Atlassian Corporation, listed on NASDAQ under the ticker TEAM, witnessed an upswing in its share price on Friday subsequent to the release of its fiscal second-quarter results for 2026. The company's financial performance during this period outpaced analysts' projections across several metrics, reflecting robust growth and operational efficiency enhancements.
Specifically, Atlassian reported total revenue of $1.59 billion for the quarter, exceeding the consensus analyst estimate of $1.54 billion as tracked by Benzinga Pro. This marks a 23% year-over-year increase, underscoring sustained demand and expansion within its product portfolio.
The company's Cloud revenue segment notably contributed to this growth, registering a 26% rise compared to the prior year. This segment itself achieved a milestone, generating its first-ever quarter surpassing $1 billion in revenue. The surge in Cloud adoption indicates strong customer engagement and market acceptance.
Adjusted earnings per share (EPS), a key profitability indicator, came in at $1.22, outperforming the expected $1.14 according to analyst forecasts. This reflects efficient cost management and scaling benefits amid revenue growth.
On the profitability front, Atlassian reported adjusted operating income of $430.2 million, rising from $335.1 million reported during the same quarter in the previous fiscal year. The operating margin improved modestly to 27%, compared with 26% in fiscal Q2 2025, indicating incremental operating leverage.
Cash generation metrics also demonstrated strength. The company produced $177.8 million in cash from operations, leading to free cash flow of $168.5 million for the period. These figures reflect the firm's ability to convert earnings into liquidity, an important aspect of financial health.
At the end of the quarter, Atlassian's balance sheet showcased a solid liquidity position with $1.6 billion held in cash, cash equivalents, and marketable securities, providing a cushion for operational and strategic needs.
Mike Cannon-Brookes, Atlassian’s CEO and co-founder, highlighted the quarter's achievements, stating, "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." His comments reflect confidence in the company's trajectory and product engagement.
Looking ahead, Atlassian has set its fiscal third-quarter revenue guidance between $1.689 billion and $1.697 billion. This anticipated range exceeds the street consensus estimate of $1.650 billion, suggesting management's optimistic outlook on continued growth. Within this, the company projects approximately 23% year-over-year growth in Cloud revenue and forecasts a notable 33.5% increase in Data Center revenue, indicating robust performance across product segments.
For the entirety of fiscal 2026, Atlassian raised its sales forecast from $6.3 billion to $6.362 billion, supported by expectations of roughly 24.3% growth in Cloud revenue. This upward revision signals management's confidence in sustained market demand and operational execution.
In premarket trading on Friday, Atlassian's shares increased by 1.12%, reaching $99.51. Despite this gain, the stock remained close to its 52-week low of $97.93, evidencing a degree of price consolidation amid broader market dynamics.
The combination of exceeding quarterly targets, maintaining solid margins, strong cash flow generation, and upgraded guidance collectively underpin the positive investor response observed in the stock price movement.