Atlassian Corp. has recently released its 10-Q report, providing a detailed look at the company's financial performance and operations. Atlassian is a collaboration software provider that offers a range of products, including Jira, Confluence, Loom, Jira Service Management, Bitbucket, Compass, Jira Product Discovery, Jira Align, Focus, Talent, Trello, and Guard. The company generates its revenues primarily through subscription fees, with a focus on Cloud offerings. Atlassian has announced plans to end-of-life its Data Center deployment offering, with a gradual phase-out of term licenses and support services.
In the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section, Atlassian highlights its mission to unleash the potential of every team and emphasizes the interconnected portfolio of apps, AI agents, and products. The company's subscription revenues primarily come from cloud-based arrangements, with additional revenues from on-premises term license agreements and premier support services. Atlassian's financial performance is also impacted by the evolving macroeconomic environment, inflationary pressures, interest rate policy, changes in trade policies, political instability, and geopolitical tensions.
During the three months ended September 30, 2025, Atlassian initiated a resource rebalancing effort, resulting in the elimination of certain roles and the optimization of its real estate footprint. This led to severance and other termination benefits of $27.9 million, stock-based compensation of $1.4 million, and impairment charges for operating lease right-of-use assets and leasehold improvements of $26.3 million.
Atlassian uses key metrics to evaluate its business, including the total customer base and free cash flow. As of September 30, 2025, the company had more than 300,000 customers, with the majority of its Cloud revenue coming from customers with greater than $10,000 in Cloud ARR. Free cash flow, a measure of liquidity, increased by $40.3 million during the three months ended September 30, 2025, compared to the same period in 2024.
The company's sources of revenues include subscription revenues from cloud-based and on-premises arrangements, with plans to discontinue its Data Center deployment offering in the future. Other revenues stem from the sale of third-party apps, advisory services, and training services. Cost of revenues primarily consists of expenses related to compensation, cloud infrastructure hosting, payment processing fees, consulting and contractors costs, amortization of acquired intangible assets, IT program expenses, and facilities and related overhead costs.
Atlassian's 10-Q report provides a comprehensive overview of its financial condition, operational activities, and strategic initiatives, offering investors and stakeholders valuable insights into the company's performance and future prospects. The market has reacted to these announcements by moving the company's shares 0.87% to a price of $160.67. If you want to know more, read the company's complete 10-Q report here.
