Palantir shares slip premarket despite posting record revenue in third quarter
Investing.com -- Atlassian Corporation (NASDAQ:TEAM) reported first-quarter fiscal 2026 results that exceeded analyst expectations, with adjusted earnings per share of $1.04 beating estimates by $0.20 and revenue of $1.43 billion surpassing the $1.4 billion consensus.
The company’s shares jumped more than 5% in premarket trading Friday.
The team collaboration software provider’s total revenue grew 21% YoY, driven largely by its cloud business, which reached $998 million, up 26% compared to the same period last year. The strong performance was fueled by enterprise sales execution, migration momentum, and accelerating adoption of the company’s artificial intelligence capabilities.
Another key positive was the current remaining performance obligations (cRPO) metric, which accelerated to 30% year-over-year.
"Cloud revenue should benefit and continue delivering 20%+ growth with good potential to accelerate," Bank of America analysts said.
"However, we reiterate our Neutral and $200 PO until we have more visibility into what Cloud revenue, Data Center revenue, and total revenue look like beyond FY26," they added.
Morgan Stanley analysts said the cloud and cRPO growth acceleration "illustrate building momentum at Atlassian."
"A key component making the Atlassian risk/reward so compelling to us at current levels – we see the bear cases to not only be incorrect, but directionally wrong, and this quarter the management team began providing data points in support of this view," they noted.
The company reported a GAAP operating loss of $96.3 million, resulting in a -7% operating margin, which included $55.7 million in restructuring charges. On a non-GAAP basis, operating income was $322.7 million with a 23% operating margin. Free cash flow reached $114.6 million, representing an 8% margin.
"Our relentless pace of AI innovation is driving results as we grew Cloud revenue in Q1 to $998 million, up 26% year-over-year, and surpassed 3.5 million monthly active users of our AI capabilities, up 50% quarter-over-quarter," said Mike Cannon-Brookes, Atlassian’s CEO and co-Founder.
For the second quarter of fiscal 2026, Atlassian expects revenue between $1.535 billion and $1.543 billion, with cloud revenue growth of approximately 22.5% YoY. The company also announced a new $2.5 billion share repurchase program to commence after completing its current $1.5 billion authorization.
In a strategic move to accelerate its cloud-first approach, Atlassian announced plans to end-of-life its Data Center products through a phased approach over the coming years. The company also completed the acquisition of The Browser Company of New York and entered an agreement to acquire engineering intelligence platform DX.
"We’re off to a solid start in FY26, with strong enterprise sales execution and migration momentum driving total revenue to over $1.4 billion," said Joe Binz, Atlassian’s CFO, who will retire effective June 30, 2026.
(Luke Juricic contributed to this report.)