Atlassian just delivered the kind of quarter that can reset a story. The stock came into this earnings season already strong over the past few months, then exploded another 35% to about US$149 after the release. That move reflects one thing above all else: profitability is finally showing through in a business many investors still bucket as a pure growth play.

Revenue for the fourth quarter sat at about US$1.8b while basic earnings per share came in at US$0.55. A double digit GAAP operating margin capped it off. The rest of the earnings details tell you how durable that profit trend might be.

Is Atlassian at US$149 a genuine discount or simply cheaper than it appears relative to high growth peers? See how NasdaqGS:TEAM screens on cash flows and peer multiples in our valuation analysis for Atlassian.

FY 2026 Earnings Summary

• Revenue, Q4 FY 2026 vs. Q4 FY 2025: US$1,766.5m vs. US$1,384.3m (higher year on year)
• Net Income, Q4 FY 2026 vs. Q4 FY 2025: profit of US$139.1m vs. loss of US$23.9m (moved from loss to profit)
• Basic EPS, Q4 FY 2026 vs. Q4 FY 2025: US$0.55 per share vs. a loss of US$0.09 per share (moved from loss to profit)
• GAAP Operating Margin, Q4 FY 2026 vs. Q4 FY 2025: double digit margin in Q4 FY 2026 compared with a lower margin position in the prior year period (clear improvement in profitability)

Tired of scrolling through walls of text and dense financial tables on Atlassian? See the full story behind its recent shift to profitability in an easy to read visual format with our company report for Atlassian.

Atlassian bull case: AI and enterprise milestones hit

The optimistic story around Atlassian is that AI driven cloud products and deeper enterprise use will turn strong usage into durable, profitable growth. The latest quarter gives that view real evidence. Revenue reached about US$1.8b with cloud at US$1.2b and remaining performance obligations at US$4.8b, which signals multi year commitments rather than one off wins. Net income swung from a loss to a profit of US$139.1m and GAAP operating margin reached double digits, so the operational leverage thesis is starting to show up in the income statement. Management linked Rovo and Collections directly to this, citing Rovo adopters with ARR that grows more than 2x non adopters and net revenue retention north of 120%. Record US$3m and US$5m plus deals and strong Service Collection uptake across HR, legal and finance back the idea that Atlassian is reaching well beyond its developer core.

Atlassian bear case: growth normalization and margin pressure

The cautious view is that Atlassian is maturing into slower growth with rising execution risk around AI monetization and cloud migrations. The numbers offer some support. Management guided subscription ARR growth of about 18% for FY27 after a period of higher growth, and flagged that FY26 ARR had about a 1 point contribution from the DX acquisition that will not repeat. GAAP operating margin guidance of roughly 6.5% for Q1 and 4.5% for FY27 points to margins stepping down from the current double digit level as Atlassian spends on AI, enterprise go to market and cost to serve. Management also called out macro and geopolitical factors and acknowledged that organizations may centralize context across several knowledge graphs. That keeps competitive and demand risk alive even as current AI usage and Rovo metrics look strong.

Compare Atlassian's push into AI, larger enterprise deals and the recent 35.29% share price jump with what institutional analysts are actually modeling for the stock. See the consensus price target analysis for Atlassian to check how far current Wall Street targets sit from today's NasdaqGS:TEAM price.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.