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TEAM Q1 Earnings Call Highlights AI Adoption and Cloud Growth
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Key Takeaways
TEAM's Q1 earnings rose to $1.65 per share, beating estimates, while revenues climbed 24% to $1.77 billion.
Atlassian's Cloud revenues grew 31% to $1.30B, while more than 87% of enterprise Cloud customers use Rovo.
TEAM projects 26% Cloud growth in fiscal 2027, amid migration timing challenges and tougher comparisons.
Atlassian Corporation (TEAM - Free Report) emphasized accelerating enterprise AI adoption, strong Cloud demand and expanding customer commitments during its first-quarter fiscal 2027 earnings call.
Management highlighted growing adoption of Rovo, Teamwork Collection and AI-powered workflows. However, questions surrounding Cloud revenue guidance, Data Center migration timing and subscription growth expectations drew attention during the analyst discussion.
TEAM's Q1 Earnings and Revenues Beat Estimates
Atlassian reported first-quarter fiscal 2027 non-GAAP earnings of $1.65 per share, surpassing the Zacks Consensus Estimate of $1.39. Earnings increased from $1.04 per share in the prior-year quarter.
Revenues increased 24% year over year to $1.77 billion, exceeding the Zacks Consensus Estimate of $1.71 billion.
Atlassian Corporation PLC Price, Consensus and EPS Surprise
Chief financial officer James Chuong highlighted Cloud revenue growth of 31% to $1.30 billion. Subscription annual recurring revenue (ARR) increased 23% to $6.81 billion, reflecting sustained enterprise adoption.
Atlassian Expands Enterprise AI Adoption
Co-founder and chief executive officer Mike Cannon-Brookes emphasized the growing role of Rovo and the Teamwork Graph in enterprise collaboration.
More than 87% of enterprise Cloud customers now use Rovo. The Teamwork Graph connects more than 250 billion objects and relationships, providing organizational context for AI-powered workflows.
During the Q&A, a Citigroup analyst questioned whether AI-driven software development could reduce collaboration requirements. Cannon-Brookes argued that increasing agent activity strengthens demand for Jira and Confluence by creating additional coordination needs.
TEAM Highlights Agentic Collaboration Opportunities
Cannon-Brookes discussed the Agentic Multiplayer Protocol (AMP), designed to integrate AI agents into existing enterprise workflows with identity, permissions and accountability.
The platform now supports more than 10 million monthly human-agent collaborations, double the level recorded six months earlier.
Responding to a Morgan Stanley analyst, Cannon-Brookes explained that AMP focuses on collaboration rather than centralized agent control. Management expects broader workflow adoption to support customer expansion across technology and business teams.
Atlassian Sees Strong Enterprise Customer Commitments
Remaining performance obligations increased 44% year over year to approximately $4.75 billion, reflecting larger and longer-duration customer contracts.
Teamwork Collection surpassed 3,000 customers, representing sevenfold year-over-year growth. Service Collection exceeded 70,000 customers, with ARR growing more than 30%.
Chuong highlighted continued enterprise expansion, including strong growth among customers spending more than $1 million annually. Management views cross-selling, seat expansion and broader workflow adoption as important growth drivers.
TEAM Addresses Cloud Migration and Guidance Concerns
During the Q&A, a Wells Fargo analyst questioned strong Data Center performance and migration trends.
Chuong explained that hybrid deployments allow large customers to transition toward Cloud over multiple years. These arrangements affected the timing of revenue recognition between Cloud and Data Center.
A Mizuho analyst also questioned expected Cloud growth deceleration. Chuong cited tougher comparisons, macroeconomic uncertainty and continued enterprise sales investments, while emphasizing management's prudent forecasting approach.
Atlassian Maintains Its Fiscal 2027 Growth Outlook
Atlassian expects second-quarter fiscal 2027 revenues between $1.825 billion and $1.835 billion, with Cloud revenue growth of approximately 27%.
For fiscal 2027, management projects total revenue growth of approximately 13.75%, Cloud growth of 26% and subscription ARR growth of 18.5%.
Chuong expects full-year non-GAAP operating margin of approximately 25.5%. Management continues balancing growth investments with profitability and operational efficiency.
TEAM Focuses on Durable, Profitable Expansion
Cannon-Brookes emphasized strengthening Atlassian's position as an enterprise system of work connecting employees, AI agents and business processes.
Management remains focused on expanding Cloud adoption, deepening enterprise relationships and embedding AI capabilities across its product portfolio.
The call reflected confidence in long-term AI opportunities alongside a measured approach to near-term revenue expectations.
Atlassian's Zacks Rank and Style Scores Offer Mixed Signals
TEAM currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term earnings estimate revision outlook. Its Growth Score of A reflects favorable growth characteristics, while its Value Score of D indicates comparatively weaker valuation attributes.
The Momentum Score of A highlights strong momentum characteristics. Its VGM Score of B reflects an attractive combined profile across value, growth and momentum, although the Zacks Rank #3 falls outside the preferred #1 (Strong Buy) and 2 (Buy) rankings.
View the Zacks #1 Rank List
Image: Bigstock
TEAM Q1 Earnings Call Highlights AI Adoption and Cloud Growth
Key Takeaways
Atlassian Corporation (TEAM - Free Report) emphasized accelerating enterprise AI adoption, strong Cloud demand and expanding customer commitments during its first-quarter fiscal 2027 earnings call.
Management highlighted growing adoption of Rovo, Teamwork Collection and AI-powered workflows. However, questions surrounding Cloud revenue guidance, Data Center migration timing and subscription growth expectations drew attention during the analyst discussion.
TEAM's Q1 Earnings and Revenues Beat Estimates
Atlassian reported first-quarter fiscal 2027 non-GAAP earnings of $1.65 per share, surpassing the Zacks Consensus Estimate of $1.39. Earnings increased from $1.04 per share in the prior-year quarter.
Revenues increased 24% year over year to $1.77 billion, exceeding the Zacks Consensus Estimate of $1.71 billion.
Atlassian Corporation PLC Price, Consensus and EPS Surprise
Atlassian Corporation PLC price-consensus-eps-surprise-chart | Atlassian Corporation PLC Quote
Chief financial officer James Chuong highlighted Cloud revenue growth of 31% to $1.30 billion. Subscription annual recurring revenue (ARR) increased 23% to $6.81 billion, reflecting sustained enterprise adoption.
Atlassian Expands Enterprise AI Adoption
Co-founder and chief executive officer Mike Cannon-Brookes emphasized the growing role of Rovo and the Teamwork Graph in enterprise collaboration.
More than 87% of enterprise Cloud customers now use Rovo. The Teamwork Graph connects more than 250 billion objects and relationships, providing organizational context for AI-powered workflows.
During the Q&A, a Citigroup analyst questioned whether AI-driven software development could reduce collaboration requirements. Cannon-Brookes argued that increasing agent activity strengthens demand for Jira and Confluence by creating additional coordination needs.
TEAM Highlights Agentic Collaboration Opportunities
Cannon-Brookes discussed the Agentic Multiplayer Protocol (AMP), designed to integrate AI agents into existing enterprise workflows with identity, permissions and accountability.
The platform now supports more than 10 million monthly human-agent collaborations, double the level recorded six months earlier.
Responding to a Morgan Stanley analyst, Cannon-Brookes explained that AMP focuses on collaboration rather than centralized agent control. Management expects broader workflow adoption to support customer expansion across technology and business teams.
Atlassian Sees Strong Enterprise Customer Commitments
Remaining performance obligations increased 44% year over year to approximately $4.75 billion, reflecting larger and longer-duration customer contracts.
Teamwork Collection surpassed 3,000 customers, representing sevenfold year-over-year growth. Service Collection exceeded 70,000 customers, with ARR growing more than 30%.
Chuong highlighted continued enterprise expansion, including strong growth among customers spending more than $1 million annually. Management views cross-selling, seat expansion and broader workflow adoption as important growth drivers.
TEAM Addresses Cloud Migration and Guidance Concerns
During the Q&A, a Wells Fargo analyst questioned strong Data Center performance and migration trends.
Chuong explained that hybrid deployments allow large customers to transition toward Cloud over multiple years. These arrangements affected the timing of revenue recognition between Cloud and Data Center.
A Mizuho analyst also questioned expected Cloud growth deceleration. Chuong cited tougher comparisons, macroeconomic uncertainty and continued enterprise sales investments, while emphasizing management's prudent forecasting approach.
Atlassian Maintains Its Fiscal 2027 Growth Outlook
Atlassian expects second-quarter fiscal 2027 revenues between $1.825 billion and $1.835 billion, with Cloud revenue growth of approximately 27%.
For fiscal 2027, management projects total revenue growth of approximately 13.75%, Cloud growth of 26% and subscription ARR growth of 18.5%.
Chuong expects full-year non-GAAP operating margin of approximately 25.5%. Management continues balancing growth investments with profitability and operational efficiency.
TEAM Focuses on Durable, Profitable Expansion
Cannon-Brookes emphasized strengthening Atlassian's position as an enterprise system of work connecting employees, AI agents and business processes.
Management remains focused on expanding Cloud adoption, deepening enterprise relationships and embedding AI capabilities across its product portfolio.
The call reflected confidence in long-term AI opportunities alongside a measured approach to near-term revenue expectations.
Atlassian's Zacks Rank and Style Scores Offer Mixed Signals
TEAM currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term earnings estimate revision outlook. Its Growth Score of A reflects favorable growth characteristics, while its Value Score of D indicates comparatively weaker valuation attributes.
The Momentum Score of A highlights strong momentum characteristics. Its VGM Score of B reflects an attractive combined profile across value, growth and momentum, although the Zacks Rank #3 falls outside the preferred #1 (Strong Buy) and 2 (Buy) rankings.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Rank can change as analysts revise earnings estimates following the recently reported quarterly results.