Atlassian Q1 2026 earnings: cloud and AI drive 21% revenue growth despite a net loss
Atlassian's cloud business and AI adoption kept accelerating in the quarter ended Sept. 30, 2025, though a one-time restructuring charge pushed it to a per-share net loss.
| Q1 2026 | Reported |
|---|---|
| EPS | -$0.20 |
| Revenue | $1.43B |
Figures as reported by the company to the SEC for the quarter ended September 30, 2025. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Total revenue grew 21% from a year earlier to about $1.43 billion, with cloud subscriptions — the product line Atlassian is steering all customers toward — growing even faster at 26% and now making up roughly 70% of total sales.
- The reported net loss was driven largely by a one-time restructuring charge of about $56 million, which alone added roughly $0.21 to the per-share loss; without it, the quarter would have been close to breakeven on a GAAP basis.
- Trailing-twelve-month operating and net margins are slightly negative, reflecting heavy ongoing spending on R&D, AI features, and moving customers off older server software onto the cloud, rather than banking profits right now.
- Even with an accounting loss, the company generated positive free cash flow of roughly $115 million for the quarter, meaning it brought in more cash than it spent despite the net loss on paper.
- More than 3.5 million people now use Atlassian’s AI assistant, Rovo, each month, up 50% from the prior quarter; the company says customers who use Rovo increase their spending with Atlassian faster than those who don’t.
- Remaining performance obligations — contracted revenue not yet billed to customers — reached $3.3 billion, up 42% from a year earlier, pointing to a growing pipeline of already-signed business still to be recognized.
- Management raised its full-year outlook for cloud revenue growth and guided next quarter’s revenue higher than the quarter just reported, signaling that cloud migration and AI adoption are expected to keep driving growth.
- CEO Mike Cannon-Brookes framed the quarter around artificial intelligence, saying AI has been one of the most significant developments for the company’s products and growth strategy.
Q1 2026 in context
| Metric | Sep 2025 | Sep 2024 | Change |
|---|---|---|---|
| Revenue | $1.4B | $1.2B | +20.6% |
| Net income | -$52M | -$124M | +58.1% |
| Free cash flow | $115M | $74M | +54.2% |
| Diluted EPS | -$0.20 | -$0.48 | +58.3% |
| Gross margin | 82.0% | 81.7% | +0.3 pts |
| Operating margin | -6.7% | -2.7% | -4.0 pts |
| Net margin | -3.6% | -10.4% | +6.8 pts |
Figures for the quarter ended Sep 2025 and the quarter ended Sep 2024, as reported to the SEC.
How the stock took it
Atlassian Corp closed at $160.67 on Oct 30, 2025, the last session before the report, and at $176.08 on Nov 3, 2025, the first session after it — +9.6% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · earnings call · company report / earnings coverage