How Atlassian Makes its Money: Revenue Breakdown
A breakdown of Atlassian (TEAM) financials. See how Atlassian makes money, their revenue streams, costs and profitability.
How Does Atlassian Make its Money?
Atlassian is the company behind some of the most widely used software development and collaboration tools in the world, including Jira (project and issue tracking), Confluence (team wiki and knowledge management), Trello (kanban boards), Bitbucket (code repository), and Loom (video messaging, acquired for $975M in 2023). Over 300,000 organizations worldwide use Atlassian’s products, from two-person startups to Fortune 500 companies.
Atlassian has been executing a major cloud migration, transitioning customers from self-managed server and data center deployments to its cloud platform. Server support officially ended in February 2024, forcing the remaining server customers to migrate to either cloud or data center. The company is also heavily investing in AI-powered features through Atlassian Intelligence across its product suite.
Atlassian (TEAM) Business Model
Atlassian operates in the technology sector as a SaaS company. Revenue comes from Cloud (subscription fees for hosted products), Data Center (annual licenses for large on-premise deployments), and Marketplace/Other (third-party app commissions and training). This breakdown uses data from Atlassian’s FY2024 filings with the SEC (fiscal year ending June 2024).
Atlassian’s distinctive go-to-market model relies on product-led growth rather than a large enterprise sales force. Teams adopt Jira or Confluence organically, then expand usage across departments, generating viral adoption within organizations. This model produces some of the lowest sales and marketing costs in enterprise software (~20% of revenue vs. 40-50% for competitors), which is a structural margin advantage.
Atlassian Competitors
Atlassian’s key competitors and comparable public companies in the technology sector include Datadog, MongoDB, and ServiceNow. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Atlassian stacks up by comparing their revenue breakdown, margins, and growth metrics.
Revenue Breakdown
| Revenue Stream | FY2024 | FY2023 | YoY Growth |
|---|---|---|---|
| Cloud | $2.63B | $2.14B | +22.9% |
| Data Center | $1.20B | $0.90B | +33.3% |
| Marketplace & Other | $0.27B | $0.24B | +12.5% |
| Server (Legacy) | $0.005B | $0.05B | -90.0% |
| Total | $4.36B | $3.53B | +23.5% |
Cloud — 60% of Revenue
Atlassian’s strategic priority and future growth engine. Cloud revenue ($2.63B) comes from monthly/annual subscriptions to Jira Software Cloud, Jira Service Management, Confluence Cloud, Trello, and now Loom. Pricing scales with number of users, starting as low as $0 for small teams (up to 10 users) and scaling to enterprise tiers.
Cloud grew 22.9%, driven by new customer acquisition, seat expansion within existing customers, and migration of server and data center customers to cloud. Atlassian is targeting $10B+ in cloud ARR over the medium term. Cloud carries higher gross margins than data center (~85%) due to Atlassian managing the infrastructure at scale.
Data Center — 28% of Revenue
Annual license fees for organizations that need to run Atlassian products on their own infrastructure (typically for compliance, security, or performance reasons). Data Center grew 33.3%, boosted by the forced migration from end-of-life Server licenses — many large enterprises that weren’t ready for cloud moved to Data Center as an intermediate step.
Data Center is a transitional product — Atlassian expects most data center customers to eventually migrate to cloud, but the timeline spans years. In the meantime, data center provides high-margin recurring revenue.
Marketplace & Other — 6% of Revenue
Atlassian’s Marketplace hosts 6,000+ apps and integrations built by third-party developers. Atlassian takes a 25% commission on marketplace sales. The Marketplace ecosystem is a key competitive moat — once an organization builds workflows around Jira + marketplace apps, switching costs become very high.
Income Statement Overview
| Metric | FY2024 | FY2023 |
|---|---|---|
| Total Revenue | $4.36B | $3.53B |
| Gross Profit | $3.57B | $2.83B |
| Operating Income | $270M | -$270M |
| Net Income | $92M | -$49M |
Financial data sourced from Atlassian SEC Filings.
Key Financial Metrics
- Gross Margin: 81.9% — Excellent for a SaaS company, reflecting the scalability of cloud software. Once products are built, the marginal cost of serving additional users is minimal.
- Operating Margin: 6.2% — Atlassian swung from -7.6% to positive 6.2%. The company is in the “invest then harvest” phase, spending heavily on R&D (44% of revenue) and AI features while beginning to show operating leverage.
- Revenue Growth: +23.5% — Strong growth driven by the cloud migration wave and seat expansion in existing accounts.
- R&D as % of Revenue: ~44% — Atlassian invests heavily in product development (Atlassian Intelligence AI, Rovo AI agent, and platform capabilities). This investment rate is high even by SaaS standards, reflecting the competitive intensity.
Is Atlassian Profitable?
Yes, Atlassian is profitable on a GAAP basis for the first time, reporting net income of $92M on $4.36B in revenue. This represents a meaningful milestone — Atlassian was unprofitable in FY2023 (-$49M). The swing to profitability was driven by revenue growth outpacing operating expense growth, demonstrating the operating leverage inherent in its product-led growth model. On a free cash flow basis, Atlassian has been consistently cash flow positive, generating $1.3B+ in FCF in FY2024.
What to Watch
- Cloud migration completion — With Server end-of-life, the key question is how quickly Data Center customers convert to Cloud. Each conversion increases lifetime value and recurring revenue predictability.
- AI monetization — Atlassian Intelligence (AI-powered features in Jira, Confluence, Loom) and the new Rovo AI agent product represent potential upsell opportunities. Whether AI features drive ARPU expansion is a key growth lever.
- Operating leverage — As Atlassian scales past the cloud migration investment phase, the product-led growth model should drive significant margin expansion. The path from 6% to 25%+ operating margins is the bull case.
- Enterprise penetration — Atlassian has been moving upmarket, selling to larger enterprises with more complex needs. Success here drives higher deal sizes and lower churn.
- Competitive pressure — Microsoft (Teams + Planner), ServiceNow, and smaller entrants compete for project management and collaboration budgets. Maintaining product differentiation requires sustained R&D investment.
Atlassian (TEAM) Financial Summary
Atlassian (TEAM) is a software company that generated $4.36B in total revenue in fiscal year 2024, growing 23.5% year-over-year. Cloud revenue grew 22.9% and represents 60% of total revenue. The company earned $92M in net income — its first year of GAAP profitability. For a deeper look at Atlassian’s revenue breakdown, business segments, and financial performance, review the detailed analysis above.
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