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Investing.com -- Atlassian Corp Plc (NASDAQ:TEAM) rose marginally higher in premarket trading Friday after the software maker reported stronger-than-expected fourth quarter results, bolstered by continued growth in its AI and cloud offerings. The company also posted upbeat fiscal year results but issued revenue guidance slightly below estimates.
For the quarter ended June 30, Atlassian posted adjusted earnings per share of $0.98, well ahead of the $0.81 consensus forecast. Quarterly revenue climbed 22% year-over-year to $1.38 billion, exceeding the Street’s $1.34 billion expectation.
Subscription sales came in at $1.31 billion, up 23% from the year-ago period, while cloud revenue surged 26% to $928 million.
"TEAM’s 4Q25 was significantly better than its disappointing 3Q performance, which suffered from back-end loaded closes of larger, complex cloud deals," Macquarie analysts said. "The highlight of the quarter was cloud revenue growth."
Free cash flow generated in the quarter was $360 million, contributing to a full-year figure of $1.42 billion and underscoring the company’s financial flexibility.
“We closed out FY25 delivering over $5.2 billion of revenue, generating over $1.4 billion in free cash flow, and reaching 2.3 million AI monthly active users,” CEO Mike Cannon-Brookes said in a statement. CFO Joe Binz added, “Our results this quarter strengthen our conviction in the investments we are making across our strategic priorities of Enterprise Cloud, AI, and the Atlassian System of Work.”
Atlassian has leaned deeper into strategic initiatives, launching AI-powered tools like Rovo, expanding product offerings such as Talent for workforce planning, and integrating AI capabilities into developer environments. The company also deepened its partnership with Google (NASDAQ:GOOGL) Cloud to enhance its platform with AI-optimized infrastructure.
While fiscal 2025 revenue grew 20% year-over-year to $5.2 billion, the company expects revenue growth to moderate slightly. First quarter fiscal 2026 guidance calls for revenue between $1.395 billion and $1.403 billion, just below the $1.41 billion consensus.
For the full-year (FY26), Atlassian projects revenue growth of approximately 18%, in line with expectations.
"We see many potential drivers for FY26 outperformance, including accelerated cross-selling, stable business trends, and continued success in the enterprise segment," Macquarie continued.
Although the outlook came in light, investors appeared encouraged by operational progress and strong traction in cloud and enterprise segments. With the departure of President Anu Bharadwaj slated for year-end, the company enters fiscal 2026 with a leadership shift and a sharpened focus on scaling its AI-driven collaboration platform.