The software maker’s blowout fiscal fourth-quarter results have triggered one of the most aggressive waves of Wall Street target hikes in recent memory, with eight investment banks lifting their price objectives in a single session and the company’s co-founder quietly signaling his own conviction through a nine-figure share purchase plan.
Atlassian reported adjusted earnings per share of $1.87 for the quarter ended June 30, crushing the $1.50 consensus, while revenue climbed 28% year over year to $1.766 billion — well ahead of the $1.66 billion analysts had penciled in. The cloud business, the company’s strategic centerpiece, grew 31% to $1.213 billion. Adjusted operating margin expanded to 36% from 24% in the prior-year period, a striking improvement that underpins the bullish reassessment now sweeping across sell-side desks.
Wall Street rushes to reset targets
Bank of America led the charge on Friday, upgrading the stock from Neutral to Buy and lifting its price objective from $105 to $175. Guggenheim followed with an upgrade of its own, moving to a $165 target from $115, citing upside in the company’s 4.5% GAAP margin forecast and a plausible path to more than $4 in GAAP earnings per share by fiscal 2028. Baird’s Rob Oliver maintained his Outperform rating while raising his target from $120 to $200 — the most aggressive call among named analysts — and Jefferies, BTIG, Wells Fargo and Truist all pushed their targets into the $160-to-$200 range.
Wells Fargo noted that results landed above investor expectations and should ease concerns about declining developer license counts. Truist highlighted the acceleration in cloud growth, driven by enterprise expansion and demand for the company’s Collections product. Morgan Stanley initiated coverage with an Overweight rating and a $120 target.
Not every firm was swept along. TD Cowen raised its target to $145 from $105 and called the quarter “impressive,” but held its Hold rating. KeyBanc went the other direction, trimming its target to $115 while keeping an Overweight stance.
A record contract and an insider’s conviction
The quarter’s most striking disclosure came in the shareholder letter: Atlassian signed the largest enterprise agreement in its history with one of the world’s biggest consumer technology companies. The company also reported record numbers of deals exceeding $1 million, $3 million and $5 million in annual contract value, with customers generating at least $5 million in ARR growing by more than 70%.
Co-founder and co-CEO Mike Cannon-Brookes added a personal vote of confidence, disclosing plans to buy up to $250 million of stock in the open market through a 10b5-1 trading plan. The insider purchase program arrives as the shares have surged 65.55% over the past 30 days, though the stock still sits roughly 18.56% below its 52-week high of €158.16 set on September 10.
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AI momentum builds across the platform
The results reflect a deliberate bet on artificial intelligence as the next growth engine. Rovo, the company’s AI assistant, is now used by more than 80% of Fortune 500 companies, and actions executed through the platform grew more than 50% quarter over quarter. The MCP server and Teamwork Graph CLI crossed one million monthly active users, doubling within a single quarter.
New AI-native features for Jira — including an integrated coding agent and integrations with Claude Code, Cursor and GitHub Copilot — will be offered free to paying Jira cloud customers. The company also brought on Ken Exner as Chief Product Officer for Enterprise and Emerging, adding more than 30 years of developer platform experience.
Guidance points to a deliberate slowdown
For the current quarter, Atlassian guided to revenue between $1.705 billion and $1.715 billion, comfortably above the roughly $1.67 billion consensus. Full-year fiscal 2027 revenue growth is expected to come in around 13%, with subscription ARR rising approximately 18% and cloud growth of 25.5%. The legacy data-center business, by contrast, is projected to shrink by about 17% — a planned transition as the company pushes customers toward its cloud platform.
Full-year fiscal 2026 revenue reached $6.572 billion, up 26%, while GAAP operating income swung from a $130 million loss to a $10 million profit. The net loss narrowed from $257 million to $54 million. Subscription ARR rose 23% to $6.606 billion, and remaining performance obligations jumped 44% to $4.817 billion.
Operating cash flow for the quarter came in at $567.5 million, with free cash flow of $561.3 million.
A market catching its breath
The stock’s response was electric: a 34.87% jump on Friday alone, bringing the weekly gain to 42.57% and the shares to €128.80. That rally has pushed the 14-day RSI to roughly 78 — firmly in overbought territory — suggesting the move may have gotten ahead of itself in the near term. The stock remains 18.69% below its September peak of €158.16.
Institutional positioning heading into the print was mixed. DNB Asset Management and Two Sigma Investments added to their stakes during the first quarter of 2026, while AQR Capital Management trimmed its position. The next earnings report, covering the first quarter of fiscal 2027, is expected in November.
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