Atlassian Q3 FY2026 earnings: cloud and Data Center growth drive 32% revenue gain
Atlassian's revenue grew sharply on cloud and AI adoption, while a GAAP net loss was driven by one-time restructuring charges rather than the core business.
| Q3 2026 | Reported |
|---|---|
| EPS | -$0.38 |
| Revenue | $1.79B |
Figures as reported by the company to the SEC for the quarter ended March 31, 2026. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Total revenue for the quarter rose 32% from a year earlier, with cloud subscription revenue up 29% and Data Center (self-managed software) revenue up 44%, showing customers continuing to shift to Atlassian’s cloud products while still expanding on its self-managed tier.
- The company posted a GAAP net loss for the quarter, but that was driven largely by $223.8 million in one-time restructuring charges tied to workforce reductions and consolidating office leases, not a decline in the underlying business.
- Excluding those one-time items and other non-cash costs, Atlassian’s adjusted (non-GAAP) profitability remained solid, with adjusted operating margin around 34% for the quarter — a sign the core software business is still generating healthy profit even though the accounting-standard (GAAP) result showed a loss.
- Remaining performance obligations — contracted revenue not yet recognized, a proxy for future bookings — grew 37% year-over-year to roughly $4.0 billion, pointing to continued demand for multi-year cloud commitments.
- The trailing-twelve-month gross margin of about 84% reflects the high profitability typical of subscription software before overhead and one-time costs are factored in; the negative trailing operating and net margins reflect the restructuring-related charges taken during the year rather than an ongoing loss-making trend.
- For the current (fourth) quarter, Atlassian guided to revenue of about $1.65 billion to $1.66 billion, with cloud revenue growth of roughly 25.5% year-over-year and an adjusted operating margin near 30.5%.
- For the full fiscal year, management projected total revenue growth of about 24% and cloud revenue growth of about 26.5%, alongside an adjusted operating margin near 29%, indicating expectations of continued but somewhat moderating growth into next quarter.
- Management pointed to continued momentum in cloud migrations and early adoption of the company’s AI-powered features across its product suite as key contributors to the quarter’s growth.
Q3 2026 in context
| Metric | Mar 2026 | Mar 2025 | Change |
|---|---|---|---|
| Revenue | $1.8B | $1.4B | +31.7% |
| Net income | -$98M | -$71M | -39.0% |
| Free cash flow | $561M | $638M | -12.1% |
| Diluted EPS | -$0.38 | -$0.27 | -40.7% |
| Gross margin | 85.3% | 83.8% | +1.5 pts |
| Operating margin | -3.1% | -0.9% | -2.2 pts |
| Net margin | -5.5% | -5.2% | -0.3 pts |
Figures for the quarter ended Mar 2026 and the quarter ended Mar 2025, as reported to the SEC.
How the stock took it
Atlassian Corp closed at $68.59 on Apr 30, 2026, the last session before the report, and at $93.16 on May 4, 2026, the first session after it — +35.8% across the report.
| Earlier report | Close before | Close after | Change |
|---|---|---|---|
| Feb 6, 2026 | $98.41 | $91.23 | -7.3% |
| Oct 31, 2025 | $160.67 | $176.08 | +9.6% |
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 · verified fundamentals · Futurum Group