics

    2
    Data Center revenue pull-forward
    $50Mvs expectations
    Q3 FY26

    Relative to expectations for Q3, approximately $50 million more in upfront term license revenue was recognized due to large customer complex migrations and a March pricing change.

    COGS efficiency
    cheaper and cheaper rate
    Q3 FY26

    The cost of operating the platform is running at a cheaper and cheaper rate without any reliability hiccups, despite operating with larger customers and increasing scale.

    Industry KPIs

    9
    MetricValueDetails
    Revenue growth32%%
    Arr net new arr$1BUSD
    Rpo current rpo$4BUSD
    Pricing model mix>10 or 12meters
    Customer account countmillionsusers
    Large deal new logo metricslargest ever quartercount
    Multi product platform attach60%%
    Ai product adoption monetization>20%%
    Net revenue net dollar retentionnorth of 120%%

    Orderbook & backlog

    3
    Total RPO$4BQ3 FY26

    up 37% YoY

    Total RPO (normalized for ASC 606)north of 40%Q3 FY26

    YoY growth

    Normalized for the impact of ASC 606, which smooths out revenue recognition timing effects.

    Current RPO (normalized for ASC 606)north of 30%Q3 FY26

    YoY growth

    Normalized for the impact of ASC 606, which smooths out revenue recognition timing effects.

    Deals & partnerships

    3
    Siemens EnergyDeepened and broadened commitment to Atlassian

    One of the world's largest enterprises deepened its commitment to Atlassian.

    RheinmetallDeepened and broadened commitment to Atlassian

    One of the world's largest enterprises deepened its commitment to Atlassian.

    WayfairDeepened and broadened commitment to Atlassian

    One of the world's largest enterprises deepened its commitment to Atlassian.

    Risks & headwinds

    1
    Data Center revenue recognition lumpinessQ3 FY26 from future periods (FY27)

    approximately $50 million pull-forward

    Mitigation: Will enhance disclosures and share historical subscription ARR at Team '26 to help normalize timing effects and better understand underlying business strength.

    What to watch in Q4 FY26

    5

    FY27 Guidance

    Q4 earnings (August)
    CurrentNot yet provided
    TargetFull FY27 guidance

    Why it matters

    Provides full-year outlook for revenue, margins, and other key metrics, crucial for investment thesis.

    it's too early to discuss any guide at this point, we'll, of course, provide that guidance out in August, our Q4 earnings.

    Q&A highlights

    5

    How does the Teamwork Graph lower AI costs by reducing token usage, and what does the data center revenue pull-forward mean for FY27?

    Mike explained that the Teamwork Graph provides superior context, leading to higher quality AI answers with fewer tokens, thus reducing costs. James detailed that a $50M pull-forward in data center term license revenue occurred in Q3 due to large customer complex migrations and a March pricing change, impacting FY27 timing.

    “Those are cheaper answers because you use far less tokens to get to an answer in the same amount of time and fundamentally using less tokens and reduces your cost of AI or allows you to do far more AI investment, whichever way you look at it.”

    asked by Keith Weiss · answered by Michael Cannon-Brookes

    2 min read6 chapters

    Detailed Narrative

    01

    AI and Teamwork Graph as a Differentiator

    Atlassian's Teamwork Graph, which connects knowledge, work, people, and code, is highlighted as a core differentiator for its AI strategy. This context-rich platform enables AI investments to be "smarter, cheaper, and more valuable" by using fewer tokens for higher quality answers, thus reducing AI costs or allowing for greater investment. The company believes that in an AI-native world, context is the only anchor to avoid chaos.

    02

    Rovo's Impact on Customer Growth

    The AI platform, Rovo, is seeing significant adoption, with millions of monthly active users and credit usage growing over 20% month-over-month. Customers utilizing Rovo are experiencing roughly double the ARR growth rate compared to non-Rovo customers, contributing to strong cloud expansion and demonstrating the value of Atlassian's AI offerings. Rovo is designed to be accessible both within Atlassian products and via third-party agents leveraging the Teamwork Graph.

    03

    Data Center Migration and Revenue Dynamics

    The migration of Data Center customers to the cloud is progressing as expected, contributing mid- to high single-digit cloud growth. However, a pull-forward📎 of approximately $50 million in upfront term license revenue from future periods into Q3 FY26 occurred. This was catalyzed by large customer complex migrations and a March pricing change, introducing lumpiness in reported revenue, RPO, and cRPO. The company plans to enhance disclosures to normalize these timing effects.

    04

    Strong Seat Expansion and Cross-Sell

    Contrary to market fears of seat compression, Atlassian observed strong seat expansion in Jira and robust cross-sell within its collections, particularly the Teamwork Collection. This is attributed to high R&D investment, the blurring of team boundaries by AI, and the platform's ability to expand into non-technical roles. The Net Revenue Retention (NRR) remained north of 120% and ticked up again, indicating strong customer commitment.

    05

    Competitive Displacements in Service Collection

    The quarter marked Atlassian's largest ever for competitive displacements, especially in the Service Collection, which also passed $1 billion in ARR. This success is driven by the quality of software, ease of adoption, strong user experience, comprehensive data integration via the Teamwork Graph, and AI-forward features that enable more efficient service operations. The company is taking share from legacy systems by offering a modern, AI-native, and better-value service platform.

    06

    Durable Profitable Growth and Operational Efficiency

    Atlassian emphasized its commitment to durable profitable growth as a strategic priority, balancing reinvestment in AI and enterprise sales with fiscal discipline. The company highlighted its capital-efficient business model and strong COGS numbers, indicating that the platform is operating at a cheaper and cheaper rate even with larger customers and increasing scale, without reliability issues.

    AI-generated summary of the company’s earnings call. Not investment advice.