Updated with Friday closing price:

Shares of Atlassian Corp. surged more than 35% Friday day after the Australian collaboration software company beat expectations on earnings and revenue in its fiscal 2026 fourth quarter and guided above forecasts for the year ahead.

For the quarter that ended June 30, Atlassian reported adjusted earnings per share of $1.87, up from 98 cents in the same quarter of the previous fiscal year, on revenue of $1.766 billion, up 28% year-over-year. Analysts were expecting $1.50 per share on revenue of $1.66 billion.

Cloud revenue was the standout at $1.213 billion, up 31%. That marks an acceleration for a business whose growth had been decelerating through fiscal 2026, to the point that Atlassian was guiding to 23% cloud growth as recently as February. Data Center revenue rose 21% to $461.9 million.

Subscription annual recurring revenue stood at $6.606 billion at the end of June, up 23%. Remaining performance obligations, a measure of contracted revenue not yet recognized, jumped 44% to $4.817 billion. Chief Financial Officer James Chuong said enterprises are deepening their commitment to Atlassian’s platform, and the company pointed to a record quarter for deals worth $1 million or more in annual contract value.

Atlassian also turned a profit on an unadjusted basis. Operating income was $211 million, against an operating loss of $28 million a year earlier, lifting operating margin to 12% from negative 2%. Net income came in at $139 million, reversing a net loss of $24 million. Free cash flow was $475 million for the quarter.

Revenue for the full fiscal year reached $6.572 billion, up 26%. Adjusted earnings came in at $5.85 per share, up from $3.68 in fiscal 2025. Atlassian still finished its fiscal year with an unadjusted net loss of $54 million, narrowed from $257 million.

Usage of Atlassian’s Model Context Protocol server and its Teamwork Graph command-line tool more than doubled during the quarter to surpass 1 million monthly active users. MCP calls rose more than 400% from the third quarter. Rovo, the company’s artificial intelligence assistant, is now used by over 80% of Fortune 500 companies, and Atlassian said assisted actions in the product grew more than 50% sequentially.

“In the AI era, context is the edge but it’s hard to build and can’t be hired,” Chief Executive and co-founder Mike Cannon-Brookes said in the company’s earnings release. “Thanks to 25 years of connecting teams, customers get one of the best context graphs for orchestrating agentic workflows.”

Guidance came in ahead of expectations as well. Atlassian expects first-quarter revenue of $1.705 billion to $1.715 billion, versus the roughly $1.665 billion analysts had forecast. For fiscal 2027, the company is projecting revenue growth of about 13%, cloud revenue growth of 25.5% and subscription annual recurring revenue growth of 18%. Data Center revenue is expected to decline about 17%.

Cannon-Brookes plans to buy as much as $250 million of Atlassian Class A stock on the open market under a Rule 10b5-1 trading plan, the company disclosed alongside the results. Atlassian also has a new chief product officer for enterprise and emerging. Ken Exner joined on Aug. 4 after stints at Amazon Web Services and Elastic N.V., where he ran the search, observability and security businesses.

Photo: Atlassian