Atlassian (TEAM) Q1 2027 earnings summary

Executive summary

• Q1 FY27 revenue was $1.772B, up 24% YoY; Cloud revenue rose 31% to $1.302B and Subscription ARR increased 23% to $6.812B.

• RPO increased 44% to $4.746B; GAAP operating margin reached 11%, versus (7%) a year earlier.

• Growth priorities included enterprise, AI, and System of Work initiatives; Teamwork Collection customers increased 7x YoY.

Financial highlights

• Revenue was $1.772B, versus $1.433B in Q1 FY26; subscription revenue was $1.698B and other revenue was $74.3M.

• GAAP operating income was $188.8M and GAAP net income was $90.7M, versus losses of $96.3M and $51.9M, respectively, a year earlier.

• GAAP diluted EPS was $0.35; non-GAAP diluted EPS was $1.65, versus $1.04 in Q1 FY26.

• Non-GAAP operating income was $575.8M and non-GAAP net income was $423.5M, versus $322.7M and $275.7M, respectively.

• Operating cash flow was $468.5M; free cash flow was $462.6M, with a 26% margin.

Outlook and guidance

• Q2 FY27 revenue target is $1.825B–$1.835B; Cloud growth ~27%, Data Center revenue decline ~14%, and Marketplace and other growth ~20% YoY.

• FY27 targets: Subscription ARR growth ~18.5%, total revenue growth ~13.75%, Cloud growth ~26%, Data Center decline ~16%, and Marketplace and other growth ~15%.

• FY27 gross margin targets are 84.5% GAAP and 86.5% non-GAAP; operating margin targets are 5.0% GAAP and 25.5% non-GAAP.

• Guidance balances business momentum with macro, fiscal policy, and geopolitical uncertainty; Q2 begins lapping the DX acquisition, while H2 faces tougher comparisons against H2 FY26 acceleration.

• No meaningful FY27 revenue contribution from usage-based pricing is assumed; enforcement begins in early December. Enterprise sales capacity remains an investment priority, with annual and multi-year deals supporting predictability.