Atlassian Corporation Plc (TEAM): BCG Matrix [Dec-2025 Updated]

You're looking at Atlassian Corporation Plc's portfolio right now, and frankly, the mandatory cloud migration makes this BCG Matrix defintely straightforward: the future is all about the cloud. We see clear Stars like the Atlassian Cloud Platform, which grew 26% year-over-year, fueled by the steady $1.4 Billion in Free Cash Flow generated by your Cash Cows like the core Jira and Confluence base. The old Server Products are officially Dogs, hitting $0.00 revenue, which means management is aggressively funding Question Marks like Loom and Compass to secure the next growth wave, even as AI (Rovo) rockets ahead with 3.5 million users. This map shows you exactly where the capital is flowing. That's the story in a nutshell.

Background of Atlassian Corporation Plc (TEAM)

You're looking at Atlassian Corporation Plc (TEAM) as of late 2025, and the story is one of continued, though perhaps decelerating, growth fueled by the cloud transition and a major push into artificial intelligence. As a seasoned analyst, I can tell you the numbers from the close of fiscal year 2025 (FY25) paint a clear picture of a company that remains a powerhouse in team collaboration software.

For the full fiscal year 2025, Atlassian Corporation Plc brought in total revenue of approximately $5.2 billion, marking a year-over-year increase of about 19.66% over the prior year's $4.36 billion. This growth rate, while still healthy, is a bit slower than the 23.31% growth seen in FY2024. The fourth quarter of FY25 (Q4 FY25) specifically saw total GAAP revenue hit $1,384.3 million, which was up 22% compared to Q4 FY2024.

When we break down where that money is coming from, it's clear the subscription model is dominant. The segment labeled 'License and Service' was the behemoth, generating $4.93 billion in FY2025, which accounted for 94.54% of the company's total revenue. This segment, which includes both Cloud and Data Center subscriptions, saw impressive growth of 25.64%. The Cloud business itself was a major driver, with Q4 FY25 Cloud revenue reaching about $928 million, a 26% jump year-over-year. To put that in perspective, Cloud products represented about 67.0% of the total GAAP revenue in that final quarter.

The core product suite-Jira for project tracking, Confluence for knowledge sharing, and Bitbucket for code management-is now being deeply integrated with their AI assistant, Rovo. Atlassian reported reaching 2.3 million monthly active users for its AI capabilities by the end of Q4 FY2025. This focus on embedding AI into the 'Atlassian System of Work' is a key strategic investment, alongside serving the enterprise. The company serves a massive base, with over 300,000 customers, and a significant footprint in the largest corporations, as 85% of Fortune 500 companies use their products.

On the profitability front, non-GAAP operating margin showed tangible improvement, moving from 20% in Q4 FY2024 to 24% in Q4 FY2025. For the full fiscal year, the non-GAAP operating margin settled at 25%. Cash generation was also strong, with Atlassian generating over $1.4 billion in free cash flow for FY2025. That Q4 performance alone yielded $360.3 million in free cash flow, representing a 26% margin. Still, on a GAAP basis, the company reported a net loss for the full year, which is something to keep an eye on as you assess capital allocation decisions.

Atlassian Corporation Plc (TEAM) - BCG Matrix: Stars

You're looking at the engine room of Atlassian Corporation Plc's current growth, the segment where high market share meets a rapidly expanding market. These are the products demanding significant investment to maintain their leadership position, but they are the ones that will fund the company tomorrow.

The Atlassian Cloud Platform is definitely showing the required high growth. For the first quarter of fiscal year 2026, Cloud revenue hit $998 million, marking a 26% year-over-year increase. Management has since raised the full fiscal year 2026 Cloud revenue growth outlook to approximately 22.5% year-over-year, reflecting stronger-than-expected migration momentum from Data Center. This migration is a key driver, with nearly 500,000 users accelerating their move to cloud in the past year through an early pilot of the FastShift tool.

The integration of AI Capabilities (Rovo) is proving to be a massive catalyst for adoption. As of Q1 FY26, Atlassian surpassed 3.5 million monthly active users (MAU) of its AI features across the platform. This usage is expanding at a rapid clip, showing a 50% quarter-over-quarter growth in MAU. The platform's Teamwork Graph, which connects work and context, now tracks over 100 billion objects and relationships, fueling this AI value.

Within the service management space, Jira Service Management (JSM) Cloud is a core component of the new Service Collection. Today, over 65,000 customers, which includes 50% of the Fortune 500, are leveraging JSM. This product is central to capturing market share in the ITSM segment, supported by the broader AI-driven Service Collection offering.

The focus on Enterprise Cloud Subscriptions is securing high-value, sticky accounts. The overall enterprise sales execution and migration momentum drove total revenue to over $1.4 billion, up 21% year-over-year in Q1 FY26. Furthermore, the backlog of subscription orders, or Remaining Performance Obligations (RPO), accelerated to $3.3 billion, a 42% year-over-year increase, signaling robust future commitment from these large customers. The success of the Teamwork Collection, launched less than two quarters prior, has driven a double-digit percentage increase in user adoption and upgrades to higher value additions.

Here is a quick summary of the key performance indicators for these Star products as of Q1 FY26:

The strategy here is clear: invest heavily to keep the market share lead while the market expands. You see this commitment in the fact that over 80% of the Fortune 500 now rely on the Atlassian AI-enabled cloud platform.

The growth is also reflected in the overall financial health supporting these investments:

• Total Revenue for Q1 FY26 was $1,433 million, up 21% year-over-year.
• Non-GAAP Operating Margin for Q1 FY26 was 23%.
• Cash flow from operations reached $129 million in the quarter.

Atlassian Corporation Plc (TEAM) - BCG Matrix: Cash Cows

You're looking at the core engine of Atlassian Corporation Plc's financial stability, the products that generate more cash than they consume, even as their underlying markets mature. These are the bedrock units that fund the big bets on AI and new Collections.

Overall Subscription Revenue Base:

Atlassian Corporation Plc closed Fiscal Year 2025 vaulting past $5.2 billion in total revenue. The cash generation from this base was substantial, with the company generating over $1.4 billion in Free Cash Flow for FY25. This cash flow is what you use to fund the significant Research and Development (R&D) and strategic acquisitions, keeping the company's growth engine running without constant reliance on external capital markets.

Data Center Product Line:

The Data Center product line, while facing a planned end-of-life as customers migrate to the Cloud, still represents a significant, high-margin cash stream. For the fourth quarter of fiscal year 2025, this segment brought in $380.8 Million in revenue. This figure is notable because it was achieved while the company actively encourages migration away from it, showing the deep installed base and the high value customers place on self-managed deployments until migration is complete.

Jira Software and Confluence Core:

Jira Software and Confluence are the historical anchors here. They maintain a dominant position in their respective spaces, which translates directly into stable, recurring revenue. The stickiness of these core products is evident in the Cloud Net Revenue Retention (NRR) rate, which stood at approximately 120%. This means revenue from existing Cloud customers grew by twenty percent in a year, even before aggressive new customer acquisition efforts, which is the hallmark of a product with high inherent value and low growth-stage promotion costs.

The stability of the core offering is best seen when you look at the revenue breakdown for the quarter:

Atlassian Marketplace:

The Atlassian Marketplace represents a mature ecosystem where third-party developers build on top of the core platform. Atlassian captures high-margin transaction fees and services revenue from this activity. In Q4 FY25, this segment generated $75.8 Million. This revenue stream requires minimal direct investment from Atlassian Corporation Plc to support the core product, making it a pure cash generator that supports the overall corporate structure.

The key characteristics supporting the Cash Cow classification for these units are:

• Cloud Net Revenue Retention (NRR) of approximately 120%.
• Total FY25 Free Cash Flow generation of over $1.4 billion.
• Data Center revenue of $380.8 Million in Q4 FY25, despite migration efforts.
• Marketplace and Services revenue of $75.8 Million in Q4 FY25.

Finance: draft a sensitivity analysis on Data Center revenue decline rate versus Cloud NRR growth by next Tuesday.

Atlassian Corporation Plc (TEAM) - BCG Matrix: Dogs

The Dogs quadrant in the Boston Consulting Group Matrix represents business units or products operating in low-growth markets with low relative market share. For Atlassian Corporation Plc, these units are candidates for divestiture or minimization due to their inability to generate significant cash flow or growth, often acting as cash traps.

Server Products

The transition away from on-premise Server offerings is a definitive move to eliminate a Dog category. The financial impact of this end-of-life (EOL) strategy is quantifiable in the Maintenance revenue line item. In fiscal year 2025, Atlassian Corporation Plc reported that Maintenance revenue decreased by 100%, moving from $177.23 million in fiscal year 2024 to $0.00 in fiscal year 2025. This complete cessation of Maintenance revenue reflects the successful execution of the Server EoS (end-of-support) plan, which concluded in Q3'24. The revenue impact from event-driven purchasing related to the Server EoS in the prior year partially offset the increase in gross margin in Q3'25. This product line is no longer a cash consumer or earner, but a closed chapter.

Legacy Perpetual Licenses

Legacy Perpetual Licenses represent the harvest strategy component of this quadrant. While the overall License and Service segment showed substantial growth, the perpetual component is now considered negligible. The License and Service segment generated $4.93 billion in fiscal year 2025, representing 94.54% of total revenue. This growth was driven by the migration to Cloud and Data Center offerings, which are now the primary focus. The perpetual licenses, which are not part of the core subscription or cloud strategy, are being phased out, meaning their contribution to the total revenue is minimal, aligning with the Dog characteristic of low market share in a declining or harvested market.

Older, Unintegrated Acquisitions

Products stemming from older, non-core acquisitions that have not been successfully folded into the unified platform or the cloud-first strategy fall into this category. These units typically exhibit low growth and low market share within the current Atlassian Corporation Plc portfolio focus. While Atlassian Corporation Plc reports revenue by broader segments like License and Service ($4.93 B) and Product and Service, Other ($284.70 million) for FY2025, there is no specific public financial disclosure isolating the revenue or cash flow for these specific, non-core, unintegrated legacy products. Their status as Dogs is inferred from the strategic imperative to focus investment on the Enterprise Cloud, AI, and the Atlassian System of Work.

The strategic implications for these Dog categories are clear:

• Dogs should be avoided and minimized.
• Expensive turn-around plans usually do not help.
• These business units are prime candidates for divestiture.

The financial reality of the shift away from the legacy on-premise model is best summarized by the segment revenue changes for fiscal year 2025:

The complete elimination of the Maintenance revenue stream to $0.00 in FY25 confirms the successful harvest/divestiture of the Server product line, a classic Dog action. The remaining perpetual licenses are now buried within the large, growing License and Service segment, where their individual contribution is effectively negligible.

Atlassian Corporation Plc (TEAM) - BCG Matrix: Question Marks

You're looking at the new ventures Atlassian Corporation Plc is pouring cash into, hoping they mature into Stars. These are the products in fast-growing areas where the company has yet to secure a dominant position. They consume capital now, but the potential payoff is significant if they capture market share quickly.

Jira Product Discovery

Jira Product Discovery is targeting the product management space, which is definitely growing as companies formalize their idea-to-launch process. As of Q2 Fiscal Year 2025, this product had already amassed over 20,000 customers and was growing more than 150% year-over-year in adoption. Still, its direct revenue contribution is likely bundled into the 'Marketplace and other revenue' segment, which was $71.8 million in Q4 Fiscal Year 2025, up 14.5% year-over-year. The introduction of a Premium edition shows the strategy to monetize this growth, but its current financial weight relative to the total $5.215 Billion in annual revenue for FY2025 suggests it's still a cash consumer.

Loom Integration

The acquisition of Loom was a major cash outlay, costing approximately $975 million. This was a strategic move to own the asynchronous video market, which is a high-growth area for enterprise collaboration. Management noted that Loom MAU (Monthly Active Users) was growing more than 30% year-over-year as of Q4 Fiscal Year 2025. However, the deal was expected to be slightly dilutive to non-GAAP operating margins in fiscal years 2024 and 2025. The challenge here is proving that this high upfront cost translates into a substantial, recurring revenue stream that justifies its position outside the core Cloud or Data Center buckets.

Compass and Atlas

Compass, the team directory tool, and Atlas, which focuses on developer experience, are aimed squarely at the massive, yet fragmented, DevOps and internal tooling market. These are investments in the 'System of Work' priority, designed to increase platform stickiness. The investment thesis here relies on capturing a small piece of a huge pie. To put the opportunity in perspective, 84% of Fortune 500 companies are already Atlassian Corporation Plc customers, yet they only represent about 10% of Total Revenue. This implies significant white space for new products like Compass and Atlas to gain traction, but it requires heavy investment before market share is established.

Isolated Cloud

The specialized cloud offerings, particularly Atlassian Government Cloud and the broader Isolated Cloud, represent a high-cost, high-potential niche. These offerings cater to highly regulated industries, which means long, complex sales cycles but potentially very sticky, high-value contracts. Robust paid growth in both Atlassian Government Cloud and Isolated Cloud was cited as a driver for the 22% year-over-year total revenue increase in Q4 Fiscal Year 2025. The Government Cloud achieving FedRAMP Moderate authorization is a critical milestone for unlocking this segment, but the associated compliance and infrastructure costs keep it firmly in the Question Mark quadrant for now.

Here's a quick look at the known metrics for these potential future Stars:

You need to watch the R&D spend allocated to these areas versus the growth in their respective customer counts. The strategy is clear: invest heavily to drive adoption past the inflection point.

• Investment Focus: Enterprise Cloud, AI integration, and the System of Work.
• Key Risk: Margin pressure from high investment, especially Loom's expected dilutive impact.
• Adoption Indicator: Cloud subscription revenue grew 22.8% year-over-year in Q4 FY25, showing the platform transition is working.
• Future Potential: Cloud revenue growth is projected at 22.5% for FY26.

Finance: draft 13-week cash view by Friday.