TLDR
- TEAM stock surged 33% after hours following a strong Q4 earnings report, reaching $144.52
- Revenue jumped 28% year-over-year to $1.38 billion, beating Wall Street estimates
- Annual revenue hit $6.5 billion, up 26%, with Q1 guidance above analyst expectations
- CEO announced plans to buy $250 million worth of stock on the open market
- Management said AI is strengthening its platform, not threatening it
Atlassian stock surged 33% in extended trading after the company reported Q4 results that beat Wall Street expectations across the board. TEAM hit $144.52 following the report, its highest level since January, and is now up 157% from its April low of $55.97.
Revenue for the quarter came in at $1.38 billion, a 28% increase year-over-year. That topped analyst estimates and calmed fears that had weighed on the stock for months. Operating income flipped from a loss of $28 million a year ago to a gain of $211 million. Net profit came in at $139 million.
For the full fiscal year, Atlassian posted $6.5 billion in revenue, up 26%.
Q1 guidance also came in ahead of expectations. Management guided for revenue between $1.70 billion and $1.71 billion. Cloud revenue is expected to grow 28.5%, partially offset by slower growth in its data center business.
CEO Steps In With $250 Million Stock Purchase
One of the more eye-catching moves from the report was the CEO’s announcement that he plans to buy $250 million worth of TEAM stock on the open market. Insider buying at that scale tends to get attention, and it did here.
The company currently trades at a forward price-to-earnings ratio of 20. That’s below the tech sector median of 24, and well below its own five-year average of 93.
Its rule-of-40 score also looks healthy. Using forward estimates, Atlassian expects around 13% annual revenue growth in the new fiscal year with a non-GAAP operating margin of 36%, giving it a combined score of 49%.
AI Is a Tailwind, Not a Threat
The bigger narrative shift from these results is what management said about artificial intelligence.
Rather than treating AI as a risk to its business model, Atlassian is leaning into it. CFO James Chuong said: “Enterprises view Atlassian as a long-term, strategic partner and are deepening their commitment to our open platform to securely deploy agents across their organizations.”
AI features are being rolled out across Jira, Confluence, and other cloud products. The company says these features are deepening how customers use its platform, which raises switching costs.
The argument is straightforward. The more useful Atlassian’s tools become with AI built in, the less likely customers are to leave. That’s a different story than the one investors had been pricing in.
For the past two years, the “SaaSpocalypse” thesis held that AI would eat into demand for enterprise software subscriptions. Atlassian’s results push back on that directly.
On the chart, TEAM has broken above the $119.27 resistance level and crossed above both its 50-day and 200-day moving averages. Analysts now point to $175 as a potential next target.
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