TEAM Q&A
Look Mom, No Hands!
Look, the numbers finally fit the narrative at Atlassian (TEAM). Growth was supposed to collapse from 26% to 12% this year, AI was supposedly going to make its tools obsolete because coders wouldn’t need them, and the company was still working through the messy transition from perpetual licenses to recurring cloud and Data Center subscriptions. Then, out of nowhere, TEAM delivered a shocker. Look, Mom—no hands! They are telling the same story as every quarter since the guidance was for slowing, but they finally showed the potential for re-acceleration. They are still the most egregious SBC as a percentage of revenues but for tonight that didn’t matter! Read the Q&A, many analysts are still skeptical of the growth ahead.
Here are the best questions from the call:
TEAM · Q4 FY2026 — Top 5 Earnings Q&A
2026-08-07
Total Revenue: $1.8B, +28%
YoYCloud Revenue: $1.2B, +31% YoY
Cloud Revenue Beat: $49M above guidance
Subscription ARR Growth: 23% YoYRPO: $4.8B, +44% YoY
GAAP Operating Margin (Q4): 12%NRR: North of 120%
FY27 Subscription ARR Growth Guide: 18% · prior 23% (FY26 exit rate)
FY27 GAAP Operating Margin Guide: 4.5%Q1 FY27 GAAP Operating Margin Guide: 6.5%
Q1 · Adam Wood · Morgan Stanley
FY27 Subscription ARR Guidance Deceleration — Cloud vs. Data Center Split and Prudence vs. Macro
Q: You printed subs ARR growth of 23% yet the FY27 guide steps down to 18%. Can you help us understand the split between cloud and data center within that, and how much of the step-down reflects moderation in new seat and seat expansion versus prudence around the macro and continued scaling of the enterprise go-to-market engine?
Mike Cannon-Brookes, Chief Executive Officer and Co-Founder: We’re really pleased with the strength we saw in the quarter printing subs ARR growth of 23% year-over-year. When it comes to the guide, we’ll continue to take a thoughtful and prudent approach, really balancing the momentum we’re seeing in the business and the demand signals we’re getting from customers with the uncertainty in the macro environment, fiscal policy, and geopolitical landscape. This is also the first time we’ll be issuing ARR guidance for the full fiscal year, and we’re still early in the fiscal year, so we’re taking a bit more of a prudent approach in the second half of FY27 specifically. It’s also worth noting that in FY26 the ARR year-over-year growth rate benefited by approximately one point from the acquisition of DX at the close of November 2025, which is our fiscal Q2. We’ll be lapping that DX acquisition and the healthy acceleration we saw in the second half of FY26. And of course we’re going to continue to scale our enterprise go-to-market sales motion as we unlock the opportunities we see in front of us. All up, we feel really good about the state of the business coming off a quarter where RPO landed at 44% year-on-year and NRR was north of 120%, and we’re just taking a balanced and prudent approach to the guide.
“It’s also worth noting that in FY26, the ARR year-over-year growth rate benefited by approximately one point from the acquisition of DX at the close of November in 2025.”
Not addressed: Asked for the specific split between cloud and data center within the FY27 ARR guide; management addressed the overall rationale for the step-down and the DX acquisition lap and did not provide a cloud versus data center breakdown.
