Atlassian (TEAM) Q3 2026 earnings report

Atlassian Shares of the software company rose more than 20% on Friday on top of Wall Street’s expectations for the fiscal third quarter report strong cloud growth and data center revenue.

Here’s how the company compares to LSEG forecasts:

• Earnings per share: $1.75 vs expected $1.32
• Revenues: 1.79 billion dollars, while the expectation was 1.69 billion dollars

Atlassian’s shares have been among those hardest hit by the “SaaS apocalypse” this year, with its shares down more than 45% year to date.

The phrase refers to sales in tech stocks following the release of software built on artificial intelligence models from companies such as OpenAI and Anthropic. Software executives responded by saying key business metrics had not worsened.

In March, Atlassian laid off about 10% of its workforce, or about 1,600 people, and said the move would allow it to “self-fund further investment in AI and enterprise sales while strengthening our financial profile.”

Atlassian CEO Mike Cannon-Brookes told CNBC on Thursday that the company saw “incredible strength” in its business during the quarter, and that concerns plaguing the broader software industry may be exaggerated.

“We’re seeing employment numbers consistently strong in areas where people are concerned, so I’m not sure those fears will continue,” Cannon-Brookes said in an interview on CNBC’s “Closing Bell: Overtime.” he said. “They are certainly not playing by Atlassian’s numbers in terms of continuing to expand our customers’ use of our software as a strategic partner in their business.”

Atlassian’s revenue grew 32% year over year in the quarter ending March 31. The cloud was a bright spot in the report; Its revenue increased by 29% annually to $1.13 billion. Analysts were expecting $1.08 billion in cloud sales, according to FactSet.

Data center revenue came in at $561 million, missing expectations of $515 million.

The company raised its full-year forecast for cloud and data center revenue growth, forecasting 26.5% and 21.5%, respectively.

Atlassian’s Teamwork Collection, a suite of apps, is “emerging as a key growth engine” as customers upgrade to earn more AI credits, analysts at BTIG said in a research note Friday. The firm has a buy rating on Atlassian’s shares.

“While it may take more time and practice to clearly establish the risk of AI disruption, this edition demonstrates that TEAM is transforming this threat into a distinct competitive advantage by leveraging the unique context of the Teamwork Graph,” BTIG analysts wrote. “We expect this fundamental momentum to extend beyond the +25% AH move.”

Atlassian posted a net loss of $98.39 million, for a loss of 38 cents per share; That widened from a year ago, when it reported a net loss of $70.81 million, for a loss of 27 cents per share.

CNBC’s Jordan Novet contributed to this article.