TEAM$86.23

Atlassian Corporation Plc

Last Updated

May 21, 2026about 2 months ago

Moat & Trend

Management

Strong

AI Impact

Competitive Radar

Moat Score

58/100

Executive Summary

Atlassian has a real but not dominant moat built on workflow embedment, a trusted developer and IT brand, and a broad app ecosystem. Jira, Confluence, and Jira Service Management create meaningful switching friction once teams standardize, and the marketplace adds incremental value over time. However, the company lacks a true network monopoly, meaningful cost leadership, or efficient-scale protection, and it faces persistent competition from Microsoft, ServiceNow, GitLab, Asana, monday.com, and others. The moat is therefore best described as narrow: durable enough to support long reinvestment, but not so deep that rivals cannot pressure growth or pricing. Cloud migration and enterprise expansion make the moat slightly stronger, so the trend is positive.

Network Effects

Ecosystem Reinforcement

Pillar Strength

6.5/10

Atlassian benefits from ecosystem effects more than from classic direct network effects. Jira, Confluence, Bitbucket, and Jira Service Management are deeply embedded across development and IT teams, and the marketplace of apps, integrations, templates, and implementation partners makes the core products more useful as adoption broadens. That said, the effect is indirect and not self-reinforcing enough to create a dominant flywheel. Customers often multi-home across adjacent tools, and teams can adopt point solutions without needing the whole Atlassian stack. The ecosystem matters, but the value added by each incremental user or app is meaningful rather than decisive, leaving the network effect real but moderate.

Switching Costs

Workflow Lock-In

Pillar Strength

7.5/10

Once an organization standardizes on Jira workflows, Confluence knowledge bases, and service-management queues, switching becomes painful. Migration requires moving years of project history, rebuilding automations, retraining employees, and revalidating integrations with identity, security, and DevOps tools. Those costs are operational and behavioral rather than contractual, but they are still material, especially in larger engineering and IT departments. Atlassian also deepens stickiness through cloud migration, which embeds users in a broader admin, billing, and access-management environment. Still, many customers begin with a subset of products, can trim seats, and can add competing tools for specialized use cases. Switching costs are meaningful, but not absolute.

Intangible Assets

Trusted Developer Brand

Pillar Strength

7.5/10

Atlassian’s strongest intangible asset is its brand among software developers and IT operators. Jira and Confluence are widely recognized defaults for project tracking, documentation, and incident workflows, giving the company a trust premium in buying decisions. The firm also has proprietary product know-how, a large installed base, and a strong partner ecosystem that reinforce credibility. However, this edge is not legally fortified like a patent moat, and it is not exclusive enough to prevent imitation. Competitors can replicate features, target narrower workflows, or bundle alternatives into larger suites. The brand still supports adoption and moderate pricing power, but the advantage rests more on reputation and execution than on hard legal protection.

Cost Advantages

Efficient SaaS Delivery

Pillar Strength

4/10

Atlassian operates an efficient software model, but that is different from a durable cost advantage. Its cloud architecture and historically self-serve go-to-market motion reduce reliance on expensive field sales, helping the company scale customers with relatively favorable economics. High gross margins and product-led acquisition support strong operating leverage over time. Even so, rivals with deep pockets can match or subsidize similar products, and there is no unique input, manufacturing scale, or distribution bottleneck that structurally lowers Atlassian’s costs versus peers. The company can price competitively because of its model, but competitors can also optimize their own cloud and sales motions. The result is a modest, not decisive, cost edge.

Efficient Scale

Crowded Software Market

Pillar Strength

3.5/10

Atlassian does not operate in a natural monopoly or a market where a small number of players can efficiently serve nearly all demand. Collaboration, project management, and IT service management are crowded categories with strong competitors including Microsoft, ServiceNow, GitLab, Asana, monday.com, and open-source alternatives. Atlassian is large enough to enjoy meaningful infrastructure and product scale, but the market can support multiple winners, and new entrants can still find profitable niches without facing severe economic disadvantages. Customer trust and installed base help, yet they do not exclude rivals. In this context, scale is beneficial but not scarce. Efficient scale therefore contributes little to the moat relative to switching costs and brand.

Management Quality Assessment

Evaluating leadership track record, capital allocation, and governance

Verdict

Strong

Atlassian’s management has a strong founder-led track record: Michael Cannon-Brookes and Scott Farquhar have run the company since inception, giving it unusually long strategic continuity and a consistent product-led culture. Capital allocation has been disciplined overall, with selective tuck-in acquisitions aimed at filling product gaps (notably Opsgenie, Mindville and Loom) rather than empire-building; the company has prioritized reinvestment over dividends or large buybacks. Insider ownership is still meaningful, though the exact recent trend is mixed because founder sales and equity dilution both matter. CEO pay is high in absolute terms but largely equity-based; alignment looks acceptable. The main governance caution is the dual-class control structure.

Key Highlights

Atlassian has been led by its co-founders for its entire public life, which has supported a coherent long-term product roadmap and a cloud migration strategy.
Management has generally avoided large, transformative deals; the biggest purchases were strategic product extensions such as Opsgenie, Mindville and Loom.
The company has not used dividends or heavy buybacks as a core strategy, choosing to reinvest cash into R&D, cloud infrastructure and go-to-market expansion.
Founder control remains significant through a dual-class structure, and insider ownership is still meaningful, but ongoing stock-based compensation has been a persistent dilution offset.

AI Impact Assessment

Evaluating how AI strengthens or disrupts existing moat pillars

AI Opportunity

6/ 10

AI Threat

6/ 10

Net AI Impact

0Neutral

Net Pressure. Atlassian’s moat rests on workflow switching costs, deep penetration in engineering and IT teams, and an ecosystem of integrations and templates. AI can reinforce that moat if it improves search, summarization, ticket triage, and knowledge discovery across Jira and Confluence, because the company sits on rich proprietary workflow and collaboration data. That said, the AI layer itself is not hard to copy, and many core use cases—project tracking, document drafting, simple knowledge management—are moving toward commodity features bundled into broader suites or AI-native tools. Fact: Atlassian has launched Atlassian Intelligence and Rovo; inference: this helps retention more than it creates a new moat. Key near-term uncertainty is whether AI meaningfully drives seat expansion or merely preserves existing usage.

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Last Updated

May 21, 2026about 2 months ago

Target Price

Analyst Consensus

Buy33 analysts

FAIR VALUE

Financial Strength

Financial Score

61/100

Executive Summary

Atlassian’s strongest attribute is its durable cash generation, with operating cash flow and free cash flow remaining robust despite softer TTM results. Revenue has expanded strongly over time and reaccelerated recently, while gross margins stay exceptional, supporting a high-quality software model. However, earnings conversion remains weak: operating losses persist, net income is negative, and rising R&D and SG&A have pressured margins. The balance sheet is liquid but somewhat stretched, with negative working capital, rising current liabilities, and deeply negative tangible equity. Leverage improved through FY2025 but has since worsened, and returns on capital remain negative. Overall, TEAM presents a high-growth, cash-generative profile with meaningful profitability and liquidity tensions, consistent with its mid-range to stronger ratings.

Income Statement

Revenue · Margins · Profitability

Section Score

5.5/10

Assuming Atlassian is a software platform company, the top line shows strong multi-year expansion, with revenue rising from $2.1bn to $5.2bn and TTM growth re-accelerating to 24% versus 19.7% in FY25. Gross margin remains excellent and fairly stable around 82–84%, but operating margin has deteriorated as R&D and SG&A have grown faster than revenue, leaving persistent operating losses. Net income is also negative each year, with TTM worsening versus FY25, while large swings in other income/expense and tax lines add noise and do not change the core loss profile. Free cash flow remains a major strength, though TTM softened. Overall, this is a high-growth, high-margin business with weak earnings conversion and meaningful cost discipline risks.

Financials are in millions USD unless otherwise specified

Metric	TTM	FY 2025	FY 2024	FY 2023	FY 2022	FY 2021
Period Ending	Mar 31, 2026	Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Revenue	6,190	5,215	4,359	3,535	2,803	2,089
Revenue Growth (YoY)	24.02%	19.66%	23.31%	26.11%	34.16%	357.08%
Net Income	-216.81	-256.69	-300.52	-486.76	-519.51	-578.98
Profit Margin	-3.50%	-4.92%	-6.89%	-13.77%	-18.53%	-27.71%

Data as of Mar 31, 2026

Balance Sheet

Assets · Liabilities · Equity

Section Score

6/10

Atlassian’s balance sheet remains liquid overall, with cash and short-term investments of $2.9 billion in FY2025 and total assets of $6.0 billion, but working capital is negative: current assets of $3.9 billion are below current liabilities of $3.2 billion, and TTM current liabilities have risen to $3.3 billion versus $2.3 billion of current assets. The liability structure is still manageable, with total debt near $1.2 billion and strong cash coverage, but deferred revenue and accrued expenses are large and growing. Shareholders’ equity expanded steadily through FY2025 to $1.35 billion, then fell to $879 million TTM, while tangible book remains deeply negative, reflecting substantial goodwill and intangibles. Overall, the balance sheet is solid but somewhat stretched structurally.

Financials are in millions USD unless otherwise specified

Metric	TTM	FY 2025	FY 2024	FY 2023	FY 2022	FY 2015
Period Ending	Mar 31, 2026	Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2015
Total Current Assets	2,334	3,891	3,076	2,736	1,897	238.63
Total Assets	5,651	6,042	5,212	4,107	3,327	397.16
Total Current Liabilities	3,323	3,181	2,610	2,028	1,594	188.15
Total Liabilities	4,772	4,696	4,179	3,452	2,999	207.11

Data as of Mar 31, 2026

Cash Flow Statement

Operations · Investing · Financing

Section Score

7/10

Cash generation is strong and generally improving, with operating cash flow rising from $129.5 million in FY2016 to $1.46 billion in FY2025, though TTM CFO slipped 17.3% to $1.25 billion from the latest FY. Free cash flow remains robust at $1.42 billion in FY2025 and $1.21 billion TTM, comfortably above capital spending of about $44 million, which suggests reinvestment is still disciplined. However, quality is mixed because stock-based compensation has climbed sharply to $1.36 billion and working capital swings remain material, especially receivables and unearned revenue. Capital allocation has leaned heavily toward buybacks and a large acquisition in FY2024, while debt activity was limited. Overall, cash production is solid, but not unusually clean.

Financials are in millions USD unless otherwise specified

Metric	TTM	FY 2025	FY 2024	FY 2023	FY 2021	FY 2016
Period Ending	Mar 31, 2026	Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2021	Jun 30, 2016
Operating Cash Flow	1,249	1,460	1,448	868.11	789.96	129.54
Operating Cash Flow Growth	-17.34%	0.84%	66.82%	9.89%	509.81%	31.89%
Free Cash Flow	1,205	1,416	1,415	842.3	758.44	95.33
Free Cash Flow Growth	-14.89%	0.03%	68.00%	11.06%	695.60%	43.47%

Data as of Mar 31, 2026

Key Ratios

Liquidity · Leverage · Efficiency · Returns

Section Score

4.5/10

Atlassian shows mixed operating quality, with clear pressure in liquidity and profitability. Current and quick ratios were around 1.2 to 1.35 for most of the period, but the latest readings fell to 0.7 and 0.62, indicating weaker short-term coverage. Leverage improved through FY2025, with debt-to-equity declining from 3.89 to 0.88, but it has risen again to 1.36, so the balance sheet is less comfortable than before. Asset turnover has been fairly steady near 0.9 to 1.0, suggesting reasonable use of assets. However, ROE, ROA, ROIC, and ROCE have all stayed negative, showing that returns on capital remain under pressure despite stronger free cash flow generation.

Ratios are dimensionless unless otherwise noted

Metric	Current	FY 2025	FY 2024	FY 2023	FY 2022	FY 2021
Period Ending	May 20, 2026	Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Debt / Equity Ratio	1.36	0.88	1.16	1.83	3.89	—
Quick Ratio	0.62	1.17	1.14	1.28	1.11	—
Current Ratio	0.7	1.22	1.18	1.35	1.19	—
ROEReturn on Equity (ROE)	-17.56%	-21.58%	-35.62%	-99.13%	-317.38%	—
ROAReturn on Assets (ROA)	-4.98%	-6.01%	-8.84%	-14.53%	4.65%	—
ROICReturn on Invested Capital (ROIC)	-8.12%	-15.67%	-23.34%	-38.68%	11.20%	—
ROCEReturn on Capital Employed (ROCE)	-8.52%	-4.77%	-5.00%	-18.11%	8.09%	—

Data as of May 20, 2026

Growth

Revenue · EPS · Valuation · Estimates

Section Score

7.5/10

Historical results run through FY2025, while FY2026-FY2027 are analyst-covered forecast years. Revenue grew every year, but the pace decelerated from 34.2% in FY2022 to 19.7% in FY2025 before reaccelerating to 26.5% in FY2026 and then moderating to 15.7% in FY2027. EPS improved gradually from negative levels through FY2025, then is expected to turn sharply positive in FY2026 and rise again in FY2027, suggesting margin expansion and operating leverage. Forward P/E falls from 15.35 to 13.56, which looks reasonable against the projected growth profile. Analyst sentiment is constructive, with a Buy consensus, 33 analysts on targets, and a fairly stable recommendation mix despite a mild shift from Strong Buy toward Hold.

Analyst Price Targets

Low$80.68-6.44%

Median$120+39.16%

Average$143.51+66.43%

High$480+456.65%

BuyConsensus rating based on analyst coverage

33 analysts

Recommendation Trends

Rating	May '26	Apr '26	Mar '26	Feb '26	Jan '26	Dec '25
Strong Buy	5	4	6	6	7	7
Buy	13	14	14	14	14	14
Hold	4	4	4	4	6	6
Sell	0	0	0	0	0	0
Strong Sell	0	0	0	0	0	0
Total	22	22	24	24	27	27

Financial Forecast

Metric	FY 2027	FY 2026	FY 2025	FY 2024	FY 2023	FY 2022	FY 2021
Revenue	7.63B	6.60B	5.22B	4.36B	3.53B	2.80B	2.09B
Revenue Growth	+15.66%	+26.51%	+19.66%	+23.31%	+26.11%	+34.17%	+29.42%
EPS	6.36	5.62	-0.98	-1.16	-1.90	-2.05	-2.32
EPS Growth	+13.23%	—	—	—	—	—	—
Forward P/E	13.6x	15.3x	—	—	—	—	—

Revenue in USD · EPS per share · Price targets in USD

Data as of FY 2025 · Italic columns are analyst estimates

Fair Value Estimation

P/S · +26.4% Margin of Safety · Undervalued

AI Fair Value Estimate (P/S)

$109vs$86.23

Margin of Safety+26.4%

Undervalued — Margin of safety detected

Atlassian’s EBITDA is still negative, so EV/EBITDA is not a clean valuation anchor despite the preselection. A sales-based comp framework is more reliable for a high-growth software platform where revenue expansion and eventual margin conversion matter more than near-term EBITDA volatility. The business is still scaling, but the market is already valuing it on forward operating leverage rather than current earnings.

AI Valuation Verdict

I value Atlassian on a sales multiple because current EBITDA is still negative, making EV/EBITDA too unstable as a primary anchor. Using a 10-year revenue scaling backdrop is less important here than the market’s willingness to pay for durable growth and eventual margin expansion. The implied value is most sensitive to the peer sales multiple range; if the company’s growth re-accelerates and operating leverage improves, upside to the low-100s is plausible. If growth slows materially or margin conversion stalls, the valuation could compress back toward the current mid-single-digit sales multiple.

Comparable Companies

Company	Ticker	Metric	Multiple	Implied Price
Salesforce	CRM	P/S (TTM)	4.0x	$94.8
ServiceNow	NOW	P/S (TTM)	4.4x	$104.3
Datadog	DDOG	P/S (TTM)	4.6x	$109
GitLab	GTLB	P/S (TTM)	4.8x	$113.8
Monday.com	MNDY	P/S (TTM)	5.2x	$123.2

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Disclaimer: The analysis on this page is generated by AI and is provided for informational purposes only. It does not constitute financial advice, investment recommendations, or an offer to buy or sell any security. Always conduct your own due diligence and consult a qualified financial adviser before making any investment decisions.