Atlassian rockets 23% after crushing earnings and flexing cloud & AI muscle

Collaboration software giant Atlassian (NASDAQ:TEAM) is flying high. Shares surged a massive 23% after the company delivered a blowout fourth quarter, easily clearing Wall Street estimates and proving its aggressive push into cloud infrastructure and AI tools is paying off in a big way.

The company posted adjusted earnings per share of $1.87, beating the analyst consensus of $1.50 by $0.37. Revenue reached $1.77 billion, surpassing the $1.66 billion estimate and representing a 28% increase YoY from $1.38 billion in the same quarter last year. Cloud revenue grew 31% YoY to $1.21 billion, while Data Center revenue came in at $461.9 million, above the $414.6 million estimate.

Shares surged following the results as the company also issued first quarter fiscal 2027 revenue guidance of $1.705 billion to $1.715 billion, with a midpoint of $1.71 billion exceeding the analyst consensus of $1.67 billion.

"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, and our MCP server and Teamwork Graph CLI surpassed one million monthly active users, more than doubling in a single quarter," said Mike Cannon-Brookes, Atlassian’s CEO and co-Founder.

The company reported subscription annual recurring revenue of $6.61 billion, up 23% YoY, while remaining performance obligations increased 44% YoY to $4.82 billion. Adjusted operating margin expanded to 36% in the fourth quarter, compared to 24% in the prior year period.

For fiscal year 2027, Atlassian expects subscription ARR growth of approximately 18% and total revenue growth of approximately 13%. Cloud revenue is projected to grow approximately 25.5% YoY, while Data Center revenue is expected to decline approximately 17%.