Atlassian at William Blair Conference: Strategic Shifts and AI Growth

On Wednesday, 04 June 2025, Atlassian Corp Plc (NASDAQ:TEAM) presented at the 45th Annual William Blair Growth Stock Conference. The company outlined its evolving go-to-market strategy, emphasizing a shift from a product-led growth model to a more enterprise-focused approach. Atlassian highlighted its commitment to leveraging artificial intelligence (AI) to enhance developer productivity, while also planning significant investments in sales and marketing for fiscal year 2026. Despite its strong foothold in the Fortune 500, Atlassian sees opportunities for further growth.

Key Takeaways

• Atlassian serves 85% of the Fortune 500, representing about 10% of its revenue.
• The company plans to increase investments in sales and marketing in FY ’26.
• AI is seen as a key driver for enhancing developer productivity and tool utilization.
• Jira Service Management (JSM) is a priority, with plans for significant investment.
• Atlassian offers Rovo.ai for free, boasting 1.5 million monthly active users.

Financial Results

• Atlassian has over 500 customers paying more than $1 million annually.
• JSM’s annual recurring revenue (ARR) reached $600 million over ten years.
• Planned increase in sales and marketing spend in FY ’26 to drive growth.

Operational Updates

• Atlassian employs approximately 400 sellers, with plans to hire more.
• The Teamwork collection, including Jira, Confluence, and Loom, aims to simplify purchasing.
• Half of Atlassian’s user seats are technical in nature, supporting its collaboration focus.
• Rovo.ai is available without charge, supporting the company’s long-term strategy.

Future Outlook

• Atlassian plans to expand its market presence, especially in mid-market segments.
• Investments in value engineering and ecosystem development are prioritized.
• The company focuses on regions like Latin America and Southern Europe where it has a competitive advantage.

Q&A Highlights

• Atlassian’s AI tools are expected to enhance coding efficiency.
• The company anticipates further expansion of Loom within its Teamwork collection.
• Emphasis on a strong "voice of the customer" feedback loop for product development.

In conclusion, Atlassian’s participation in the conference underscored its strategic focus on AI, enterprise growth, and market expansion. For a detailed review of the conference call, refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Arjun Bhatia, Analyst, William Blair: All right. Perfect. We’ll go ahead and get started. Thanks, everyone, for joining us. My name is Arjun Bhatia.

I am the analyst here at William Blair who covers Atlassian. For full list of disclosures, you can go to williamblair.com. That’s a pleasure to have the Atlassian team here. We have Brian Duffy, who’s the CRO, and Martin Lamb, who runs Investor Relations. Thank you both for coming.

Thank you. Brian, maybe we can start with you. You started Atlassian in early ’twenty five, January ’1?

Brian Duffy, CRO, Atlassian: January ’1.

Arjun Bhatia, Analyst, William Blair: January ’1. So maybe for those that don’t know you, give us a little bit of background into yourself. Where did you come from? What’s your philosophy on running go to market and the CRO organization?

Brian Duffy, CRO, Atlassian: Sure. Thanks. Well, great to be here, first of all. So like you said, I joined January 1. So I guess into my sixth month now, You can tell maybe by the accent originally Irish.

I had spent close to twenty years at SAP. I am based actually out of Chicago. I had run actually the European business for SAP for a few years. And then my last gig, what we call launched and ran what was called the RISE business, which was ERP in the cloud for SAP, which basically was what’s currently fueling their nice stock price, I would say, for them. And a lot of similarities actually to what we’re currently doing with Atlassian as well in terms of that cloud transformation.

And after that, I was the CEO of Partner SoftwareONE and then got a call from Mike probably maybe March time from last year and then joined here in January. And then like in terms of like how I’d like to work with our customers, I think it’s really important that we, one, build a relationship with customers. We can build go to market models, but I’ve learned over the years that you can build great models, but you need to meet your customers where they are. They all they’ve been using our products for many, many years. I’ve spent now time with many customers.

On Monday, I was spending time with a customer who has 350,000 seats of Atlassian. And you can imagine the complexity that a customer with 350,000 seats must have. So they are in data center, and now we’re obviously in conversations with them about moving to the cloud. But you can imagine when you talk about meeting them where they are, they are in a very unique position. So I think it’s very important that we meet them where they are and we help navigate with them as they are going to move and transition to the cloud.

Arjun Bhatia, Analyst, William Blair: All right. Perfect. And Atlassian has a unique foundation in how the company has grown its customer base, Bootstrap business, obviously, from the beginning. And the go to market motion was very bottom up. Think you talk about serving the Fortune 500,000, and that’s been a viral go to market motion.

And now as you move to enterprise, things have been becoming a little bit more top down. So talk a little bit about how this evolution of the go to market motion works. What’s the opportunity in enterprise? And how can you really force fuel on the fire with this top down sales motion that you’re kind of adding on to the existing?

Brian Duffy, CRO, Atlassian: Yes. So Atlassian is in a unique position because if you were to look up product led growth in a dictionary, I think Atlassian’s name would be beside it. So we have a high touch motion. We have a low touch motion. And then we have that, which I think everybody would love to have, the no touch motion.

And the move forward plan is we will continue to have all three motions. And we have 85% of the Fortune 500 customers are customers of Atlassian today. They make up approximately 10% of our revenue. So there is an opportunity for us to do more, obviously, with those customers. We’ll continue to invest in that no touch motion from an R and D perspective.

And then from the, let’s say, the enterprise motion, we have today north of 500 customers that pay us $1,000,000 or more a year. We plan to, one, hire more sellers. Currently, we have approximately 400 sellers only. So when you think of our market cap and the size that we are, we have 400 sellers, right? So we have an incredible opportunity ahead of us.

We are focused on getting closer to our customers. And the best way to do that, obviously, is to hire more people. So as we move into FY ’twenty six, you will see an increase in our spend on sales and marketing. We will also be focused on value engineering, which means that we will be pulling on the value that our solutions are driving for our customers. I say that because that is in one of the ways that enterprise sales organizations work by really pulling out the value that the solutions are driving for customers in terms of savings, etcetera, etcetera, rather than looking at purely how many seats, licenses, etcetera, does the customer need.

And then at the same time, we’re gonna be working very, very closely with the ecosystem, which is obviously a huge scaling engine for us as an organization. Since I joined Atlassian, I’ve been super impressed with the ecosystem itself, how large it is, how such a significant portion of our business comes from the ecosystem, which is great, and how we need to invest further into the ecosystem so that they can continue to scale our business as well.

Arjun Bhatia, Analyst, William Blair: And you obviously have a lot of experience in enterprise sales coming from SAP, which has been a very enterprise led organization. When you think about Atlassian’s enterprise readiness, where do you think we are on the journey? Obviously, you’re adding capacity, which is great. But from a process perspective, from a structure perspective, how do you think of the organization?

Brian Duffy, CRO, Atlassian: Yes. So firstly, we’re already there, right? So I’d like to remind everyone, we’re already in the enterprise. We have 330,000 customers already. Like I said, 85% of the Fortune 500 are already our customers and many 500 paying us north of a of a million.

The sales organization plays a very important role of being the voice of the customer. So feeding back to our product organization, for example, if there are blockers for our customer that are going to be moving to the cloud or if there are blocker or if there are issues in terms of one particular product, what it needs to be on the road map. That’s a muscle which is normal, let’s say, for a traditional enterprise software company. But for a product led growth company, that’s kind of a new muscle that needs to be built. Because within PLG, that didn’t really need to happen.

Now within enterprise, that’s where my organization needs to be pretty loud and and pushing on product. The great thing is our internally within our organization, they want that. Product wants that. They want to be closer to the customers. They want to be pushed.

And so far, we have been pushing and they turn around very, very quickly. So we’re going to continue to be the voice of the customer, to push back where we need to and to continue to serve our customers as best as possible.

Arjun Bhatia, Analyst, William Blair: One of the things I like about Atlassian, I think from a product perspective, there’s so much available. But I feel like we’re just at the start of unlocking a lot of that cross sell because for so long, I think it’s been Jira, Confluence, and JSM that have been the big growth drivers. But now you’re starting to do some more bundling and pricing and packaging changes with how you’re going to market on the cloud side. You’ve launched this Teamwork bundle, puts together a few of your core products. But talk about how this is augmenting the sales motion and what it can mean for growth, this Teamwork bundle and the bundling strategy broadly.

Brian Duffy, CRO, Atlassian: Yes. Yes. So we launched our team. We launched the collections in general. So firstly, it’s going to make it easier for our customers to buy, which I think is incredibly important.

It gives us an opportunity to not only sell traditionally to our IT buyers, but also gives us an opportunity to now expand within our customers and to target new buyers. So for example, the strategy collection gives us an opportunity to go to the Chief Strategy Officer, go to the CFO, etcetera. With our software collection, we now have an opportunity to go into new buyers as well, if that’s going to be the CHRO or again to the CFO. Again, we have a strong footprint within IT. And as we look to expand our footprint within our customer base, we won’t be going alone, but instead we will be leveraging the relationships that we have with IT and bringing them with us as we go to new buyers.

I think what is for me, what is incredibly refreshing is the relationship that we have with our customers, the respect and admiration that our customers have for the products that we have is amazing. You know, we have to be reminded that product like what literally is people started just swiping a credit card, and that’s how we got to where we are today. And every one of the 330,000 customers came through the same door, which is swiping a credit card, every single one of them, right? Even our largest customer in the world came through the exact same door. Not one of them came through a net new sales motion of somebody walking in to try to sell.

They all came through somebody swiping a credit card. And you only do that when the product is great, right? And it’s on that the back of that trust and the back of that relationship that gives us the right to be able to go to the CFO and to go to HR. Now in order to to do that and to do that sales motion, it’s not necessarily something that’s going to be particularly easy. It will require us hiring some new sellers that are gonna be able to have those conversations, but not only sellers, presales people, and value engineers so that we can have the the right conversations and you’re going to be investing in to ensure that we have the right content to have those conversations.

But it’s certainly an opportunity that we see to expand our footprint within those customers.

Arjun Bhatia, Analyst, William Blair: Yeah. So it gets you access to a lot more seats than I think is a thesis, that you can broaden your footprint inside these organizations. When you think about you have 330,000 customers. So when you think about the opportunity to actually target which customers are best for the bundles, for the Teamwork bundle to expand into the CFO, into the HR organization, how do you think about doing that? Is that a particular subset?

Or is this something that every Atlassian customer it’s relevant for every Atlassian customer?

Brian Duffy, CRO, Atlassian: Yes. So firstly, when we look at like Teamwork collection, that is our strategy moving forward. So we will lead with Teamwork collection, and we will lead with the collections in general. So that will be our de facto for our, let’s say, our high touch customers or enterprise customers. So that will be what we lead with for, again, our enterprise customers.

So that will be our de facto motion. So for any net new motion that we have, we will be leading with those. For any customer that’s currently in data center, that’s what we will be looking to to move them to. That’s where, again, where we’re gonna be prioritizing our our developments. For example, for Teamwork Collection, included in Teamwork Collection is Jira, Confluence and Loom.

That means that if they currently have Jira, they’re also then moving forward going to have Confluence, and then there will be the opportunity for them to have Loom, and we expect to see an expansion of Loom as they move forward in Teamwork collection. I would imagine that customers who are already in the cloud with us are going to now be, and we’ve already seen this, will be looking at possibly moving from potentially a stand alone Jira or Confluence and looking at moving to Teamwork Collection with us as well. We launched in early April, and we have had some inquiries from customers already and expect to see an uptick in terms of inquiries and demand from customers as we move forward.

Arjun Bhatia, Analyst, William Blair: And then in terms of just to wrap it up, in terms of the mechanisms for growth with Teamwork Collection, I think there’s a SKU or an addition element to it where customers are enrolled in a higher tier, or they have to have a same tier across all products. Is that the right way to think about it in terms of capability, sophistication and then pricing as well?

Brian Duffy, CRO, Atlassian: Yes. So there’s basically, have the same one SKU whereby they would have the same eligibility and quantities licensed effectively across all Jira and a Confluence across all of the tiers. Yes.

Arjun Bhatia, Analyst, William Blair: All right. Perfect. Maybe switching gears to AI because it’s been a very hot topic, obviously. In the software development life cycle, you have a lot of devs and engineers that use Jira and your other products. We’ve heard several companies call out maybe AI is having 30% efficiency in their coding time for their developers.

How does that the introduction of AI into the development lifecycle impact Atlassian? How does it impact Jira? And how does it impact your outlook on what AI can do for software engineers and the flow through to Atlassian?

Brian Duffy, CRO, Atlassian: Yeah. Good question. So for us, we see this as actually really being a tailwind and something that’s going to help our business. So obviously, developers are incredibly important to us and are a large portion of the seats, overall seats for us. Now when you think of developers, a portion of their time is spent literally hands on keyboards in terms of writing code.

But actually only onethree of their time is really spent hands on keyboard. The rest of their time is spent collaborating with team members and managing the projects. And they will be doing that predominantly via our tools, Jira, Confluence, etcetera, which is great for us. Now as new tools, like you highlighted, are introduced, those tools are going to be helping them actually code more efficiently and effectively bending the curve of productivity for these developers. And that’s good news for them and good news for the projects that they’re working on because that allows them to do projects more efficiently and in theory, do more projects.

But as they’re doing those projects, it doesn’t change our world because they’re actually still managing all of those projects through the same pane of glass, which is Jira and Confluence. And if anything, they’re actually doing more projects. So instead of seats potentially going down, for us, what we see is developer productivity increasing for projects that we’re working on and more utilization of our license of our solutions and not an impact that maybe what you were alluding to in terms of a decline of seats. So for us, we actually see a tailwind here. And maybe I’ll let Martin comment on maybe you wanna talk about some of the startups.

Martin Lamb, Investor Relations, Atlassian: Yeah. And, again, like, think it’s important to remember that fundamental fundamentally, Atlassian is a collaboration company. Right? Like, all of our products facilitate collaboration. And so as the output increases of software, because no doubt it will, there become all these new problems that humans have to collaborate together on and solve.

And Brian Brian echoed of that. Right? It’s like, do you manage all this new software? How do you sell it? How do you get feedback from what customers want so that you can iterate on that software?

Again, there’s a there’s a abundance of new new problems that get created. I think it’s also important to remember that already today, 50% of our seats are technical in nature. So that’s developers, engineers, IT. And already, we serve 50% that are nontechnical. So there’s business users, and we’ll continue to push more in that direction.

When you actually look at some of these SMB tech startups that you would expect to be much more kind of embracing of of or forward tech embracing, When you look at their patterns of seat expansion, it’s been consistent for the past year. So that’s good. And then also when you contrast that against SMBs of similar size in different industries, it’s very consistent. So you don’t see any deviation in kind of seat expansion patterns. Continue to see very healthy seat growth, continue to see absolute seat growth.

I think the other interesting anecdote is when we look at some of these CEOs or people that make kind of bombastic proclamations, when you look at the underlying customer data, we actually see seat expansion within a lot of these companies. And so it’s I think we feel really good as we continue to see seat growth because of all the initiatives and projects that continue to develop as Brian said, but also as we kind of continue to push more into serving these nontechnical users.

Arjun Bhatia, Analyst, William Blair: And I even maybe to to put a finer point on it, even you know, I think software development is not done in a silo, right, especially in the enterprise. It’s not you have a group of developers that are just like, oh, this is what we need to build, and we’ll go build it. Right? It’s part of a collaborative process. You have product teams involved.

You have marketing teams involved. You have finance. It can span the spectrum. And what you’re saying is Jira is the place where all these stakeholders that are part of the development process come together. And it’s not just engineers.

It’s a much broader audience that you’re going after.

Brian Duffy, CRO, Atlassian: Yeah. And you know, even for for myself and our developers who are delivering projects for me, you know, who are utilizing some of these tools as well, the number of projects in the last few months have been steadily increasing. And then my utilization and other people within my team, utilization of Jira and other tools has now been steadily increasing, quite frankly, because the number of projects that we have have been increasing because the deliverables that they have have been increasing as well. So I think as more and more tools and products, software come to market that increases their productivity, it’s actually going to help us because it’s going to be driving more efficiency, which will drive more projects. More projects drives more utilization.

More utilization will drive more seats, which is good business for us.

Arjun Bhatia, Analyst, William Blair: Yeah, absolutely. And then on the other side of AI, you have your own AI capabilities that you’re offering to take part in this boom in productivity that’s happening with developers, but also everywhere else. AI is pretty important. You have rovo.ai, which you launched in 2024. It does GenAI search and your agentic offering.

I think last you disclosed maybe 1,500,000 MAUs for AI capabilities. So how are customers using rovo and Atlassian’s AI capabilities? And what kind of ROI are you seeing them drive out the solutions you’ve launched?

Brian Duffy, CRO, Atlassian: Sure. So we made the bold decision that we were going to make rovo available for customers, and we were not going to charge for that. We announced that in a team earlier in April. And as you rightly said, we now have 1,500,000 monthly active users, a number that we track very, very closely and track the daily active usage as well. We are very maniacally focused in terms of ensuring that our customers are now going to start to adopt the solution.

Within customer success, we have ring fenced people, our CSMs, who are going to be focused on having our customers adopt Rovo. In addition, we’re working very closely with our partners who are similarly going to be working on use cases to have our customers adopt the solution as well. Our Atlassian plays the long game, wherein we get the solution into the organization. This is a strategy that the company has done many times over and it has worked very well, get the solution into the company and it, in general, spreads. And then fast forward two, three and five years, and the solution is pervasive across the organization.

When we look to companies like Harper Collins, the productivity gains that they are receiving, a large automotive company that I can’t name in terms of the productivity gains that they are also receiving in terms of the number of hours on the production line that they’re saving as well. It’s considerable. And now as we look at not only the productivity gains and the numbers of hours that we’re giving back to employees. We’re now also looking at how we, as an organization, can start to use AI within our sales organization more and more as well. Because obviously, it’s critically important that we’re going to be a poster child for this as well.

But it’s still very early days for us in considering that we announced this at TEAM, which is only two short months ago. So I expect to see considerable movements over the coming months ahead.

Arjun Bhatia, Analyst, William Blair: All right. And then one of the products maybe where you’ve had where we’ve seen the success, you’ve kind of it’s taken off is JSM. I think the last you disclosed, maybe it was $600,000,000 in ARR and your fastest growing product at scale. It started off as maybe like an augmentation of Jira itself, and then you productized it. But what is the success you’re seeing now with JSM in the part of the market where you play?

And as we think about runway and growth drivers for the next few years, how big of a driver is Jira Service Management in and of itself?

Brian Duffy, CRO, Atlassian: Yes. So when I was coming into the company, I was very excited, and I remain very excited and bullish on JSM. We are investing heavily into JSM in FY ’twenty six in terms of sales capacity. Our natural sweet spot as an organization, when you look at where the majority of our customers sit, is in mid market. When you look at JSM, obviously, are some competitors that you all know, where they do not play is in mid market.

And they do not play in mid market because they have one issue, which is price. They are priced out of that particular segment. Where we are very, very competitive even in strategic and enterprise at the top of the pyramid is price, and we can beat them on price. We are choosing to focus in mid market because that is our natural right to win space, and we are going to double down our focus in FY ’twenty six in JSM. There are certain segments or certain geographies around the world as well within mid market where we have even more of a right to win.

Southern Europe, Latin America, Asia, I believe, where we have even more of a right to win because of pricing pressures that those geographies have. Our strategy will be to win in mid market and then to do a bubble up. And then we will do more in enterprise and strategic as we move forward. We do get called on regularly to compete on certain renewals for a certain player in the ITSM space. We will compete on some of those.

Some of those, we will choose not to. If we think it’s just a rat race to the bottom that we’re maybe not gonna win, we have more productive things to do with our time. But it is a large strategic bet for us. There’s a massive opportunity there, we are going to double down in this space. And I think this business grew to 600,000,000 over ten years, I would say, with not a huge amount of intention behind us.

And in FY 2026, we’re putting a huge amount of intention and velocity behind this one.

Arjun Bhatia, Analyst, William Blair: All right. Perfect. Well, that’s a good place to end it. Brian Martin, thank you so much for joining us. Thanks, everyone, for coming.

Appreciate it.

Brian Duffy, CRO, Atlassian: Thank you.

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