Atlassian Stock Slides Despite Q1 Beat as Growth Outlook Cools
Atlassian's revenue rose 24% to $1.77 billion and beat estimates, but shares fell as its full-year forecast pointed to slower subscription growth.
Atlassian, the maker of Jira and Confluence, beat Wall Street's estimates for its first fiscal quarter, but its stock fell sharply anyway. The company reported revenue of $1.77 billion, up 24% from a year earlier, after the close on Thursday, November 5, 2026. Shares were down 14.1% in premarket trading Friday, according to Reuters.
The selling came after Atlassian forecast slower growth in subscription revenue for the full fiscal year, Investing.com reported.
Atlassian Q1 fiscal 2027 by the numbers
Measure | Q1 FY2027 | Year earlier | Estimate |
|---|---|---|---|
Revenue | $1.772B (+24%) | $1.433B | $1.71B |
Cloud revenue | $1.302B (+31%) | — | — |
Non-GAAP EPS | $1.65 | $1.04 | $1.43 |
GAAP EPS | $0.35 | −$0.20 | — |
Non-GAAP operating margin | 32% | 23% | 28.6% |
Free cash flow | $463M | — | — |
Remaining performance obligations | $4.746B (+44%) | — | — |
Sources: Atlassian release; estimates as reported by Investing.com. The quarter ended September 30, 2026.
Atlassian's fiscal year runs from July to June, so this was the first quarter of fiscal 2027. The company swung to a GAAP profit of $91 million from a $52 million loss a year earlier.
Why the stock fell
The beat was not the problem; the outlook was. Atlassian expects subscription annual recurring revenue (ARR) to grow about 18.5% in fiscal 2027, compared with 23% growth in the first quarter, Investing.com noted. ARR is the yearly value of the subscriptions customers are paying for, so investors watch it closely as a sign of future sales.
The company also expects revenue from its Data Center products, software that big customers run on their own servers, to fall about 14% in the December quarter and about 16% for the full year, while cloud revenue keeps growing at more than 25%.
The outlook
Guidance | Q2 FY2027 | Full fiscal 2027 |
|---|---|---|
Total revenue | $1.825B–$1.835B | about +13.75% growth |
Cloud revenue growth | about 27% | about 26% |
Data Center revenue growth | about −14% | about −16% |
Non-GAAP operating margin | about 26.0% | about 25.5% |
Source: Atlassian. Analysts had expected Q2 revenue of $1.82 billion, Investing.com said, so the sales forecast was slightly above estimates.
CEO Mike Cannon-Brookes said in the release that "Q1 was a strong start to fiscal 2027," pointing to a 44% rise in remaining performance obligations, a measure of contracted revenue not yet recognized.
What it means for investors
The reaction shows how much software stocks are priced on future growth rather than the latest quarter. It also came during a rough week for tech: the Nasdaq fell 5.5% on Thursday. Our stock market today story covers the wider market, and our guide on how to read an earnings report explains terms like non-GAAP EPS and guidance.
This article is for information only and is not investment advice.
Sources
- Atlassian (Business Wire via Yahoo Finance): Atlassian Announces First Quarter Fiscal Year 2027 Results (November 5, 2026)
- Investing.com via Yahoo Finance: Atlassian tumbles 16% on weaker subscription growth outlook (November 5, 2026)
- Reuters via Yahoo Finance: Nasdaq futures rise after steep AI selloff as chip stocks stabilize (November 6, 2026)
This article is for information only and is not investment advice. Do your own research before buying or selling any asset.