Collaboration software company Atlassian (NASDAQ: TEAM) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 23.3% year on year to $1.59 billion. Guidance for next quarter’s revenue was optimistic at $1.69 billion at the midpoint, 2.9% above analysts’ estimates. Its non-GAAP profit of $1.22 per share was 6.6% above analysts’ consensus estimates.
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Atlassian (TEAM) Q4 CY2025 Highlights:
- Revenue: $1.59 billion vs analyst estimates of $1.54 billion (23.3% year-on-year growth, 2.8% beat)
- Adjusted EPS: $1.22 vs analyst estimates of $1.14 (6.6% beat)
- Adjusted Operating Income: $430.2 million vs analyst estimates of $379.7 million (27.1% margin, 13.3% beat)
- Revenue Guidance for Q1 CY2026 is $1.69 billion at the midpoint, above analyst estimates of $1.64 billion
- Operating Margin: -3%, up from -4.5% in the same quarter last year
- Free Cash Flow Margin: 10.6%, up from 8% in the previous quarter
- Billings: $1.71 billion at quarter end, up 16.3% year on year
- Market Capitalization: $27.64 billion
“We closed out Q2 with incredible momentum across the Atlassian platform and achieved some impressive milestones along the way. We delivered our first-ever $1 billion Cloud revenue quarter, which grew 26% year-over-year, crossed 350,000 customers, and Rovo surpassed 5 million monthly active users,” said Mike Cannon-Brookes, Atlassian’s CEO and co-Founder.
Company Overview
Started by two Australian university friends who funded their startup with credit cards, Atlassian (NASDAQ: TEAM) provides software tools that help teams plan, track, collaborate, and share knowledge across organizations.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Atlassian’s sales grew at a solid 26.1% compounded annual growth rate over the last five years. Its growth beat the average software company and shows its offerings resonate with customers, a helpful starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Atlassian’s annualized revenue growth of 21.6% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Atlassian reported robust year-on-year revenue growth of 23.3%, and its $1.59 billion of revenue topped Wall Street estimates by 2.8%. Company management is currently guiding for a 24.8% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 19.5% over the next 12 months, a slight deceleration versus the last two years. Despite the slowdown, this projection is noteworthy and implies the market is forecasting success for its products and services.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
Atlassian’s billings came in at $1.71 billion in Q4, and over the last four quarters, its growth was underwhelming as it averaged 12.1% year-on-year increases. This alternate topline metric grew slower than total sales, meaning the company recognizes revenue faster than it collects cash - a headwind for its liquidity that could also signal a slowdown in future revenue growth. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.
Atlassian is extremely efficient at acquiring new customers, and its CAC payback period checked in at 20.8 months this quarter. The company’s rapid recovery of its customer acquisition costs means it can attempt to spur growth by increasing its sales and marketing investments.
Key Takeaways from Atlassian’s Q4 Results
It was encouraging to see Atlassian’s revenue guidance for next quarter beat analysts’ expectations. We were also happy its revenue and adjusted operating profit outperformed Wall Street’s estimates. On the other hand, its billings slightly missed. Big picture, there has been turmoil in enterprise software as the market increasingly views AI as an existential threat to these SaaS companies and their product offerings. Without a perfect quarter, it seems tough for these stocks to rally, TEAM shares traded down 9.7% to $90.05 immediately after reporting.
Big picture, is Atlassian a buy here and now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
