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1. Company Snapshot

1.a. Company Description

Atlassian Corporation, through its subsidiaries, designs, develops, licenses, and maintains various software products worldwide.Its product portfolio includes Jira Software and Jira Work Management, a project management system that connects technical and business teams so they can better plan, organize, track and manage their work and projects; Confluence, a connected workspace that organizes knowledge across all teams to move work forward; and Trello, a collaboration and organization product that captures and adds structure to fluid and fast-forming work for teams.The company also offers Jira Service Management, an intuitive and flexible service desk product for creating and managing service experiences for various service team providers, such as IT, legal, and HR teams; and Jira Align, an Atlassian's enterprise agility solution designed to help businesses to adapt and respond dynamic business conditions with a focus on value-creation.


In addition, it provides Bitbucket, an enterprise-ready Git solution that enables professional dev teams to manage, collaborate, and deploy quality code; Atlassian Access, an enterprise-wide product for enhanced security and centralized administration that works across every Atlassian cloud product; and Jira Product, a prioritization and road mapping tool.Further, the company's portfolio includes Atlas, a teamwork directory; Bamboo, a continuous delivery pipeline; Crowd, a single sign-on; Crucible, a collaborative code review; Fisheye, a search, track, and visualize code change software; and Compass, a developer experience platform.Additionally, it offers Opsgenie, an on-call and alert management software; Sourcetree, a free git client for windows and mac; Statuspage that communicates real-time status to users; Beacon, an intelligent threat detection software; and Atlassian Access that enhance data security and governance for Atlassian Cloud products.


The company was founded in 2002 and is headquartered in Sydney, Australia.

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1.b. Last Insights on TEAM

Atlassian Corporation's recent performance was negatively impacted by increased sales and marketing spend outpacing revenue growth, low Fortune 500 penetration, and rising stock-based compensation leading to potential dilution. Despite strong Q2 results, with 21% YoY revenue growth and improved profit margins, management raised full-year revenue growth guidance to 19% with an implied Q4 acceleration to 20% YoY growth. The company's high-margin subscription-based model, supported by increased cloud migrations and rising product upsells, is a positive driver. However, concerns about the company's ability to sustain its growth momentum and maintain its competitive edge in the market remain.

1.c. Company Highlights

2. Atlassian's Strong Q2 Earnings Driven by Enterprise AI and Cloud Growth

Atlassian Corporation reported a robust second-quarter fiscal year 2026, with revenue surpassing $6 billion in annual run-rate and achieving its first-ever $1 billion cloud revenue quarter, up 26% year-over-year. Revenue Performance Obligation (RPO) grew 44% year-over-year to $3.8 billion. The company's EPS came in at $1.22, beating estimates of $1.12. The strong financial performance was driven by the company's AI capabilities, with its AI tool, Robo, having over 5 million monthly active users. The gross margin has continued to improve, allowing the company to manage AI costs effectively.

Publication Date: Feb -08

📋 Highlights
  • Cloud Revenue Milestone: Achieved first $1 billion cloud revenue quarter, up 26% YoY.
  • Enterprise Sales Growth: Surpassed $6 billion annual run-rate revenue, driven by seat expansion and cross-sell.
  • RPO Surge: Revenue Performance Obligation grew 44% YoY to $3.8 billion, signaling strong long-term demand.
  • AI Adoption Impact: Robo AI tool reached 5 million MAUs, boosting Jira usage by 5% and improving R&D productivity by 10-20%.
  • JSM Expansion: Jira Service Management passed 65,000 customers, with 60% YoY enterprise growth and 50% Fortune 500 adoption.

Business Drivers and Customer Adoption

The company's success is attributed to its strategic partnerships and focus on helping customers through AI transformations. Customers are looking for a trusted platform with compliance, security, and good ROI. Atlassian's hybrid pricing model, which includes both seat-based and consumption-based offerings, has been successful. The company is seeing broad-based expansion across tech and non-tech users, driven by its Teamwork Collection product. The use of AI code generation tools has led to a 5% increase in Jira usage, with customers expanding their usage at a faster rate.

Competitive Landscape and Growth Prospects

Atlassian views Anthropic's CoWork as a potential partner rather than a competitor, with opportunities for integration and collaboration. The company is confident about its growth prospects, driven by its leading position in the enterprise service management wave and significant migration from legacy service management platforms. JSM (Jira Service Management) is growing rapidly, with 50% of the Fortune 500 as customers and enterprise-side growth over 60% year on year.

Valuation and Outlook

Atlassian's P/S Ratio stands at 4.33, indicating a relatively high valuation. However, the company's growth prospects, driven by its AI capabilities and cloud growth, may justify this valuation. The company remains confident in its ability to deliver healthy and accelerating cloud revenue growth, with a midterm outlook of 20% plus compounded annual revenue growth through FY 2027. Analysts estimate next year's revenue growth at 17.9%. The company's commitment to delivering value to customers and shareholders is evident in its pricing strategy, with room for further pricing increases commensurate with value delivery.

3. NewsRoom

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Australian Billionaire Mike Cannon-Brookes' Atlassian Cuts 1,600 Jobs Amid AI Push

06:10

Source: forbes.com

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Atlassian layoffs impact 63 workers in Washington as CTO steps down

04:35

Source: geekwire.com

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Watch what Atlassian's CEO said in a 4-minute video on the company's AI-induced layoffs

02:28

Source: businessinsider.com

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Atlassian says it's laying off 10% of its global workforce and attributes the cut to the 'AI era'

Mar -11

Source: businessinsider.com

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Atlassian to Cut About 10% of Workforce as It Ramps Up AI Spending

Mar -11

Source: wsj.com

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Atlassian slashes 10% of workforce to 'self-fund' investments in AI and enterprise sales

Mar -11

Source: cnbc.com

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Atlassian to lay off about 1,600 people in pivot to AI

Mar -11

Source: reuters.com

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Capital Group Private Client Services Inc. Lowers Stock Holdings in Atlassian Corporation PLC $TEAM

Mar -11

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (25.00%)

6. Segments

Software & Programming

Expected Growth: 25.0%

Atlassian's Software & Programming segment is expected to grow at a CAGR of 25% due to increasing demand for remote collaboration tools, driven by the shift towards digital transformation and remote work. Strong adoption of Jira, Confluence, and Trello will fuel growth, supported by expanding customer bases and continuous product innovation.

7. Detailed Products

Jira

Jira is a project management and issue tracking tool that helps teams plan, track, and manage their work.

Confluence

Confluence is a collaboration and content management platform that helps teams create, share, and store content.

Bitbucket

Bitbucket is a version control and source code management platform that helps teams manage their code.

Trello

Trello is a visual project management and collaboration tool that helps teams organize and prioritize their work.

Opsgenie

Opsgenie is an incident management and alerting tool that helps teams manage their alerts and incidents.

Statuspage

Statuspage is a status and incident communication platform that helps teams communicate with their customers during incidents.

8. Atlassian Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Atlassian's products, such as Jira and Trello, have become an integral part of many businesses' workflows, making it difficult for substitutes to fully replace them. However, there are alternative project management and collaboration tools available, such as Asana, Microsoft Teams, and Slack, which can be considered substitutes. The threat of substitutes is medium because while there are alternatives, Atlassian's products have a strong brand presence and a wide range of features that make them a popular choice.

Bargaining Power Of Customers

Atlassian has a large customer base across various industries, and its products are widely used. While individual customers may have some bargaining power, the company's scale and market presence give it a strong position in negotiations. Additionally, Atlassian's products often become deeply ingrained in customers' workflows, making it difficult for them to switch to alternative solutions.

Bargaining Power Of Suppliers

Atlassian's suppliers are likely to be software developers, cloud infrastructure providers, and other technology companies. While these suppliers may have some bargaining power, Atlassian's scale and market presence give it a strong position in negotiations. The company also has a diverse range of suppliers, which reduces its dependence on any one supplier.

Threat Of New Entrants

The barrier to entry in the software industry is relatively high, particularly in the areas of project management and collaboration tools. New entrants would need to invest significant amounts in product development, marketing, and sales to compete with established players like Atlassian. However, the market is still growing, and new entrants with innovative solutions could potentially disrupt the market.

Intensity Of Rivalry

The software industry is highly competitive, and Atlassian faces intense rivalry from established players like Microsoft, Google, and Salesforce, as well as newer entrants like Notion and Airtable. The competition is particularly fierce in the areas of project management and collaboration tools, where many vendors offer similar solutions. Atlassian must continually innovate and differentiate its products to remain competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 54.74%
Debt Cost 4.33%
Equity Weight 45.26%
Equity Cost 9.49%
WACC 6.67%
Leverage 120.96%

11. Quality Control: Atlassian Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Karooooo

A-Score: 6.3/10

Value: 1.7

Growth: 7.3

Quality: 8.4

Yield: 5.8

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

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Intuit

A-Score: 5.6/10

Value: 1.0

Growth: 8.1

Quality: 8.6

Yield: 1.0

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Grab

A-Score: 5.3/10

Value: 0.7

Growth: 8.3

Quality: 6.2

Yield: 0.0

Momentum: 7.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Atlassian

A-Score: 4.5/10

Value: 2.6

Growth: 7.1

Quality: 5.8

Yield: 0.0

Momentum: 2.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
FICO

A-Score: 4.2/10

Value: 2.0

Growth: 8.3

Quality: 7.4

Yield: 0.0

Momentum: 3.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Constellation Software

A-Score: 4.2/10

Value: 1.2

Growth: 8.7

Quality: 6.3

Yield: 0.0

Momentum: 1.5

Volatility: 7.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

75.45$

Current Price

75.45$

Potential

-0.00%

Expected Cash-Flows