Atlassian Reports Record Q2 2026 Earnings with Strong Cloud Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Should l Buy TEAM?
Source: seekingalpha
- Record Cloud Revenue: Atlassian achieved its first-ever $1 billion cloud revenue quarter in Q2, representing a 26% year-over-year increase, which signifies robust growth in its cloud business and is expected to further drive future revenue expansion.
- Strong Enterprise Sales: The company recorded over 1,000 customers upgrading to the Teamwork Collection in Q2, purchasing more than 1 million seats, indicating a strong preference for standardizing on the Atlassian system, thereby reinforcing its market position.
- Accelerated AI Adoption: Rovo surpassed 5 million monthly active users, demonstrating the rapid adoption of AI capabilities that are transforming work processes and directly driving business growth and customer demand.
- Long-Term Growth Confidence: Management reaffirmed a target of over 20% compounded annual revenue growth through FY27, along with a commitment to maintain a non-GAAP operating margin above 25%, reflecting confidence in future market opportunities.
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Analyst Views on TEAM
Wall Street analysts forecast TEAM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for TEAM is 235.57 USD with a low forecast of 185.00 USD and a high forecast of 320.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
23 Analyst Rating
19 Buy
4 Hold
0 Sell
Strong Buy
Current: 98.410
Low
185.00
Averages
235.57
High
320.00
Current: 98.410
Low
185.00
Averages
235.57
High
320.00
About TEAM
Atlassian Corporation is a provider of team collaboration and productivity software. The Company specializes in software development, work management, and enterprise service management software, which enables enterprises to connect their business and technology teams with an artificial intelligence (AI)-powered system of work. Its interconnected portfolio of apps, AI agents, and Collections, each with discrete value propositions, delivers solutions for software teams, IT operations and support teams, leadership, and business teams. Its apps, agents, and Collections are all built on the Atlassian Cloud Platform and data model: a common technology foundation that connects teams, information, and workflows throughout an organization. Its apps include Jira, Confluence, Loom, Jira Service Management, Rovo, Bitbucket, Compass, Jira Product Discovery, Jira Align, Focus and Talent. It offers team collaboration products on its Data Center deployment option. It operates the Dia and Arc browsers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Revenue Growth Expectations: Hynes anticipates that Atlassian's fiscal Q2 revenue growth will exceed guidance, potentially enabling the company to raise its full-year cloud targets, thereby enhancing investor confidence in its long-term growth potential.
- Market Reaction Analysis: Despite recent price target cuts from several research firms, including UBS lowering its target from $185 to $145 and BofA from $200 to $170, Hynes believes the company's pricing strategies and product upgrades will improve revenue run rates.
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- Improved Profitability: Adjusted earnings per share reached $1.22, exceeding the analyst estimate of $1.14, while operating income hit $430.2 million, with an operating margin rising from 26% last year to 27%, reflecting effective cost control and efficiency improvements.
- Strong Cash Flow: The company generated $177.8 million in operating cash flow and $168.5 million in free cash flow during the quarter, ending with $1.6 billion in cash and cash equivalents, providing ample funding for future investments.
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