How do the 44% task efficiency and 48% token reduction gains from Teamwork Graph influence customer conversations, buying behavior, and sales cycles?

Mike Cannon-Brookes stated that AI and Teamwork Graph are top reasons for cloud and Teamwork Collection upgrades. The graph's density and connections provide better, cheaper, and faster answers, which resonates with customers concerned about token costs. He highlighted that customers often don't realize they already have a significant Teamwork Graph. “AI and the Teamwork Graph is 1 of the biggest reasons -- it's 1 of the top 2 reasons quoted by our customers for their reason to upgrade to the cloud and to upgrade the Teamwork Collection.”

What components drove the cloud strength beyond guidance? Was it seat additions or Teamwork Collection? Any changes to guidance philosophy?

James Chuong clarified that DC migrations were in line with expectations. Cloud outperformance was driven by cross-sell (Service Collection, Teamwork Collection uptake) and broad-based seat expansion (Jira, Confluence, including knowledge workers). The guidance philosophy remains unchanged, focusing on prudence. “The 2 primary drivers here of the outperformance were really the cross-sell and seat expansion that we were seeing similar to what we saw in the cross sell side, we continue to see strong uptake in our collections across Service Collection and Teamwork Collection.”

Other software companies see margin pressure from AI, but Atlassian's margins are holding. What's different about Atlassian's cost structure or approach?

James Chuong attributed margin strength to disciplined hiring, resource reallocation, and moderating stock-based compensation. Mike Cannon-Brookes added that long-term architectural thinking, blending multiple AI models, and optimizing cost-to-serve for AI have been key. He highlighted R&D efforts in getting the best quality at the best price and speed. “We've talked for 3 years now around our AI gateway and how we think about AI. We've been blending multiple models for a multiyear period, and we're getting really, really good at it.”

TEAM

Atlassian (TEAM) Q4 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q4 FY26)· Information Technology· Aug 6, 2026

Source: earnings call transcript

Executive summary

Atlassian Q4 FY26 — Accelerating Cloud Growth and AI Monetization

Atlassian concluded FY26 with an outstanding quarter, marked by accelerating cloud revenue and robust RPO growth, driven by strong enterprise adoption and AI monetization. The company's Teamwork Graph is proving a key differentiator, enhancing AI accuracy and efficiency for customers. While maintaining a prudent outlook for FY27 subscription ARR growth due to macro factors, Atlassian remains committed to durable profitable growth through disciplined investments and cost management.

Highlights

Total revenue grew 28% to $1.8 billion.
Cloud revenue surged to $1.2 billion, accelerating to 31% year-over-year growth.
Remaining Performance Obligations (RPO) grew 44% year-over-year to $4.8 billion.
Rovo assisted actions grew 50% quarter-over-quarter, with adopters growing ARR more than twice as fast as non-adopters.
Achieved a GAAP operating margin of 12% for the quarter, demonstrating durable profitable growth.

Concerns

FY27 subscription ARR growth is guided at 18%, down from FY26's 23%, reflecting a prudent approach amidst macro uncertainty and lapping a 1-point benefit from the DX acquisition.

Guidance & targets

Category	Target	Timeline	Confidence
Subscription ARR growth	18% high materiality	FY27	Medium
GAAP operating margin	6.5% medium materiality	Q1 · FY27	High
GAAP operating margin	4.5% high materiality	FY27	High

TEAM operating KPIs by quarter

TEAM operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q3 FY26	This call Jun 2026 Q4 FY26	Change vs prior quarter
Remaining performance obligation (RPO)	$4B Cloud revenue surpassed $1.1 billion and accelerated to 29% growth year-over-year, and RPO grew again 37% year-over-year to $4 billion. Source: earnings call transcript	$4.8B RPO grew 44% year-over-year to $4.8 billion, and we delivered a GAAP operating margin of 12%. Source: earnings call transcript	+20%
Net revenue retention rate	120%+ Similarly, you can see that NRR maintained north of 120% and even ticked up again for, I think, the third or fourth quarter in a row. Source: earnings call transcript	120%+ And coming off a quarter where RPO landed at 44% year-on-year NRR was north of 120%. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Remaining Performance Obligations (RPO) $4.8 billion Q4 FY26

grew 44% year-over-year

Product announcements

Product	Type	Timeline
Rovo	milestone	during the quarter
Service Collection	milestone	Q4 FY26
Teamwork Graph (MCP server, CLI)	expansion	Team '26 US
AI Agents (Cursor, Claude, GitHub)	expansion	during the quarter

Deals & partnerships

DX Acquisition that benefited FY26 ARR growth

Acquisition of DX at the close of November in 2025 (fiscal Q2) contributed to FY26 ARR growth.

Risks & headwinds

Macroeconomic uncertainty, fiscal policy, and geopolitical landscape FY27

uncertainty

Mitigation:Prudent approach to FY27 guidance, balancing momentum with external factors.

Lapping the benefit from DX acquisition in FY26 FY27

approximately 1 point (impact on FY26 ARR growth)

Mitigation:Considered in the prudent FY27 ARR guidance.

What to watch in Q1 FY27

Subscription ARR growth

FY27

Current 23% (FY26)

Target 18% (FY27 guide)

Why it matters

This is a key indicator of the company's core growth trajectory and management's prudence in forecasting amidst macro uncertainties.

And you again had another way down to year 23% growth for the fiscal year '27 guide is down to 18%.

Find out whether TEAM delivers this. Inve re-checks your case every morning.

Q&A highlights

Why is FY27 subscription ARR guidance (18%) lower than FY26 growth (23%)? Is it due to macro, new seat expansion, or enterprise go-to-market scaling?

James Chuong explained the prudent approach due to macro uncertainty, lapping the 1-point benefit from the DX acquisition in FY26, and being early in the fiscal year. He reiterated confidence in the business momentum (23% ARR growth, 44% RPO, >120% NRR).

“When it comes to the guide, we'll continue to take a thoughtful and prudent approach here, really balancing the momentum that we're seeing in the business, the demand signals that we're getting from our customers with the uncertainty as you look out in the macro environment, fiscal policy and geopolitical landscape.”

asked by Adam Wood · answered by James Chuong

2 min read 5 chapters

Detailed narrative

AI-Driven Growth and Contextual Advantage

Atlassian's AI offering, Rovo, is a significant growth driver, with over 80% of Fortune 500 companies using it and assisted actions growing 50% quarter-over-quarter. Rovo adopters demonstrate more than double the ARR growth of non-adopters. This success is attributed to Atlassian's "Teamwork Graph," which leverages 25 years of deep data to provide highly accurate AI answers (up to 44% more accurate) while consuming fewer tokens (48% reduction), creating a compounding differentiator.

Enterprise Momentum and Strategic Partnerships

The company achieved record performance in large deals, with $3 million ARR customers growing over 50% and $5 million ARR customers growing over 70% year-over-year. This enterprise momentum is a result of sustained investment in technology (e.g., compliance for Rovo) and human-centric enterprise connectivity over several years, rather than a single "unlock." The platform is increasingly seen as a strategic piece in customers' technology estates, leading to longer and larger deals.

Cloud and Collection Adoption

Cloud revenue accelerated to 31% year-over-year, reaching $1.2 billion. This growth was primarily driven by strong cross-sell and seat expansion, particularly within the Service Collection and Teamwork Collection. The Service Collection saw over a 3x increase in Agentic automation, expanding beyond IT to HR, legal, and finance teams.

The Teamwork Collection remains the primary vehicle for AI adoption, driving ARPU uplift as customers upgrade for increased Rovo credits and predictability.

Durable Profitable Growth and Margin Management

Despite increased AI usage, Atlassian maintains a focus on durable profitable growth, evidenced by a 12% GAAP operating margin in Q4 FY26. The company attributes this to a disciplined hiring approach, strategic resource reallocation, and moderating stock-based compensation. Significant R&D efforts have focused on optimizing the cost-to-serve for AI, blending multiple models, and managing traffic costs, ensuring high-quality AI answers at competitive prices.

Expanding User Base and System of Work

Atlassian's user base continues to diversify, with roughly two-thirds of Jira and Confluence users being knowledge workers outside of software development. This broad-based expansion across HR, legal, and finance teams highlights the increasing need for collaboration tools at enterprise scale.

The "system of work" strategy aims to connect technology teams with business teams on a single platform, supporting organizations where technology is a key competitive advantage, regardless of their core industry.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.