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Atlassian (TEAM)
NASDAQ:TEAM
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Atlassian (TEAM) AI Stock Analysis

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TEAM

Atlassian

(NASDAQ:TEAM)

Rating:67Neutral
Price Target:
$217.00
▲(6.90%Upside)
Atlassian's strong financial performance and positive earnings call sentiment are key strengths, reflecting robust revenue growth and strategic advancements in AI. However, technical analysis and valuation scores suggest caution due to ongoing profitability challenges and macroeconomic uncertainties. The overall score reflects a balanced view of the company's growth potential and current market risks.
Positive Factors
Cloud Migration
Cloud migration offers significant upside potential for Atlassian.
Financial Performance
Atlassian outperformed across all fronts in its third quarter, with Cloud revenue growth of 25.2%, ahead of expectations.
Growth Opportunities
TEAM's attractive risk/reward at a significant discount to peers highlights potential for growth.
Negative Factors
Developer Headcount
Investors are concerned about potential declines in developer headcount due to the efficacy of Code Generation tools and AI monetization.
Investor Sentiment
Shares of Atlassian are down approximately 23% year-to-date, reflecting negative investor sentiment.

Atlassian (TEAM) vs. SPDR S&P 500 ETF (SPY)

Atlassian Business Overview & Revenue Model

Company DescriptionAtlassian 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.
How the Company Makes MoneyAtlassian generates revenue primarily through the sale of software subscriptions, licenses, and related support and services. The company offers its products via a subscription-based model, with customers paying for access to software hosted in the cloud or through on-premises licenses. Key revenue streams include Jira Software, Jira Service Management, Confluence, Trello, and other collaborative tools. Atlassian also earns from the Atlassian Marketplace, where third-party developers can sell add-ons and integrations, sharing revenue with Atlassian. The company benefits from a high-volume, low-touch sales model, leveraging a self-service approach that reduces the need for a large sales force. Additionally, strategic partnerships and an extensive ecosystem of integrators and developers contribute significantly to its earnings by expanding the functionality and reach of its core products.

Atlassian Key Performance Indicators (KPIs)

Any
Any
Customers
Customers
Tracks the number of active users and accounts, indicating market penetration, customer retention, and potential for upselling or cross-selling opportunities.
Chart InsightsAtlassian's customer growth plateaued at 300,000 since late 2023, indicating a stabilization after a period of rapid expansion. Despite this, the company is leveraging strong cloud revenue growth and AI integration, as highlighted in their earnings call. The introduction of new cloud offerings and FedRAMP authorization could attract more enterprise clients, potentially reigniting customer growth. However, delayed enterprise deals and macroeconomic uncertainties pose challenges. Atlassian remains optimistic about long-term growth, aiming for significant revenue targets despite these hurdles.
Data provided by:Main Street Data

Atlassian Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q3-2025)
|
% Change Since: -11.38%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong cloud revenue growth and significant advancements in AI adoption and platform capabilities. However, it also noted challenges with delayed enterprise deals and macroeconomic uncertainties impacting revenue growth. Overall, the company remains confident in its strategic priorities and long-term growth potential.
Q3-2025 Updates
Positive Updates
Strong Cloud Revenue Growth
Cloud revenue grew by 25% year-over-year, contributing significantly to the total revenue of $1.4 billion in Q3.
Free Cash Flow Margin
Atlassian achieved a free cash flow margin of 47% for the quarter, indicating strong financial health and operational efficiency.
AI Integration and Adoption
The company has over 1.5 million monthly active users of AI across its platform, with significant customer interest in the Rovo AI capabilities.
Product and Platform Advancements
Introduced two new cloud offerings and achieved FedRAMP Moderate authorization for U.S. federal government customers, expanding the cloud platform capabilities.
Engineering Efficiency
Continued improvements in cloud infrastructure and support costs, achieving a gross margin of 86%.
Negative Updates
Delayed Enterprise Deals
Enterprise deals landed later than expected, affecting Q3 cloud revenue growth due to elongated deal cycles.
Shorter Multi-Year Agreements in Data Center
A shift to shorter multi-year agreements impacted data center revenue recognition, contributing to revenue growth challenges.
Macroeconomic Uncertainty
The company acknowledged macroeconomic uncertainties, impacting their risk-adjusted guidance for Q4.
Company Guidance
In the third quarter of fiscal year 2025, Atlassian reported total revenue of $1.4 billion, reflecting a 25% year-over-year increase in cloud revenue and a free cash flow margin of 47%. The company highlighted significant progress in strategic areas such as enterprise service, AI advancements, and the integration of technology and business teams through the Atlassian System of Work. Notably, their AI platform, Rovo, now has over 1.5 million monthly active users, and its capabilities have been embedded into premium enterprise subscriptions of key products like Jira, Confluence, and Jira Service Management. Atlassian also achieved FedRAMP Moderate authorization, facilitating cloud platform access for U.S. federal government customers. CEO Mike Cannon-Brookes emphasized the potential for continued growth, aiming for $10 billion in revenue, while CFO Joe Binz reassured that the company remains on track to achieve a 20% CAGR through FY '27 despite macroeconomic uncertainties and back-end loaded enterprise deals in Q3.

Atlassian Financial Statement Overview

Summary
Atlassian exhibits robust revenue growth and strong cash flow generation, crucial strengths for the software industry. However, persistent net losses and negative margins suggest areas for improvement in operational efficiency and cost management. The company's sound balance sheet provides a solid foundation to address profitability challenges and continue its growth trajectory.
Income Statement
75
Positive
Atlassian's revenue has shown impressive growth with a TTM increase to $4.96 billion from $4.35 billion in the previous year, a growth rate of approximately 13.9%. The gross profit margin remains strong at 82.2% TTM. However, the company continues to face challenges with profitability, as indicated by negative net profit margins and EBIT margins in both TTM and the previous year, highlighting an ongoing struggle to convert revenue growth into net income.
Balance Sheet
80
Positive
Atlassian maintains a healthy financial position with a strong equity base and a debt-to-equity ratio of 0.90 TTM, indicating a balanced approach to leverage. The return on equity remains negative due to net losses, but the equity ratio improved to 23.3% TTM, reflecting a solid asset base supported by equity.
Cash Flow
78
Positive
The company demonstrates strong cash flow management, with a significant operating cash flow of $1.51 billion TTM and a stable free cash flow, which saw a modest growth rate of about 3.5% from the previous year. The operating cash flow to net income ratio is robust, indicating efficient cash generation relative to net income losses.
BreakdownJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue4.36B3.53B2.80B2.09B1.61B
Gross Profit3.56B2.90B2.34B1.75B1.35B
EBITDA57.35M-239.97M-374.58M-419.10M-199.20M
Net Income-300.52M-486.76M-614.12M-696.32M-350.65M
Balance Sheet
Total Assets5.21B4.11B3.36B2.95B3.89B
Cash, Cash Equivalents and Short-Term Investments2.34B2.11B1.46B1.23B2.16B
Total Debt1.25B1.28B1.31B605.35M1.15B
Total Liabilities4.18B3.45B3.03B2.65B3.32B
Stockholders Equity1.03B654.67M335.60M294.91M575.31M
Cash Flow
Free Cash Flow1.42B842.30M808.89M808.01M538.50M
Operating Cash Flow1.45B868.11M883.50M841.33M574.21M
Investing Cash Flow-963.75M-1.26M46.85M256.64M-318.93M
Financing Cash Flow-408.22M-148.42M-461.73M-1.65B-42.58M

Atlassian Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price203.00
Price Trends
50DMA
204.93
Negative
100DMA
211.45
Negative
200DMA
231.85
Negative
Market Momentum
MACD
-1.77
Negative
RSI
51.95
Neutral
STOCH
82.23
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEAM, the sentiment is Neutral. The current price of 203 is above the 20-day moving average (MA) of 201.51, below the 50-day MA of 204.93, and below the 200-day MA of 231.85, indicating a neutral trend. The MACD of -1.77 indicates Negative momentum. The RSI at 51.95 is Neutral, neither overbought nor oversold. The STOCH value of 82.23 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TEAM.

Atlassian Risk Analysis

Atlassian disclosed 56 risk factors in its most recent earnings report. Atlassian reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Atlassian Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$71.74B-40.16%27.50%-49.96%
76
Outperform
$50.61B317.506.48%25.54%40.02%
75
Outperform
$16.45B15.3870.20%7.85%935.80%
72
Outperform
$63.33B130.975.70%15.38%-67.58%
67
Neutral
$52.61B-34.33%19.12%-161.42%
64
Neutral
$29.58B7,452.21-1.34%19.17%83.20%
63
Neutral
$34.70B4.89-11.39%1.66%5.53%-19.00%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TEAM
Atlassian
203.00
25.68
14.48%
WDAY
Workday
241.74
13.10
5.73%
HUBS
HubSpot
559.66
66.94
13.59%
DOCU
DocuSign
80.33
24.43
43.70%
DDOG
Datadog
149.84
31.53
26.65%
SNOW
Snowflake
219.51
90.51
70.16%

Atlassian Corporate Events

Executive/Board Changes
Atlassian Appoints Karen Dykstra to Board of Directors
Neutral
Apr 14, 2025

On April 9, 2025, Enrique Salem announced his retirement from the Board of Directors of Atlassian Corporation, effective April 14, 2025, after nearly 12 years of service. Subsequently, on April 11, 2025, the Board appointed Karen Dykstra as a new director, effective April 14, 2025. Dykstra, who has previously held executive roles at VMware and serves on boards of other prominent companies, will join Atlassian’s Audit Committee. Her compensation includes a pro-rated retainer and restricted stock units, with provisions for accelerated vesting upon a company sale.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 11, 2025