Atlassian Says AI Tailwind Is Building as Cloud Growth and Rovo Adoption Accelerate

AI adoption is accelerating: Rovo-assisted actions rose 50% quarter over quarter, agentic automations tripled in six months, and 80% of Fortune 500 companies use Rovo. Atlassian plans to begin charging for certain metered AI capabilities in December.

Cloud momentum remains strong: Fiscal fourth-quarter revenue increased 28% to $1.8 billion, while cloud growth accelerated to 31%. Data Center-to-cloud migrations remain a major opportunity, with migrated customers spending an average of 1.75 times more after three years.

Enterprise expansion supports the outlook: Atlassian is growing its salesforce and sees cross-selling potential across its product collections, particularly Jira and Service Collection. Management is targeting a positive 4.5% GAAP operating margin in fiscal 2027 while continuing to invest in AI.

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Atlassian (NASDAQ:TEAM) CFO James Chuong told investors at Citi's TMT conference that artificial intelligence is becoming a tailwind for the company, citing increased adoption of its Rovo AI capabilities, expanding cloud usage and demand for its bundled product collections.

Chuong, who said he had been in the CFO role for about five and a half months, said his early experience has largely reinforced the company's existing strategy. Atlassian's priorities include AI, its "system of work" strategy, enterprise expansion and durable profitable growth, he said.

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"AI is going to be a tailwind for Atlassian," Chuong said, pointing to the company's Teamwork Graph, which connects enterprise work, context and workflows across its platform. He said the graph can power AI use cases across organizations rather than only individual productivity tools.

Chuong highlighted Atlassian's fiscal fourth-quarter results, including $1.8 billion in revenue, up 28% year over year. Annual recurring revenue grew 23%, while remaining performance obligations rose 44%, he said.

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Standalone seat growth in Jira, Confluence and Jira Service Management exceeded the company's expectations during the quarter, according to Chuong. He also said revenue growth reaccelerated in Atlassian's Service Collection business.