Atlassian Corporation

Good afternoon and thank you for joining Atlassian's earnings conference call for the first quarter of fiscal year 2026. As a reminder, this conference call is being recorded and will be available for replay on the investor relations section of Atlassian's website following this call. I will now hand the call over to Martin Lamb, Atlassian's head of investor relations.

Welcome to Atlassian's first quarter fiscal year 2026 earnings call. Thank you for joining us today. On the call with me today we have Atlassian CEO and co-founder Mike Cannon-Brooks and Chief Financial Officer Joe Binns. Earlier today we published a shareholder letter and press release with our financial results and commentary for our first quarter of fiscal year 2026. The shareholder letter is available on the investor relations section of our website where you will also find other earnings-related materials, including the earnings press release and supplemental investor data sheet. As always, our shareholder letter contains management's insight and commentary for the quarter. So during the call today, we'll have brief opening remarks and then focus our time on Q&A. This call will include forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, Our results could differ materially from the results expressed or implied by the forward-looking statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management's beliefs and assumptions only as of the date such statements are made, and we undertake no obligation to update or revise such statements should they change or cease to be current. Further information on these and other factors that could affect our business performance and financial results is included in filings we make with the Securities and Exchange Commission from time to time, including the section titled Risk Factors in our most recent filed annual and quarterly reports. During the call today, we will also discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and are not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Reconciliation between GAAP and non-GAAP financial measures is available in our shareholder letter, earnings release, and investor data sheet on the investor relations section of our website. We'd like to allow as many of you to participate in Q&A as possible. Out of respect for others on the call, we'll take one question at a time. With that, I'll turn the call over to Mike for opening remarks.

Thank you all for joining us today. As you've already read in our shareholder letter, we're off to an incredible start to FY26. with total revenue in Q1 growing 21% year-over-year to $1.4 billion. Our strong execution fueled cloud revenue growth of 26% year-over-year to $998 million and accelerated growth in RPO to 42% year-over-year to $3.3 billion. We continue to make great strides across our strategic priorities of enterprise, AI, and the system of work. Not only do our results reflect this, but our customers are taking notice. All up, over 300,000 customers, including Databricks, Expedia, Ford, and Wells Fargo, rely on Atlassian's AI-enabled cloud platform to power their business processes and mission-critical workflows. We're proud of our ability to continue to deliver AI into the hands of those customers to use today. We've amassed over 3.5 million monthly active users of our AI capabilities across the platform. Once again, up over 50% since last quarter. This usage is widespread across both business teams as well as technical teams. I'll repeat what you've heard me say in the past. AI is one of the best things that's ever happened to Atlassian. The need to track, plan, and manage work while harnessing your organizational knowledge are things that don't change in this era. And I'd argue those things become even more important as more software is created and more people have the ability to create amazing technology that changes our lives. AI is also directly driving demand for our cloud offerings. Customers are choosing to migrate to the cloud and they're upgrading to the Teamwork Collection to take advantage of our AI-powered cloud platform. In fact, in less than two quarters since we launched the Teamwork Collection, We've seen it drive a double-digit percentage increase in users, as well as upgrades to higher value additions and the consolidation of competitor tools, as our customers standardize on Atlassian. We're putting world-class AI at the center of our platform and throughout our entire set of collections and apps. We've showcased our relentless pace of innovation just a few weeks back at our sold-out Team25 Europe event in Barcelona with AI stealing the show. Of course, you can read more about all these announcements in our shareholder letter. I want to take a moment to thank Atlassian for their tremendous execution and dedication this quarter. Without them, none of these exciting opportunities would be possible. I've talked to hundreds of customers this past quarter from all over the world, small to the biggest enterprises on the planet. And what I'm most proud of is how they're turning to us as a strategic partner to help them transform how work gets done. during a time when AI is changing their world. Collaboration becomes even more important as more creation is enabled, as work evolves, and as new opportunities are created for their businesses. And our customers are looking for our help. I feel incredibly bullish about how we're partnering with them and helping their businesses thrive. With that, I'll pass the call to the operator for Q&A.