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Can Atlassian's Cloud Momentum Sustain Strong Revenue Growth?
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Key Takeaways
TEAM's cloud revenues rose 29% YoY in Q3 FY26, surpassing $1.1B on enterprise demand.
Atlassian's Service Collection topped $1B ARR with growth exceeding 30% YoY.
TEAM expects FY26 cloud revenue growth of about 26.5%, above overall revenue growth.
Atlassian Corporation’s (TEAM - Free Report) accelerating cloud momentum is emerging as a major driver of sustained revenue growth, supported by strong enterprise demand, rising AI adoption and expanding platform engagement. In third-quarter fiscal 2026, cloud revenues surpassed $1.1 billion and grew 29% year over year, reflecting continued migration to Atlassian Cloud and deeper customer adoption across Jira, Confluence and Service Management offerings.
The company’s cloud business is benefiting from larger and longer-term enterprise commitments as organizations increasingly adopt Atlassian’s AI-powered “System of Work.” Management highlighted that customers are expanding seats across core cloud products while adopting higher-value offerings like Teamwork Collection and Service Collection. This trend is strengthening recurring revenue visibility, improving platform stickiness and deepening customer engagement across Atlassian’s cloud ecosystem.
Service Collection has become a meaningful growth catalyst, surpassing $1 billion in ARR with growth exceeding 30% year over year. The platform’s expanding adoption across IT, HR, finance and customer service workflows is helping Atlassian broaden its cloud footprint, expand its addressable market and create additional recurring revenue streams.
Atlassian’s fiscal 2026 guidance further reinforces confidence in the durability of its cloud-led growth strategy. The company expects cloud revenue growth of approximately 26.5% for fiscal 2026, significantly outpacing the overall projected revenue growth of 24%. This highlights cloud as the primary engine of top-line expansion, supported by continued enterprise migrations, rising AI adoption and stronger customer engagement across its platform.
Atlassian’s Cloud Push Faces Rising Competition
Monday.com (MNDY - Free Report) is becoming a major challenger to Atlassian in the cloud-based SaaS market as enterprises consolidate their workflows into a unified platform. MNDY reported 24% revenue growth in the first quarter of 2026, driven by strong enterprise adoption and AI-related offerings. The company is evolving into an “AI work platform” with mondayDB 3.0, AI agents and consumption-based AI pricing. While Atlassian still leads in developer ecosystems through Jira and Confluence, MNDY’s rapid AI innovation and enterprise expansion are increasing competitive pressure.
ServiceNow (NOW - Free Report) is accelerating its challenge to Atlassian in the cloud software market through its enterprise workflow platform, AI orchestration capabilities and AI-native CRM expansion. NOW reported 19% subscription revenue growth in the first quarter of 2026 and positioned itself as an “AI control tower for business reinvention.” NOW benefits from enterprise-scale workflow automation, deep integrations and its AI “Context Engine” trained on billions of workflows and transactions. While Atlassian remains strong in developer productivity, NOW’s expanding AI platform and cloud automation capabilities are intensifying competition.
TEAM’s Price Performance, Valuation & Estimates
Shares of Atlassian have declined 38.7% in the year-to-date period, underperforming the Zacks Computer & Technology sector’s growth of 16.1% and the Internet – Software industry’s fall of 11.1%.
TEAM’s Price Performance
Image Source: Zacks Investment Research
TEAM has a Value Score of F. It is currently trading at a Price/Sales ratio of 3.46X compared to the sector’s 6.59X.
TEAM’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for TEAM’s fiscal 2026 earnings is pegged at $5.48 per share, unchanged over the past 30 days, indicating a 48.91% increase from the previous year.
View the Zacks #1 Rank List
Image: Bigstock
Can Atlassian's Cloud Momentum Sustain Strong Revenue Growth?
Key Takeaways
Atlassian Corporation’s (TEAM - Free Report) accelerating cloud momentum is emerging as a major driver of sustained revenue growth, supported by strong enterprise demand, rising AI adoption and expanding platform engagement. In third-quarter fiscal 2026, cloud revenues surpassed $1.1 billion and grew 29% year over year, reflecting continued migration to Atlassian Cloud and deeper customer adoption across Jira, Confluence and Service Management offerings.
The company’s cloud business is benefiting from larger and longer-term enterprise commitments as organizations increasingly adopt Atlassian’s AI-powered “System of Work.” Management highlighted that customers are expanding seats across core cloud products while adopting higher-value offerings like Teamwork Collection and Service Collection. This trend is strengthening recurring revenue visibility, improving platform stickiness and deepening customer engagement across Atlassian’s cloud ecosystem.
Service Collection has become a meaningful growth catalyst, surpassing $1 billion in ARR with growth exceeding 30% year over year. The platform’s expanding adoption across IT, HR, finance and customer service workflows is helping Atlassian broaden its cloud footprint, expand its addressable market and create additional recurring revenue streams.
Atlassian’s fiscal 2026 guidance further reinforces confidence in the durability of its cloud-led growth strategy. The company expects cloud revenue growth of approximately 26.5% for fiscal 2026, significantly outpacing the overall projected revenue growth of 24%. This highlights cloud as the primary engine of top-line expansion, supported by continued enterprise migrations, rising AI adoption and stronger customer engagement across its platform.
Atlassian’s Cloud Push Faces Rising Competition
Monday.com (MNDY - Free Report) is becoming a major challenger to Atlassian in the cloud-based SaaS market as enterprises consolidate their workflows into a unified platform. MNDY reported 24% revenue growth in the first quarter of 2026, driven by strong enterprise adoption and AI-related offerings. The company is evolving into an “AI work platform” with mondayDB 3.0, AI agents and consumption-based AI pricing. While Atlassian still leads in developer ecosystems through Jira and Confluence, MNDY’s rapid AI innovation and enterprise expansion are increasing competitive pressure.
ServiceNow (NOW - Free Report) is accelerating its challenge to Atlassian in the cloud software market through its enterprise workflow platform, AI orchestration capabilities and AI-native CRM expansion. NOW reported 19% subscription revenue growth in the first quarter of 2026 and positioned itself as an “AI control tower for business reinvention.” NOW benefits from enterprise-scale workflow automation, deep integrations and its AI “Context Engine” trained on billions of workflows and transactions. While Atlassian remains strong in developer productivity, NOW’s expanding AI platform and cloud automation capabilities are intensifying competition.
TEAM’s Price Performance, Valuation & Estimates
Shares of Atlassian have declined 38.7% in the year-to-date period, underperforming the Zacks Computer & Technology sector’s growth of 16.1% and the Internet – Software industry’s fall of 11.1%.
TEAM’s Price Performance
Image Source: Zacks Investment Research
TEAM has a Value Score of F. It is currently trading at a Price/Sales ratio of 3.46X compared to the sector’s 6.59X.
TEAM’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for TEAM’s fiscal 2026 earnings is pegged at $5.48 per share, unchanged over the past 30 days, indicating a 48.91% increase from the previous year.
Image Source: Zacks Investment Research
TEAM stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.