Atlassian (NASDAQ:TEAM) shares jumped about 23% on Friday morning following stronger-than-expected fiscal third quarter results and an upward revision to its full-year revenue outlook.
For fiscal 2026, the company raised its total revenue growth forecast to approximately 24%, up from a prior outlook of 22%. It continues to expect cloud revenue growth of about 26.5% and non-GAAP operating margin of roughly 29%.
For the quarter ended March 31, the collaboration software company reported revenue of $1.79 billion, up 32% year over year and ahead of analyst estimates of roughly $1.69 billion.
Adjusted earnings per share came in at $1.75, also beating expectations of about $1.32.
Cloud revenue rose 29% year over year to $1.13 billion, reflecting continued adoption of Atlassian’s core Jira and broader cloud-based product suite.
Remaining performance obligations increased 37% to $3.996 billion, indicating solid contracted future revenue growth.
On a GAAP basis, Atlassian posted an operating loss of $56.3 million, compared with a $12.5 million loss a year earlier. The result included $223.8 million in restructuring charges tied to resource rebalancing and lease consolidation, which weighed on margins. Non-GAAP operating income rose to $607.2 million, with operating margin expanding to 34% from 26% a year earlier.
Net non-GAAP income reached $456.5 million, or $1.75 per diluted share, up from $261.5 million, or $0.97 per share, in the prior-year period. Free cash flow was $561.3 million, with a margin of 31%.
“Our strong Q3 results show the power of our strategy in action, with total revenue growing 32% year-over-year to $1.8 billion,” Atlassian CEO Mike Cannon-Brookes said, pointing to larger customer commitments and adoption of its AI-enabled platform.
He noted that the company’s Service Collection surpassed $1 billion in annual recurring revenue and is growing at more than 30% annually.
Atlassian CFO James Chuong highlighted accelerating cloud momentum and continued expansion in enterprise customers, citing increased seat growth in Jira and rising adoption of Atlassian’s AI-enhanced Teamwork Collection.