Atlassian has assured investors it can add AI to its services without blowing out its costs or shrinking margins.<\/p>\n
CEO Mike Cannon-Brookes used the company\u2019s Thursday earnings call to reveal Atlassian now has five million users of its Rovo<\/a> agentic AI offering and suggested that investors in the company might worry that costs would blow out as a result.<\/p>\n \u201cWe’re able to deliver those five million Rovo seats and continue to improve gross margin,\u201d he reassured. \u201cThat’s a huge achievement on behalf of our engineering teams, but it shows that we can manage those AI costs inside for the vast majority of customers.\u201d<\/p>\n Atlassian runs entirely in public clouds, and Cannon-Brookes\u2019 remarks suggest optimizing its operations, rather than high prices, is the reason it\u2019s kept margins stable. Which isn\u2019t great news for cloud operators, as it suggests at least one SaaS giant has found a way to add AI to its offerings without spending much more.<\/p>\n The Australian collaborationware company is, however, sending more business to big clouds by ditching its on-prem datacenter products. CFO Joe Binz said Atlassian \u201csaw very healthy cloud migrations in Q2\u201d and Cannon-Brookes pointed to the company winning $1 billion of revenue from cloud products for the first time in this quarter.<\/p>\n The CEO also batted away suggestions that Atlassian, like other SaaS companies<\/a>, is susceptible to attack by AI.<\/p>\n \u201cI\u2019m convinced AI is great for Atlassian. Others think software is dead,\u201d he wrote in his shareholder letter<\/a> [PDF]. \u201c In this environment, it seems that noise swamps signal, nuance gets lost,\u201d he added. On the earnings call, he expanded on that point by saying Atlassian customers still want its wares.<\/p>\n \u201cWhen I talk to customers, they believe that we’re helping them through a lot of that noise,\u201d he said. \u201cEnterprise customers want a platform they can trust. They need it to be compliant and secure and all the things they’ve always needed.\u201d<\/p>\n And they\u2019re spending more with Atlassian to get those things: Cannon-Brookes said the company continues to see customers adopt more of its stack and commit to using it for longer.<\/p>\n He also shrugged off suggestions that Anthropic, which recently previewed a product called \u201cClaude Cowork\u201d<\/a> that competes with Jira, is a threat because the new AI product will need to access information stored in Atlassian\u2019s software.<\/p>\n It\u2019s not all rosy for Atlassian because Cannon-Brookes declared himself \u201cfrustrated\u201d by Atlassian\u2019s share price, which has fallen 70 percent in the last twelve months, and fell two more points in after-hours trading. The company is therefore accelerating the pace of stock buybacks. \u201cWe believe our shares are significantly undervalued,\u201d Cannon-Brookes said.<\/p>\n Q2 revenue landed at $1.6 billion, up 23 percent year over year. Operating losses narrowed from Q2 2025\u2019s $57.5 million to $47.7 million. \u00ae<\/p>\n Bootnote<\/p>\n When The Register started work on this story, we accessed the company\u2019s shareholder letter and were a little startled that its opening sentence read \u201cWe had a fantastic Q2. We\u2019re building a f**king great business.\u201d We closed that tab and later loaded the letter again to find it had a new filename and the text had changed to \u201cWe\u2019re building a bloody great business.\u201d Outlets who covered the company before we completed this story record<\/a> the executive F-bomb.<\/p>\n","protected":false},"excerpt":{"rendered":"Atlassian has assured investors it can add AI to its services without blowing out its costs or shrinking…\n","protected":false},"author":2,"featured_media":410968,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,733,4308,86,56,54,55],"class_list":{"0":"post-410967","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-technology","12":"tag-uk","13":"tag-united-kingdom","14":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/410967","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=410967"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/410967\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/410968"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=410967"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=410967"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=410967"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}