Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
Negative Points
Q & A Highlights
Q : Can you discuss the decision to embed Rovo into core products and its impact on revenue growth? A : Michael Cannon-Brookes, Co-Founder and Co-CEO, explained that embedding Rovo into core products is a strategic move to maximize usage and adoption. While it may impact near-term revenue growth, the focus is on expanding the user base and enhancing product stickiness. Joe Binz, CFO, added that despite macro uncertainties, the company remains confident in achieving a 20% CAGR through FY27.
Q : What caused the delay in enterprise deals and how did it affect cloud revenue growth? A : Joe Binz, CFO, noted that larger, more complex deals took longer to close, impacting Q3 cloud revenue growth. However, these deals are expected to contribute to Q4 revenue. The delay was attributed to the nature of the deals rather than macroeconomic factors.
Q : How is Atlassian addressing cloud platform parity with data center offerings? A : Michael Cannon-Brookes, Co-Founder and Co-CEO, stated that the company feels confident about cloud platform parity with data center offerings. Recent advancements, such as FedRAMP authorization and the introduction of Atlassian Government Cloud, have strengthened their position. The cloud offers a better experience, and significant customer traction supports this transition.
Q : What are the expectations for cloud migrations and data center growth in FY26? A : Joe Binz, CFO, indicated that cloud migration contributions to revenue growth are expected to improve in FY26 and FY27. While data center growth will continue, it will be offset by increasing migrations to the cloud. Specific FY26 guidance is not yet available.
Q : How is Atlassian managing gross margins and efficiency gains? A : Joe Binz, CFO, highlighted that the company achieved an 86% gross margin in Q3, driven by price increases, premium upsells, and engineering-driven cost optimizations. Atlassian aims to maintain these efficiency gains while continuing to invest in cloud infrastructure and AI capabilities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
This article first appeared on GuruFocus .