Atlassian reported revenue of 1.772 billion dollars for its fiscal first quarter ended September 30, 2026, up 24 percent from 1.433 billion dollars a year earlier and ahead of the 1.71 billion dollar analyst estimate. Cloud revenue rose 31 percent to 1.302 billion dollars. Subscription annual recurring revenue reached 6.812 billion dollars, up 23 percent, and remaining performance obligations jumped 44 percent to 4.746 billion dollars on larger multiyear enterprise commitments.
Profitability swung hard. GAAP operating income was 189 million dollars, an 11 percent margin, against a 96 million dollar loss a year earlier, and GAAP net income was 91 million dollars, or 0.35 dollars per share. Non-GAAP operating income was 576 million dollars, a 32 percent margin, with non-GAAP EPS of 1.65 dollars against a 1.43 dollar estimate. Free cash flow was 463 million dollars, a 26 percent margin.
The guidance is what the market sold. Atlassian guided second quarter revenue of 1.825 billion to 1.835 billion dollars, slightly ahead of estimates, but told investors subscription ARR growth will slow to about 18.5 percent by the end of fiscal 2027, with full year revenue growth of about 13.75 percent. Data Center revenue, the self managed line being retired in March 2029, grew only about 5 percent to 391 million dollars and is guided to decline about 16 percent for the year.
The shares fell more than 17 percent in after hours trading, having nearly doubled between the August report and late October. Management framed the quarter around enterprise AI adoption, pointing to its Teamwork Graph and agent platform, but the print shows a market that now discounts any guided deceleration in subscription growth immediately and at full size.