Atlassian reported a significant profitability improvement in its fiscal fourth quarter of 2026 as subscription annual recurring revenue reached approximately $6.6 billion and revenue growth remained strong across its cloud business.
Quarterly revenue increased 28% year-over-year to $1.766 billion from $1.384 billion. Cloud revenue grew even faster, increasing 31% to $1.213 billion, while Subscription ARR reached $6.606 billion, up 23% year-over-year.
The profitability shift was particularly notable. Atlassian generated $210.7 million of GAAP operating income during the quarter, producing a 12% operating margin, compared with a $28.5 million operating loss and a negative 2% operating margin in the same period last year.
On a non-GAAP basis, operating income reached $636 million, representing a 36% operating margin. That compares with $336 million of non-GAAP operating income and a 24% margin in the prior-year quarter.
Atlassian also returned to quarterly GAAP profitability, reporting $139.1 million of net income, or $0.55 per diluted share, compared with a $23.9 million net loss, or $0.09 per share, a year earlier. Non-GAAP net income reached $473 million, or $1.87 per diluted share.
Cash generation strengthened alongside the earnings improvement. Atlassian generated $479 million of operating cash flow and $475 million of free cash flow during Q4, representing a 27% free cash flow margin.
The company’s contracted revenue base also continued to expand. Remaining performance obligations reached $4.817 billion, up 44% year-over-year, providing additional visibility into future revenue. Management said enterprises increasingly view Atlassian as a long-term strategic partner as customers expand their use of its cloud platform.
Artificial intelligence is becoming an increasingly important component of Atlassian’s broader platform strategy. Its MCP server and Teamwork Graph CLI surpassed one million monthly active users during the quarter, more than doubling sequentially. Atlassian is positioning its Teamwork Graph as a context layer that can help AI agents coordinate work across development, service management and other enterprise workflows.
Atlassian also introduced new agentic development capabilities in Jira that allow engineering teams to convert intent into agent-ready specifications, assign tasks to coding agents, monitor sessions and measure AI costs against output.
For the full fiscal year, Atlassian generated $6.572 billion in revenue, up 26% from $5.215 billion. The company moved to GAAP operating income of $10.4 million from a $130.4 million operating loss in fiscal 2025.
Looking ahead to fiscal 2027, Atlassian expects Subscription ARR growth of approximately 18%, total revenue growth of approximately 13% and cloud revenue growth of approximately 25.5%. It is targeting a GAAP operating margin of approximately 4.5% and a non-GAAP operating margin of approximately 25% for the full year.
KEY QUOTES:
“Q4 closes out a year that proves our long-term strategy is paying off. Total revenue grew 28% year-over-year to $1.8 billion, Cloud revenue growth accelerated to 31% year-over-year.”
“In the AI era, context is the edge but it’s hard to build and can’t be hired. Thanks to 25 years of connecting teams, customers get one of the best context graphs for orchestrating agentic workflows.”
Mike Cannon-Brookes, CEO and Co-Founder of Atlassian
“Q4 was a strong finish to fiscal 2026, with Subscription ARR of $6.6 billion, increasing 23% year-over-year, and RPO growing 44% year-over-year to $4.8 billion.”
James Chung, CFO of Atlassian
