Atlassian Corporation

Good afternoon, and thank you for joining Atlassian's earnings conference call for the second 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 second quarter fiscal year 2026 earnings call. Thank you for joining us today. On the call with me today, we have Atlassian's CEO and co-founder, Mike Cannon-Brooks, and Chief Financial Officer, Joe Binns. Earlier today, we published the shareholder letter and press release with our financial results and commentary for our second quarter of fiscal year 2026. The shareholder letter is available on the investor relations section of our website, where you will also find our other earnings-related materials, including the earnings press release and supplemental investor data sheet. As always, our shareholder letter contains management, insight, and commentary for the quarter. 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 recently filed annual and quarterly reports. During today's call, 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. A 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, so 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 closed out Q2 with very strong enterprise sales execution and incredible momentum across our business. We surpassed $6 billion in annual run rate revenue, delivered our first ever $1 billion cloud revenue quarter, up 26% year over year, and grew our RPO 44% year-over-year to $3.8 billion. We have strong momentum across our enterprise, AI, and system of work transformations, and you can see this in our numbers. Customers are choosing us for their future in bigger ways and bigger numbers than ever before. Enterprises like Cisco, Expedia, Reddit, and Syncretic Financial rely on Atlassian to power their most critical business processes and workflows. robo surge plus five million monthly active users of our ai capabilities we're seeing firsthand every day how ai is transforming the way that work gets done and we are directly benefiting as a business when we look at the thousands of customers in our software teams using ai code generation tools we found that they create five percent more tasks than jira have 5% higher monthly active users, and expand their Jira seats 5% faster than those who don't use these AI coding tools. As I've said before, AI is the best thing to happen to Atlassian, and the results we're seeing today are no accident. As a long-term focus company, we're now benefiting from years of thoughtful investment across product, R&D, and GTM, which have positioned us to capture this moment. These investments are creating what we believe is a truly differentiated customer experience. First, the data and domain expertise living inside our teamwork graph, which is now well more than 100 billion objects and connections across first and third party tools, enables Robo to deliver real business value that's context aware and actionable for customers across their search, chat and agentic experiences. Second, our decade-long investments in enterprise-grade security, data governance, permissioning capabilities, and compliance enable every organization to securely move work forward at scale while deploying these fantastic new AI capabilities with the trust that they need. We provide a system of work built on deep integration into customer workflows with that compliance, security, and support that enterprises trust built in. Lastly, our unique distribution engine enables us to seamlessly deliver those incredible experiences to over 350,000 customers, including more than 80% of the Fortune 500 and 60% of the Forbes AI50. Customers are realizing the value of our unified system of work and want to continue to partner more closely with us than ever before. And all of this is driving our results. We closed a record number of deals greater than $1 million ACV in Q2. nearly doubling year over year again, as enterprises are choosing to standardize on the Atlassian system of work. In less than three quarters, more than 1,000 customers have upgraded to our main AI monetization driver, the Teamwork Collection, purchasing more than 1 million seats to get the best AI platform and many more AI credits for their agents. As I look across our business, two things are clear. We've never been more of a strategic partner to the biggest businesses in the world, empowering their AI and future work transformations. And our momentum is continuing to grow. This gives us confidence in our road ahead and our long-term opportunity. We are truly transforming how work gets done and solving the toughest human AI collaboration challenges for our customers, and we're doing it every day. We're pushing ahead with strong conviction, and I could not be more bullish about the massive opportunities in front of us as we advance our mission to unleash the potential of every team. With that, I'll pass over to the operator for Q&A.