Atlassian (TEAM) Financials

Atlassian (NASDAQ: TEAM) has shown steady revenue growth over the past four years, with operating revenue increasing from approximately $807 million in Q1 2023 to $1.38 billion in Q4 2025. Despite the revenue growth, the company has consistently reported net losses each quarter, though the magnitude of losses has seen some fluctuations.

Key positive trends for Atlassian include:

• Strong and consistent revenue growth across the past four years, reaching $1.38 billion in Q4 2025, up from $807 million in Q1 2023.
• Gross profit has increased proportionally with revenue, indicating maintained or improved product/service margins.
• Growing cash flow from operating activities, with $375 million generated in Q4 2025, showing solid cash generation capacity despite net losses.
• Substantial non-cash adjustments positively impacting operating cash flow, suggesting effective management of non-cash items like stock-based compensation.
• A strong cash and equivalents position, rising from $1.46 billion in Q1 2023 to about $2.66 billion by Q3 2025, supporting liquidity and operational flexibility.
• Significant investment in R&D and marketing, demonstrating commitment to product innovation and market expansion, with R&D expense increasing from $399 million in Q1 2023 to $700 million in Q4 2025.

Neutral observations include:

• Operating costs related to revenue have grown over time but at a slower pace than revenue, which is typical for a scaling tech company.
• Interest and investment income exceed interest expense each quarter, indicating positive net financial income supporting earnings.
• The company continues repurchasing common equity aggressively, with a repurchase of $392 million in Q4 2025, which could signal confidence in valuation but also reduces cash buffers.
• There are fluctuations in net income tax expense, with some quarters showing tax benefits and others tax charges, impacting net income volatility.

Negative factors investors should be aware of:

• Persistent net losses over the quarters analyzed, with Q4 2025 posting a net loss of approximately $24 million and many prior quarters showing losses exceeding $100 million.
• High and rising total operating expenses (including SG&A, marketing, and R&D), which have increased to nearly $1.18 billion in Q4 2025, surpassing gross profit and leading to operating losses.
• Total operating income remains negative each quarter, indicating ongoing challenges in achieving profitability from core operations.
• Net change in cash and equivalents has been negative or volatile in several recent quarters, notably a $148 million decrease in Q4 2025, reflecting outflows from financing and investing activities.
• Increasing long-term debt obligations, reaching approximately $987 million by Q3 2025, potentially increasing financial risk.
• Large acquisition and investment outflows, such as $827 million in acquisitions in Q2 2024, which could strain liquidity if not accretive.

In summary, Atlassian demonstrates robust revenue and gross profit growth, strong cash flow from operations, and solid liquidity. However, the company continues to face challenges achieving net profitability, with high operating expenses and persistent losses. Investors should monitor Atlassian's ability to control costs and turn profitable while sustaining growth.