Atlassian (TEAM) Q2 2025 earnings summary

Executive summary

• Achieved over $5B in annual run rate revenue, with Q2 FY25 revenue up 21% year-over-year to $1.29B, driven by 30% subscription and Cloud growth, and strong enterprise momentum with record $1M+ deals.

• Platform serves 300,000+ customers, including 85% of the Fortune 500, and was named #1 on Fortune's "The Future 50" list.

• Net loss for Q2 was $38M (GAAP), an improvement from the prior year, with non-GAAP net income at $256M.

• Free cash flow for Q2 was $343M, up 21% year-over-year.

• End of Server support led to a decline in maintenance revenue, offset by Cloud and Data Center growth.

Financial highlights

• Q2 FY25 revenue reached $1.29B, up 21% year-over-year; Cloud revenue grew 30% to $847M, Data Center up 32% to $362M.

• GAAP gross margin at 83%, non-GAAP at 85%; GAAP operating loss of $57M, non-GAAP operating margin at 26%.

• Free cash flow margin at 26.6% of total revenues.

• Deferred revenue increased 33% year-over-year to $2.2B, reflecting strong multi-year agreements.

• Cash and cash equivalents: $2.2B as of December 31, 2024; long-term debt at $987M.

Outlook and guidance

• FY25 revenue growth outlook raised to 18.5–19.0%; Cloud revenue growth expected at ~26.5%, Data Center at ~21.5%.

• FY25 GAAP gross margin guided to 81.5–82.0%, non-GAAP to 84.0–84.5%; non-GAAP operating margin at 23.5%.

• Guidance remains conservative and risk-adjusted, reflecting macroeconomic uncertainty and execution risk in enterprise go-to-market transformation.

• Operating margins in H2 expected to be slightly lower than H1 due to increased investment in sales, marketing, and R&D for enterprise growth.

• Company believes existing liquidity and credit facilities are sufficient for at least the next 12 months.