By Anita Hamilton and Kit Norton

Shares of Atlassian skyrocketed on Friday after the workflow software company beat both earnings and revenue expectations for its fiscal third quarter ended in March.

Atlassian reported revenue of $1.787 billion, exceeding estimates of $1.696 billion. Earnings of $1.75 a share beat the $1.33 expected.

For the fiscal year ending in June, the company raised its guidance for overall revenue growth to 24%, up from the 22% it forecast last quarter. Cloud and data center revenue estimates also rose modestly, as did the outlook for gross and operating margins on an adjusted basis.

Atlassian CEO and co-founder Mike Cannon-Brookes attributed the earnings beat to customers signing bigger, longer term commitments while connecting "their teams and workflows on our AI-powered platform."

A Morgan Stanley analyst team, led by Keith Weiss, on Friday wrote that Atlassian's quarterly cloud revenue growing 29%, the biggest expectations beat in four years, "should yield a near-term pop" for the stock.

Atlassian stock surged 30% to $88.88 on Friday, notching its largest daily percentage increase on record, according to Dow Jones Market Data.

However, the stock remains 81% below its record closing high of $458.13 from Oct. 29, 2021. Shares of Atlassian have fallen 45% in 2026 and have declined 57% over the past 12 months.

The maker of workplace software programs Trello, Jira, and Confluence has been a victim of the broader selloff in software stocks on fears that AI will render them obsolete.

The company announced in March that it was laying off about 1,600 workers, or one-tenth of its staff. "We are doing this to self-fund further investment in AI and enterprise sales, while strengthening our financial profile," Cannon-Brookes wrote in a March 11 blog post.

"Over the past year, Atlassian has been the poster child for investor fears on the potential negative impacts of Generative AI on software," Weiss wrote. "The acceleration in cloud revenues in Q3, and perhaps more importantly the drivers of growth, should help investors better understand the fallacy of that bear case thesis."

Write to Anita Hamilton at anita.hamilton@barrons.com and Kit Norton at kit.norton@barrons.com

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May 01, 2026 16:33 ET (20:33 GMT)

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