Atlassian Corporation

Good afternoon and thank you for joining Atlassian earnings conference call for the fourth 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 Lam, Atlassian's head of investor relations.

Welcome to Atlassian's fourth 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-Brookes and Chief Financial Officer James Chuong. Earlier today, we published a shareholder letter and press release with our financial results and commentary for our fourth 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 sheets. As always, our shareholder letter contains management insight and commentary for the quarter, but during the call today, we'll have a 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 and our most recently filed annual and quarterly reports. During today's call, we will also discuss non-GAAP financial metrics. These non-GAAP financial metric 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. 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, Q4 was another outstanding quarter, capping off an incredible fiscal year for Atlassian. Total revenue grew 28% to $1.8 billion, cloud revenue surged to $1.2 billion as growth accelerated again, up 31% year-over-year. RPO grew 44% year-over-year to $4.8 billion. We delivered a gap operating margin of 12%. We're firing across all of our strategic priorities, enterprise, the system of work, and AI, all while driving durable, profitable growth. In the enterprise, we had an all-time record quarter at the $1 million level, the $3 million level, and the $5 million level of deals. With our $3 million ARR customers growing over 50% year on year, and our $5 million ARR customers growing over 70%. In the Atlassian system of work, leading enterprises like Google Cloud are using our platform to power the way their teams collaborate. And in AI, Robo is now used by over 80% of the Fortune 500. Rovo Assisted Actions grew 50% over the prior quarter and Rovo Adopters, that is customers using Rovo, continue to grow their ARR at more than twice the rate of non-adopters. When we think about what AI is doing for Atlassian, the results speak for themselves. Customers are getting real value from the AI embedded directly into their workflows and it's translating into direct growth in our business. customers are committing more deeply to the Atlassian platform because of the value delivered. We're seeing longer customer commitments, larger deals, stronger seed expansion, great cross-sell momentum, and higher NRR. Last quarter, we recognized customers like NVIDIA and ResMed at Team 26 for how they're putting the Atlassian platform to work in the AI era to drive their businesses using the teamwork graph. The reason customers like these and many more are getting so much value from Atlassian comes down to a key structural advantage and that advantage is context. We believe models will keep improving and organizations will hire that intelligence by the token. The context, their internal knowledge, experience and memory is much harder for organizations to build and it cannot be hired. With the teamwork graph, we have 25 years of deep data about work. That's enabled us to build one of the best context graphs that exists for enterprise knowledge, now spanning over 200 billion objects and connections. For agents grounded in the teamwork graph, organizations can see up to 44% more accurate answers while consuming 48% fewer tokens. In short, it enables to get customers results from their AI that are cheaper, better, and faster. Context is a clear compounding differentiator. I shared more on this in my investor loom. As you've read in our shareholder letter, we're executing well on our long-term strategy from a position of strength and we're seeing this play out each quarter in our strong results. And the best is truly yet to come for Atlassian. With that, I'll pass the call to the operator for Q&A.