Q3 2026 Atlassian Corp Earnings Call Transcript
Key Points
- Atlassian Corp (TEAM) reported a 32% year-over-year revenue growth, reaching $1.8 billion, with cloud revenue surpassing $1.1 billion and accelerating to 29% growth.
- The company experienced significant growth in its Rovo AI platform, with monthly active users and credit usage growing over 20% month-over-month.
- Atlassian's Teamwork Graph is enhancing AI investments by making them smarter, cheaper, and more valuable, leading to better quality AI answers at a lower cost.
- The company achieved its largest ever quarter for competitive displacements from a major ITSM provider, indicating strong competitive momentum.
- Atlassian's Service Collection surpassed $1 billion in ARR, driven by strong adoption in non-IT use cases and AI features delivering real value.
- There is a noted pull-forward effect in data center revenue, which may impact future quarters' revenue recognition and create lumpiness.
- The transition of large customers with complex migrations to the cloud is expected to be a multi-year journey, potentially delaying revenue realization.
- Despite strong results, there is ongoing concern about the potential for seat compression in the future, although current signals do not indicate this.
- The company is facing rising credit and token costs associated with AI investments, which could impact profitability if not managed effectively.
- Atlassian's pricing strategy remains largely seat-based, which may limit flexibility compared to peers exploring usage-based pricing models.
Good afternoon, and thank you for joining Atlassian's earnings conference call for the third quarter of fiscal year 2026. This conference call is being recorded and will be available for replay on the Investor Relations section of the Atlassian website following this call.
I will now hand the call over to Martin Lam, Atlassian's Head of Investor Relations.
Welcome to Atlassian's third quarter fiscal year 2026 earnings call. Thank you for joining us today. On the call with me today, we have Atlassian's CEO and Co-Founder, Mike Cannon-Brookes; and Chief Financial Officer, James Chuong.
Earlier today, we published a shareholder letter and press release with our financial results and commentary for our third quarter of fiscal year 2026. The shareholder letter is available on the Investor Relations section of our website where you will also find our other earnings-related materials, including the earnings press release and supplemental investor data sheet. As always, our shareholder letter
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