# TEAM — Atlassian Corporation

## Company & Research Metadata

- **Company:** Atlassian Corporation
- **Ticker:** TEAM
- **Exchange:** Nasdaq
- **Sector / Industry:** Technology / collaboration and work-management software
- **Template version:** 2.7
- **Research date:** 2026-10-21
- **Valuation / score price snapshot:** $191.05 — 2026-11-03 regular-session close, America/New_York
- **Tracking tier:** Primary Watchlist
- **Owned:** Yes
- **Primary operating period reviewed:** Q4 FY2026
- **Historical period reviewed:** FY 2026, FY 2025, FY 2024; latest balance-sheet date shown below
- **Latest investor presentation reviewed:** Results release and associated financial tables; no separate slide deck materially used
- **Latest earnings call reviewed:** Q4 FY2026, complete material Q&A
- **Latest post-earnings management commentary reviewed:** No separate later management presentation incorporated

- **Price snapshot date:** 2026-11-03

- **Price snapshot time / timezone:** Regular-session close, America/New_York (including exchange half-days)
- **Competitor / analyst-Q&A audit:** 2026-10-28; original operating, price and valuation snapshots retained.

## What's Changed Since Previous Review

**Current Review:** 2026-10-28

**Previous Review:** 2026-10-21

**Update Trigger:** Competitor relevance and analyst-Q&A correction

| Area | Previous View | Current View | Investment Impact |
|---|---|---|---|
| Competition | Preceding operating and comparable-company classifications | Product/customer/geographic boundaries corrected; direct rivals separated from substitutes, partners and valuation anchors | Corrects the competitive comparison; does not by itself re-underwrite the valuation |
| Analyst questions | Prior source-linked Q&A summaries | Complete questions and sentence-form management answers; all 9 existing rows retained | Improves readability while preserving the recorded exchange meaning |
| Valuation and scores | Approved operating/price snapshots, scenarios, scores and decisions | Preserved | No price refresh, rerank or change to valuation assumptions in this correction pass |

**Thesis:** No new fundamental thesis determination is made in this correction pass. The prior investment decision is preserved; the corrected competitive scope should govern the next substantive review.

## Investment Snapshot

| Metric | Current View |
|---|---|
| Price Snapshot | $191.05 — 2026-11-03 regular-session close, America/New_York |
| Rating / Zone Status | Hold / Watch |
| Bear / Base / Bull Fair Value | $69.31 / $174.65 / $339.59 |
| Scenario Probabilities | 25% / 50% / 25% |
| Probability-Weighted Fair Value | $189.55 |
| Probability-Weighted Expected Return | -0.8% |
| Bear-Case Return | -63.7% |
| Strong Buy Zone | ≤ $76.24 |
| Buy Zone | >$76.24–$151.64 |
| Avoid Chasing Above | > $210.61 |
| Quality Score / Tier | 79.1 / Tier B |
| Opportunity Score / Rank | 49.1 / #45 of 76 |
| Risk Level | Medium-High |
| Tracking / Ownership | Primary Watchlist / Owned |

**Decision rationale:** TEAM is **Avoid** at $221.11, with -14.3% probability-weighted upside and -68.7% bear-case return. An embedded system of work can retain relevance as AI increases the need for shared context and governed execution. Confidence is 56/100 because the earnings conversion, competitive and capital assumptions below remain conditional.

## Investment Thesis

An embedded system of work can retain relevance as AI increases the need for shared context and governed execution. FY26 Q4 revenue grew 28% and cloud revenue 31%. The central question is whether that growth produces owner earnings after compensation and whether AI expands the platform rather than reducing paid seats. Strong reported growth does not by itself establish attractive per-share economics.

### What the Market May Be Mispricing

| Debate | Research judgment |
|---|---|
| Cloud retention and enterprise expansion | An embedded system of work can retain relevance as AI increases the need for shared context and governed execution. |
| AI workflow relevance and paid monetization | Cloud retention, paid expansion, enterprise adoption, migration success and sales productivity determine returns. |
| SBC, dilution and economic margins | FY26 FCF was approximately $1.32 billion, below SBC of $1.61 billion. |

## Business Overview

Atlassian sells Jira, Confluence, Jira Service Management and related collaboration and development tools, increasingly through cloud subscriptions. Product-led adoption, enterprise sales and a large marketplace of integrations support distribution. Cloud migration, AI features and consumption-based services can expand customer value, while legacy deployment transitions affect comparisons. Software-development and knowledge-work demand are exposed to changing AI workflows.

### Business Takeaway

Atlassian sells Jira, Confluence, Jira Service Management and related collaboration and development tools, increasingly through cloud subscriptions. Cloud retention, paid expansion, enterprise adoption, migration success and sales productivity determine returns.

## Industry, TAM & Market Share

Collaboration, service management and development workflows remain large categories. Microsoft, ServiceNow, Notion and specialist platforms compete on integration, simplicity and AI capability. Overlapping workflow TAMs should not be added without accounting for shared budgets.

### Market-Share Analysis

Comparable same-definition share data for the subject and its principal rivals were not established. TAM estimates and company-specific volume measures are not treated as directly comparable market shares. The positioning analysis below is more reliable than a table of unmatched percentages.

#### Competitive Scale / Position

| Company / Platform | Primary Position | Relative Scale | Growth Direction | Investment Relevance |
|---|---|---|---|---|
| Microsoft (MSFT) | Direct segments: Azure DevOps/GitHub and Teams/SharePoint workflows | Product scope; no matched operating-scale series | Competes for development and collaboration workflows | Customer choice in the stated segment only |
| ServiceNow (NOW) | Direct segment: IT service management | Product scope; no matched operating-scale series | Competes with Jira Service Management | Customer choice in the stated segment only |
| Notion (private) | Direct segment: knowledge, documents and team collaboration | Product scope; no matched operating-scale series | Competes with Confluence and selected team workflows | Customer choice in the stated segment only |

### Industry Takeaway

Overlapping workflow TAMs should not be added without accounting for shared budgets. The base case requires evidence of profitable adoption within that market.

## Customer Economics

Cloud retention, paid expansion, enterprise adoption, migration success and sales productivity determine returns. AI usage can increase engagement while changing pricing and inference costs. Marketplace and workflow integrations support switching costs, but customers can consolidate tools or reduce seats.

### Customer-Economics Takeaway

The economic test is SBC, dilution and economic margins. Marketplace and workflow integrations support switching costs, but customers can consolidate tools or reduce seats.

## Competitive Landscape & Moat

### Competitive Landscape

Map competition to Jira, Jira Service Management and Confluence. Microsoft’s cloud business is not itself the competing product; the overlap is named development/collaboration software.

| Competitor | Market Share | Positioning | Advantages vs. Company | Disadvantages vs. Company | Current Direction |
|---|---|---|---|---|---|
| Microsoft (MSFT) | No consistent comparable series | Direct segments: Azure DevOps/GitHub and Teams/SharePoint workflows | Developer and enterprise distribution | Different product packaging and cloud/software mix | Competes for development and collaboration workflows |
| ServiceNow (NOW) | No consistent comparable series | Direct segment: IT service management | Enterprise ITSM workflow footprint | Not a substitute for all Jira software planning or Confluence use | Competes with Jira Service Management |
| Notion (private) | No consistent comparable series | Direct segment: knowledge, documents and team collaboration | Flexible knowledge/workspace workflows | Different software-development and ITSM breadth | Competes with Confluence and selected team workflows |

### Moat Assessment

Jira and Confluence's installed workflows, integrations and shared organizational context create meaningful switching costs. The moat depends on staying useful in AI-assisted development and collaboration, not on historical seat growth alone.

**Moat direction:** Stable — an analytical judgment about product and distribution economics, not a measured market-share claim.

### Competitive Takeaway

Jira and Confluence's installed workflows, integrations and shared organizational context create meaningful switching costs. The direct rivals determine commercial pressure; diversified or sector anchors provide valuation context and are not substitutes for direct competition.

## Financial Profile

### Historical Financials

Financial reporting periods follow the issuer's fiscal year: completed FY rows plus standalone current-year quarters and cumulative H1/9M for FY2027. Revenue, FCF and SBC are flows; cash is a period-end balance. FCF = operating cash flow minus property/equipment capex from SEC company facts; quarterly FCF after Q1 and any quarterly SBC derived from YTD are visibly marked. Missing values are N/D, not zero. Unit: USD millions. Data extracted from SEC-tagged filings as of 2026-11-07. Company-specific FCF definitions and acquisition effects may require further reconciliation.

| Period | Revenue | Growth | Gross Margin | Operating Margin | FCF | FCF Margin | SBC | Diluted Shares | Cash | Debt |
|---|---:|---:|---:|---:|---:|---:|---:|---:|---:|---:|
| FY2024 | 4,359 | 23.31% | 81.56% | -2.69% | 1,415 | 32.47% | 1,081 | 259 | 2,339 | 1,249 |
| FY2025 | 5,215 | 19.66% | 82.84% | -2.50% | 1,416 | 27.14% | 1,362 | 262 | 2,937 | 1,239 |
| FY2026 | 6,572 | 26.02% | 85.64% | 4.50% | 1,319 | 20.07% | 1,607 | 260 | 1,240 | 1,233 |
| Q1 FY2027 | $1,772.15 | N/D | 85.2% | 10.7% | $462.554 (derived: CFO - capex) | 26.1% | $356.487 | 256.85 | $1,120.504 | N/D |

### Financial Takeaways

FY26 FCF was approximately $1.32 billion, below SBC of $1.61 billion. This is a material gap between reported cash generation and economic owner earnings. Scenario EPS assumes future operating improvement after compensation and financing costs; it does not treat the entire FCF margin as distributable cash.

**Financial direction:** Mixed — assess the reported trend alongside dilution and the balance sheet.

## Management & Capital Allocation

Founder-led product continuity is valuable, but compensation, acquisitions and capital discipline require scrutiny. Monitor organic cloud growth, AI monetization and net dilution. The financial objective should be rising economic earnings per share rather than growth at any compensation cost.

### Management Takeaway

The financial objective should be rising economic earnings per share rather than growth at any compensation cost.

## Valuation

### Current Valuation

| Metric | Value |
|---|---|
| Price Snapshot | $191.05 — 2026-11-03 regular-session close, America/New_York |
| Market Capitalization | $55.97B |
| Enterprise Value | $55.96B |
| Trailing P/E | n/a |
| Provider forward P/E | 40.64 |
| EV / Sales | 8.52 |

### Comparable Company Analysis

| Company | Relevance | Public / Private | Forward P/E | EV / Sales | Growth / Margin / Risk Context |
|---|---|---|---|---|---|
| TEAM — Atlassian Corporation | Subject company | Public | 40.64 | 8.52 | collaboration and work-management software; 3Y revenue-growth estimate 14.90%; operating margin 4.50% |
| Notion | Direct operating competitor / substitute | Private | N/A | N/A | collaboration, knowledge and AI workflows; no compatible standalone public multiple used |
| NOW — ServiceNow, Inc. | Direct ITSM overlap with Jira Service Management | Public | 33.01 | 10.61 | enterprise workflow software; 3Y revenue-growth estimate 19.84%; operating margin 12.39% |
| MSFT — Microsoft | Direct named developer/collaboration segments; diversified group multiple | Public | 26.91 | 12.06 | cloud, enterprise software and AI distribution; 3Y revenue-growth estimate 19.76%; operating margin 46.78% |

**Comparable takeaway:** Map competition to Jira, Jira Service Management and Confluence. Microsoft’s cloud business is not itself the competing product; the overlap is named development/collaboration software. Quoted multiples retain their original dated snapshot; missing matched multiples are not estimated. Consolidated parent multiples do not isolate the competing product. No mechanical peer average is used.

The base terminal P/E is 28×, versus the provider's current forward P/E of 40.64×. Holding that quoted multiple constant on this model's 2029 EPS gives an illustrative present value of **$253.49**, versus the central base FV of **$174.65**. Earnings definitions differ, so this is a sensitivity check; it makes the dependence on a rerating or derating explicit.

### Valuation Scenarios

| Scenario | Key Assumptions | Fair Value | Probability | Probability Rationale | Return From Price Snapshot |
|---|---|---|---|---|---|
| Bear | 3Y revenue CAGR 10%; sustainable 2029 EPS $5.00 after compensation; 20× P/E; 13% discount rate; AI pricing and slower expansion limit 2029 economic EPS to $5. | $69.31 | 25% | Execution, financing or competitive setbacks remain credible | -63.7% |
| Base | 3Y revenue CAGR 19%; sustainable 2029 EPS $9.00 after compensation; 28× P/E; 13% discount rate; Cloud scale and lower compensation intensity produce $9 of 2029 economic EPS. | $174.65 | 50% | Most likely operating trajectory, requiring measurable progress | -8.6% |
| Bull | 3Y revenue CAGR 27%; sustainable 2029 EPS $14.00 after compensation; 35× P/E; 13% discount rate; Strong platform adoption and efficient AI delivery produce $14 of 2029 economic EPS. | $339.59 | 25% | Successful product conversion and operating leverage; not assured | +77.7% |
| **Probability-Weighted** | Sum of each scenario value × its probability | $189.55 | **100%** | Judgmental scenario probabilities | -0.8% |

### Valuation Takeaway

- **Primary valuation method:** Present value of sustainable 2029 equity earnings × scenario P/E, plus assumed interim dividends. The three-year discount horizon approximates late-2029 earning power.
- **Cross-check methods:** Direct competition, quoted peer multiples, current cash conversion, and the separate revenue/share/net-margin bridge in [the valuation workpaper](../valuation/watchlist_models_2026-10-21.md).
- **Key valuation dependencies:** Cloud retention and enterprise expansion; AI workflow relevance and paid monetization; SBC, dilution and economic margins. All forward figures are independent research assumptions, not company guidance or consensus.
- **Valuation confidence / Risk Level:** 56/100 / Medium-High. Scenario values are sensitive to sustainable earnings and terminal multiples.
- **Margin-of-safety conclusion:** Avoid at $221.11. New-file boundaries use Strong Buy = min(P/W FV ÷ 1.5, 1.1 × bear FV), Buy upper = P/W FV ÷ 1.25, Avoid above = P/W FV ÷ 0.90. Returns are to present fair value, not annualized returns or price targets for a particular date.

## Analyst Questions

The table consolidates related questions and follow-ups from each material participant in the complete call.

| Analyst / Firm | Core Question | Management Response | Research Read-Through |
|---|---|---|---|
| Adam Wood / Morgan Stanley | How much acquisition contribution is included in the ARR growth framework? | Management said the growth framework includes acquisition contribution. | Confirm that this opportunity converts into profitable recurring demand. |
| Allan Verkhovski / U.S. Bancorp | What makes AI agents useful to customers? | Management said organizational context supports agent usefulness. | Check repeat usage and cohort economics rather than initial sales alone. |
| Ryan MacWilliams / Wells Fargo | Did migration timing explain the cloud revenue beat? | Management said migration timing did not explain the upside. | Confirm that this opportunity converts into profitable recurring demand. |
| Karl Keirstead / UBS | How do AI costs affect margin targets? | Management said it is targeting a positive GAAP operating margin. | Require durable cash conversion after compensation and ongoing investment. |
| Gregg Moskowitz / Mizuho | Does Teamwork Graph usage extend beyond software developers? | Management said usage extends beyond software engineers. | Confirm that this opportunity converts into profitable recurring demand. |
| DJ Hynes / Canaccord | What is the monetization opportunity for Rovo? | Management said the installed base offers a large expansion opportunity. | Confirm that this opportunity converts into profitable recurring demand. |
| Koji Ikeda / Bank of America | What supports Atlassian's long-term platform relevance and share? | Management said integration usage supports platform relevance. | Confirm that this opportunity converts into profitable recurring demand. |
| Alex Zukin / Wolfe Research | How do the enterprise opportunity and acquisition affect the outlook? | Management said the acquisition helps comparisons and the initial guidance is cautious. | Treat the stated timetable as conditional on demonstrated execution. |
| Rob Owens / Piper Sandler | How do Rovo credits and collection bundles encourage upgrades? | Management said collection bundles encourage customers to upgrade. | Confirm that this opportunity converts into profitable recurring demand. |

### Analyst-Q&A Takeaway

Cloud strength exceeds migration timing, and Rovo expands platform use. Positive GAAP margins and earnings after compensation remain the key tests as bundled credits encourage broader adoption.

## Thesis Monitoring

| Driver | Current State | Positive Trigger / Catalyst | Negative Trigger / Falsifier | What It Changes |
|---|---|---|---|---|
| Cloud retention and enterprise expansion | An embedded system of work can retain relevance as AI increases the need for shared context and governed execution. | Revenue trajectory sustains approximately 19% annual growth on a comparable basis | Growth remains below the 10% bear assumption over a full operating cycle | Revenue outlook and scenario probabilities |
| AI workflow relevance and paid monetization | Cloud retention, paid expansion, enterprise adoption, migration success and sales productivity determine returns. | After-cost earnings progress toward the base implied net margin of 21.5% | Competition, credit losses or service costs make that margin trajectory unattainable | Margins, moat score and valuation multiple |
| SBC, dilution and economic margins | FY26 FCF was approximately $1.32 billion, below SBC of $1.61 billion. | Financing and compensation remain consistent with 264.7M economic shares in the 2029 base case | Required capital or cumulative dilution materially exceeds the model without matching earnings | Financial score, confidence and downside value |

## Quality & Opportunity Scorecards

### Quality Score

| Component | Score | Weight | Weighted Contribution | Evidence |
|---|---|---|---|---|
| Business durability and economics | 87 | 25% | 21.8 | Cloud retention, paid expansion, enterprise adoption, migration success and sales productivity determine returns. |
| Moat and competitive position | 85 | 25% | 21.3 | Jira and Confluence's installed workflows, integrations and shared organizational context create meaningful switching costs. |
| Growth runway and durability | 83 | 20% | 16.6 | Collaboration, service management and development workflows remain large categories. |
| Financial quality and balance sheet | 63 | 15% | 9.5 | FY26 FCF was approximately $1.32 billion, below SBC of $1.61 billion. |
| Management, governance and capital allocation | 67 | 15% | 10.0 | Founder-led product continuity is valuable, but compensation, acquisitions and capital discipline require scrutiny. |
| **Quality Score** | **79.1** | **100%** | **79.1** | Weighted score, independent of ownership and current price |

- **Quality Tier:** B
- **Speculative override:** None

### Opportunity Score

| Component | Raw Input | Normalized Score | Weight | Weighted Contribution |
|---|---|---|---|---|
| Quality | 79.1 | 79.1 | 30% | 23.7 |
| Probability-weighted upside | -0.8% | 48.4 | 35% | 16.9 |
| Bear-case downside | -63.7% | 0.0 | 20% | 0.0 |
| Risk / valuation confidence | 56 | 56.0 | 15% | 8.4 |
| **Opportunity Score** |  | **49.1** | **100%** | **49.1** |

- **Opportunity Rank:** #45 of 76
- **Zone Status:** Hold / Watch

## Portfolio Context

- **Tracking tier:** Primary Watchlist
- **Owned:** Yes
- **Tracking source of truth:** `my_watchlist.md`
- **Portfolio source of truth:** `portfolio/holdings.md`
- **Scoring independence:** Ownership, account, shares, position size and cost basis do not change research, valuation, Quality, Opportunity, rank or zones.

## Investment Decision History

| Timestamp | Price | Rating | Zone Status | Buy Zone | Strong Buy Zone | Avoid Chasing Above | Base FV | P/W FV | P/W Return | Quality | Opportunity / Rank | Change / Rationale |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026-10-21 (America/New_York) | $221.11 | Avoid | Avoid | >$76.24–$151.64 | ≤ $76.24 | > $210.61 | $174.65 | $189.55 | -14.3% | 79.1 | 39.7 / #50 | Initial missing-file analysis; common-universe ranking; independent scenario assumptions |

---

## Material Sources

| Source | Type | Date / Period | What It Supports |
|---|---|---|---|
| [www.sec.gov](https://www.sec.gov/Archives/edgar/data/1650372/000165037226000031/ex991q4fy26.htm) | Company IR / earnings filing | Q4 FY2026 | Latest operating results, guidance, products and financial supplement |
| [TEAM complete earnings-call transcript](https://stockanalysis.com/stocks/team/transcripts/658602-q4-2026/) | Transcript | Q4 FY2026 | Prepared remarks and all material Q&A exchanges |
| [TEAM regular-session historical price](https://stockanalysis.com/stocks/team/history/) | Market data | 2026-10-20 close | Common price used in returns, scores and zones |
| [TEAM valuation statistics](https://stockanalysis.com/stocks/team/statistics/) | Market data | 2026-10-20 close; ratios retrieved 2026-10-21 | Market capitalization, shares, quoted multiples and current ratios |
| [TEAM historical income statement](https://stockanalysis.com/stocks/team/financials/income-statement/) | Standardized financial statements | Latest reported period and two preceding fiscal years | Historical income statement; source-native currency and definitions |
| [TEAM historical balance sheet](https://stockanalysis.com/stocks/team/financials/balance-sheet/) | Standardized financial statements | Latest reported period and two preceding fiscal years | Historical balance sheet; source-native currency and definitions |
| [TEAM historical cash flows](https://stockanalysis.com/stocks/team/financials/cash-flow-statement/) | Standardized financial statements | Latest reported period and two preceding fiscal years | Historical cash flows; source-native currency and definitions |
| [ServiceNow, Inc. statistics](https://stockanalysis.com/stocks/now/statistics/) | Comparable-company market data | 2026-10-20 regular close | Peer multiples and financial context; public quote basis |
| [Microsoft statistics](https://stockanalysis.com/stocks/msft/statistics/) | Comparable-company market data | 2026-10-20 regular close | Peer multiples and financial context; public quote basis |
| [FY2026 10-K — products and competition](https://www.sec.gov/Archives/edgar/data/1650372/000165037226000036/team-20260630.htm) | Regulatory filing / primary product evidence | FY ended 2026-06-30; checked 2026-10-28 | Developer, ITSM and knowledge-workflow segmentation |
| [Jira Service Management — ITSM scope](https://www.atlassian.com/software/jira/service-management/itsm-software) | Regulatory filing / primary product evidence | Current product page; checked 2026-10-28 | Jira Service Management competes in ITSM, unlike every Atlassian product |
| [SEC XBRL company facts — TEAM](https://data.sec.gov/api/xbrl/companyfacts/CIK0001650372.json) | Regulatory filing (as tagged) | FY2027, through 2026-09-30 | Current-year standalone-quarter and year-to-date source facts for FCF, SBC, revenue and other reported metrics |