Atlassian (TEAM -7.46%), a major provider of collaboration and productivity software for teams and enterprises worldwide, reported earnings for Q4 FY2025 on August 7, 2025. The results featured revenue growth, a sizable non-GAAP earnings beat, and expanding margins. Revenue (GAAP) came in at $1,384 million, exceeding analyst expectations of $1,356 million (GAAP). Earnings per share (Non-GAAP) reached $0.98, outpacing the $0.83 analyst estimate (non-GAAP). Atlassian’s performance displayed strong execution across cloud and Data Center segments, along with progress in artificial intelligence (AI) initiatives. The company continues to operate at a Non-GAAP profit, with growing operating margins (non-GAAP), while GAAP net losses and heavy stock-based compensation remain. Overall, the quarter reflected robust operational discipline and investment in innovation.
| Metric | Q4 FY25(Ended June 30, 2025) | Q4 FY25Estimate1 | Q4 FY24(Ended June 30, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.98 | $0.83 | $0.66 | 48.5% |
| Revenue (GAAP) | $1,384 million | N/A | N/A | N/A |
| Operating Margin (Non-GAAP) | 24% | 20% | 4 pp | |
| Free Cash Flow (Non-GAAP) | $360 million | $413 million | (12.8%) | |
| Subscription Revenue | $1,313 million | $1,069 million | 22.9% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2025 earnings report.
What Atlassian Does and Where It’s Focused
Atlassian builds software platforms that help teams organize, track, and complete work. Its main products include project management tools like Jira, knowledge-sharing apps such as Confluence, and code collaboration services like Bitbucket. The company serves businesses of all sizes, from startups to large global enterprises.
Recent efforts have centered on driving growth through its product-led strategy, platform ecosystem, and heavy investment in research and development (R&D). Atlassian’s key goal is to make products that teams want to use and expand adoption organically. Growth is supported by innovation in areas like AI, seamless integration of tools, and new partnerships. Essential success factors include expanding cloud adoption, embedding AI into core products, and maintaining strong investment in R&D.
Quarter Highlights: Financials and Key Developments
Atlassian delivered year-over-year GAAP revenue growth of 22% in Q4 FY2025. Its subscription revenue rose by nearly 23% year over year, driven by cloud and Data Center services. The cloud business generated 67.0% of overall GAAP revenue, and Cloud revenue saw a 25.7% increase year over year in Q4 fiscal year 2025, bringing the total to nearly 52,000 customers with greater than $10,000 in Cloud ARR.
Profitability improved as Non-GAAP operating margin expanded 4 percentage points year over year. Free cash flow was lower than the same quarter last year but remained strong at $360.3 million (non-GAAP).
The company continued to grow its platform ecosystem. Its customer base now spans over 300,000 organizations, including more than 80 % of the Fortune 500. Over 40% of sales are now to enterprise-level customers, compared to 15% in 2020.
Cloud, AI, Partnerships, and Product Trends
The main source of revenue growth was the cloud software segment. Cloud products allow customers to access Atlassian’s tools over the internet, reducing infrastructure and maintenance burdens. Cloud revenue rose to $927.7 million in Q4 fiscal year 2025, a 25.7% increase year over year. The Data Center segment, which focuses on self-managed, scalable deployments for larger organizations, also saw double-digit growth.
Artificial intelligence (AI) remains a centerpiece of Atlassian’s product vision. The Rovo AI assistant, now integrated directly with core products such as the Jira project management tool, Confluence collaboration platform, and Bitbucket code management system, gained traction. AI features reached 2.3 million monthly active users by the end of Q4 FY2025, up sharply from 1.5 million the previous quarter (Q3 FY2025). The company prioritized broad adoption over short-term monetization, intending to make AI central to user workflows and future product differentiation.
Product bundling, such as Strategy and Teamwork Collections, was another focus. For instance, Atlassian Talent, a workforce planning application, has now launched as a part of the company’s collections strategy to drive deeper adoption. Executive leadership cited “significant attach opportunities” as motivations for this approach.
Strategic partnerships also featured in the quarter. Atlassian expanded its relationship with Google Cloud to deliver improved AI-powered teamwork capabilities and enhance its multi-cloud strategy. Integration of acquired companies, such as Loom for asynchronous video collaboration, continued to grow Atlassian’s platform. There was a change in leadership as President Anu Bharadwaj, key to the cloud shift and product strategies, announced her departure after twelve years.
Looking Ahead: Guidance and Areas to Monitor
Atlassian provided guidance for Q1 FY2026 and FY2026, including both GAAP and non-GAAP metrics. For Q1 FY2026, it expects total revenue between $1,395 million and $1,403 million, with cloud revenue targeted to grow about 22.5% year over year. For FY2026, management projects overall revenue growth of approximately 18%, with cloud revenue to increase around 21%, and Data Center sales are expected to rise by about 12.5%. These outlooks suggest continued, though moderating, expansion in its core markets. Operating and gross margins are expected to remain strong under Non-GAAP methods.
Investors should watch for continued improvements in margins. Heavy investments in research, stock-based compensation trends, and the evolving product bundling approach will also shape future financial outcomes.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
