TEAM

Atlassian remains a structurally excellent software franchise. Revenue grew 19.7% to $5.22B in FY2025, extending a remarkably consistent ramp from $2.09B in FY2021, and gross profit rose 21.5% to $4.32B for an 82.8% gross margin that signals genuine pricing power and a sticky, subscription-based Cloud and Data Center base. Management frames expansion within the existing customer base — particularly customers above $10,000 in Cloud ARR — as the primary growth engine, and the recurring revenue model means new-sales softness shows up only with a lag.

The problem is that the business still does not make GAAP money. Net income was -$257M and operating income -$130M in FY2025 (operating margin -2.5%, net margin -4.9%), and a -$4.24B accumulated deficit plus a -19.1% ROE underscore that profitability has been elusive despite scale. R&D of $2.67B (up 22.2%) is the right strategic spend given the AI repositioning management describes, but it is also why margins stay negative. Operating cash flow of $1.46B confirms the model is genuinely cash-generative — the GAAP loss is largely stock-comp and amortization — which is the bull's redeeming point.