Atlassian Q2 Earnings Surpass Expectations, Revenues Rise Y/Y

Atlassian TEAM came out with second-quarter fiscal 2026 earnings of $1.22 per share, which beat the Zacks Consensus Estimate of $1.12. This compares to earnings of 96 cents per share a year ago.

Over the last four quarters, the company has surpassed earnings estimates in each of the last four quarters, with an earnings surprise of 20.67%.

Atlassian posted revenues of $1.59 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 3%. The company reported revenues of $1.29 billion in the year-ago quarter.

Atlassian’s Q2 FY26 Details

Segment-wise, Subscription revenues rose 24.3% year over year to $1.51 billion, reflecting continued strength in Cloud migrations, paid seat expansion, and enterprise adoption.

Atlassian Corporation PLC Price, Consensus and EPS Surprise

Atlassian Corporation PLC price-consensus-eps-surprise-chart | Atlassian Corporation PLC Quote

Atlassian’s Other revenues (including perpetual license revenues) increased 7.4% year over year to $78.7 million, driven by growth in Marketplace and other offerings.

During the fiscal second quarter, Cloud revenues were $1.07 billion, up 26% year over year. Data Center revenues rose 20% to $435.6 million, while Marketplace and other revenues reached $83.7 million, up 8% year over year.

The company’s non-GAAP gross profit rose to $1.39 billion, with a non-GAAP gross margin of 88%, up 300 basis points from the prior-year quarter.

TEAM’s non-GAAP operating income increased to $430.2 million, driven by strong Cloud growth, enterprise demand, and operating leverage. Non-GAAP operating margin improved to 27%, up 100 basis points year over year.

TEAM’s Balance Sheet

As of Dec. 31, 2025, the company held $1.6 billion in cash, cash equivalents, and marketable securities.

TEAM generated $177.8 million in operating cash flow and $168.5 million in free cash flow during the quarter.

TEAM’s Q3 and FY26 Guidance

For the third quarter of fiscal 2026, the company projects revenues in the range of $1.689-$1.697 billion. The Zacks Consensus Estimate for the third quarter of fiscal 2026 revenues is pegged at $1.64 billion, indicating growth of 21% year over year.

Non-GAAP gross margin is expected to be 88%, while the non-GAAP operating margin is projected at around 27.5%.

The Zacks Consensus Estimate for the third quarter of fiscal 2026 earnings is pegged at $1.29, indicating growth of 33% year over year.

For fiscal 2026, Atlassian expects total revenue growth of approximately 22% year over year.

Non-GAAP gross margin for fiscal 2026 is expected to be approximately 87%, while the non-GAAP operating margin is projected at 25.5%.

The Zacks Consensus Estimate for third-quarter fiscal 2026 revenues and earnings is pegged at $6.30 billion and $4.78, respectively.

TEAM’s Zacks Rank & Stocks to Consider

Currently, TEAM carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector are Amkor Technology AMKR, Arista Networks ANET and Advanced Energy AEIS. While Amkor Technology sports a Zacks Rank #1 (Strong Buy), Arista Networks and Advanced Energy carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amkor Technology shares have surged 103.2% in the trailing six-month period. Amkor Technology is set to report fourth-quarter 2025 results on Feb. 9.

Shares of Arista Networks have jumped 27.6% in the trailing six-month period. Arista Networks is set to report fourth-quarter 2025 results on Feb. 12

Shares of Advanced Energy have rallied 85.4% in the trailing six-month period. Advanced Energy is slated to report third-quarter 2025 results on Feb. 10.

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This article originally published on Zacks Investment Research (zacks.com).

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