Atlassian raises annual revenue forecast on resilient software spending

Feb 5 (Reuters) - Atlassian TEAM.O raised its fiscal 2026 revenue growth forecast on Thursday, betting on strong spending on its enterprise software services as clients increasingly incorporate artificial intelligence into their businesses.

Companies looking to incorporate machine learning and automate tasks have taken to Atlassian's software products, as tools such as Jira Service Management and Rovo help clients manage teams, track work and analyze data.

"We delivered our first-ever $1 billion Cloud revenue quarter, which grew 26% year-over-year, crossed 350,000 customers, and Rovo surpassed 5 million monthly active users," Atlassian's Chief Executive Officer, Mike Cannon-Brookes, said.

Shares of the company, however, were down around 8% in extended trading. Free cash flow for the second quarter fell around 51% to $168.5 million.

Atlassian now expects annual revenue to grow around 22%, compared with its earlier growth forecast of around 20.8%.

The company forecast third-quarter revenue of between $1.69 billion and $1.70 billion, compared with estimates of $1.65 billion according to data compiled by LSEG.

Revenue for the second quarter was $1.59 billion, beating estimates of $1.54 billion.