Shares of Atlassian cratered as much as 18% in after-hours trading Thursday after the collaboration-software maker delivered a quarter that beat every major estimate — then told investors the rest of the year would look nothing like it. The stock dropped roughly $30 within minutes of the filing, and the culprit is the full-year guide: management is targeting total revenue growth of about 13.75% for all of fiscal 2027, a sharp deceleration from the 24% pace the company just delivered in Q1.
The Numbers Were Great — Until They Weren't. Atlassian posted adjusted earnings of $1.65 per share, clearing the $1.43 consensus by roughly 16% and extending a streak of consecutive quarterly beats to six.
Revenue rose 24% year-over-year to $1.77 billion, surpassing the $1.71 billion consensus estimate.
Adjusted operating margin also came in ahead at 32%, compared with an estimated 28.6%. On any other night, this would have been a celebration.
The Old Product Line Is Dragging Down the Forecast. Cloud revenue surged 31% to $1.30 billion, the clear engine of the business, but Data Center revenue — the legacy self-managed product Atlassian plans to retire — is expected to decline about 16% for the full year as customers migrate away.
Growth in Data Center slowed to about 5%, with those customers expanding less as they plan their cloud moves. That shrinking revenue pool mechanically weighs on total growth, even as the cloud business hums.
Wall Street Is Punishing the Gap Between Today and Tomorrow. For all of FY2027, Atlassian expects cloud revenue growth of approximately 26% and subscription ARR (annual recurring revenue — the yearly value of active subscriptions) growth of about 18.5%. Those figures would have impressed two years ago, but the stock had nearly doubled since August, reflecting that run-up between Atlassian's August report and late October. Investors had priced in acceleration, not deceleration.
Cash Flow Tells a More Resilient Story. Free cash flow more than quadrupled year-over-year to $463 million, a 26% margin, and Atlassian returned $581 million to shareholders through buybacks.
Remaining performance obligations — contracted revenue yet to be recognized — rose 44% to $4.7 billion , suggesting the demand pipeline hasn't dried up. Management cited macroeconomic, fiscal-policy, and geopolitical uncertainty as reasons for a prudent approach to guidance.
The core question: at $157, is the market correctly discounting a growth-company-to-mature-company transition, or overreacting to conservatism from a management team sitting on a $4.7 billion backlog? Atlassian itself said total revenue growth should pick up again in fiscal 2028. For now, the stock is priced for doubt.