Key Highlights

  • Total Revenue reached $1.77 billion, compared with $1.43 billion a year earlier.
  • Cloud revenue rose to $1.30 billion, up 31 percent year over year.
  • Remaining performance obligations totaled $4.75 billion, up 44 percent.
  • Second quarter fiscal 2027 total revenue is targeted between $1.825 billion and $1.835 billion.

Atlassian Corporation (NASDAQ:TEAM), a provider of collaboration and team productivity software, reported financial results for its first quarter of fiscal 2027, which ended September 30, 2026. Total revenues reached $1,772.2 million, compared with $1,432.6 million a year earlier, an increase of roughly 24 percent. Chief Executive Mike Cannon-Brookes said the company is positioning its platform for enterprise customers that combine teams with AI agents, while the company's finance chief pointed to continued operational discipline alongside the growth.

Cloud Growth Drives Revenue Mix

Cloud revenue was $1,302.5 million, up from $997.7 million in the prior-year quarter, a gain of about 31 percent. Data Center revenue rose more modestly to $390.7 million from $372.6 million, while Marketplace and other revenue increased to $79.0 million from $62.2 million. Cloud now represents the largest portion of the company's total revenue, and its growth rate exceeded the company's overall increase.

Subscription annual Recurring Revenue grew 23 percent year over year, according to the release. The company attributed the expansion to enterprise customers adopting its platform for AI-enabled teamwork, and it highlighted growth in the number of Teamwork Collection customers, which management said rose sevenfold over the period.

Cloud revenue accounted for roughly 73 percent of total revenue in the quarter, based on the reported figures of $1,302.5 million out of $1,772.2 million. Data Center revenue made up about 22 percent, so the company's revenue base is now concentrated in cloud offerings more than in any other line.

Backlog, Margins and Cash Measures

Remaining performance obligations, a measure of contracted revenue yet to be recognized, totaled $4,746 million, up 44 percent. That increase indicates that future revenue commitments are growing faster than the current period's revenue, which may support visibility into coming quarters, although Backlog figures do not guarantee the timing of revenue recognition.

The release frames its Teamwork Graph and Amp offerings as central to enterprise demand. Those product references are management's description of strategy; the financial figures themselves cover revenue, backlog and operating Margin rather than results for individual products.

GAAP Operating Margin expanded to 11 percent, while non-GAAP operating margin was 32 percent. The gap between the two measures reflects the company's standard non-GAAP adjustments, which the release reconciles in its tables.

Second Quarter Targets

For the second quarter of fiscal 2027, Atlassian is targeting total revenue between $1,825 million and $1,835 million, which management said would represent year-over-year growth of approximately 13.75 percent. The sharp contrast between that projected growth rate and the 24 percent first-quarter increase is a notable feature of the outlook, and it suggests that the comparison base or timing effects will shape the next reported period.

The targets are presented as forward-looking estimates subject to the risks described in the company's filings.

The targeted second quarter revenue range of $1,825 million to $1,835 million sits above the first quarter total of $1,772.2 million, which implies sequential growth of roughly 3 percent at the midpoint.

Final Takeaways

Atlassian's first quarter of fiscal 2027 shows revenue expansion led by its cloud business, growing backlog and a higher GAAP operating margin. The second quarter target points to a moderating growth rate relative to the first quarter. Future results will show whether the cloud and AI-related Demand highlighted in the release continue to lift the company's revenue and margin profile at the pace seen in the period.