Q1 2026 Atlassian Corp Earnings Call

Call is being recorded and will be available for replay on the Investor Relations section of Atlassian is website. Following this call.

I will now hand, the call over to Martin Lam Atlassian as head of Investor Relations.

Welcome to <unk> first quarter fiscal year 2026 earnings call.

For joining us today.

On the call with me today, we have Atlassian, CEO and cofounder, Mike Cannon Brookes.

Chief Financial Officer, Joe <unk>.

Earlier today, we published the shareholder letter and press release with our financial results and commentary for our first quarter of fiscal year 2026.

Shareholder letter is available on the Investor Relations section of our website, where you will also find other earnings related materials, including the earnings press release and supplemental investor data sheet.

As always our shareholder letter contains management's insight and commentary for the quarter. So during the call today will have brief opening remarks, and then focus our time on Q&A.

This call will include forward looking statements forward looking statements involve known and unknown risks uncertainties and assumptions.

Any such risks or uncertainties materialize or if any of the assumptions prove incorrect our results could differ materially from the results expressed or implied by the forward looking statements we make.

Should not rely upon forward looking statements as predictions of future events forward looking statements represent our management's beliefs and assumptions only as of the date such statements are made and we undertake no obligation to update or revise such statements should they change or cease to be current.

Further information on these and other factors that could affect our business performance and financial results is included in filings, we make with the Securities and Exchange Commission from time to time, including the section titled Risk factors in our most recent filed annual and quarterly reports.

During the call today, we will also discuss non-GAAP financial measures.

These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP.

Reconciliation between GAAP and non-GAAP financial measures is available in our letter earnings release, and Investor data sheet on the Investor Relations section of our website.

Wed like to allow as many of you to participate in Q&A as possible out of respect for others on the call. We'll take one question at a time.

With that I'll turn the call over to Mike for opening remarks.

Thank you all for joining us today.

As you've already read in our shareholder letter we're off to an incredible start to FY 'twenty six with total revenue in Q1 growing 21% year over year to $1 4 billion.

Our strong execution.

Cloud revenue growth of 26% year over year to $998 million and accelerated growth in IPO to 42% year over year to $3 3 billion.

We continue to make great strides across our strategic priorities of enterprise.

And the system of work.

Now turning to our results reflect this but our customers are taking notice.

All up over 300000 customers, including data bricks, Expedia Ford and Wells Fargo.

Rely on Atlassian AI enabled cloud platform to power their business processes and mission critical workflows.

We're proud of our ability to continue to deliver AI into the hands of those customers to use today.

We've been asked over three 5 million monthly active users of our AI capabilities across the platform once again up over 50% since last quarter.

This usage is widespread across both business teams as well as technical teams.

I'll repeat what you've heard me say in the past.

Was one of the best thing Thats ever happened to Atlassian. They.

They need to track plan and manage work.

<unk> your organizational knowledge of things that don't change in this era.

Do those things become even more important as more software as credit and more people have the ability to create amazing technology that changes our lives.

AI is also directly driving demand for our cloud offerings.

Customers are choosing to migrate to the cloud and they're upgrading to the teamwork collection to take advantage of our AI powered cloud platform.

In fact in less than two quarters since we launched the tumor collection, we've seen it drive a double digit percentage increase in users.

As well as upgrades to high value additions and the consolidation of competitive tools.

Is that customized customers standardize on it last year.

We're putting world class AI at the center of our platform and throughout our entire set of collections and apps.

We've showcased a relentless pace of innovation just a few weeks back in a sold out $2 25, Europe event in Barcelona with II stealing the show.

Of course, you can read more about all of these announcements.

Shareholder letter.

I want to take a moment to thank atlassian for their tremendous execution and dedication this quarter without them. None of these exciting opportunities would be possible.

I've talked to hundreds of customers this past quarter from all over the world small to the biggest enterprises on.

On the planet.

And what I'm most proud of is how they turn to us as a strategic partner.

Help them transform how work gets done during.

During a time when AI is changing as well.

Collaboration becomes even more important is <unk> has enabled us work evolves and as new opportunity to credit for their businesses.

And our customers are looking for our help.

I feel incredibly bullish about how we're partnering with them and helping their businesses thrive.

With that I'll pass the call to the operator for Q&A.

We will now begin the question and answer session.

If you have a question. Please press star followed by the one on your side.

If you'd like to withdraw from the queue. Please press star followed by the <unk>.

Your first question comes from Keith Weiss from Morgan Stanley. Please go ahead.

Excellent. Thank you guys for taking the question and congratulations on a really strong start to Q1.

Mike Cannon-Brookes: Take advantage of our AI-powered cloud platform. In fact, in less than two quarters since we launched the Teamwork Collection, we've seen it drive a double-digit % increase in users, as well as upgrades to higher-value editions and the consolidation of competitor tools, as our customers standardize on Atlassian. We're putting world-class AI at the center of our platform and throughout our entire set of collections and apps. We've showcased our relentless pace of innovation just a few weeks back at our sold-out Team25 Europe event in Barcelona, with AI stealing the show. Of course, you can read more about all these announcements in our shareholder letter. I want to take a moment to thank Atlassian for their tremendous execution and dedication this quarter. Without them, none of these exciting opportunities would be possible.

A lot of really impressive product innovation a lot of.

Impressive numbers.

I was hoping we could drill into the total revenue guide for the full year.

And just to better understand the moving parts in this and I'm looking at the chart.

We look forward in terms of total revenue guide to go from 18% to 28%, but three 2% of that coming from data center end of life, which means you're effectively lowering the non sort of end of life impact.

By 50 basis points.

So given all of the strength that you are talking about in the letter.

This momentum.

Why why is the full year apps and the data center and of life coming down about 50 bps.

Hey, Keith This is Joe I'll go first and then Mike will follow on with additional context, I'd say the key development that we saw in Q1 was that we had significantly stronger than expected cloud migrations from data center, which is a great thing for our business. As you know this has been a big area of investment for US, It's a key strategic priority.

Mike Cannon-Brookes: I've talked to hundreds of customers this past quarter from all over the world, small to the biggest enterprises on the planet. What I'm most proud of is how they're turning to us as a strategic partner to help them transform how work gets done during a time when AI is changing their world. Collaboration becomes even more important as more creation is enabled, as work evolves, and as new opportunities are created for their businesses. Our customers are looking for our help. I feel incredibly bullish about how we're partnering with them and helping their businesses thrive. With that, I'll pass the call to the operator for Q&A.

Allows us the opportunity to provide more value to customers in ways that we simply can't on data center, and we can offer capabilities, such as automation analytics and AI.

And so basically it's simply the most valuable and secure experience we can offer to our customers. So it's a great thing for the business cloud migrations also however have an impact on the timing of revenue recognition because cloud revenue is recognized Ratably and data center has a combination of upfront recognition and some ratable and then lastly, the move to cloud also impacts marketplace revenue because we.

Collaboration becomes even more important is more creation is enabled as work evolves and as new opportunities are created for their businesses.

And our customers are looking for our help.

I feel incredibly bullish about how we're partnering with them and helping their businesses thrive.

With that, I pass a call to the operator for Q&A.

Operator: We will now begin the question-and-answer session. If you have a question, please press star followed by the one on your phone. If you'd like to withdraw from the queue, please press star followed by the two. Your first question comes from Keith Weiss from Morgan Stanley. Please go ahead.

Have a lower take rate on cloud App sales.

We will now begin the question-and-answer session.

We do on data center apps.

All other organic growth drivers in our business in Q1, we had a slightly better or in line with our expectations and we've maintained that same guidance approach on those factors that we held three months ago. So we continue to hold a very conservative and risk adjusted outlook for all the other variables in the growth equation outside of migrations.

If you have a question, please press star followed by the 1 on your phone.

If you'd like to withdraw from the queue, please press star followed by the 2.

[Analyst]: Excellent. Thank you, guys, for taking the question, and congratulations on a really strong start to Q1. A lot of really impressive product innovation, a lot of impressive numbers. I was hoping we could drill into the total revenue guide for the full year and just to better understand the moving parts in this. I'm looking at the chart that you guys put forward in terms of total revenue guide going from 18% to 20.8%, but 3.2% of that coming from Data Center end-of-life, which means you're effectively lowering the non-sort of end-of-life impact by 50 basis points. Given all of the strength that you're talking about in the letter, the product momentum, why is the full year absent the Data Center end-of-life coming down by 50 bps?

Your first question comes from Keith Weiss from Morgan Stanley. Please go ahead.

So with that Q1 performance and momentum we have adjusted our full year outlook for a greater cloud migration forecast and we've left all other organic driver assumptions in place and because of those revenue recognition timing differences between cloud and data center and the impact of marketplace. This drives the half point decline in our organic revenue growth outlook for the rest of the year.

And so thats the math underneath the guidance that we're giving for the full year on the organic part of the business.

Mike.

Yeah, Hi, I just wanted to follow on Joe's chose laid out the math for you and how it pencils out I just wanted to reiterate this is a really good thing.

Increase in migrations.

Excellent. Thank you guys for taking the question, uh, in congratulations. On a, a really strong start to q1. Uh, a lot of impressive product Innovation, a lot of um, impressive numbers. I I was hoping we could drill into the total revenue guide for the full year um and and and to just to better understand the moving part in this. And I'm looking at the the chart uh there you guys put forward in terms of uh total revenue guide going from 18% to 20.8% but 3.2% of that coming from data center end of life which means you're effectively lowering the non sort of end of life impact, uh, by 50 basis points. Um, so given all of the strength that you're talking about in the letter, uh, the product momentum. Um, why, why is the full year?

Good for Atlassian, and it's great for our customers and you can see that coming through in our results, 26% cloud growth rate this quarter, 42% <unk> growth rate.

And the data center of Life coming down by 50 deaths.

Joe Binz: Hey, Keith, this is Joe. I'll go first, and Mike will follow on with additional context. I'd say the key development that we saw in Q1 was that we had significantly stronger-than-expected cloud migrations from Data Center, which is a great thing for our business. As you know, this has been a big area of investment for us. It's a key strategic priority. It allows us the opportunity to provide more value to customers in ways that we simply can't on Data Center, and we can offer capabilities such as automation, analytics, and AI. Basically, it's simply the most valuable and secure experience we can offer to our customers. It's a great thing for the business. Cloud migrations also, however, have an impact on the timing of revenue recognition because cloud revenue is recognized ratably, and Data Center has a combination of upfront recognition and some ratable.

Hey Keith, this is Joe. I'll go first and Mike will follow on with additional contacts. Uh I'd say the key development that we saw in q1

An increase significant increase in cloud guidance, Brian all while reiterating our long term, 20% CAGR growth rate that we gave out at the end of FY 'twenty four.

We feel just incredible confidence in our ability to deliver against that and I think all of the movements of Joe laid out are incredibly positive for for a lessening of the business.

Was that we had significantly stronger than expected Cloud. Migrations from data center, which is a great thing for our business. As you know, this has been a big area of investment for us. It's a key strategic priority. Uh it allows us the opportunity to provide more value to customers in ways that we simply can't on Data Center and we can offer capabilities such as automation, analytics and AI

Your next question comes from Kash Rangan from Goldman Sachs. Please go ahead.

Hello. Thank you very much I have to applaud you on your decision to do.

Joe Binz: Lastly, the move to cloud also impacts marketplace revenue because we have a lower take rate on cloud app sales than we do on Data Center apps. All other organic growth drivers in our business in Q1 were either slightly better or in line with our expectations. We've maintained that same guidance approach on those factors that we held three months ago. We continue to hold a very conservative and risk-adjusted outlook for all the other variables in the growth equation outside of migrations. With that Q1 performance and momentum, we've adjusted our full-year outlook for a greater cloud migration forecast, and we've left all other organic driver assumptions in place. Because of those revenue recognition timing differences between cloud and Data Center and the impact to marketplace, this drives the half-point decline in our organic revenue growth outlook for the rest of the year.

Data center end of life I think this is likely to accelerate the cloud transition something that personally I have been waiting for for a few years now so kudos on that on pulling the plug there. So the strategic question is given that we've got line of sight into cloud migration, we're not fighting multiples good battles I wonder if.

And so basically it's simply the most valuable and secure experience we can offer to our customers. So it's a great thing for the business Cloud. Migration is also, however, have an impact on the timing of Revenue recognition. Because Cloud revenue is recognized relatively and data center has a combination of upfront, recognition, and some Ribble. And then, lastly, the move to Cloud. Also impacts Marketplace Revenue because we have a lower take rate on Cloud app sales than we do on data center apps.

Mike you can talk about the playbook that clean playbook for cloud migration and the years ahead, what are the things that you've learned from the last quarter or so in terms of tactics, especially with the new CMO coming on board are you.

All other organic growth drivers in our business and q1. We're either slightly better or in line with our expectations and we've maintained that same guidance approach on those factors that we held 3 months ago. So we continue to hold a very conservative and risk adjusted outlook for all the other variables in the growth equation outside of migrations

Tackling with field engagements and the partnerships with the systems integrators to take this.

Take this fall off because I do think its pretty exciting what youre object.

Thanks, Kash, let guys.

Joe Binz: That's the math underneath the guidance that we're giving for the full year on the organic part of the business. Mike.

I appreciate the applause I guess.

Let me say, a few things about ascend and cloud.

So with that, q1 performance and momentum, we've adjusted our full year outlook for a greater Cloud migration forecast and we've left all other organic driver assumptions in place and because of those Revenue recognition timing differences between cloud and data center, and the impact of marketplace, this drives the Half Point decline in our organic Revenue growth outlook for the rest of the year. And so, that's the math, underneath the, uh, the guidance that we're giving for the full year on the organic part of the business.

Like,

Mike Cannon-Brookes: Yeah, hi, Keith. I just wanted to follow on. Joe's laid out the math for you and how it pencils out. I just want to reiterate this is a really good thing. Increased migrations is good for Atlassian, and it's great for our customers. You can see that coming through in our results: 26% cloud growth rate this quarter, 42% RPO growth rate, and a significant increase in cloud guidance, right? All while reiterating our long-term 20% CAGR growth rate that we gave out at the end of FY2024. We feel just incredible confidence in our ability to deliver against that. I think all of the movements that Joe laid out are incredibly positive for Atlassian as a business.

Cloud migrations.

Firstly.

The partner and customer reaction has been.

Fantastic.

I think that's because we have.

yeah. Hi Kate, I just wanted to follow on Joe's, Joe's, laid out the the Maths for you and how it it pencils out. I just want to reiterate, this is a really good thing.

Well telegraphed to our customers and partners.

Increase migrations.

Todd community. The cloud is the future its the best experience for our customers. So we had very little surprise.

Is good for it last year and it's great for our customers. And you can see that coming through in our results,

So a full on long term about how we've managed the transition I think and the reaction has been very positive as a result.

26% cloud growth rate this quarter, 42% RPO growth rate, and that.

I think the.

Removal of technical barriers and the delivery of innovation in the cloud has been a combination of effects, it's really bringing that through you see that in the number of customers had mentioned to me. For example, AI is one of the big reasons that I'm moving to the cloud.

Long term 20% uh, kegger growth rate that we gave out at the end of fy24. We feel just incredible confidence in our ability to deliver against that. And I think all of the movements are Joe laid out are incredibly positive for uh, for at last seen as a business,

Operator: Your next question comes from Kash Rangan from Goldman Sachs. Please go ahead.

<unk>.

An awful lot about how to help those customers manage that upgrade through the phosphate program through our amazing partner network through a lot of different things over the last five plus years and you say that in our.

Kash Rangan: Hello. Thank you very much. I have to applaud you on your decision to do a Data Center end-of-life. I think this was likely to accelerate the cloud transition, something that personally I've been waiting for for a few years now. Kudos on that, on pulling the plug there. The strategic question is, given that we've got lineups set into cloud migration, we're not fighting multiple good battles. I wonder if Mike, you can talk about the playbook, the clean playbook for cloud migration in the years ahead. What are the things that you've learned from the last quarter or so in terms of tactics, especially with the new Chief Revenue Officer coming on board? How are you tackling the field engagements and partnerships with the systems integrators to take this full on? I do think it's pretty exciting what you're on to.

Your next question comes from Kash rangan from Goldman Sachs, please go ahead.

Doubling the number of migrations.

Its that were upgraded in the last quarter that doubled year on year, that's a huge achievement for us.

And it is thanks to those partners that you talked about and everybody else and you see it in us pricing that the cloud revenue outlook. So.

Think cloud is ready for our customers, he said that and federate moderate and.

Government cloud isolated cloud multi cloud strategy so.

We feel.

Incredibly bullish that we have the experience to do this we feel that it's the right experience for our customers.

Hello, thank you very much. I have to applaud you on your decision to do a data center end of life. I think this was likely to accelerate the cloud transition. Something that personally I've been waiting for for a few years now. So Kudos on that on pulling the plug there. So the Strategic question is given that we've got line of sight into Cloud migration or not fighting multiple good battles. I wonder, uh, if you Mike, you can talk about the Playbook that clean playbook for cloud. Migration in the years ahead. What are the things that you've learned from the last quarter or so, in terms of tactics, especially with the new Co coming on board? How are you tackling the field engagements and the Partnerships with the systems integrators to take this uh uh, take this full on because I think I I do think it's pretty exciting. What you're on to.

And we are thoughtfully managing that migration.

Mike Cannon-Brookes: Thanks, Kash. Look, I always appreciate the applause, I guess. Let me say a few things about Ascend and cloud migrations. Firstly, the partner and customer reaction has been fantastic. I think that's because we have well telegraphed to our customers, our partners, the entire community that cloud is the future. It's the best experience for our customers, so we had very little surprise. We're very thoughtful and long-term about how we've managed the transition, I think, and the reaction has been very positive as a result. I think the removal of technical barriers and the delivery of innovation in the cloud has been a combination of effects that's really bringing that through. You see that in the number of customers that mentioned to me, for example, AI is one of the big reasons that they are moving to the cloud.

As you pointed out so I don't think the playbook has necessarily changed as much as every year and every quarter that goes by we get better at it we did lots and lots of large migrations last quarter across different geographies different industries pretty much any country that I go to any city I can point to a large.

Thanks Cash.

Always appreciate the applause, I guess. Um,

Let me say a few things about Ascend and and Cloud migrations.

Firstly.

<unk> customer in that geography in their industry that has already moved.

Um the partner and customer reaction has been uh fantastic. I think that's because we have

So that's that's what gives us that.

Our confidence going forward and allows us to reiterate those those long term targets that we've laid out.

Well, telegraphed to our customers, our partners, the entire Community. The cloud is the future. It's the best experience for our customers.

Your next question comes from Arjun Bhatia from William Blair. Please go ahead.

So we had very little surprise, we're very thoughtful and long-term about how we've managed the transition I think. And the reaction has been uh very positive as a result.

um,

I think the

Yeah perfect. Thank you I'll add my.

Congrats on a great quarter here, Mike maybe I'm curious just.

Obviously, we kind of knew the end of life on data center was coming at some point.

I'm curious kind of what made you decide to do that now is it just sort of.

Mike Cannon-Brookes: We've learned an awful lot about how to help those customers manage that upgrade through the FastShift program, through our amazing partner network, through a lot of different things over the last five-plus years. You see that in our doubling the number of migrations, seats that were upgraded in the last quarter. That doubled year on year. That's a huge achievement for us, and it is thanks to those partners that you talked about and everybody else. You see it in us raising the cloud revenue outlook. I think cloud is ready for our customers. You see that in federal and moderate, in government cloud, isolated cloud, our multi-cloud strategy. We feel incredibly bullish that we have the experience to do this. We feel that it's the right experience for our customers, and we are thoughtfully managing that migration, as you pointed out.

The technical advancements in cloud that you've talked about.

Comfortable more comfortable customers with cloud and then just.

Youre seeing youre seeing the maybe the second part of your question Youre seeing.

Migration impact already but I'm curious, how you think it impacts cloud migrations for the rest of this year and through 2027. When do you think we start to see the.

removal of technical barriers and the delivery of innovation in the cloud has been a combination of effects. That's really, uh, uh, bringing that through. You see that in the number of customers that mentioned to me, for example, AI is 1 of the big reasons that they are moving to the cloud. We've learned an awful lot about how to help those customers manage that upgrade, uh, through the fast shift program through, our amazing partner Network through a lot of different things over the last 5 plus years. And you see that in our, our, um, doubling the number of migrations, uh, uh, seats that were upgraded in the last quarter that doubled year on year, that that's a huge achievement for us. Um, and it is thanks.

Next step of acceleration and data center to cloud migrations are still going to take some time or is that more immediate thank you.

To those partners that you talked about and, and everybody else and you see it in US, raising the, the cloud Revenue Outlook. So,

Look thanks.

I think cloud is ready for our customers. You see that in Federate Moderate in, in, uh, uh, Government Cloud, Isolated Cloud, our multi-cloud strategy. So,

Mike I.

We feel.

I would say that we've.

It's a continuum. So we've been investing in building an enterprise grade cloud platform with AI and all the compliance and governance and scalability and data residency and government cloud all of the amazing.

Mike Cannon-Brookes: I don't think the playbook has necessarily changed as much as every year and every quarter that goes by. We get better at it. We did lots and lots of large migrations last quarter across different geographies, different industries. Pretty much any country that I go to, any city, I can point to a large customer in that geography, in their industry that has already moved. That's what gives us a lot of that confidence going forward and allows us to reiterate those long-term targets that we've laid out.

Amazing technical achievements that we've invested in over the last five plus years.

A continuum, we will continue we will continue to invest in those but we feel like.

Good about the ability we have right now to accommodate the vast majority of remaining data center customers in the cloud that we have today.

We feel great about our execution.

Of the cloud roadmap that we've laid out in front of us and things like the isolated cloud and we fundamentally spent a lot of time with our customers. We feel like now is the right time.

Incredibly uh, bullish that we have the experience to do this. We feel that it's the right experience for our customers. Uh, and we are thoughtfully managing that migration, uh, as as you pointed out. So I don't think the Playbook has necessarily changed as much as every year and every quarter that goes by, we, we get better at it. We did lots and lots of large migrations last quarter across different geographies, different Industries, uh, pretty much any country that I go to any City, I can point to a large uh customer in that geography in their industry that has already moved. Um, so that's, that's what gives us a lot of that confidence going forward and uh allows us to reiterate those. Those long-term targets that we've laid out

Operator: Your next question comes from Arjun Bhatia from William Blair. Please go ahead.

For that that we are prepared they already that our partners already.

Your next question comes from Arjun. Barta from William Blair, please. Go ahead.

Mike Cannon-Brookes: Yep. Perfect. Thank you. I'll add my congrats on a great quarter here. Mike, maybe I'm curious, just obviously, we kind of knew the end-of-life on Data Center was coming at some point. I'm curious, kind of what made you decide to do that now? Is it just sort of the technical advancements in cloud that you've talked about, more comfortable customers with cloud? You're seeing maybe the second part of this question, you're seeing the migration impact already, but I'm curious how you think it impacts cloud migrations for the rest of this year and through 2027. When do you think we start to see the next step of acceleration in Data Center to cloud migrations? Is it still going to take some time, or is that more immediate? Thank you.

We've said many times on calls we no longer get the if we're moving to cloud. It's a win conversation with every single customer that I deal with.

So I.

I would say, we just feel very good about the delivery we've had and so now is a good time for that.

In terms of the expectation of migration will kind of I'd say thats all.

Yep, perfect. Um, thank you. I'll add my, uh, congrats on a, on a, on a great quarter here. Um, Mike. Maybe I'm curious just, uh, you know, obviously we kind of knew the end of life on data center was coming at some point. Um, I'm curious kind of what made you decide to do that now. Is it just, um, sort of

<unk>.

Obviously, we've.

If a company no bullshit as our core customer value. So we've laid out what we see in front of us for those customers the multi year period of that giving them.

Time to migrate giving them the partnerships and everything else that we need.

And.

We have included that into our.

Into our guidance and into our results so that the confidence that we feel is included in the guidance that we've given them.

the technical advancements in Cloud that that you've talked about, uh, comfortable, uh, more comfortable customers, uh, with, with cloud. And then just, I, you're seeing you're seeing the, the second part of this question, you're seeing the, um, migration impact, uh, already. But I'm curious how you think it impacts Cloud migrations for the rest of this year and through 2027, when, when do you think we start to see the, uh, next step of acceleration in in data center, to Cloud migrations, it's still going to take some time. Or is that more immediate? Thank you.

Yes.

And then RJ I'd, just ask I'd add one other point that while we expect more momentum on migrations in the short term there is going to be variability in the pace of these migrations quarter to quarter and they will take time to move and we expect most customers will migrate as we get closer to the data center end of life date in March 2029, So we expect migrations to accelerate in the 2008 2009 timeframe.

Mike Cannon-Brookes: Look, thanks. Mike, look, I would say that we've—it's a continuum. We've been investing in building an enterprise-grade cloud platform with AI and all the compliance and governance and scalability and data residency and government cloud. All of the amazing technical achievements that we've invested in over the last five-plus years are a continuum. We will continue to invest in those. We feel good about the ability we have right now to accommodate the vast majority of remaining Data Center customers in the cloud that we have today. We feel great about our execution of the cloud roadmap that we've laid out in front of us and things like isolated cloud. We fundamentally spend a lot of time with our customers. We feel like now is the right time for that, that we have prepared, that they are ready, that our partners are ready.

Look, thanks.

look, I I would say that we've

Your next question comes from Ryan <unk>.

Um, it's it's a Continuum. So, we've been investing in building an Enterprise grade Cloud platform. It's Ai, and all the compliance, and governance, and scalability and data residency, and government Cloud. All of the

From Wells Fargo. Please go ahead.

Amazing, technical achievements that we've invested in over the last 5 plus years.

Thanks for taking the question.

are a Continuum, we will continue, we will continue to invest in those but we feel like

This is kind of like a high level question, but there's been a lot of extra conversation around like a super App.

World, where you know AI interact with multiple different parts of your software stack from one pane of glass, but Alaska is always made it easy to integrate here with some of the other software solutions and I thought the browser company acquisition was interesting that it often.

Good about the ability we have right now to accommodate the vast majority of remaining data center customers in the cloud that we have today.

We feel great about our execution.

It's easier to use the last thing some other tools. So how do you think about it.

Future, where you try to use AI across a bunch of different software solutions and atlassian fits in the world.

Mike Cannon-Brookes: We've said many times on calls, we no longer get the if we're moving to cloud. It's a when conversation with every single customer that I deal with. I would say we just feel very good about the delivery we've had, and now is a good time for that. In terms of the expectation of migration, I would say that's all. Obviously, we've open company no bullshit is a core customer value. We've laid out what we see in front of us for those customers, the multi-year period of that EOL, giving them time to migrate, giving them the partnerships and everything else that we need. We have included that into our guidance and into our results. That confidence that we feel is included in the guidance that we've given them.

Yeah.

Thanks, Ron.

Question.

Firstly I would say we are.

Um, of the the cloud roadmap that we've laid out in front of us and things like isolated cloud. And uh, we fundamentally spend a lot of time with our customers. We feel like now is the right time, uh, for that, that we have prepared that they are ready, that our partners are ready. Um, we've said many times on calls, we no longer get the if we're moving to Cloud. It's a when conversation with every single customer that I deal with. So I would say we just feel very good about the the delivery we've had. And and so now is a, is a good time for that.

Making amazing progress in our AI capabilities and delivery to customers.

In terms of the expectation of migration, look, I would say that's all. Um,

I think the company broadly should be incredibly proud of.

Shipping II to our customers it turns up as one of the reasons that they are migrating to the cloud when you talk to them. It shows up as one of the reasons that they are moving to the tumor collection. It shows up as one of the reasons they are there.

Obviously, we've, uh, open company. No, bulshit is a core customer value. So we've laid out what we see in front of us for those customers, the multi-year period of that EOL, giving them, uh, time to migrate, uh, giving them the Partnerships and everything else that we need. And

we have included that into our

Deepening that relationship as a strategic partner with Atlassian is R. R.

Or investment NII, which is which is which is world class. We are doing an incredibly good job of delivering to customers to give them the benefits today and giving us confidence that we will continue to deliver that into the future.

Um, into our guidance and into our results, so that that that confidence that we feel is is included in the in the guidance that we've given now.

Joe Binz: Arjun, I'd just add one other point that while we expect more momentum on migrations in the short term, there is going to be variability in the pace of these migrations quarter to quarter, and they will take time to move. We expect most customers will migrate as we get closer to the Data Center end-of-life date in March 2029. We expect migrations to accelerate in the 2028, 2029 timeframe.

Tierra has always been an incredibly integrated tool, we're very proud of that.

The Atlassian platform is incredibly integrated you can see that in a number of partnerships that we've signed up in the last quarter.

Lots of which are listed in the letter to integrate our platform with other offerings. Our customers have it's a core part of our customer value proposition is we believe that your best technology World. Your best software World is a deeply integrated and deeply connected.

And then Argent, I just asked, I'd add 1 other point that uh, while we expect more momentum on migrations, in the short term, there is going to be variability in the pace of these migrations quarter to quarter and they will take time to move. And we, we expect most customers will migrate. As we get closer to the data center end of life date, in March 2029. So we expect uh, migrations to accelerate in the 2829 time frame.

Operator: Your next question comes from Ryan MacWilliams from Wells Fargo. Please go ahead.

Your next question comes from Ryan MC Williams from Wells, Fargo. Please go ahead.

Mike Cannon-Brookes: Thanks for taking the question. Mike, this is kind of like a high-level question, but there's been a lot of conversation around a super app world where AI interacts with multiple different parts of your software stack from one pane of glass. Atlassian has always made it easy to integrate Jira with some of the other software solutions. I thought the Browser Company acquisition was interesting, that it also makes it easier to use Atlassian with some of the other tools. How do you think about a future where you try to use AI across a bunch of different software solutions and how Atlassian fits in that world?

World you can see that in the ability to use atlassian. They are off the atlassian from within other tools and vice versa to use other tools from within the Atlassian World and I think that will depend on where the customer workflows and where they are working.

Thanks for taking the question. Like this is kind of like a high level question but there's been a lot of other conversation around like a super app.

Most prominently recently you can see that in <unk> ability to assign work items two agents, whether those are technical agent from get hobble, coosa or whether those are non technical license from Canberra, a box or <unk> or.

Or someone else. This is about taking your workflows and business processes assigning parts of them off two Io agents as that world evolves and then bringing it back in for collaboration with further users. So.

Uh world where, you know, AI interact with uh, multiple different parts of your software stack from, you know, 1 pane of glass. But the last scene has always made it easy to integrate Euro with some of the other software Solutions. And I thought the browser company acquisition was interesting that it also makes it easier to use the last thing, on some other tools. So, how do you think about, you know, a future where, you know, you try to use AI across a bunch of different software Solutions and how Alaskan fits in the world? Thanks.

Mike Cannon-Brookes: Thanks, Ryan. Great question. Firstly, I would say we are making amazing progress in our AI capabilities in delivery to customers. I think the company broadly should be incredibly proud of shipping AI to our customers. It turns up as one of the reasons that they are migrating to the cloud when you talk to them. It shows up as one of the reasons that they're moving to the Teamwork Collection. It shows up as one of the reasons they are deepening their relationship as a strategic partner with Atlassian, which is our core investment in AI, which is world-class. We are doing an incredibly good job at delivering AI to customers to give them the benefits today and giving them confidence that we will continue to deliver that into the future. Jira has always been an incredibly integrated tool. We're very proud of that.

Thanks Ron. C question.

Think.

We will continue to be integrated I think that's the best.

firstly, I would say we are

Outcome for our customers and I think that.

Everything from the teamwork graft to the design expertise that we're putting into our AI offerings to just a world class set of capabilities that come with robo is showing up in.

making amazing progress in our AI capabilities in delivery to customers.

I think the company broadly should be incredibly proud of.

Our customers and it is a reason that they are more daily partnering with us so incredibly proud.

Proud of the delivery we've had there.

A lot of work to do every single quarter as we go forward.

Shipping AI to our customers. It it turns up as 1 of the reasons that they are migrating to the cloud when you talk to them. It shows up as 1 of the reasons that they're moving to the team or collection. It shows up as 1 of the reasons they are.

We're rolling.

Deepening their relationship as a strategic partner with Atlassian is our...

Your next question comes from Alex Zukin from Wolfe Research. Please go ahead.

Core investment in AI which is which is, which is world class. We are doing an incredibly good job at delivering AI to customers to give them the benefits today and giving you the confidence that we will continue to deliver that into the future.

Mike Cannon-Brookes: The Atlassian Platform is incredibly integrated. You can see that the number of partnerships that we've signed up in the last quarter, lots of which are listed in the letter, to integrate our platform with other offerings that customers have. It's a core part of our customer value proposition. We believe that your best technology world, your best software world, is a deeply integrated and deeply connected world. You can see that in the ability to use Atlassian's AI off Atlassian from within other tools and vice versa to use other tools from within the Atlassian world. I think that will depend on where the customer workflows are and where they are working.

Okay.

Jira has always been an incredibly integrated tool. We're very proud of that. The Atlassian platform is incredibly integrated. You can see that there are a number of partnerships that we've signed up in the last quarter, many of which are listed in the letter.

Your next question comes from Alex Zukin. Please go ahead.

Okay.

Hey, guys. Thanks for everything.

Yes. Please go ahead Alex.

Hey, sorry about that I was just having some voice issues.

Many guys just some of the most interesting commentary from the letter I think was your commentary about looking at your cohort of customers that are also using some of these AI coding tools and how they are up.

Mike Cannon-Brookes: Most prominently recently, you can see that in Jira's ability to assign work items to agents, whether those are technical agents from GitHub or Cursor, or whether those are non-technical agents from Canva or Box or someone else. This is about taking your Jira workflows and business processes, assigning parts of them off to AI or agents as that world evolves, and then bringing it back in for collaboration with further users. I think we will continue to be integrated. I think that's the best outcome for our customers. I think that everything from the Teamwork Graph to the design expertise that we're putting into our AI offerings to just a world-class set of capabilities that come with Rovo is showing up in our customers, and it is a reason that they are more deeply partnering with us. Incredibly proud of the delivery we've had there.

Those customers are adding seats to the tune of 5% what other.

Anecdotes do you have to share in terms of other product.

Attainment and adoption trends that youre seeing from that kind of Super user cohort and then maybe just a quick one.

On Dx spin.

Assigning parts of them off to AI or agents that will devolve and then bringing it back in for collaboration with further users. So I think

Specifically.

How you maybe see that.

we will continue to be integrated. I think that's the best.

Accelerating some of the uptake in <unk>.

Expansion with respect to the cloud portfolio.

Thanks, Alex.

Look on well on record at this point is saying.

I firmly believe there'll be more developers in five years' time.

Mike Cannon-Brookes: A lot of work to do every single quarter as we go forward. We're rolling.

There'll be far more people, creating software and a far greater amount of technology in the world, which is which is great for all of us and that significantly expands atlassian as opportunities.

Outcome for our customers. And I think that our, um, everything from the teamwork graph to the design expertise that we're putting into our AI offerings to just the world class set of capabilities that come with Roo is showing up in, uh, our customers and it is a reason that they are more deeply partnering with us. So incredibly proud, proud of the delivery we've had their, um, and a lot of work to do every single quarter as we go forward.

We're rolling.

Operator: Your next question comes from Alex Zukin from Wolfe Research. Please go ahead. Your next question comes from Alex Zukin. Please go ahead.

Why do I have such conviction maybe important to note. We have the best data, we have amazing visibility right now 300000 customers, 80% of the fortune, 560% of the Forbes II 50, Atlassian, Kosmos right, where mission critical central to their business processes.

Your next question comes from Alex zukin. From Wolfe research, please go ahead.

We have tens of millions of developers engineers product managers designers that use our applications.

The next question comes from Alex sukin. Please go ahead.

Across millions of teams. So we have some pretty phenomenal insights into how customers get work done how they build software and how they build technology and.

Mike Cannon-Brookes: Hey, guys. Can you hear me?

And as we said in the shareholder letter we continues to see really healthy user growth. The statistic you gave we've looked at a cohort of customers that were using.

Operator: Yes, please go ahead, Alex.

Mike Cannon-Brookes: Hey, sorry about that. I was just having some voice issues. Maybe, guys, just some of the most interesting commentary from the letter, I think, was your commentary about looking at your cohort of customers that are also using some of these AI coding tools and how they're up. Those customers are adding seats to the tune of 5%. What other anecdotes do you have to share in terms of other product attainment and adoption trends that you're seeing from that kind of super user cohort? Maybe just a quick one on DX, specifically, how you maybe see that accelerating some of the uptake in expansion with respect to the cloud portfolio?

Yes, please go ahead, Alex.

Generation tools, Github Copilot blood code Casa we excluded Rojo Dev on purpose, so as to remove bias of our own sort of U K.

Customer base.

And those customers are using those cogeneration tools are expanding their paid seats on zero at a rate, 5% foster than those who didn't.

They were managing more than 20% more projects than those that didn't.

And importantly.

All of those three and others.

Working with us in partnership to bring their agents into gyro into their business processes and workflows that they are using.

Sorry about that. I was just having some Voice issues. Um, maybe guys, just some of the uh, most interesting commentary from the letter. I think was your commentary about looking at your cohort of customers that are also using some of these AI coding tools, and how they're up. Um, those customers are adding seats to the tune of 5%. What other um, anecdotes do you have to share in terms of other product, uh, attainment and adoption trends that you're seeing from that kind of super user cohort? And then maybe just a quick 1 on DX, uh, specifically,

Because that's where customers that are doing work.

The.

How you maybe see that? Um accelerating some of the uptake in uh expansion with respect to the cloud portfolio.

Other anecdotes that we might have look we've given a lot of statistics. He arrived the teamwork grass is phenomenal it's up over 100 billion objects and connections and continuing to grow it.

Mike Cannon-Brookes: Thanks, Alex. Look, I'm well on record at this point as saying I firmly believe there'll be more developers in five years' time. There'll be far more people creating software and a far greater amount of technology in the world, which is great for all of us. That significantly expands Atlassian's opportunities. Why do I have such conviction? Maybe important to note, we have the best data. We have amazing visibility right now. 300,000 customers, 80% of the Fortune 500, 60% of the Forbes AI, 50 Atlassian customers, right? We're mission-critical and central to their business processes. We have tens of millions of developers, engineers, product managers, designers that use our applications across millions of teams. We have some pretty phenomenal insights into how customers get work done, how they build software, and how they build technology.

Thanks Alex.

At a really incredible clip.

Look, I'm well on record at this point as sang.

II interactions are up I think it's a 100 almost 150% in the last six months, we've tripled the number of tokens, we process quarter on quarter. So.

I firmly believe, there'll be more developers in 5 years time.

Millions of workflows, which involve automation and agents.

There'll be far, more people creating software and a far greater amount of technology in the world which is which is great for all of us.

We are doing a really good job in AI is a fantastic thing for Atlassian business and for our customers. It creates lots of great opportunities for us.

And that significantly expands at latin's opportunities.

You mentioned <unk>.

Think as.

Customers are changing the way they build technology and software.

To make sure that they are getting the right amount of productivity, where their investments going and where they are getting back from this increasing engineering force that they have every business is becoming a software company at some point.

Why do I have such conviction? May be important to note, we have the best data. We have amazing visibility right now 300,000 customers, 80% of the Fortune 500, 60% of the Forbes AI 50 at last in customers. Right? We're Mission critical and Central to their business processes.

We have tens of millions of developers Engineers, product managers designers that use our applications.

And hence Dx doing a fantastic job at explaining the customers their developer productivity, where they can improve and how they can take actions on that and especially when it comes to bringing in all of the AI coating tools, we have today and the ones that are coming tomorrow and to show those customers how that is working.

Mike Cannon-Brookes: As we said in the shareholder letter, we continue to see really healthy user growth. The statistic you gave, we looked at a cohort of our customers that were using code generation tools, GitHub Copilot, Boardcode, Cursor. We excluded Rovo Dev on purpose to remove bias of our own sort of customer base. Those customers using those code generation tools were expanding their paid seats on Jira at a rate 5% faster than those who didn't. They were managing more than 20% more projects than those that didn't. Importantly, all of those three and others are working with us in partnership to bring their agents into Jira, into the business processes and workflows that they are using because that's where customers are doing work. Other anecdotes that we might have, we've given a lot of statistics here, right? The Teamwork Graph is phenomenal.

Across millions of teams. So we have some pretty phenomenal insights into how customers get work done, how they build software, and how they build technology.

And as we said in the shareholder, we continue to see really healthy user growth, the statistic you gave, we we'll look at a cohort of our customers that we're using.

It'll be a really great part of our portfolio. It's fantastic team. So we're incredibly bullish about that when the.

Code generation, tools GitHub, co-pilot board code cursor. We excluded ROV on purpose. So, as to remove bias of our own sort of, you know, customer base

When the deal closes and we can move forward.

And those customers are using those code generation tools or expanding their paid seats on jira at a rate, 5% faster than those who didn't.

Your next question comes from Gregg Moskowitz from Mizuho. Please go ahead.

They were managing more than 20% more projects than those that didn't.

And importantly.

Alright, Thank you very much for taking the question and congratulations on a really good performance Mike.

Mike I also like Alex was pretty fascinated by the data you provided.

all of those 3 and others are working with us, in Partnership, to bring their agents into jira into the business processes and workflows that they are using

That you just spoke to a moment ago and I'm wondering if it's possible to give us a rough sense of the size of this cohort that.

Because that's where customers are doing work.

The.

Might shed some light on the FC data would in fact be a fair represent representation of what your customers are.

Mike Cannon-Brookes: It's up over 100 billion objects and connections and continuing to grow at a really incredible clip. Our AI interactions are up, I think it's almost 150% in the last six months. We've tripled the number of tokens we process quarter on quarter. Millions of workflows involve automation and agents. We are doing a really good job in AI. AI is a fantastic thing for Atlassian's business and for our customers. It creates lots of great opportunities for us. You mentioned DX. I think as customers are changing the way they build technology and software, they want to make sure that they are getting the right amount of productivity. Where are their investments going, and where are they getting back from this increasing engineering force that they have? Every business is becoming a software company at some point.

You know may be doing again, particularly the ones who are.

Utilizing by coding and then secondly for Joe just to clarify because the guidance puts and takes are addicted to using your fundamental growth outlook stronger weaker were unchanged as compared with 90 days ago.

Thank you.

Okay.

Thanks, Greg.

Other anecdotes that we might have. Look, we've given a lot of Statistics here, right? The teamwork graphs is phenomenal, it's up over a hundred billion objects and connections and continuing to grow at a, at a really incredible clip. Um, our AI interactions are up, I think it's 100 almost 150% in the last 6 months with with tripled, the number of tokens, we processed quarter on quarter. So um millions of workflows which involve Automation and agents, we are doing a really good job in ai, ai is a fantastic thing for add licensed business, and for our customers, it creates lots of great opportunities for us.

You mentioned DX.

We wouldn't give out any statistics that we didn't feel were statistically relevant.

I think, as

In terms of the size of the cohort that we are going through.

Obviously, we are very invested in making sure that this is the case.

And.

Mike Cannon-Brookes: DX is doing a fantastic job at explaining to customers their developer productivity, where they can improve, and how they can take actions on that. Especially when it comes to bringing in all of the AI coding tools we have today and the ones that are coming tomorrow, to show those customers how that is working, I think it'll be a really great part of our portfolio. It's a fantastic team. We're incredibly bullish about that when the deal closes and we can move forward.

I think it's a fair representation of what the best companies in the World are doing and we believe there will be many more companies that following those cards over the years ahead.

As do we believe that.

I will continue to improve those abilities and processes, we saw that in.

And our Bravo Dave's going Gi this quarter, which is doing a fantastic job at a lot of different things run.

I believe over half of the security incidents that occur at Atlassian.

Changing the way they build technology and software, they want to make sure that they are getting the right amount of productivity. Where are their Investments going? And where are they getting back from this increasing engineering force that they have? Every business is becoming a software company at some point and hence, DX doing a fantastic job at explaining the customers, their developer productivity where they can improve and how they can take actions on that and especially when it comes to bringing in all of the AI coding tools, we have today and the ones that are coming tomorrow and to show those customers how that is working it. I think it'll be a really great part of our portfolio. It's fantastic team. So we're incredibly bullish about that. When the uh,

Uh uh when the deal closes and and we can move forward.

Findings.

<unk> from Robo Dev right. So there are a lot of ability for AI to continue to improve technical business processes and building software, but also in the service collection and an AI ops and in the ability to run and operate software.

Operator: Your next question comes from Gregg Moskowitz from Mizuho. Please go ahead.

Your next question.

Comes from Greg moscowitz from mizuho. Please go ahead.

[Analyst]: Thank you very much for taking the question and congratulations on a really good performance. Mike, I also, like Alex, was pretty fascinated by the data you provided that you just spoke to a moment ago. I'm wondering if it's possible to give us a rough sense of the size of this cohort that might shed some light on if these data would, in fact, be a fair representation of what your customers may be doing, particularly the ones who are utilizing Vibe Coding. Secondly, for Joe, just to clarify, because the guidance puts and takes are a bit confusing, is your fundamental growth outlook stronger, weaker, or unchanged as compared with 90 days ago? Thank you.

There is a lot of work to be download of amazing things to be built.

But we do think it's going to be great for Atlassian business.

And we think that human AI collaboration whether that's in our software team whether it's in a business team with their tenant service team is right at the heart of what we do for our customers.

And at the same time.

I will point out this.

A lot of enterprise concerns when I talk to customers around governance controls ordered ability traceability permissions theres a lot of new issues coming up with a lot of this AI technology and we're right at the forefront of giving enterprises as we've shown in robo and neither in our AI cloud platform the ability to have the right level of controls and.

All right. Thank you very much for for taking the question, and congratulations on a really good performance. Um, Mike. I also like Alex was, uh, pretty fascinated by the data, you provided, uh, that you just spoke to a moment ago. And, you know, I'm wondering if it's possible to give us a rough sense of the size of this cohort that, um, uh, you know, Mike had some light on FC's data with, in fact, be a fair represent representation of what your customers. Um, uh, uh, you know, may be doing. Uh, again, particularly the ones who are uh um uh utilizing. Bye coding.

And then secondly uh for Joe just to clarify because the guidance puts and takes Arabic, confusing is your fundamental growth, Outlook stronger, weaker or unchanged as compared with 90 days ago. Thank you.

Mike Cannon-Brookes: Thanks, Gregg. Look, we wouldn't give out any statistics that we didn't feel were statistically relevant. In terms of the size of the cohort that we are going through, obviously, we are very invested in making sure that this is the case. I think it's a fair representation of what the best companies in the world are doing. We believe there will be many more companies that follow in those paths over the years ahead, as we believe that AI will continue to improve those abilities and processes. We saw that in our Rovo Dev going GA this quarter, which is doing a fantastic job at a lot of different things, right? I believe over half of the security incidents that occur at Atlassian, the findings are coming from Rovo Dev, right?

Governance that they need.

And the right level of debt.

Thanks Greg, look.

The change in movement so incredibly.

Incredibly bullish from my point of view on what AI is doing for Atlassian business as I've said and how it's really transformations.

We wouldn't give out any statistics that we didn't feel were statistically relevant.

<unk> enterprise and the system of work delivering today in the cloud growth rates that you say interop YOD growth rates and our commitment to our long term targets. So I'll, let Joe answer on the on the financials.

In terms of the size of the cohort that we are going through.

Obviously, we are very invested in making sure that this is the case. And

To answer your question.

Yeah, Thanks, Mike and thanks, Greg Greg, we fundamentally believe our business in FY 'twenty six will be stronger today than we did 90 days ago that will show up in better bookings that will show up in better C. R. P. L and it's driven by the Q1 outperformance and the fact, we expect greater volume of cloud migrations through the rest of the year.

I think it's a fair representation of what the best companies in the world are doing and we believe there will be many more companies that follow in those parts over the years ahead.

Hope that helps.

Your next question comes from the cleanup Leilani from Citi. Please go ahead.

Mike Cannon-Brookes: There are a lot of abilities for AI to continue to improve technical business processes in building software, but also in the service collection and in AI ops and in the ability to run and operate software. There is a lot of work to be done, a lot of amazing things to be built. We do think it's going to be great for Atlassian's business. We think that human-AI collaboration, whether that's in a software team, whether it's in a business team, whether it's in a service team, is right at the heart of what we do for our customers. At the same time, I will point out there's a lot of enterprise concerns when I talk to customers around governance, controls, auditability, traceability, permissions. There are a lot of new issues coming up with a lot of this AI technology.

Good afternoon, and thank you for taking my question.

Mike and you have a be tested effectively this concept of consumption pricing. There was some of that introduced last year under the contract with a J S and I'm wondering if you can share an update on how pervasive that modality is in terms of monetizing some of your innovation that's come down the Pike.

As do we believe that AI will continue to improve those abilities and processes. We saw that in an hour Robo, devs going GA this quarter, which is doing a fantastic job at a lot of different things, right? Um, I believe over half of the security incidents that occur, uh, at at last in the, the, uh, the findings are coming from rogo Dev, right? So, there are a lot of abilities for AI to continue to improve technical business processes in building software, but also in the service collection, in an AI Ops and in the ability to run and operate software, uh, there is a lot of

Work to be done, all of amazing things to be done, um, but we do think it's going to be great for atlassian business.

The last 12 to 18 month in.

And maybe more specifically.

How does if I coding and coding assistant.

Um, and we think that human AI collaboration whether that's in a software team, whether it's in a business team, whether it's in a service team is right at the heart of what we do for, uh, customers.

And coding assistant related co generation that is poised to absolutely explode software co generation, how do you get to capitalize on that as all of that gets shipped inside its euro environment held captive and.

and at the same time,

I will point out, there's

Mike Cannon-Brookes: We're right at the forefront of giving enterprises, as we've shown in Rovo and in our AI cloud platform, the ability to have the right level of controls and governance that they need and the right level of that change and movement. Incredibly bullish from my point of view on what AI is doing for Atlassian's business, as I've said, and how our three big transformations, AI, enterprise, and the system of work, are delivering today in the cloud growth rates that you see in our RPO growth rates and in our commitment to our long-term targets. I'll let Joe answer on the financial question.

Work out of it you're right environment I'd love to get your perspective on how you can capitalize on that trend by way of consumption pricing and again, how pervasive that is generally within the base today. Thank you.

A lot of Enterprise concerns when I talk to customers around governance controls auditability traceability, uh, permissions. There's a lot of new issues coming up with a lot of this AI technology. And we're right at the Forefront of giving Enterprises as we've shown in rovo and in our AI Cloud platform. The ability to have the right level of controls and governance that they need.

Thanks for the team and I look.

We have a series of different consumption based pricing offerings.

As we have announced.

Announced and Sean from.

The Robo NII credits World to the service collection world of agents and assets.

Joe Binz: Yeah, thanks, Mike, and thanks, Gregg. Gregg, we fundamentally believe our business in FY26 will be stronger today than we did 90 days ago. That will show up in better bookings. That will show up in better CRPO. It is driven by the Q1 outperformance and the fact we expect greater volume of cloud migrations through the rest of the year. Hope that helps.

Two a bit bucket and pipelines to rubber Dev to forge.

And the right level of that uh uh change and movement. So uh incredibly bullish from my point of view on what AI is doing for it last year's business as I've said and how uh 3 big Transformations, AI Enterprise and the system of work are delivering today in the cloud growth rates that you see in our RPO growth rates and in our commitment to our our long-term targets. So I'll let Joe answer on the, uh, on the financial question.

CVP.

That is certainly something that we have as an option set for our customers. It's one of our elements of monetization.

I think it is.

Yeah, thanks Mike and thanks, Greg. Uh Greg, we fundamentally believe our business and FY 26 will be stronger today than we did 90 days ago, that will show up in better bookings, that will show up in better crpo and it's driven by the q1 outperformance. And the fact we expect greater volume of cloud migrations through the rest of the year.

Hope that helps.

Certainly something customers are interested in is certainly something that theyre also cautious about.

Operator: Your next question comes from Fatima Boolani from Citi. Please go ahead.

I think the most important thing for us when it comes to your question about <unk>.

Fatima Boolani: Good afternoon. Thank you for taking my questions. Mike, you have A/B tested effectively this concept of consumption-based pricing. There was some of that introduced last year under the confines of Jira Service Management. I'm wondering if you can share an update on how pervasive that modality is in terms of monetizing some of your innovation that's come down the pike in the last 12 to 18 months. Maybe more specifically, how does Vibe Coding and Coding Assistant, and coding assistant-related code generation that is poised to absolutely explode software code generation, how do you get to capitalize on that as all of that gets a shift inside a Jira environment and is held captive and worked out of a Jira environment?

Your next question comes from Fatima. Bulani from City, please go ahead.

Monetization.

I would say we are already seeing it.

Our three.

Strategic priorities right, we reiterate them because they are so important to us delivering a world class AI platform.

Continuing to grow our enterprise capabilities and the system of work across our customers'.

Teams and enterprise.

Making amazing progress in all three and I will say that is directly driving the results. We see in Q1, it's directly driving the cloud growth rate of 26%.

Behind accelerating our op yard to over 40%.

So.

We are already seeing that in everything from cloud migrations to the II stats, we have to the addition upgrades. So there's this question of monetization.

Tim My question, Brian customers that move their talk about AI every customer I told you mentioned is one of the reasons that they are moving to the tumor collection to the cloud et cetera, and we have a huge number of customers that presented a $2 25.

Fatima Boolani: I'd love to get your perspective on how you can capitalize on that trend by way of consumption-based pricing and, again, how pervasive that is generally within the base today. Thank you.

Year under the confines of JSM. Uh, I'm wondering if you can share an update on how pervasive that modality is. Uh, in terms of monetizing some of your Innovation that's come down the pike in the last 12 to 18 months, uh, and maybe more specifically, uh, how does Vive coding and coding assistant, uh, and and coding assistant related code generation. Uh, that is poised to absolutely explode, software code generation, how do you get to capitalize on that as all of that gets shipped inside a jira environment? That is held captive and, uh, um, you know, uh, worked out of a jira environment. I'd love to get your perspective on how you can capitalize on that Trend uh by way of consumption pricing and and again how pervasive that is generally within the Base today. Thank you.

Couple of weeks ago in Barcelona from Mercedes Benz to Sun Oscar Fanjul, the 24 hour fitness, all giving amazing feedback on our AI capabilities across business teams and technical teams and our ability to connect both diseases at the core of the system of work.

Mike Cannon-Brookes: Thanks, Fatima. Look, we have a series of different consumption-based pricing offerings. As we have announced and shown from the Rovo and AI credits world to the service collection world of agents and assets to Bitbucket and pipelines to Rovo Dev to Forge, consumption-based pricing, that is certainly something that we have as an option set for our customers. It's one of our elements of monetization. I think it is certainly something customers are interested in. It's certainly something that they're also cautious about. I think the most important thing for us when it comes to your question about AI monetization, I would say we are already seeing it. Our three strategic priorities, right? We reiterate them because they are so important to us: delivering a world-class AI platform, continuing to grow our enterprise capabilities and the system of work across our customers' teams and enterprise.

Thanks for Tina. Look, um,

We have a series of different consumption-based pricing offerings, as we have,

I think.

This question of co Gen and capitalizing we leave a lot of stats on how it improves Tara and I think the the fundamentals there about your human and AI collaboration you will still need and you will have work items that are assigned to various AI agents that come from probably a lot of different platforms ALS.

Announced and shown from the Roo and AI credits world to the service collection world of agents and assets.

To, uh, uh, Bitbucket and pipelines to Roto, Dev to forge, uh, CBP.

that is, is certainly something that we have as, uh,

And others.

We solve human problems, we always have and at the core of those human problems is collaboration and that's why we're putting that at the core of our AI platform and making sure we deliver world class capabilities in all of these waves and I think we're already seeing that floats around monetization and.

An option set for our our customers. It's, it's 1 of our elements of monetization.

I think it is, um,

Certainly something customers are interested in, it's certainly something that they're also cautious about.

Our bullishness as we head into the future on our ability to continue to build the iron day to do the world class work and hence have greater customer partnership is very strong right now.

I think the most important thing for us when it comes to your question about AI, monetization,

I would say we are already seeing it.

Our 3.

Strategic priorities. Right? We reiterate them because they're so important to us, delivering a world-class AI platform.

Your next question comes from Raimo Lynn Zhao from Barclays. Please go ahead perfect. Thank you Congrats from me as well Mike. One question asked me kind of evolve and as new AI World. How do you think about M&A build versus buy.

Mike Cannon-Brookes: We're making amazing progress in all three. I will say that it's directly driving the results we see in Q1. It's directly driving the cloud growth rate of 26%. It's behind accelerating our RPO to over 40%. We are already seeing that in everything from cloud migrations to the AI stats we have to the addition upgrades. This question of monetization, Teamwork Collection, right? Customers that move there talk about AI. Every customer I talk to mentions AI as one of the reasons that they're moving to the Teamwork Collection, to the cloud, etc. We have a huge number of customers that presented at Team 25 a couple of weeks ago in Barcelona from Mercedes-Benz to Sonos to FanDuel, the 24 Hour Fitness, all giving amazing feedback on our AI capabilities across business teams and technical teams.

And this for you I'm thinking about the browser company I got a lot of questions of people how that would fit in.

Continuing to grow our Enterprise capabilities and the system of work across a customer's uh, teams and Enterprise. We're making amazing progress in all 3. And I will say that it's directly driving the results we see in q1, it's directly driving. The cloud growth rate of 26%, it's behind accelerating our RPO to over 40%

um, so

The new World et cetera can you just speak to that please thank you.

Hey, Matt I'm not sure I can I can talk to that a question.

We are already seeing that in everything from cloud, migrations to the the AI stats. We have to the addition upgrades. So this this question of monetization

Okay. So firstly.

I would say that there's no change in our M&A philosophy, when it comes to AI or anything else, that's really important point.

Um, teamwork collection right customers that move their talk about AI every customer. I talked to mentions AI is 1 of the reasons that they're moving to the team of collection to the cloud Etc. And we have a huge number of customers that presented a 1025.

Had the same philosophy for well over a decade now we look for companies with a great strategic fit to Atlassian.

For great teams that feel like they belong in Archrock and.

Mike Cannon-Brookes: Our ability to connect both of these is at the core of the system of work. I think this question of code gen and capitalizing, we have a lot of stats on how it improves Jira. The fundamentals there are about human and AI collaboration. You will still need, and you will have, work items that are assigned to various AI agents that come from probably a lot of different platforms, ours and others. We solve human problems. We always have. At the core of those human problems is collaboration, and that's why we're putting that at the core of our AI platform and making sure we deliver world-class capabilities in all of these ways. I think we're already seeing that flow through our monetization.

An opportunity that fits both sides, we have to have the capital to execute.

And the timing has to be right that philosophy hasn't changed.

A couple of weeks ago in Barcelona from Mercedes Benz to Sonos to fuel, the 24-Hour Fitness all giving amazing feedback on our AI capabilities, across business teams and Technical teams and our ability to connect. Both of these is at the core of the system of work.

We don't believe all the innovations outside of Atlassian, We don't believe all the innovations inside the last thing I would take a very pragmatic on long term here.

I think you can see in some of the stats we gave in the shareholder letter from the loan acquisition, it's just labs to use.

And it's built a fantastic business north of 100 million IRR already that Standalone, that's with no contribution from tumor collection.

I think the this question of codegen and capitalizing, we, we, we've a lot of stats on how it improves tra. And I think the, uh, the fundamentals there are about you. Human and AI collaboration, you will still need and you will have work items that are assigned to various AI agents that come from probably a lot of different platforms, ours and others.

Driven by <unk>.

And the ice Q, Brian which is growing over 100% year on year.

Why is that well if you go back two years ago and have a look at what we said at the time of that acquisition.

Younger people, joining the workforce video, becoming a bigger part of how they want to communicate and collaborate.

Mike Cannon-Brookes: Our bullishness as we head into the future on our ability to continue to build the R&D to do the world-class work and hence have greater customer partnership is very strong right now.

Remote work distributed companies and AI changing the nature of how video collaboration can work for both consumption and creation.

We solve human problems, we always have. And at the core of those, human problems is collaboration. And that's why we're putting that at the core of our AI platform and making sure we deliver world-class capabilities in all of these ways. And I think we're already seeing that flow through our monetization and, uh, our, our bullishness as we head into the future, on our ability to continue to build the R&D to do the world class work. And hence have greater customer partnership is very strong right now.

I think we've done a pretty good job of paying out all of those.

Operator: Your next question comes from Raymond James from Barclays. Please go ahead.

Trends and movements as we've navigated through the last couple of years and win is a fantastic product a huge reason why customers are also talking about moving to the tumor collection in terms of video recordings and that team has done an amazing job to continue to deliver on innovation. So.

[Analyst]: Perfect. Thank you. Congrats for me as well. Mike, one question. As we kind of evolve in this new AI world, how do you think about M&E or build versus buy? In this for you, I'm thinking about the Browser Company. I got a lot of questions of people how that would fit into the new world, etc. Can you just speak to that, please? Thank you.

We continue to think about that.

When it comes to acquisitions.

The browser company and Dx two very different acquisitions for different strategic rationales as we've tried to communicate.

Your next question comes from raimo, lynchell from blay. Please, go ahead, perfect. Thank you. Congrats for me as well. Uh, Mike, 1 question, as we kind of evolved in this new AI world. How do you think about m&a or or build versus buy? Um, in this for you I'm thinking about, you know, the browser company. I got a lot of questions of people how that would fit in, uh, into the new world, Etc. Um, can you just speak to that please? Thank you.

Mike Cannon-Brookes: Hey, Raymo. Sure. I can talk to that. Question. Firstly, I would say that there's no change in our M&A philosophy when it comes to AI or anything else. That's a really important point. We've had the same philosophy for well over a decade now. We look for companies with a great strategic fit to Atlassian. We look for great teams that feel like they belong in our tribe, an opportunity that fits both sides. We have to have the capital to execute, and the timing has to be right. That philosophy hasn't changed. We don't believe all the innovations outside Atlassian. We don't believe all the innovations inside Atlassian. We take a very pragmatic and long-term view. I think you can see in some of the stats we gave in the shareholder letter from the Loom acquisition.

On the browser company, specifically that you mentioned I think.

Our belief is that AI is going to continue to reshape, how and where knowledge workers get.

Very much. Sure. I can. I can talk to that. Uh, question.

Let's say, put firstly.

Their work done.

That technical disruptions and changes if you look back at history have tended to.

Change and shift the the interface via a points of interaction.

And today's browsers were built before we had this explosion of SaaS apps and well before we had any of this AI era.

I would say that, uh, there's no change in our m&a philosophy, when it comes to AI, or anything else, that's really important. Point, we've had the same philosophy for well, over a decade. Now, we look for companies with great strategic fit to alassian, we look for great teams that feel like they belong in our tribe.

Execute.

And they weren't really built for knowledge workers, and we think that by optimizing for knowledge workers in the SaaS apps. They use in building an amazing product that fits into today's world and the enterprise World.

And uh, the timing has to be right. That philosophy hasn't changed.

Packing it with AI skills and agents and the teamwork graph and all the things that we have.

We don't believe all the Innovations outside atlassian. We don't believe all the Innovations inside the last scene. We take a very pragmatic and long-term View

Mike Cannon-Brookes: It's just lapsed two years, and it's built a fantastic business north of $100 million ARR already. That's standalone, that's with no contribution from Teamwork Collection, driven by AI and the AI SKU, right, which is growing over 100% year on year. Why is that? If you go back two years ago and have a look at what we said at the time of that acquisition, younger people joining the workforce, video becoming a bigger part of how they want to communicate and collaborate, remote work, distributed companies, and AI changing the nature of how video collaboration can work for both consumption and creation. I think we've done a pretty good job of paying out all of those trends and movements as we've navigated through the last couple of years. Loom is a fantastic part.

As well as enterprise grade security compliance governance, especially when it comes to AI. There is a fantastic opportunity for us.

Browser company fits all of those criteria I gave earlier in terms of M&A doing an amazing job and we think between the two companies. We can we can really make an impact here. So.

I think you can see in some of the stats. We gave in the shareholder letter from the Lum acquisition. It's just elapsed 2 years. And, uh, it's built. A fantastic business, north of 100 million are already at Standalone, that's with no contribution from teamwork collection.

Driven by Ai and the AI skew right. Which is growing over 100% year on year.

Just just just closed we'll we'll get cracking on doing some amazing work and hope to have some similar results report to you in two years' time.

Why is that? Well, if you go back 2 years ago, and have a look at what we said, at the time of that acquisition,

Younger people joining, the workforce video, becoming a bigger part of how they want to communicate and collaborate.

Your next question comes from Robyn <unk> from Baird. Please go ahead.

Great. Thanks for taking my question.

Uh, remote work, distributed companies, and AI are changing the nature of how video collaboration can work for both consumption and creation. I think we've done a pretty good job of paying out all of those.

Mike you guys have.

Mike Cannon-Brookes: It's a huge reason why customers are also talking about moving to the Teamwork Collection in terms of meeting recordings, and the team's done an amazing job to continue to deliver on innovation. We continue to think about that when it comes to acquisitions. The Browser Company and DX looked two very different acquisitions for different strategic rationales as we've tried to communicate. On the Browser Company specifically that you mentioned, I think our belief is that AI is going to continue to reshape how and where knowledge workers get their work done. Technical disruptions and changes, if you look back at history, have tended to change and shift the interface layers, the points of interaction. Today's browsers were built before we had this explosion of SaaS apps and well before we had any of this AI era, and they weren't really built for knowledge workers.

Got a lot of preparation for this cloud move and it seems like projects like ascend or are working really well fast shift team.

Trends and movements as we've navigated through the last couple of years, and Loom is a fantastic product. It's a huge reason why customers are also talking about moving to the Timber Collection in terms of medium recording. The team has done an amazing job to continue to deliver on innovation.

When you think about your extended partner network.

We continue to think about that.

When it comes to our acquisitions.

How well developed is the cloud motion with them currently.

From our checks a lot of them have been out kind of.

The browser company and and DX look 2, very different Acquisitions for different strategic rationals as we've tried to communicate.

Early on that but as you guys really accelerate and Wi Fi DC. How prepared is your extended partner network to help you guys manage this transition. Thank you.

Um, on the browser company specifically that you mentioned, I think?

Thanks, Rob yet.

I would say we continue to be.

Our long term thinking company that makes these changes over the multi year period, I think we've seen that play out over the last five years and this cloud migration and I expect it to play out over the next five years.

Our belief is that AI is going to continue to reshape our and where knowledge workers. Get their work done. That technical disruptions and changes if you look back at history, have tended to uh change and shift the uh the interface layer, so points of interaction.

...and today's browsers will build before we had this explosion of South apps and, well, before we had any of this AI era.

Mike Cannon-Brookes: We think that by optimizing for knowledge workers and the SaaS apps they use and building an amazing product that fits into today's world and the enterprise world, packing it with AI skills and agents and the Teamwork Graph and all the things that we have, as well as enterprise-grade security, compliance, governance, especially when it comes to AI, there is a fantastic opportunity for us. The Browser Company fits all of those criteria I gave earlier in terms of M&A. They're doing an amazing job. We think between the two companies, we can really make an impact here. We just closed, we'll get cracking on doing some amazing work and hope to have some similar results to report to you in two years' time.

The partner program and our channel broadly play a critical role.

In that transition.

I spend a lot of time with lots of different partners all over the world.

And they weren't really built for knowledge workers. We think that by optimizing for knowledge workers and the SaaS apps they use, and by building an amazing product that fits into today's world and the enterprise world.

We have continued to communicate openly with that partner network.

packing it with AI skills and agents and the teamwork graph and all the things that we have

It's been well telegraphed to them.

And they have continued to evolve their businesses to understand both how to help customers migrate to the cloud.

As well as Enterprise grade security. Compliance governance especially when it comes to AI. There is a fantastic opportunity for us and that

Fast shift is an additive elements to those partners.

And how to explain to customers the benefits of AI for example in their business, which is.

Our positivity of moving to the cloud, but again one of the areas, where our partners can really excel and are starting to hit some.

Browser company fits all of those, uh, criteria. I gave earlier in terms of m&a, they're doing an amazing job. And we think between the 2 companies we can, we can really make an impact here. So, um, just just just closed. We'll, uh, we'll get cracking on on doing some amazing work and hope to have some similar results report to you in 2 years time.

Operator: Your next question comes from Robert Oliver from Barclays. Please go ahead.

Some real wins in terms of delivering those workflow improvements for customers on our cloud platform, which further incentivize as other parts of those large customers to move to the cloud so.

[Analyst]: Great. Thanks for taking my question. Mike, you guys have done a lot of preparation for this cloud move, and it seems like projects like Ascend are working really well, FastShift team. When you think about your extended partner network, how well developed is the cloud motion with them currently? From March X, a lot of them have been out kind of early on that. As you guys really accelerate end of life on Data Center, how prepared is your extended partner network to help you guys manage this transition? Thank you.

Your next question comes from Robert. Oliver from bed, please go ahead.

Very thoughtful and measured approach long term thinking from Atlassian at the same time with execution.

Thank the channel.

Touching about 50% of our revenues.

You can look at it that way.

Sure.

Well.

Mature and how to handle this over over the last few years and I believe that as you said we are at the right point for the ascend program to.

To help continue that momentum in the channel.

Your next question comes from Brent Thill from Jefferies. Please go ahead.

Great. Thanks for taking my question. Um, Mike, you guys have uh, done a lot of preparation for this, uh, Cloud move. And, you know, it seems like projects like, um, Ascend are are, are working really well. Fast shift team. Um, when you think about your extended partner Network, um, how how well developed is the cloud motion with them, currently, uh, from our checks, a lot of them have been out kind of, you know, early on that. But as you guys really accelerate and, and of Life on DC, how prepared is your extended partner Network to help you guys manage this transition? Thank you.

Thanks, I know, Brian Duffy is about 10 months in but I think everyones curious just to get an update on the go to market and the changes you're making what's what's starting to resonate well.

Mike Cannon-Brookes: Thanks, Rob. Yeah. Look, I would say we continue to be a long-term thinking company that makes these changes over the multi-year period. I think we've seen that play out over the last five years in this cloud migration, and I expect it to play out over the next five years. The partner program and our channel broadly play a critical role in that transition. I spend a lot of time with lots of different partners all over the world. We have continued to communicate openly with that partner network. It's been well telegraphed to them, and they have continued to evolve their businesses to understand both how to help customers migrate to the cloud. FastShift is an additive element to those partners and how to explain to customers the benefits of AI, for example, in their business, which is a positivity of moving to the cloud.

Thanks Rob. Yeah look I would say we continue to be

What's ahead and Joe if I can sneak one in for you.

You know it's been been great great couple of decades, working with you just maybe the question of why now thank.

A long-term thinking company that makes these changes over the multi-year period. I think we've seen that play out over the Last 5 Years In This Cloud, migration and I expect it to play out over the next 5 years.

Thank you.

Hey, Brent sure, let me Uh huh.

A few things about maybe go to market and the movement we have there.

Brian.

It's amazing to think he only arrived nine months ago.

I have to remind myself of that but.

But often.

He obviously brings vast experience and to say he's hit the ground running is an understatement.

The partner program and our Channel, broadly play a critical role in that transition. Um, I spend a lot of time with with lots of different partners all over the world. Um, we have continued to communicate openly with that partner Network. It's been well telegraphed to them and they have continued to evolve their businesses to understand both, how to help customers migrate to the cloud.

Um, Fast Shift is an additive element to those partners.

Huge impact and continuing to.

Continuing to evolve our go to market motions, it's not revolutionary as I said, we've been on an enterprise journey for a decade, we continue to strive to be a better and better strategic partner to the largest organizations on the planet and this is a part of our continued evolution.

Mike Cannon-Brookes: One of the areas where our partners can really excel and are starting to hit some real wins is in terms of delivering those workflow improvements to customers on our cloud platform, which further incentivizes other parts of those large customers to move to the cloud. Very thoughtful and measured approach, long-term thinking from Atlassian at the same time with execution. I think the channel, touching about 50% of our revenues, you can look at it that way, are mature in how to handle this over the last few years. I believe that, as I said, we are at the right point for the Ascend program to help continue that momentum in the channel.

We obviously have a massive.

Serviceable addressable market as we've talked to run at a $14 billion of opportunity in our existing customer base, along with our existing products.

Thoughtful and measured approach long-term thinking from a Latin. At the same time with execution I think the

80% of the Fortune 500, representing just 10% of our business between D C. The cloud migrations with ascend.

Channel um touching you know about 50% of our revenues. You can look at it that way. Um are

Well.

And the Tmall collection.

Service collection software question, we have a lot of opportunities in our base and I think.

Brian has done a fantastic job along with all of the sales and marketing teams and go to market motions on continuing to execute this quarter, but we've made great progress with <unk>.

Mature and how to handle this over over the last few years. And I believe that, as I said, we are at the the right point for the Ascend program, uh, to help continue that momentum in the, in the channel.

Operator: Your next question comes from Brent Thill from Jefferies. Please go ahead.

Your next question comes from Brentville. From Jeffrey's, please go ahead.

Brent Thill: Thanks. I know Brian Duffy's about 10 months in, but I think everyone's curious just to get an update on the go-to-market and the changes he's making, what's starting to resonate well, and what's ahead. Joe, if I can sneak one in for you, it's been a great couple of decades working with you. Just maybe the question of why now? Thank you.

Large enterprises are we.

We have signed some of our largest deals.

In the quarter in almost every sector industry vertical and geography on some of the world's largest technology companies huge global financial institutions are large.

A large telecommunications companies have all come on board this quarter multiples in each category moving to the cloud.

Thanks. Uh I I know that Brian Duffy's about 10 months in but I think everyone's curious just to get an update and I go to markets and the changes he's making what's uh what's starting to resonate well and what's ahead and and Joe, if I can speak 1 in for you, um you know, it's been been great. Great couple decades working with you. Just maybe the question of why, now,

Thank you.

Moving to the Atlassian platform consolidating on multiple tools into the Atlassian.

Mike Cannon-Brookes: Hey, Brent. Sure. Let me talk a few things about maybe go-to-market and the movement we have there. Brian, it's amazing to think he only arrived nine months ago. I have to remind myself of that quite often. He obviously brings vast experience, and to say he's hit the ground running is an understatement. Huge impact in continuing to evolve our go-to-market motions. It's not revolutionary, as I said. We've been on an enterprise journey for a decade. We continue to strive to be a better and better strategic partner to the largest organizations on the planet. This is a part of our continued evolution. We obviously have a massive serviceable, addressable market, as we've talked to, right? A $14 billion opportunity in our existing customer base alone with our existing products, 80% of the Fortune 500 representing just sort of 10% of our business.

Hey, Brent sure. Let me uh,

World and at the same time excited by our opportunities and that's that's up to Brian and team to continue to explain to our customers and help them on that journey over a multiyear period. So.

Talk a few things about, maybe go to market. And, and the movement we we have their

um,

I'd say the entire go to market team is executing extremely well this quarter and we should be incredibly happy and our customers are the beneficiaries of that.

I'll pass to John for the second half.

Brian. Uh, it's amazing to think he only arrived 9 months ago. Um, I have to remind myself of that, uh, quite often, he obviously brings vast experience and to say, he's hit the ground running as an understatement.

Great. Thanks, Mike and thanks, Brent it's been great working with you as well I would make one clarification as Mike reminds me to announce now but transition later, so I wouldn't say the timing is now.

um, huge impact in continuing to

In terms of why the announcement now in the transition timing just I've got a lot of day life events coming up and I really want to be fully present for those and I say this is something my wife, and I have been discussing pretty intensely over the last year and from a work perspective I feel like the finance team is in good shape I'm, a big believer in new energy and new ideas and those being a good thing and I think that applies to me.

continuing to evolve our go to market motions. It's not revolutionary. As I said, we've been on an Enterprise Journey for a decade. We continue to strive to be a better and better. Strategic partner to the largest organizations on the planet. And this is a part of our continued evolution.

As it applies to just about anybody else so.

Um, we obviously have a massive uh serviceable addressable Market as we've talked to write a 14 billion dollar opportunity in our existing customer base alone with our existing products.

That's sort of the logic behind it.

Mike Cannon-Brookes: Between Data Center to cloud migrations with Ascend and the Teamwork Collection, Service Collection, Software Collection, we have a lot of opportunities in our base. I think Brian has done a fantastic job along with all of the sales and marketing teams and go-to-market motions on continuing to execute this quarter, right? We've made great progress with large enterprises. We have signed some of our largest deals in the quarter in almost every sector, industry vertical, and geography, right? Some of the world's largest technology companies, huge global financial institutions, large telecommunications companies have all come on board this quarter, multiples in each category, moving to the cloud, moving to the Atlassian platform, consolidating on multiple tools into the Atlassian world, and at the same time, excited by our AI opportunities.

Right now I'm really focused on making sure there's a clean transition and then a lot of work to do around that and I'll be able to update you on what's going to happen next after that when we get down the road and I get a little bit closer to the transition date.

Okay.

Okay.

<unk> from Canaccord. Please go ahead.

Hey, Thank you guys. Congrats on the nice quarter, Joe one other questions I've been getting is whether you're raising the cloud revenue guide only on the back of better than forecast data center to cloud migration can you just talk about what youre seeing with the non migration cloud business. How you are feeling there and what's actually contributing to the increased cloud outlook.

80% of the Fortune, 500 representing just sort of, 10% of our business between DC De Cloud, migrations with the send, um, and the teamwork collection, um, service collection software collections. We, we have a lot of opportunities in our base and I think, uh, Brian has done a fantastic job along with all of the sales and marketing teams and and go to market motions on continuing to execute this quarter, right? We've made great progress with large Enterprises. Uh, we have signed some of our largest deals.

Yeah, Great question, Thanks, and I'll try and clarify so we are raising our cloud revenue outlook by one five points to 22, 5% year over year.

That is only to reflect the stronger migrations performance and the outperformance in Q1. So we now expect migrations to make a mid to high single digit contribution to cloud revenue growth in FY 'twenty six and.

In the quarter in almost every sector industry, vertical and geography, right? Some of the world's largest technology companies, huge Global Financial, uh, institutions, uh, large telecommunications companies have all. Come on board, this quarter multiples in each category, moving to the cloud.

Mike Cannon-Brookes: That's up to Brian and team to continue to explain to our customers and help them on that journey over a multi-year period. I'd say the entire go-to-market team is executing extremely well this quarter, and we should be incredibly happy. Our customers are the beneficiaries of that. I'll pass to Joe for the second half.

And for that migrations upside to land in the back half of the year, just given the datacenter exploration base.

And to your question directly it's important to note. We haven't made any changes to our other organic drivers of cloud revenue growth in our guidance. So we continue to maintain a conservative and risk adjusted approach on all those other variables in the cloud and from our cloud revenue growth driver perspective for the rest of the year.

Moving to the Alaskan platform, consolidating on multiple tools into the Atlassian world. At the same time, we are excited by our opportunities, and that's up to Brian and the team to continue explaining to our customers and helping them on that journey over a multi-period. So, um,

I'd say the entire go to market team is is executing extremely well this quarter and and we should be incredibly happy and our customers are the beneficiaries of that.

Joe Binz: Great. Thanks, Mike. Thanks, Brent. It's been great working with you as well. I would make one clarification, as Mike reminds me, it's announced now, but transition later. I wouldn't say the timing is now. In terms of why the announcement now and the transition timing, I've got a lot of big life events coming up, and I really want to be fully present for those. I'd say this is something my wife and I have been discussing pretty intensely over the last year. From a work perspective, I feel like the finance team is in good shape. I'm a big believer in new energy and new ideas and those being a good thing. I think that applies to me as it applies to just about anybody else. That's sort of the logic behind it.

I'll, I'll pass to Joe for the second half.

Yeah.

Thank you Mccain promo jump on DJ just to say, one or two things if I might.

Firstly, it's worth reiterating that our expansion rights 120%.

Any are et cetera on changing so when Joe says, we are continuing with our cloud.

Our guidance in other areas I think those are really strong numbers and we should we should reiterate that we feel great strength in the cloud broad tumor collection going very very well.

Joe Binz: Right now, I'm really focused on making sure there's a clean transition and a lot of work to do around that. I'll be able to update you on what's going to happen next after that when we get down the road and I get a little bit closer to the transition date.

Great, thanks. Mike and thanks Brent. It's been great working with you as well. I would make 1 clares. Mike, reminds me it's announced now but transition later. So I wouldn't say the timing is now um, in terms of why the announcement now and the transition timing, just I got a lot of big life events coming up and I really want to be fully present for those and I'd say this is something my wife and I have been discussing pretty intensely over the last year and from a work perspective, I feel like the finance team is in good shape. Uh, I'm a big believer in new energy and new ideas and those being a good thing and I think that applies to me as applies to just about anybody else. So, um, that's sort of the logic behind it. And, you know, right now I'm really focused on making sure there's a clean transition and a lot of work to do around that and uh, I'll be able to update you on.

Two quarters in our AI delivering our enterprise platform all of these things lead to a very strong cloud business in and of itself that continues to grow.

You know, what's going to happen next. After that, uh, when we get down the road and I get a little bit closer to it to the transition date.

Operator: Your next question comes from DJ Hines from Canaccord Genuity. Please go ahead.

You're next.

The ascend program and migrations are.

Brent Thill: Hey, thank you, guys. Congrats on the next quarter. Joe, one of the questions I've been getting is whether you're raising the cloud revenue guide only on the back of better than forecast Data Center to cloud migration. Can you just talk about what you're seeing with the non-migration cloud business, how you're feeling there, and what's actually contributing to the increased cloud outlook?

I'm kind of cold, please go ahead.

Additive to that which is really great when I talk to our customers that are already in the cloud at scale. They are bullish about the continued adoption of more apps and collections of more areas that they will move to Atlassian and you can see that showing up in both our PE.

Patriot expansion rights, our cloud growth rate in and of itself, our op Yo growth ride and.

Joe Binz: Yeah, great question. Thanks. I'll try and clarify. We are raising our cloud revenue outlook by 1.5 points to 22.5% year over year. That is only to reflect the stronger migrations performance and the outperformance in Q1. We now expect migrations to make a mid to high single-digit contribution to cloud revenue growth in FY2026. For that, migrations upside is expected to land in the back half of the year just given the Data Center expiration base. To your question directly, it's important to note we haven't made any changes to our other organic growth drivers of cloud revenue growth in our guidance. We continue to maintain a conservative and risk-adjusted approach on all those other variables in the cloud and from a cloud revenue growth driver perspective for the rest of the year.

Hey, thank you guys. Uh, congrats to the next quarter, Joe 1 of the questions. I've been getting is whether you're raising the cloud Revenue guide, only on the back of better than forecast data center to Cloud. Migration. Can you just talk about what you're seeing with the non-migration cloud business, how you're feeling there and what's actually contributing to the increase Cloud Outlook.

Our recommitment to our three year.

20% CAGR that we get out so.

<unk> bullish about the cloud business as a whole as a result of AI.

Enterprise and the system of work all the things that we've been saying for a while now continue to come commentary with our customers and I'll tell you having spent a lot of time with them. They're all incredibly excited about what we are delivering to them every single day and it's a credit to the entire Lexington.

Stronger, migrations performance and the outperformance in q1. So we now expect migrations to make a mid to high single-digit contribution to Cloud Revenue growth in FY. 26.

and for that migrations upside to land in the back, half of the year, just given the data center, expiration base,

Thank you that's all the questions. They have time for today I will now turn the call if that's knock for closing remarks.

And to your question directly, it's important to note. We haven't made any changes to our other organic drivers of cloud Revenue growth in our guidance. So we can continue to maintain a conservative and risk adjusted approach on all those other variables in the cloud. Uh, and from a cloud Revenue growth driver perspective for the rest of the year.

Operator: Thank you.

Mike Cannon-Brookes: I can probably jump on, DJ, just to say one or two things, if I might. Firstly, it's worth reiterating that our expansion rates, 120% NER, etc., aren't changing. When Joe says we are continuing with our cloud guidance in other areas, I think those are really strong numbers, and we should reiterate that. We feel great strength in the cloud, right? Teamwork Collection going very, very well, only two quarters in. Our AI delivering, our enterprise platform, all of these things lead to a very strong cloud business in and of itself that continues to grow. The Ascend program and migrations are additive to that, which is really great. When I talk to our customers that are already in the cloud at scale, they are bullish about their continued adoption of more apps and collections of more areas that they will move to Atlassian.

Thank you.

Thanks, everyone for joining the call today.

Jump on DJ just to say one or two things if I might, um.

As always thank you to all of the Atlassian team for an amazing quarter.

So all of those on the call. We appreciate your.

Firstly, it's worth reiterating that our expansion rights uh uh 120%.

Thoughtful questions and continue to support.

And have a have a kick <expletive> day and and let's go.

Um, near-term estimates aren't changing. So when Joe says we are continuing with our cloud guidance in other areas, I think those are really strong numbers and we should reiterate that we feel great strength in the cloud. Right? Teamwork collection is going very, very well. I need two quarters in our AI delivering our enterprise platform. All of these things lead to a very strong cloud business in and of itself that continues to grow, and the Ascend program and migrations are.

Mike Cannon-Brookes: You can see that showing up in both our paid seat expansion rates, our cloud growth rate in and of itself, our RPO growth rate, and our recommitment to our three-year 20% CAGR that we gave out. Incredibly bullish about the cloud business as a whole as a result of AI, enterprise, and the system of work. All the things that we've been saying for a while now continue to come due with our customers. I'll tell you, having spent a lot of time with them, they're all incredibly excited about what we are delivering to them every single day. It's a credit to the entire Atlassian team.

Attitude to that, which is, um, really great when I talk to our customers that are already in the cloud at scale, they are bullish about their continued. Adoption of more apps and collections of more areas that they will move to atlassian. And you can see that showing up in both, our uh, paid seat, expansion rates, our uh, Cloud growth rate in and of itself our RPO growth rate, uh, and our recommitment to our 3 year, uh, 20%, uh, kegger that we we gave out so incredibly bullish about the cloud business as a whole as a result of AI.

Enterprise and the system of work, all the things that we've been saying for a while now, continue to come, come due with our customers. And I'll tell you, having spent a lot of time with them, they're all incredibly excited about what we are delivering to them every single day, and it's equated to the entire Latin team.

Operator: Thank you. That's all the questions we have time for today. I will now turn the call over to Mike for closing remarks.

Thank you. That's all the questions we have time for today. I will now turn the call over to Mike for closing remarks.

Mike Cannon-Brookes: Thanks, everyone, for joining the call today. As always, thank you to all of the Atlassian team for an amazing quarter. To all of those on the call, we appreciate your thoughtful questions and continuing to support. Have a kick-ass day, and let's go.

Thanks everyone for, for joining the call today.

as always, thank you to all of the Alaskan team for an amazing quarter, um, to all of those on the call, we appreciate your

Thoughtful questions and continue to support.

And, uh, have a kick-ass day. And, uh, let's go.