Atlassian (TEAM)

Consolidated Balance Sheets69 Consolidated Statements of Operations70 Consolidated Statements of Comprehensive Loss71 Consolidated Statements of Stockholder s Equity72 Consolidated Statements of Cash Flows73 Notes to Consolidated Financial Statements74 65 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Atlassian Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Atlassian Corporation (the Company) as of June 30, 2026 and 2025, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended June 30, 2026, and the related notes (collectively referred to as the consolidated financial statements ). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2026, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company s internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated August 14, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on the Company s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Revenue Recognition Description of the MatterAs described in Note 2 to the consolidated financial statements, the Company reports revenues in two categories: (i) subscriptions and (ii) other. The Company s contracts often include promises to transfer multiple products and services to a customer. The Company allocates the transaction price for each contract to each performance obligation based on the relative standalone selling price ( SSP ) for each performance obligation. Auditing the Company s revenue recognition was challenging due to the effort required to analyze the accounting treatment for contracts with multiple performance obligations. This involved assessing the impact of terms and conditions of contracts and the determination of SSP for the identified performance obligations. 66 How We Addressed the Matter in Our AuditWe obtained an understanding of the process for revenue recognition by performing a walkthrough. We also evaluated the design and tested the operating effectiveness of the Company s internal controls over the assessment of terms and conditions of contracts, which included the internal controls over the determination of SSP for the identified performance obligations. To evaluate management s assessment of terms and conditions of contracts, we performed audit procedures that included, among others, testing a sample of contracts to understand the terms and conditions and evaluating SSP for the identified performance obligations. To evaluate management s determination of SSP for the identified performance obligations, we performed audit procedures that included, among others, assessing the appropriateness of the methodologies used in the Company s SSP analyses, testing the completeness and accuracy of the underlying data used, and testing the mathematical accuracy. Finally, we assessed the related disclosures in the consolidated financial statements. Valuation of developed technology intangible asset in the acquisition of A Software Company Description of the MatterAs described in Note 7 to the consolidated financial statements, the Company acquired A Software Company ( DX ) during fiscal 2026 for total purchase price consideration of $720.4 million. In connection with this acquisition, management recognized a developed technology intangible asset of $138.0 million. The valuation of the developed technology intangible asset is complex and judgmental due to the use of subjective assumptions in the valuation models used by management when determining their estimated fair value. In particular, the fair value estimate for the acquired developed technology intangible asset is sensitive to changes in assumptions for forecasted revenue, revenue growth rate, and discount rate. How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the determination of the fair value of the developed technology intangible asset. This included controls over management s development of the assumptions described above. To test management s estimate of the fair value of the developed technology intangible asset, we performed audit procedures that included, among others, evaluating the significant assumptions used by the Company to develop the forecasted revenue, revenue growth rate, and discount rate, including validating the completeness and accuracy of the underlying data supporting the significant assumptions. We performed sensitivity analyses to evaluate the changes in the fair value of the developed technology intangible asset that would result from changes in the assumptions and compared the more sensitive significant assumptions used by management to the current results of the acquired business and to current industry and competitor data. In addition, we involved our valuation professionals to assist in our evaluation of the methodology used by the Company and the significant assumptions underlying the fair value estimates. /s/ Ernst & Young LLP We have served as the Company s auditor since 2012. San Francisco, California August 14, 2026 67 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Atlassian Corporation Opinion on Internal Control Over Financial Reporting We have audited Atlassian Corporation s internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Atlassian Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of June 30, 2026, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2026 consolidated financial statements of the Company and our report dated August 14, 2026 expressed an unqualified opinion thereon. Basis for Opinion The Company s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP San Francisco, California August 14, 2026 68 ATLASSIAN CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except par value and share data) June 30, 20262025 Assets Current assets: Cash and cash equivalents$1,239,512 $2,512,874 Marketable securities 424,268 Accounts receivable, net1,269,947 778,302 287,663 175,793 Total current assets2,797,122 3,891,237 Non-current assets: Property and equipment, net86,302 105,118 Operating lease right-of-use assets114,059 169,127 Strategic investments213,147 221,942 Intangible assets, net432,258 244,840 Goodwill2,302,739 1,304,445 Deferred tax assets4,088 3,762 Other non-current assets153,814 101,499 Total assets$6,103,529 $6,041,970 Liabilities and Stockholders Equity Current liabilities: Accounts payable$262,609 $222,092 Accrued expenses and other current liabilities764,579 681,601 Deferred revenue, current portion2,495,431 2,227,002 Operating lease liabilities, current portion48,509 50,164 3,571,128 3,180,859 Non-current liabilities: Deferred revenue, net of current portion166,260 254,252 Operating lease liabilities, net of current portion194,841 201,483 Long-term debt989,560 987,684 Deferred tax liabilities27,853 23,881 Other non-current liabilities95,445 48,157 Total liabilities5,045,087 4,696,316 Commitments and contingencies (Note 12) Stockholders equity Class A Common Stock, $0.00001 par value; 750,000,000 shares authorized, 159,268,260 and 165,949,196 issued and outstanding at June 30, 2026 and 2025, respectively 2 2 Class B Common Stock, 0.00001 par value; 230,000,000 shares authorized, 94,133,617 and 97,030,987 issued and outstanding at June 30, 2026 and 2025, respectively 1 1 Additional paid-in capital7,180,851 5,574,290 Accumulated other comprehensive income (loss)(17,034)13,226 Accumulated deficit(6,105,378)(4,241,865) Total stockholders equity1,058,442 1,345,654 Total liabilities and stockholders equity$6,103,529 $6,041,970 The above consolidated financial statements should be read in conjunction with the accompanying notes. 69 ATLASSIAN CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Fiscal Year Ended June 30, 202620252024 Revenues: Subscription$6,262,194 $4,930,604 $3,924,389 310,114 284,700 434,214 Total revenues6,572,308 5,215,304 4,358,603 Cost of revenues (1) (2) 996,830 894,851 803,495 Gross profit5,575,478 4,320,453 3,555,108 Operating expenses: Research and development (1) (2) 3,269,257 2,669,312 2,184,111 Marketing and sales (1) (2) 1,541,178 1,134,535 877,497 General and administrative (1) 754,688 646,998 610,577 Total operating expenses5,565,123 4,450,845 3,672,185 Operating income (loss)10,355 (130,392)(117,077) Other expense, net (8,565)(50,277)(30,916) Interest income69,710 112,324 96,663 Interest expense(49,450)(30,550)(34,077) Income (loss) before income taxes 22,050 (98,895)(85,407) Provision for income taxes(75,878)(157,792)(215,112) Net loss$(53,828)$(256,687)$(300,519) Basic$(0.21)$(0.98)$(1.16) Diluted$(0.21)$(0.98)$(1.16) Weighted-average shares used in computing net loss per share attributable to Class A and Class B common stockholders: Basic260,163 261,787 259,133 Diluted260,163 261,787 259,133 (1) Amounts include stock-based compensation, as follows: Cost of revenues$71,817 $83,017 $71,691 Research and development1,143,944 937,440 712,409 Marketing and sales206,368 168,270 137,347 General and administrative184,432 173,495 159,986 (2) Amounts include amortization of acquired intangible assets, as follows: Cost of revenues$78,906 $40,508 $36,988 Research and development374 374 374 Marketing and sales22,206 14,635 12,386 The above consolidated financial statements should be read in conjunction with the accompanying notes. 70 ATLASSIAN CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Fiscal Year Ended June 30, 202620252024 Net loss$(53,828)$(256,687)$(300,519) Other comprehensive loss, net of reclassification adjustments: Foreign currency translation adjustment(11,576)3,639 (2,270) Net change in unrealized gain (loss) on marketable and privately held debt securities(345)1,032 314 Net loss on cash flow hedging derivative instruments (18,339)(16,745)(6,746) Other comprehensive loss, before tax (30,260)(12,074)(8,702) Income tax effect Other comprehensive loss, net of tax (30,260)(12,074)(8,702) Total comprehensive loss, net of tax $(84,088)$(268,761)$(309,221) Additional paid in capitalAccumulated other comprehensive lossAccumulated deficitTotal stockholders equity Class AClass B SharesAmountSharesAmount Balance at June 30, 2023152,437 $2 105,124 $1 $3,130,631 $34,002 $(2,509,964)$654,672 Common stock issued5,000 Conversion from Class B Common Stock to Class A Common Stock4,112 (4,112) Stock-based compensation 1,081,433 1,081,433 Repurchases of Class A Common Stock (2,161) (394,033)(394,033) Other comprehensive loss, net of tax (8,702) (8,702) Net loss (300,519)(300,519) Balance at June 30, 2024159,388 2 101,012 1 4,212,064 25,300 (3,204,516)1,032,851 Common stock issued6,473 4 4 Conversion from Class B Common Stock to Class A Common Stock3,981 (3,981) Stock-based compensation 1,362,222 1,362,222 Repurchases of Class A Common Stock (3,982) (780,662)(780,662) Other comprehensive loss, net of tax (12,074) (12,074) Net loss (256,687)(256,687) Balance at June 30, 2025165,860 2 97,031 1 5,574,290 13,226 (4,241,865)1,345,654 Common stock issued8,273 Conversion from Class B Common Stock to Class A Common Stock2,897 (2,897) Stock-based compensation 1,606,561 1,606,561 Repurchases of Class A Common Stock (19,117) (1,809,685)(1,809,685) Other comprehensive loss, net of tax (30,260) (30,260) Net loss (53,828)(53,828) Balance at June 30, 2026157,913 $2 94,134 $1 $7,180,851 $(17,034)$(6,105,378)$1,058,442 The above consolidated financial statements should be read in conjunction with the accompanying notes. 72 ATLASSIAN CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Fiscal Year Ended June 30, 202620252024 Cash flows from operating activities: Net loss$(53,828)$(256,687)$(300,519) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization140,668 92,375 78,738 Stock-based compensation1,606,561 1,362,222 1,081,433 Impairment charges for leases and leasehold improvements80,316 Deferred income taxes(23,080)4,050 119 Gain on a non-cash sale of a controlling interest of a subsidiary (1,378) Amortization of interest rate swap contracts(7,163)(26,344)(4,166) Net loss (gain) on strategic investments (22,029)22,994 13,337 Net foreign currency loss (gain)6,182 (2,494)2,301 Other1,507 (532)1,305 Changes in operating assets and liabilities, net of business combinations: Accounts receivable, net(484,465)(150,035)(148,469) Prepaid expenses and other assets(155,832)(85,385)(3,122) Accounts payable41,907 42,873 18,150 Accrued expenses and other liabilities69,077 90,988 158,123 Deferred revenue153,314 366,368 552,307 Net cash provided by operating activities1,353,135 1,460,393 1,448,159 Cash flows from investing activities: Business combinations, net of cash acquired(1,228,875)(14,245)(847,767) (34,060)(44,850)(33,112) Purchases of strategic investments(9,250)(27,430)(14,400) Purchases of marketable securities(67,259)(411,635)(248,897) Proceeds from maturities of marketable securities144,125 144,878 116,537 Proceeds from sales of marketable securities352,093 5,893 41,514 Proceeds from sales of strategic investments36,333 5,067 22,379 Net cash used in investing activities (806,893)(342,322)(963,746) Cash flows from financing activities: Repayment of Term Loan (1,000,000) Proceeds from issuance of debt, net of issuance cost 987,039 Repurchases of Class A Common Stock(1,800,485)(779,439)(395,256) Other (3,143) Net cash used in financing activities(1,800,485)(782,582)(408,217) Effect of foreign exchange rate changes on cash and cash equivalents(10,233)151 (1,989) Net increase (decrease) in cash, cash equivalents, and restricted cash (1,264,476)335,640 74,207 Cash, cash equivalents, and restricted cash at beginning of period2,513,762 2,178,122 2,103,915 $1,249,286 $2,513,762 $2,178,122 Reconciliation of cash, cash equivalents, and restricted cash within the consolidated balance sheets to the amounts shown in the consolidated statements of cash flows above: Cash and cash equivalents$1,239,512 $2,512,874 $2,176,930 Restricted cash included in other non-current assets9,774 888 1,192 Total cash, cash equivalents, and restricted cash$1,249,286 $2,513,762 $2,178,122 Supplemental disclosures of cash flow information: Income taxes paid, net of refunds$160,706 $180,470 $253,828 Interest paid54,320 54,268 61,339 Received from interest rate swap contracts (65,734) Non-cash investing and financing activities: Purchase of property and equipment included in accrued expenses and other liabilities19,538 10,523 1,263 Repurchases of Class A Common Stock and related excise tax liability included in accrued expenses and other current liabilities13,366 4,167 2,943 Debt issuance costs included in accrued expenses and other current liabilities 1,344 3 years Computer hardware and computer-related software3 - 5 years Furniture and fittings5 years Leasehold improvementsShorter of the remaining lease term or 7 years Leases The Company determines if an arrangement is a lease at inception. The Company s lease agreements generally contain lease and non-lease components. Payments under the Company s lease arrangements are primarily fixed. Non-lease components primarily include payments for maintenance and utilities. The Company combines fixed payments for non-lease components with lease payments and accounts for them together as a single lease component, which increases the amount of its lease assets and liabilities. 78 Certain lease agreements contain variable payments, which are expensed as incurred and not included in the lease assets and liabilities. These amounts include payments affected by the Consumer Price Index and payments for maintenance and utilities. Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company s incremental borrowing rate, because the interest rate implicit in the Company s leases is not readily determinable. The Company s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The Company s lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company generally uses the base, non-cancelable, lease term when determining the lease assets and liabilities. The Company reassesses the lease term if and when a significant event or change in circumstances occurs. Lease assets also include any prepaid lease payments and lease incentives. Operating lease expense (excluding variable lease costs) is recognized on a straight-line basis over the lease term. The Company applies the short-term lease recognition exemption for short-term leases, which are leases with a lease term of 12 months or less. Payments associated with short-term leases are recognized on a straight-line basis over the lease term. The Company did not have any finance lease arrangements for fiscal years 2026, 2025, and 2024. Business Combinations The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed, based on their estimated fair values. The excess of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Assumptions used to estimate the fair value of the intangible assets include, but are not limited to, projected revenue growth, projected operating expenses, and technology migration curves. These estimates are inherently uncertain and subject to refinement and, as a result, actual results may differ from estimates. During the measurement period, which may not be later than one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Consolidated Statements of Operations. Intangible Assets The Company acquires intangible assets separately or in connection with business combinations. Intangible assets are measured at cost initially. Intangible assets with finite lives are amortized over their estimated useful life using the straight-line method. The amortization expense on intangible assets is recognized in the Consolidated Statements of Operations in the expense category consistent with the function of the intangible asset. The estimated useful lives for each intangible asset class are as follows: Patents, trademarks, and other rights 3 - 12 years Customer relationships3 - 10 years Acquired developed technology3 - 7 years Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate an asset s carrying value may not be recoverable. When the projected undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts, the assets are adjusted to their estimated fair value and an impairment loss is recorded as a component of operating income (expense). 79 Goodwill Goodwill is the excess of the aggregate of the consideration transferred over the identifiable assets acquired and liabilities assumed. Goodwill is tested for impairment at least annually during the fourth quarter of the Company s fiscal year and more often if and when circumstances indicate that the carrying value may be impaired. The Company s reporting unit is at the operating segment level. The Company performs its goodwill impairment test at the level of its operating segment, as there are no levels below the operating segment level for which discrete financial information is prepared and regularly reviewed by the Company s CODM. A qualitative assessment is performed to determine whether it is more likely than not that the fair value of its operating segment is less than its carrying amount. If the operating segment does not pass the qualitative assessment, the carrying amount of the operating segment, including goodwill, is compared to fair value and goodwill is considered impaired if the carrying value exceeds its fair value. Any excess is recognized as an impairment loss in the current period earnings. Stock-based Compensation The Company recognizes compensation expense related to all stock-based awards, including restricted stock units ( RSU ) and restricted stock awards ( RSA ) issued to the Company s employees in exchange for their service, based on the estimated fair value of the awards on the grant date. The fair value of each RSU or RSA is based on the fair value of the Company s Class A Common Stock on the date of grant. The Company recognizes costs related to stock-based awards, net of estimated forfeitures, over the awards requisite service period on a straight-line basis, which is generally four years. The Company estimates forfeitures based on historical experience. The respective expenses are recognized as employee benefits and classified in the Consolidated Statements of Operations according to the activities that the employees perform. Defined Contribution Plan The Company offers various defined contribution plans for its U.S. and non-U.S. employees. The Company matches a portion of employee contributions each pay period, subject to maximum aggregate matching amounts, or contributes based on local legislative rates for eligible employees. Total defined contribution plan expense was $137.3 million, $114.5 million, and $96.3 million for fiscal years 2026, 2025, and 2024, respectively. Advertising Costs Advertising costs are expensed as incurred as a component of marketing and sales expense in the Consolidated Statements of Operations. Advertising expense was $206.4 million, $153.1 million, and $100.2 million for fiscal years 2026, 2025, and 2024, respectively. Research and Development Research and development costs are expensed as incurred and consist of the employee, software, and hardware costs incurred for the development of new apps, AI agents and products, enhancements and updates of existing offerings and quality assurance activities. The costs incurred for the development of the Company s cloud-based platform and internal use software are evaluated for capitalization during the development phase. The Company did not capitalize software development costs on its Consolidated Balance Sheet for the periods presented. Concentration of Credit Risk and Significant Customers Financial instruments potentially exposing the Company to credit risk consist primarily of cash, cash equivalents, accounts receivable, derivative contracts and investments. The Company holds cash at financial institutions that management believes are high credit, quality financial institutions and invests in investment grade securities rated A- and above and debt securities. The Company s derivative contracts expose it to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. The Company enters into master netting agreements with select financial institutions to reduce its credit risk and trades with several counterparties to reduce its concentration risk with any single counterparty. The Company does not have significant exposure to counterparty credit risk at this time. In addition, the Company does not require nor is required to post collateral of any kind related to any foreign currency derivatives. Credit risk arising from accounts receivable is mitigated to a certain extent due to the Company s large number of customers and their dispersion across various industries and geographies. The Company s customer 80 base is highly diversified, thereby limiting credit risk. The Company manages credit risk with customers by closely monitoring its receivables and contract assets. The Company continuously monitors outstanding receivables locally to assess whether there is objective evidence that outstanding accounts receivables and contract assets are credit-impaired. As of June 30, 2026 and June 30, 2025, no customer represented more than 10% of the total accounts receivable balance. For fiscal years ended June 30, 2026, 2025, and 2024, no customer represented more than 10% of the total revenues. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities represent temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and their corresponding tax basis used in the computation of taxable income. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be reversed. The Company recognizes the effect on deferred tax assets and liabilities of a change in tax rates within the provision for income taxes as expense and income in the period that includes the enactment date. The Company accounts for the tax impact of including Global Intangible Low-Taxed Income in U.S. taxable income as a period cost. A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. Changes in deferred tax assets or liabilities are recognized as a component of benefit from (provision for) income taxes in the Consolidated Statements of Operations, except where they relate to items that are recognized in other comprehensive income or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively. Where deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination. Deferred tax assets are regularly evaluated for future realization and reduced by a valuation allowance to an amount for which realization is more likely than not. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning strategies, carry back potential if permitted under the tax law, and results of recent operations. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the amount of future taxable income, together with future tax-planning strategies. Assumptions about the generation of future taxable income depend on management s estimates of future cash flows, future business expectations, capital expenditures, dividends, and other capital management transactions. Management judgment is also required in relation to the application of income tax legislation, which involves complexity and an element of uncertainty. In the event there is a change in the Company s assessment of its ability to recover deferred tax assets, the income tax provision would be adjusted accordingly, resulting in a corresponding adjustment to the Consolidated Statements of Operations. Uncertain tax positions are recorded in accordance with Accounting Standards Codification Topic 740 Income Taxes ( ASC 740 ), Income Taxes. ASC 740 specifies a two-step process in which (1) the Company determines whether it s more likely than not that tax positions will be sustained on the basis of the technical merits of the position, and (2) for those positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with the related tax authority. The Company considers many factors when evaluating uncertain tax positions, which involve significant judgment and may require periodic reassessment. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. For details of taxation, please refer to Note 18, Income Taxes. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued Accounting Standards Update ( ASU ) No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires disaggregated information about a reporting entity s effective tax rate reconciliation as well as information on income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-09 on a prospective basis effective July 1, 2025. Refer to Note 18, Income Taxes for further information. New Accounting Standards Not Yet Adopted in Fiscal Year 2026 81 In November 2024, the FASB issued ASU No. 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. This ASU requires disaggregated disclosure of income statement expenses for public entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and disclosures. In July 2025, the FASB issued ASU 2025-05 Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets for Private Companies and Certain Not-for-Profit Entities, which amends ASC 326-20 to provide a practical expedient and an accounting policy election (for all entities, other than public business entities that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. This ASU is effective for fiscal years beginning after December 15, 2025, and early adoption is permitted. The Company is currently evaluating the impact of the new guidance and does not expect it to have a material impact on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-06 Intangibles Goodwill and Other Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU makes targeted improvements to modernize the accounting for internally developed software subject to ASC 350-40. This ASU is effective for fiscal years beginning after December 15, 2027, and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. 82 3. Fair Value Measurements The following table presents the Company s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2026, by level within the fair value hierarchy (in thousands): Level 2 $727,056 $ 727,056 17,506 $727,056 $17,506 744,562 $ $17,005 17,005 $ $17,005 17,005 The following table presents the Company s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2025, by level within the fair value hierarchy (in thousands): Level 2 Assets measured at fair value$1,774,138 $ 1,774,138 Corporate debt securities 382 Marketable securities: 176,661 Agency securities 3,216 Certificates of deposit and time deposits 10,000 Commercial paper 19,697 Corporate debt securities 214,694 Derivative financial instruments 23,234 Total assets measured at fair value$1,774,138 $447,884 2,222,022 $ $2,445 2,445 Total liabilities measured at fair value$ $2,445 2,445 Due to the short-term nature of accounts receivable, net, contract assets, accounts payable, accrued expenses, and other current liabilities, their carrying amount is assumed to approximate their fair value. Determination of Fair Value The Company uses quoted prices in active markets for identical assets to determine the fair value of the Company s Level 1 investments. The fair value of the Company s Level 2 investments is determined based on quoted market prices or alternative market observable inputs. Strategic Investments Measured and Recorded at Fair Value on a Non-Recurring Basis The Company s investments in privately held companies are not included in the tables above and are discussed in Note 4, Investments. The carrying value of the Company s privately held equity securities are adjusted on a non-recurring basis upon observable price changes in orderly transactions for identical or similar investments of the same issuer, or impairment (referred to as the measurement alternative). Privately held equity securities that have been remeasured during the period based on observable price changes in orderly transactions are classified within Level 2 or Level 3 in the fair value hierarchy because the Company estimates the value based 83 on valuation methods which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, rights and preferences of the investments, and obligations of the securities the Company holds. The fair value of privately held equity securities that have been remeasured due to impairment is classified within Level 3. The Company s privately held debt and equity securities amounted to $157.3 million and $168.8 million as of June 30, 2026 and June 30, 2025, respectively. 4. Investments Marketable Securities The Company did not have any investments of marketable securities as of June 30, 2026. The Company s investments of marketable securities as of June 30, 2025, consisted of the following (in thousands): Amortized CostUnrealized GainsUnrealized LossesFair Value Marketable debt securities U.S. treasury securities$176,338 $388 $(65)$176,661 Agency securities3,197 19 3,216 Certificates of deposit and time deposits10,000 10,000 Commercial paper19,697 19,697 Corporate debt securities214,190 527 (23)214,694 $423,422 $934 $(88)$424,268 The table below summarizes the Company s marketable securities by remaining contractual maturity as of June 30, 2025 (in thousands): Due in one year or less271,923 Due in one year through five years Total marketable debt investments424,268 The Company regularly reviewed the changes to the rating of its marketable securities by rating agencies and monitored the surrounding economic conditions to assess the risk of expected credit losses. As of June 30, 2025, unrealized losses and the related risk of expected credit losses were not material. Strategic Investments Carrying value of privately held debt securities The Company s investments of privately held debt securities as of June 30, 2026, consisted of the following (in thousands): Amortized CostUnrealized GainsUnrealized LossesFair Value Privately held debt securities$7,180 $ $(2,750)$4,430 The Company s investments of privately held debt securities as of June 30, 2025, consisted of the following (in thousands): Amortized CostUnrealized GainsUnrealized LossesFair Value Privately held debt securities$7,780 $ $(3,350)$4,430 Carrying value of privately held equity securities Privately held equity securities are measured using the measurement alternative. The carrying value is measured as the total initial cost plus the cumulative net gain (loss). 84 The carrying values of privately held equity securities as of June 30, 2026 are summarized below (in thousands): 145,802 152,836 166,302 164,393 202620252024 $9,846 $1,549 $2,084 Unrealized losses recognized on privately held equity securities including impairment(3,820)(967)(1,628) Unrealized losses on privately held debt securities(250) (500) Unrealized gains (losses), net$5,776 $582 $(44) Realized gains recognized on publicly traded equity securities 14,658 515 Realized gains (losses) recognized on privately held equity securities1,367 (3,142)(2,546) 228 Gains (losses) on strategic investments, net $22,029 $(2,560)$(2,075) Unrealized gains recognized during the reporting period on privately held equity securities still held at the reporting date $6,026 $582 $456 Unrealized gains recognized on privately held equity securities include upward adjustments from equity securities accounted for under the measurement alternative, while unrealized losses recognized on privately held equity securities include downward adjustments and impairment. Realized gains on sales of privately held securities, net, reflect the difference between the sale proceeds and the carrying value of the security at the beginning of the period or the purchase date, if later. Realized gains (losses) recognized on publicly traded equity securities, privately held equity securities, and debt securities, reflect the difference between the sale proceeds and the carrying value of the security at the beginning of the period or the purchase date, if later. 85 Equity Method Investment Vertical First Trust ( VFT ) was established for the construction project associated with the Company s new global headquarters in Sydney, Australia (the Australian HQ Property ). In fiscal year 2023, the Company completed a non-cash sale of the controlling interest of VFT to a third-party buyer as part of the contemplated transactions for the buyer to invest in and develop the Australian HQ Property. The maximum exposure to loss related to the Company s investment in VFT equals the Company s capital investment. The Company retained a minority equity interest of 13% in the form of ordinary units in VFT and has significant influence in VFT. The Company s interest in VFT is accounted for using the equity method in the consolidated financial statements. Under the equity method, the Company records its proportionate share of VFT s earnings or losses. The following table sets forth the carrying amounts of the equity method investment and the movements during fiscal years 2025 and 2026 (in thousands): Balance as of June 30, 202474,510 Share of losses Effect of change in exchange rates Balance as of June 30, 202553,119 Balance as of June 30, 202655,881 The carrying amount of the Company s investment in VFT was reported within strategic investments in the Company s Consolidated Balance Sheets. 5. Derivative Contracts The Company has derivative instruments that are used for hedging activities as discussed below. The following table sets forth the notional amounts of the Company s hedging derivative instruments as of June 30, 2026 (in thousands): Notional Amounts of Derivative Instruments Notional Amount by Term to MaturityClassification by Notional Amount Under 12 monthsOver 12 monthsTotalCash Flow HedgeNon HedgeTotal Forward contracts$1,030,684 $62,031$1,092,715$704,613$388,102 $1,092,715 Notional Amount by Term to MaturityClassification by Notional Amount Under 12 monthsOver 12 monthsTotalCash Flow HedgeNon HedgeTotal Forward contracts$1,064,280 $79,858$1,144,138$765,613$378,525 $1,144,138 Balance Sheet Location20262025 Derivative assets Derivatives designated as hedging instruments: Foreign exchange forward contractsPrepaid expenses and other current assets$17,110 $16,210 Foreign exchange forward contractsOther non-current assets156 3,715 Derivatives not designated as hedging instruments: Foreign exchange forward contractsPrepaid expenses and other current assets240 3,309 Total derivative assets$17,506 $23,234 Derivative liabilities Derivatives designated as hedging instruments: Foreign exchange forward contractsAccrued expenses and other current liabilities$10,085 $2,409 Foreign exchange forward contractsOther non-current liabilities988 Derivatives not designated as hedging instruments: Foreign exchange forward contractsAccrued expenses and other current liabilities5,932 36 Total derivative liabilities$17,005 $2,445 The pre-tax effects of derivatives designated as cash flow hedging instruments on the consolidated financial statements were as follows (in thousands): 202620252024 $24,679 $41,424 $48,170 Gross unrealized gains (losses) recognized in other comprehensive loss7,877 (1,897)10,826 Recognized in cost of revenues43 1,447 1,072 Recognized in research and development(12,840)7,194 7,718 Recognized in marketing and sales(3,223)1,027 1,264 Recognized in general and administrative(3,033)1,828 2,320 Recognized in interest(7,163)(26,344)(29,946) Ending balance of accumulated gains in accumulated other comprehensive loss$6,340 $24,679 $41,424 87 6. Property and Equipment Property and equipment, net consisted of the following (in thousands): As of June 30, 20262025 Equipment$16,270 $15,008 Computer hardware and software73,057 58,559 Furniture and fittings27,676 25,217 Leasehold improvements and other125,604 154,113 242,607 252,897 Less: accumulated depreciation(156,305)(147,779) Property and equipment, net$86,302 $105,118 Depreciation expense was $39.2 million, $36.9 million, and $29.0 million for fiscal years 2026, 2025, and 2024, respectively. During fiscal year 2026, the Company recorded a $18.7 million impairment charge for leasehold improvements and other as a result of the Company s restructuring efforts. Refer to Note 14, Restructuring, for additional information. 7. Business Combinations The Browser Company of New York Inc. On October 20, 2025, the Company acquired 100% of the outstanding equity of The Browser Company of New York Inc. ( BCNY ), the company behind the Dia and Arc browsers. The total purchase price was $488.3 million, composed of $481.5 million in cash and $6.8 million in non-cash settlement of existing BCNY shares included in the Company s strategic investments. The acquisition of BCNY further expands offerings to Atlassian customers by providing a browser for enterprises designed for knowledge workers using SaaS applications in the AI-era. The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands): Fair Value Cash and cash equivalents$22,160 Prepaid expenses and other current assets1,235 Intangible assets, net91,000 Goodwill376,885 Accrued expenses and other current liabilities(2,102) Deferred tax liabilities(832) Net assets acquired$488,346 The excess of purchase price over the fair value of assets acquired and liabilities assumed was recorded as goodwill. The resulting goodwill is primarily attributed to the assembled workforce and expanded market opportunities, including providing the BCNY browsers to customers as an additional product along with existing Company offerings. The goodwill is not deductible in the U.S. for income tax purposes. The fair values assigned to assets acquired and liabilities assumed are preliminary and based on management s estimates and assumptions which may be subject to change as additional information is received. The primary areas that remain preliminary relate to the fair values of certain intangible assets acquired, certain tangible assets and liabilities acquired, contingencies as of the acquisition date, income tax, including deferred taxes, and residual goodwill. The Company expects to finalize the valuation no later than one year from the acquisition date. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands, except for useful life): 88 Fair ValueUseful Life (years) Developed Technology$80,000 3 Trade Name11,000 3 Developed technology represents the estimated fair value of BCNY s AI-enabled browser technology. Trade name represents the estimated fair value of the BCNY trade name. In connection with the transaction, the Company granted $8.2 million worth of replacement awards in the form of restricted stock units ( RSU ) to BCNY employees and $97.0 million worth of RSU awards to certain key BCNY employees. The fair value of the RSU awards was based on the stock price of the Company on the grant date. The RSU awards are subject to future vesting provisions based on service conditions, and the related expense is accounted for as stock-based compensation and classified in the consolidated statement of operations according to the activities that the employees perform. A Software Company On November 10, 2025, the Company acquired 100% of the outstanding equity of A Software Company ( DX ), which specializes in engineering intelligence. The acquisition of DX further expands the offerings to Atlassian customers and enhances the Company s Collections. The total purchase price was composed of $720.4 million in cash. The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands): Fair Value Cash and cash equivalents$27,910 Accounts Receivable6,529 Other non-current assets9,929 Intangible assets, net182,800 Goodwill557,439 Accrued expenses and other current liabilities(1,706) Deferred revenue, current(25,482) Deferred tax liabilities(26,865) Other non-current liabilities(10,192) Net assets acquired$720,362 The excess of purchase price over the fair value of assets acquired and liabilities assumed was recorded as goodwill. The resulting goodwill is primarily attributed to the assembled workforce and expanded market opportunities, including integrating the DX engineering intelligence platform with existing Company offerings. The goodwill is not deductible in the U.S. for income tax purposes. The fair values assigned to assets acquired and liabilities assumed are preliminary and based on management s estimates and assumptions which may be subject to change as additional information is received. The primary areas that remain preliminary relate to the fair values of certain intangible assets acquired, certain tangible assets and liabilities acquired, contingencies as of the acquisition date, income tax, including deferred taxes, and residual goodwill. The Company expects to finalize the valuation no later than one year from the acquisition date. The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands, except for useful life): Fair ValueUseful Life (years) Developed Technology$138,000 5 Trade Name37,000 5 Customer Relationships4,800 5 Backlog3,000 3 89 Developed technology represents the estimated fair value of DX s engineering intelligence technology. Trade name represents the estimated fair value of the DX trade name. In connection with the transaction, the Company granted $201.8 million in restricted stock awards ( RSAs ) and provided $38.9 million in deferred cash compensation to certain key DX employees. The fair value of the RSAs was based on the Company s stock price on the grant date. Both the RSAs and cash compensation are subject to future vesting provisions based on service conditions. The related expense for the RSAs and cash compensation is accounted for as employee compensation expense, specifically stock-based compensation related to the RSAs, and is classified in the consolidated statement of operations according to the activities that the employees perform. Other Fiscal Year 2026 Business Combinations During the fiscal year 2026, the Company also completed two additional acquisitions to expand its offerings. These transactions were accounted for as business combinations and were not material individually or in the aggregate to the consolidated financial statements. Total transaction costs incurred related to the business combinations were not material for fiscal year 2026. The Company has included the financial results of BCNY, DX, and the other two additional business combinations described above in its consolidated financial statements from the date of acquisition, which were not material for fiscal year 2026. Pro forma results of operations have not been presented for fiscal year 2026 because the effect of the acquisitions individually and in the aggregate would not be material to the Company s consolidated financial statements. 8. Goodwill and Intangible Assets Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill amounts are not amortized but rather tested for impairment at least annually during the fourth quarter, or when indicators of impairment exist. Goodwill consisted of the following (in thousands): Balance as of June 30, 20241,288,756 Additions Effect of change in exchange rates Balance as of June 30, 2025 Additions Effect of change in exchange rates Balance as of June 30, 20262,302,739 Intangible Assets Intangible assets consisted of the following as of June 30, 2026 (in thousands): Gross Carrying AmountAccumulated AmortizationNet Acquired developed technology$700,032 $(356,383)$343,649 Patents, trade names, and other rights118,928 (50,555)68,373 Customer relationships143,487 (123,251)20,236 Total Intangible Assets$962,447 $(530,189)$432,258 Intangible assets consisted of the following as of June 30, 2025 (in thousands): 90 Gross Carrying AmountAccumulated AmortizationNet Acquired developed technology$466,932 $(278,525)$188,407 Patents, trade names, and other rights70,928 (37,337)33,591 Customer relationships135,687 (112,845)22,842 Total Intangible Assets$673,547 $(428,707)$244,840 The weighted-average remaining useful lives of the Company s acquired intangible assets as of June 30, 2026 are as follows: Weighted-Average Remaining Useful Lives (years) Acquired developed technology4 Patents, trade names, and other rights4 Customer relationships3 Amortization expense for intangible assets was approximately $101.5 million, $55.5 million, and $49.7 million for fiscal years 2026, 2025, and 2024, respectively. The following table presents the estimated future amortization expense related to intangible assets held as of June 30, 2026 (in thousands): Fiscal Years: 2027$120,007 2028117,244 202987,814 203073,839 203131,108 Thereafter2,246 Total future amortization expense$432,258 9. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): As of June 30, 20262025 Accrued expenses$198,206 $180,197 Employee benefits468,473 422,986 Customer deposits19,185 16,396 Tax liabilities17,429 36,726 Derivative liabilities16,017 2,445 45,269 22,851 Total accrued expenses and other current liabilities$764,579 $681,601 10. Leases The Company rents office space and equipment under non-cancelable operating leases with various expiration dates through fiscal year 2034. Certain lease agreements include varying terms, escalation clauses and renewal rights. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably certain at lease commencement. The Company s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. 91 The components of lease costs and other information related to leases were as follows (in thousands): Fiscal Year Ended June 30, 202620252024 Operating lease costs $38,681 $43,720 $41,426 Variable lease costs17,200 14,781 11,908 Total lease costs$55,881 $58,501 $53,334 Weighted average remaining lease term (in years)456 Weighted average discount rate3.5 %3.1 %2.9 % Supplemental cash flow information related to operating leases were as follows (in thousands): Fiscal Year Ended June 30, 202620252024 Cash payments for operating leases$56,010 $52,981 $49,803 Right-of-use assets obtained in exchange for new operating lease liabilities$40,601 $34,717 $23,265 Future lease payments under non-cancelable operating leases with initial lease terms in excess of one year included in the Company s lease liabilities as of June 30, 2026 were as follows (in thousands): Fiscal years:Operating Lease Payments 2027$56,148 202851,985 202942,186 203018,527 203119,078 Thereafter87,443 Total future operating lease payments275,367 Less: imputed interest(32,017) Total lease liability balance$243,350 During fiscal year 2026, in addition to operating lease costs disclosed above, the Company recorded an impairment charge of $80.0 million in aggregate for operating lease right-of-use assets as a result of its facilities consolidation restructuring efforts. Refer to Note 14, Restructuring, for additional information. The Company entered into an Agreement for Lease (the AFL ) for the Australian HQ Property in March 2022. Following the completion of the development of the Australian HQ Property, the AFL requires the Company to enter into a lease agreement for the planned headquarters office space. The lease is expected to commence in fiscal year 2027 and will continue for fifteen years, with the Company s option to extend the term for up to two additional ten-year periods. Future lease payments are approximately $959.8 million as of June 30, 2026, for the initial term of fifteen years. Please refer to Note 4, Investments, for details of the transaction. 11. Debt Credit Facility In August 2024, the Company s principal U.S. operating subsidiary, Atlassian US, Inc., entered into an amended and restated credit agreement (the 2024 Credit Agreement ) which eliminated a term loan facility and provides for a $750 million senior unsecured revolving credit facility (the 2024 Credit Facility ). The 2024 Credit Agreement replaced the Company s prior credit agreement entered into in October 2020 ( 2020 Credit Agreement ) which provided for a $1 billion senior unsecured delayed-draw term loan facility (the Term Loan ) and a $500 million senior unsecured revolving credit facility. 92 The 2024 Credit Facility bears interest, at the Company s option, at a base rate or the Secured Overnight Financing Rate, plus, in each case, a spread of 0.875% to 1.50% per annum. In each case, the applicable margin will be determined by the consolidated leverage ratio of the Company and its subsidiaries, or, following the Company s one time option, the Company s credit rating. The Company may repay outstanding loans under the 2024 Credit Facility at any time, without premium or penalty, and the Company has the option to request an increase of $250 million in certain circumstances. The 2024 Credit Facility matures in August 2029. As of June 30, 2026, there were no borrowings under the 2024 Credit Facility. The Company is also obligated to pay a commitment fee on the undrawn amounts of the 2024 Credit Facility at an annual rate ranging from 0.075% to 0.20%, determined by the Company s consolidated leverage ratio, or, following the Company s one time option, the Company s credit rating. The 2024 Credit Facility requires compliance with various financial and non-financial covenants, including affirmative and negative covenants. The financial covenants include a maximum consolidated leverage ratio of 3.5x, which increases to 4.5x during the period of four fiscal quarters immediately following a material acquisition. As of June 30, 2026, the Company was in compliance with all covenants associated with the 2024 Credit Facility. Senior Notes On May 15, 2024, the Company issued $500.0 million aggregate principal amount of 5.250% senior notes due 2029 (the 2029 Notes ) and $500.0 million aggregate principal amount of 5.500% senior notes due 2034 (the 2034 Notes, and together with the 2029 Notes, the Notes ). The Notes will mature on May 15, 2029, and May 15, 2034, respectively. The 2029 Notes bear interest at a rate of 5.250% per year. The 2034 Notes bear interest at a rate of 5.500% per year. Interest on the Notes is paid semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2024. The Notes are senior unsecured obligations of the Company. The Company may redeem either series of the Notes, in whole or in part, at any time or from time to time at the applicable redemption price. Upon the occurrence of a change of control event, the Company will be required to make an offer to repurchase all outstanding notes from their holders at a price equal to 101% of their principal amount thereof, plus accrued and unpaid interest to, but not including, the date of repurchase. The indenture governing the Notes also includes covenants (including certain limited covenants restricting the Company s ability to incur certain liens and enter into certain sale and leaseback transactions), events of default, and other customary provisions. As of June 30, 2026, the Company was in compliance with all covenants associated with the Notes. The Company incurred debt discount and issuance costs of approximately $14.3 million in connection with the Notes offering, which were allocated on a pro rata basis to the 2029 Notes and 2034 Notes. The debt discount and issuance costs are amortized on an effective interest rate method to interest expense over the contractual term of the Notes. The proceeds from this offering, net of debt discounts and issuance costs, were $985.7 million. The net proceeds were used primarily to repay the Term Loan. The components of the Notes were as follows (in thousands, except percentage data): InstrumentExpected Remaining Term (years)Contractual Interest RateEffective Interest RateJune 30, 2026June 30, 2025 2029 Notes2.95.25 %5.55 %$500,000 $500,000 2034 Notes7.95.50 %5.71 %500,000 500,000 Unamortized debt discount and issuance costs(10,440)(12,316) $989,560 $987,684 The total estimated fair value of the Notes was approximately $1.00 billion and $1.03 billion as of June 30, 2026, and 2025, respectively. The estimated fair value of the Notes, which the Company deems Level 2 financial instruments, was determined based on quoted bid prices in an over-the-counter market on the last trading day of the reporting period. 93 12. Commitments and Contingencies Noncancellable Purchase Obligations The Company has contractual commitments for services with third-parties related to its cloud services platform, marketing related contracts and other services. These commitments are non-cancellable with contractual terms ranging from two to seven years. There were no material contractual commitments that were entered into during fiscal year 2026 that were outside the ordinary course of business. The following table sets forth contractual commitments as of June 30, 2026 and 2025 (in thousands): Fiscal Year Ended June 30, 20262025 Contractual purchase obligations$3,735,049 $1,814,106 Obligations for leases that have not yet commenced959,795 912,344 Total purchase obligation$4,694,844 $2,726,450 Maturities of purchase obligations as of June 30, 2026 were as follows (in thousands): Other contractual commitmentsLeases not commencedTotal Fiscal Years: 2027 $663,118 $27,961 $691,079 2028680,631 49,052 729,683 2029609,256 51,014 660,270 2030577,647 53,054 630,701 2031653,397 55,176 708,573 Thereafter551,000 723,538 1,274,538 Total commitments$3,735,049 $959,795 $4,694,844 Please refer to Note 10, Leases, for discussion of lease commitments that the Company has entered but the leases have not yet commenced. Legal Proceedings From time to time, the Company is party to litigation and other legal proceedings in the ordinary course of business. While the Company does not believe the ultimate resolutions of these pending legal matters are likely to have a material adverse effect on the Company s financial position, the results of any litigation or other legal proceedings are uncertain and as such the resolution of such legal proceedings, either individually or in the aggregate, could have a material adverse effect on its business, results of operations, financial condition or cash flows. The Company accrues for loss contingencies when it is both probable that it will incur the loss and when it can reasonably estimate the amount of the loss or range of loss. For the periods presented, the Company has not recorded any material liabilities as a result of the litigation or other legal proceedings in the consolidated financial statements. Indemnification Provisions The Company s agreements include provisions indemnifying customers against intellectual property and other third-party claims. In addition, the Company has entered into indemnification agreements with its directors, executive officers, and certain other officers that will require the Company to, among other things, indemnify these individuals for certain liabilities that may arise as a result of their affiliation with the Company. For the periods presented, the Company has not incurred any costs as a result of such indemnification obligations and has not recorded any liabilities related to such obligations in the consolidated financial statements. 94 13. Revenue Remaining Performance Obligations The transaction price allocated to the remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price allocated to the remaining performance obligations is influenced by several factors, including the timing of renewals, the timing of delivery of software licenses, average contract terms, and foreign currency exchange rates. Unbilled portions of the remaining performance obligations are subject to future economic risks including bankruptcies, regulatory changes, and other market factors. As of June 30, 2026, approximately $4.8 billion of revenue is expected to be recognized from transaction price allocated to remaining performance obligations. The Company expects to recognize revenue on approximately 65% of these remaining performance obligations over the next 12 months, with the balance recognized thereafter. Disaggregated Revenue The Company s revenues by geographic region based on end-users who purchased the Company s offerings were as follows (in thousands): Fiscal Year Ended June 30, 202620252024 Americas United States$2,760,458 $2,182,073 $1,847,194 Other Americas405,910 334,828 278,240 Total Americas3,166,368 2,516,901 2,125,434 EMEA Germany692,300 539,550 442,063 Other EMEA2,000,288 1,584,421 1,308,847 Total EMEA2,692,588 2,123,971 1,750,910 Asia Pacific713,352 574,432 482,259 Total revenues$6,572,308 $5,215,304 $4,358,603 The Company provides different deployment options for its offerings. Cloud offerings provide customers the right to use the Company s software in a cloud-based infrastructure that the Company provides. Data Center offerings are on-premises term license agreements for the Company s Data Center products, which are software licensed for a specified period, and include support and maintenance services that are bundled with the license for the term of the license period. Marketplace and other offerings mainly include fees received for sales of third-party apps in the Atlassian Marketplace and services like premier support, advisory services and training services. Premier support consists of subscription-based arrangements for a higher level of support across different deployment options, and revenues from this offering are included in Subscription revenues within the Company s consolidated statements of operations. In September 2025, the Company announced plans to end-of-life its Data Center offering. As of March 2026, the Company no longer sells term licenses to new customers, and the Company will stop selling term licenses and expansions to existing customers in March 2028. Subject to limited exceptions, the Company plans to end maintenance and support for its Data Center offerings in March 2029. The Company s revenues by deployment options are as follows (in thousands): 95 Fiscal Year Ended June 30, 202620252024 Cloud$4,410,627 $3,447,427 $2,698,899 Data Center1,830,941 1,467,167 1,208,498 Server 177,645 Marketplace and other330,740 300,710 273,561 Total revenues$6,572,308 $5,215,304 $4,358,603 Contract Assets The Company records a contract asset when revenue recognized on a contract exceeds the billings and the Company has an unconditional right to payment. Contract assets were $53.5 million and $3.3 million as of June 30, 2026 and 2025, respectively, and are included in prepaid expenses and other current assets in the Company s Consolidated Balance Sheets. Deferred Revenue The Company records deferred revenues when cash payments are received or due in advance of the Company satisfying its performance obligations, including amounts that are refundable. The changes in the balances of deferred revenue were as follows (in thousands): Fiscal Year Ended June 30, 20262025 Balance, beginning of period$2,481,254 $2,114,736 Additions6,752,745 5,581,822 Revenue(6,572,308)(5,215,304) Balance, end of period$2,661,691 $2,481,254 For fiscal years 2026 and 2025, approximately 32% and 34% of revenue recognized was from the deferred revenue balances at the beginning of each fiscal year, respectively. Deferred Contract Acquisition Costs The changes in the balances of deferred contract acquisition costs were as follows (in thousands): Fiscal Year Ended June 30, 20262025 Balance, beginning of period$136,340 $79,711 Additions135,116 96,869 Amortization expense(68,099)(40,240) Balance, end of period$203,357 $136,340 Deferred contract acquisition costs included in: Prepaid expenses and other current assets$76,003 $50,233 Other non-current assets127,354 86,107 Total$203,357 $136,340 The Company periodically reviews these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the periods presented. 14. Restructuring During the first quarter of fiscal year 2026, the Company initiated a restructuring plan to reduce capacity that was no longer necessary due to the increased ability, accessibility, performance, stability, and supportability of its products. 96 During the third quarter of fiscal year 2026, the Company initiated another restructuring plan to accelerate building the future of teamwork in the AI era. This includes self-funding further investment in key strategic priorities, such as AI and enterprise sales, reorganizing its teams to move with more focus and speed across the Atlassian System of Work, and optimizing for long-term operational efficiency and sustainability. This initiative resulted in the elimination of certain roles, which impacted approximately 10% of the Company s workforce. The execution of these actions, including cash payment of the severance and other termination benefits related liabilities, have been substantially satisfied as of June 30, 2026. As a result, the Company recorded total severance and other termination benefits of $203.9 million, and additional stock-based compensation of $1.4 million for the affected employees during fiscal year 2026. In addition, during fiscal year 2026, the Company exited certain leased properties to optimize its real estate footprint and has entered, or plans to enter, into sublease agreements for these locations. As a result, the Company recorded total impairment charges of $80.0 million associated with the optimization of its leased facilities, primarily for operating lease right-of-use assets and leasehold improvements for the fiscal year 2026. The fair values of the impaired assets were estimated using discounted cash flow models (income approach) based on market participant assumptions with Level 3 fair value inputs. The assumptions used in estimating fair value include the expected downtime prior to the commencement of future subleases, projected sublease income over the remaining lease periods, and discount rates that reflect the level of risk associated with receiving future cash flows. A summary of the Company s restructuring charges for fiscal year 2026, by major activity type was as follows (in thousands): Severance and Other Termination BenefitsStock-based CompensationLease ConsolidationTotal Cost of revenue$45,185 $1,432 $6,647 $53,264 Research and development108,844 35,650 144,494 Marketing and sales25,110 26,421 51,531 General and administrative24,778 11,303 36,081 Total$203,917 $1,432 $80,021 $285,370 The following table is a summary of the changes in the liabilities, included within accrued expenses and other current liabilities on the consolidated balance sheets as of June 30, 2026, related to the restructuring charges (in thousands): Severance and Other Termination BenefitsStock-based CompensationLease ConsolidationTotal Charges$203,917 $1,432 $80,021 $285,370 Payments(188,526) (70)(188,596) Non-cash items(446)(1,432)(79,951)(81,829) Effect of change in exchange rates(2,094) (2,094) Restructuring provision as of June 30, 2026 $12,851 $ $ $12,851 97 15. Geographic Information The Company s long-lived assets by geographic regions are as follows (in thousands): As of June 30, 20262025 $104,167 $168,841 Australia60,602 54,073 India25,044 34,909 All other countries 10,548 16,422 Total long-lived assets$200,361 $274,245 Long-lived assets for this purpose consist of property and equipment, net and operating lease right-of-use assets. 16. Stockholders Equity Common Stock As of June 30, 2026, the Company s common stock consists of Class A Common Stock and Class B Common Stock, each of which has a par value of $0.00001. Each share of Class B Common Stock will convert automatically into one share of Class A Common Stock in the following circumstances: (1) upon the written consent of the holders of at least 66.66% of the total number of outstanding shares of Class B Common Stock; (2) if the aggregate number of shares of Class B Common Stock then outstanding comprises less than ten percent (10%) of the total number of shares of Class A Common Stock and Class B Common Stock then outstanding; and (3) upon any transfer to a person that is not a permitted transferee described in the Company s amended and restated certificate of incorporation. Any dividend declared by the Company must be paid on the Class A Common Stock and the Class B Common Stock pari passu as if they were all stock of the same class. Additionally, upon the liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, holders of Class A Common Stock and Class B Common Stock will be entitled to receive ratably on a per share basis all assets of the Company available for distribution to its stockholders, unless disparate or different treatment of the shares of each such class is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and by the affirmative vote of the holders of a majority of the outstanding shares of Class B Common Stock, each voting separately as a class. Each share of Class A Common Stock is entitled to one vote. Each share of Class B Common Stock is entitled to 10 votes. Preferred Stock The Company s board of directors has the authority to issue up to 10 million shares of preferred stock in one or more series. The Company s board of directors may designate the rights, preferences, privileges, and restrictions of the preferred stock, including voting rights, dividend rights, conversion rights, redemption privileges, and liquidation preferences, the right to elect directors to and increase or decrease the number of shares of any series. As of June 30, 2026 and 2025, no shares of preferred stock were outstanding. Stock-based Compensation The Company maintains the Atlassian Corporation Amended and Restated 2015 Share Incentive Plan (the 2015 Plan ), and the Atlassian Corporation Amended and Restated 2015 Employee Share Purchase Plan (the ESPP and, together with the 2015 Plan, the Incentive Plans ). At June 30, 2026, the Company had 22,163,095 shares of its common stock available for future issuance under the 2015 Plan. The Company currently does not have common stock outstanding or open offering periods under the ESPP. RSU grants generally vest evenly over four years on a quarterly basis. 98 A summary of RSU activity for fiscal year 2026 is as follows (in thousands except share and per share data): Number of SharesWeighted Average Grant Date Fair ValueAggregate Intrinsic Value 16,578,020$190.98 $3,366,830 Granted20,012,718133.12 Vested(8,208,180)184.85 972,609 Forfeited or cancelled(6,075,673)157.80 Balance as of June 30, 202622,306,885$149.21 $1,735,253 The weighted-average grant date fair value of RSUs granted in fiscal years 2025 and 2024 was $179.10 and $199.66, respectively. The total intrinsic value of the RSUs vested in fiscal years 2025 and 2024 was $1.5 billion and $950.3 million, respectively. The income tax benefit recognized related to awards vested in fiscal years 2026, 2025 and 2024 were $235.2 million, $335.1 million, and $218.7 million, respectively. As of June 30, 2026, total compensation cost not yet recognized in the consolidated financial statements related to employee and director RSU awards was $2.5 billion, which is expected to be recognized over a weighted-average period of 2.7 years. During fiscal year 2026, the Company granted RSAs for 1,353,312 shares of Class A Common Stock in connection with business combinations. During fiscal year 2025, the Company did not grant any RSAs. As of June 30, 2026 and 2025, there were RSAs for 1,355,510 and 90,083 shares of Class A Common Stock outstanding, respectively. These outstanding RSAs are subject to forfeiture following employee termination. The total aggregate intrinsic value of outstanding RSAs was $105.4 million and $18.3 million as of June 30, 2026 and 2025, respectively. Of the total stock-based compensation expense, costs recognized for awards granted to non-employees were immaterial for all periods presented. Share Repurchase Program In September 2024, the Board of Directors authorized a program to repurchase up to $1.5 billion of the Company s outstanding Class A Common Stock (the 2024 Repurchase Program ). The 2024 Repurchase Program commenced in April 2025 following completion of the previous repurchase program. The 2024 Repurchase Program was completed in March 2026. In October 2025, the Board of Directors authorized a new program under which the Company may repurchase up to an additional $2.5 billion of the Company s outstanding Class A Common Stock (the 2025 Repurchase Program. The 2025 Repurchase Program commenced in March 2026 following completion of the 2024 Repurchase Program. The 2025 Repurchase Program does not have a fixed expiration date, may be suspended or discontinued at any time, and does not obligate the Company to repurchase any specific dollar amount or to acquire any specific number of shares. The Company may repurchase shares of Class A Common Stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act ), in accordance with applicable securities laws and other restrictions. The timing, manner, price, and amount of any repurchases will be determined by the Company at its discretion and will depend on a variety of factors, including business, economic, and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. During fiscal year 2026, the Company repurchased and subsequently retired approximately 19.1 million shares of its Class A Common Stock for approximately $1.8 billion at an average price per share of $94.31. The 1% excise tax instituted by the Inflation Reduction Act is excluded in the total repurchase cost and average price paid. All repurchases were made in open market transactions. As of June 30, 2026, $1.9 billion of the Company s Class A Common Stock remained available for repurchase under the 2025 Repurchase Program. 17. Net Loss Per Share The Company computes net loss per share of Class A and Class B Common Stock using the two-class method. As the liquidation and dividend rights for both Class A and Class B Common Stock are identical, the net loss is allocated on a proportionate basis to the weighted-average number of shares of common stock outstanding 99 for the period. Basic net loss per share attributable to Class A and Class B stockholders is computed by dividing the net loss by the weighted-average number of Class A and Class B Common Stock outstanding during the period. For the calculation of diluted net loss per share, net loss for basic earnings per share is adjusted by the effect of dilutive securities, including awards under the Company s equity compensation plans. The dilutive potential shares of common stock are computed using the treasury stock method or the as-if converted method, as applicable. Since the Company is in a loss position for all periods reported, basic and diluted net loss per share are the same for all periods as the inclusion of potential dilutive shares would have been anti-dilutive. The following tables present the calculation of basic and diluted net loss per share attributable to common stockholders (in thousands, except per share data): Fiscal Year Ended June 30, 202620252024 Class AClass BClass AClass BClass AClass B Numerator: Net Loss$(34,202)$(19,626)$(160,050)$(96,637)$(181,587)$(118,932) Denominator: Weighted-average shares outstanding, basic and diluted165,30894,855163,23098,557156,580102,553 Net loss per share, basic and diluted$(0.21)$(0.21)$(0.98)$(0.98)$(1.16)$(1.16) The potential weighted average dilutive securities that were not included in the dilutive earnings per share calculation because the effect would be anti-dilutive were as follows (shares in thousands): Fiscal Year Ended June 30, 202620252024 16,7467,4238,320 Class A Common Stock restricted stock awards5542923 Total potentially dilutive securities17,3007,4528,343 18. Income Taxes The components of income (loss) before provision for income taxes by U.S. and foreign jurisdictions consist of the following (in thousands): Fiscal Year Ended June 30, 202620252024 Domestic$(71,814)$(137,403)$(139,687) Foreign93,864 38,508 54,280 Total$22,050 $(98,895)$(85,407) 100 The provision for income taxes consists of the following (in thousands): Fiscal Year Ended June 30, 202620252024 Current: Federal$1,270 $(1,249)$2,134 State3,472 4,534 3,969 Foreign94,225 149,908 209,002 Total98,967 153,193 215,105 Deferred: Federal(22,681)927 (14,030) State(1,333)1,814 3,680 Foreign925 1,858 10,357 Total(23,089)4,599 7 Total provision for income taxes$75,878 $157,792 $215,112 The Company adopted ASU 2023-09 on a prospective basis effective July 1, 2025. A reconciliation of the U.S. federal statutory rate to the Company s effective tax rate for the fiscal year 2026 is as follows (in thousands): 101 Fiscal Year Ended June 30, 2026 AmountPercent Tax at U.S. federal statutory rate$4,630 21 % State, net of the federal benefit (1) (3,774)(17) Foreign tax effects: Australia Statutory tax rate difference between Australia and the U.S.(5,885)(27) R&D incentive(8,651)(39) Foreign tax credits(15,791)(72) Stock-based compensation115,305 523 Change in valuation allowance(79,820)(362) Other5,248 24 India Statutory tax rate difference between India and the U.S.16,131 73 Other1,193 5 Brazil Withholding taxes7,494 34 Other foreign jurisdictions23,580 107 Effects of cross border tax laws Global intangible low-taxed income42,216 192 Other(4,637)(21) Tax credits Research and development(38,700)(175) Foreign tax credits(7,855)(36) Non-taxable or non-deductible items Stock-based compensation81,330 369 Section 162(m) adjustment 5,871 27 Basis difference in investments9,559 43 Change in unrecognized tax benefits 34,860 158 Change in valuation allowance(109,140)(495) Other2,714 12 Provision for income taxes $75,878 344 % (1) The state that contributed to the majority of the tax effect in this category was California. A reconciliation between the effective income tax rate and the federal statutory income tax rate applied to the loss before income taxes for years prior to the adoption of ASU 2023-09 is as follows (in thousands): 102 Fiscal Year Ended June 30, 20252024 Tax at federal statutory rate$(20,768)$(17,935) State, net of the federal benefit28,097 16,362 Effects of non-U.S. operations7,332 (14,575) Tax credits(233,946)(151,912) Stock-based compensation94,305 123,719 Non-deductible executive compensation10,462 6,721 Australian R&D deductions forgone in lieu of R&D credit29,169 29,502 Foreign taxes1,159 (131) Basis difference in investments(34,562)14,615 Change in reserves29,886 32,505 Change in valuation allowance239,975 174,994 Other6,683 1,247 Provision for income taxes$157,792 $215,112 Effective tax rate (%)(160)%(252)% Income taxes paid, net of refunds received, for the fiscal year 2026 were as follows (in thousands): Fiscal Year Ended June 30, 2026 Federal$(7,112) State930 Foreign Australia90,592 India36,077 Netherlands11,261 All other foreign28,958 Income taxes, net of amounts refunded$160,706 The following table sets forth significant components of the Company s deferred tax assets and deferred tax liabilities (in thousands). Where necessary, a valuation allowance has been recognized to offset the Company s deferred tax assets by the amount of any tax benefits that are not expected to be realized. 103 As of June 30, 20262025 Deferred tax assets: Property and equipment$5,957 $11,028 Loss carryforwards 645,268 615,687 Credit carryforwards460,856 401,629 Operating lease liabilities55,358 56,962 Basis differences in investments1,900,521 2,040,203 Provisions, accruals, and prepayments 69,336 66,735 Deferred revenue242,151 317,761 Capitalized research and development89,790 113,489 1,197 571 Total deferred tax assets3,470,434 3,624,065 Less valuation allowance(3,383,071)(3,549,451) Total deferred tax assets, net of valuation allowance87,363 74,614 Deferred tax liabilities: 3,233 4,163 Operating right of use assets26,689 46,348 Stock-based compensation1,355 7,205 Intangible assets79,851 35,495 Other 1,522 Total deferred tax liabilities111,128 94,733 Net deferred tax liabilities$(23,765)$(20,119) The Company recorded a valuation allowance of $3.4 billion, $3.5 billion and $3.3 billion as of June 30, 2026, 2025, and 2024, respectively, primarily relating to the basis difference of the U.S. investment in a wholly owned partnership, U.S. net operating loss and credit carryforwards, and the deferred revenue deferred tax assets. The decrease in valuation allowance in fiscal year 2026 was primarily related to a decrease in the basis difference of the U.S. investment in a wholly owned partnership and the deferred revenue deferred tax assets. The decrease also reflected the release of valuation allowances on certain pre-existing U.S. deferred tax assets that became realizable as a result of deferred tax liabilities recognized in business combinations completed during the year. The increase in valuation allowance in fiscal years 2025 and 2024 were primarily related to an increase in the basis difference of the U.S. investment in a wholly owned partnership and the deferred revenue deferred tax assets, offset by the utilization of U.S. federal and state net operating losses. The Company regularly assesses the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all of its deferred tax assets will not be realized. The Company evaluates and weighs all positive and negative evidence such as historic results, future reversals of deferred tax liabilities, projected future taxable income, as well as prudent and feasible tax planning strategies. The assessment requires significant judgment and is performed in each of the applicable jurisdictions. The Company intends to maintain a full valuation allowance on its federal deferred tax assets in the U.S. and Australia until there is sufficient positive evidence to support their reversal. As of June 30, 2026, the Company had U.S. federal, state, and foreign net operating loss carryforwards of $663.4 million tax effected. Of the $566.0 million tax effected U.S. federal net operating loss carryforwards, $565.8 million may be carried forward indefinitely, and the remaining $0.2 million will begin to expire in 2032. The state net operating loss carryforwards of $97.1 million tax effected begin to expire in 2027. The foreign net operating loss carryforwards of $0.4 million may be carried forward indefinitely. As of June 30, 2026, the Company also had research and development U.S. federal and state tax credits of $277.9 million and $135.7 million, respectively, and U.S. federal foreign tax credits of $59.0 million. The U.S. federal research and development credits will begin 104 expiring in 2036 if not utilized, and the U.S. federal foreign tax credits will begin expiring in 2034. The state tax credit carryforwards do not expire except for the state research and development credits of Texas which will begin to expire in 2039. Utilization of the Company s US net operating loss and tax credit carryforwards may be subject to annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss and tax credit carryforwards before utilization. As of June 30, 2026, the Company also had Polish R&D credits of $16.8 million, which will begin to expire in 2028. On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act which includes, among other provisions, changes to the U.S. corporate income tax system such as allowing of immediate expensing of qualifying domestic research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. Certain provisions were effective for the Company beginning in fiscal year 2026. The changes did not have material impact on the Company s provision for income taxes for the fiscal year 2026. The Organization for Economic Co-operation and Development released Pillar Two model rules defining a 15% global minimum tax for multinational corporations. Many countries in which the Company operates, including the member states of the EU, have enacted Pillar Two. Based on enacted laws, Pillar Two has not materially impacted the Company s effective tax rate or cash flows. New legislation or guidance could change the Company s current assessment. U.S. income tax has not been recognized on the excess of the amount for financial reporting over the tax basis of investment in foreign subsidiaries that is indefinitely reinvested outside the United States. Un-remitted earnings become taxable upon repatriation of assets from the subsidiary or a sale or liquidation of the subsidiary. The amount of such un-remitted earnings and the corresponding unrecognized deferred tax liability as of June 30, 2026 is not material. The Company records a current income tax receivable when income tax payments made to a taxing authority exceed the income tax liability for that jurisdiction. Current income tax receivables were $68.0 million and $15.8 million as of June 30, 2026 and 2025, respectively, and are included in prepaid expenses and other current assets in the Company's Consolidated Balance Sheets. The Company recognizes the tax benefit of an uncertain tax position only if it concludes it is more likely than not that the position is sustainable upon examination by the taxing authority, based on the technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. A reconciliation of the beginning and ending balance of total unrecognized tax benefits is as follows (in thousands): Fiscal Year Ended June 30, 202620252024 Beginning of the period$136,882 $104,453 $122,302 Tax positions taken in prior period: Gross increases 105 10,887 Gross decreases(5,302)(4,547) Tax positions taken in current period: Gross increases47,195 36,871 25,707 Settlements (53,648) Lapse of statute of limitations(29) Currency translation effect (795) End of period$178,746 $136,882 $104,453 As of June 30, 2026, 2025, and 2024, the Company had gross unrecognized tax benefits of approximately $14.8 million, $0.4 million, and $10.9 million, respectively, that would impact the effective tax rate if recognized. The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, Australia, and in various other international jurisdictions. Tax years 2012 and forward generally remain open for examination for U.S. federal and state tax purposes. Tax years 2017 and forward generally remain open for examination for non- 105 U.S. tax purposes. To the extent utilized in future years tax returns, net operating loss carryforwards as of June 30, 2026, and 2025 will remain subject to examination until the respective tax year is closed. There are differing interpretations of tax laws and regulations, and as a result, disputes may arise with tax authorities involving issues of the timing and amount of deductions and allocations of income among various tax jurisdictions. The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result from these examinations. The Company has not recognized any material interest and penalties related to unrecognized tax benefits in the income tax provision during fiscal years 2026, 2025, and 2024, respectively. As of June 30, 2026, 2025, and 2024, the accrual balances were also not material. ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of June 30, 2026, have concluded that, as of such date, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified by the SEC s rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control Integrated Framework (2013). Our internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of June 30, 2026. Our independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report with respect to the effectiveness of our internal control over financial reporting, which appears in Part II, Item 8 of this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act that occurred during the quarter ended June 30, 2026 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Limitations on Effectiveness of Controls and Procedures In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. ITEM 9B. OTHER INFORMATION None. 106 ITEM 9C. DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this item is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended June 30, 2026. ITEM 11. EXECUTIVE COMPENSATION The information required by this item is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended June 30, 2026. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended June 30, 2026. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. The information required by this item is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended June 30, 2026. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended June 30, 2026. 107 PART IV ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULE (a) The following documents are filed as part of this report: 1.Financial Statements See Index to Financial Statements in Item 8. Financial Statements to this Annual Report on Form 10-K. 2. Financial Statement Schedules Schedules not listed above have been omitted because they are not required, not applicable, or the required information is otherwise included. 3. Exhibits The exhibits listed below are filed as part of this Annual Report on Form 10-K or are incorporated herein by reference, in each case as indicated below. Exhibits Incorporated by Reference Exhibit NumberDescriptionProvided HerewithFormSEC File No.ExhibitFiling Date 3.1 Amended and Restated Certificate of Incorporation of Atlassian Corporation, adopted as of September 27, 2022. 8-K001-376513.110/03/2022 3.2 Amended and Restated Bylaws of Atlassian Corporation, adopted as of September 30, 2022. 8-K001-376513.210/03/2022 4.1 Specimen Class A Common Stock Certificate. S-8333-2669984.310/04/2022 4.2Indenture, dated as of May 15, 2024, between the Company and U.S. Bank Trust Company, National Association, as trustee. 8-K001-376514.105/15/2024 4.3 First Supplemental Indenture, dated as of May 15, 2024, between the Company and U.S. Bank Trust Company, National Association, as trustee. 8-K001-376514.205/15/2024 4.4 Form of 5.250% senior notes due 2029 (included in Exhibit 4.3). 8-K001-376514.205/15/2024 4.5 Form of 5.500% senior notes due 2034 (included in Exhibit 4.3). 8-K001-376514.205/15/2024 4.6 Description of Securities. 10-K 001-37651 4.608/06/2024 108 10.1 Amended and Restated Credit Agreement, dated as of August 12, 2024, by and among the Company, Atlassian US, Inc., Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, JPMorgan Chase Bank, N.A. and Morgan Stanley Senior Funding, Inc., as Co-Syndication Agents and L/C Issuers, and the other L/C Issuers and lenders party thereto 10-K 001-37651 10.108/06/2024 10.2 #Form of Indemnification Agreement. 8-K001-3765110.210/03/2022 10.3#Form of Executive Officer Offer Letter. 10-Q001-3765110.311/04/2022 10.4 #Atlassian Corporation Amended and Restated 2015 Share Incentive Plan. X 10.5 #Atlassian Corporation Amended and Restated 2015 Employee Share Purchase Plan. X 10.6 #Atlassian Corporation Amended and Restated Executive Severance Plan. 8-K001-3765110.610/03/2022 10.7 #Atlassian Corporation Amended and Restated Cash Incentive Bonus Plan. 8-K001-3765110.710/03/2022 10.8 #Atlassian Corporation Amended and Restated Non-Employee Director Compensation Policy. 10-K 001-37651 10.108/06/2024 10.9 Agreement for Lease, dated March 23, 2022, by and among Atlassian Corporation Plc, Atlassian Pty Ltd, Vertical First Pty Ltd as trustee for the Vertical First Trust, Dexus Property Services Pty Limited, Dexus Funds Management Limited as responsible entity for Dexus Property Trust and Dexus Funds Management Limited as responsible entity for Dexus Operations Trust. 6-K001-3765110.103/25/2022 10.10 Deed of Amendment, dated April 30, 2022, to Agreement for Lease, dated March 23, 2022, by and among Atlassian Corporation Plc, Atlassian Pty Ltd, Vertical First Pty Ltd as trustee for the Vertical First Trust, Dexus Property Services Pty Limited, Dexus Funds Management Limited as responsible entity for Dexus Property Trust and Dexus Funds Management Limited as responsible entity for Dexus Operations Trust. 20-F001-3765110.2208/19/2022 10.11Guarantor Replacement Deed, dated November 8, 2022, to the Agreement for Lease, dated March 23, 2022, by and among Atlassian Corporation Limited (formerly Atlassian Corporation Plc), Atlassian Pty Ltd, Atlassian Corporation, Vertical First Pty Ltd as trustee for the Vertical First Trust, Dexus Property Services Pty Limited, Dexus Funds Management Limited as responsible entity for Dexus Property Trust and Dexus Funds Management Limited as responsible entity for Dexus Operations Trust. 10-Q001-3765110.102/03/2023 10.12 Deed of Amendment (No. 2), dated August 28, 2023, to Agreement for Lease, dated March 23, 2022, by and among Atlassian Corporation Plc, Atlassian Pty Ltd, Vertical First Pty Ltd as trustee for the Vertical First Trust, Dexus Property Services Pty Limited, Dexus Funds Management Limited as responsible entity for Dexus Property Trust and Dexus Funds Management Limited as responsible entity for Dexus Operations Trust. 10-Q001-3765110.111/03/2023 109 10.13 Deed of Amendment (No. 3), dated September 3, 2024, to Agreement for Lease, dated March 23, 2022, by and among Atlassian Corporation Plc, Atlassian Pty Ltd, Vertical First Pty Ltd as trustee for the Vertical First Trust, Dexus Property Services Pty Limited, Dexus Funds Management Limited as responsible entity for Dexus Property Trust and Dexus Funds Management Limited as responsible entity for Dexus Operations Trust. 10-Q001-3765110.211/01/2024 19.1 Atlassian Corporation Insider Trading and Disclosure Policy. 10-K 001-37651 19.108/06/2024 21.1 Subsidiaries of the Registrant. X 23.1 Consent of Independent Registered Public Accounting Firm. X 24.1 Power of Attorney (included on signature page to this Annual Report on Form 10-K). X 31.1 Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. X 32.1 Certification of Principal Executive Officers and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X 97.1#Atlassian Corporation Compensation Recovery Policy. 10-K001-3765110.1108/18/2023 101.INSInline XBRL Instance Document. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.X 101.SCHInline XBRL Taxonomy Extension Schema Document.X 101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.X 101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.X 101.LABInline XBRL Taxonomy Extension Label Linkbase Document.X 101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.X 104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101 filed herewith).X # Indicates management contract or compensatory plan, contract, or agreement. Portions of this exhibit have been redacted. Certain exhibits and schedules to this agreement have been omitted. 110 The certification attached as Exhibit 32.1 that accompanies this Annual Report on Form 10-K pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is not deemed filed by the registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. ____________________________ 111 ITEM 16. FORM 10-K SUMMARY None. 112 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. ATLASSIAN CORPORATION Date: August 14, 2026 By:/s/ Michael Cannon-Brookes Name:Michael Cannon-Brookes Title:Chief Executive Officer (Principal Executive Officer) By:/s/ James Chuong Name:James Chuong Title:Chief Financial Officer (Principal Financial Officer) 113 POWER OF ATTORNEY AND SIGNATURES KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael Cannon-Brookes and James Chuong, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign this Annual Report on Form 10-K of Atlassian Corporation, and any or all amendments, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each or any of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. SignatureTitleDate /s/ Michael Cannon-BrookesChief Executive Officer and DirectorAugust 14, 2026 Michael Cannon-Brookes(Principal Executive Officer) /s/ James ChuongChief Financial OfficerAugust 14, 2026 James Chuong(Principal Financial Officer) /s/ Gene LiuChief Accounting OfficerAugust 14, 2026 Gene Liu(Principal Accounting Officer) /s/ Shona L. BrownDirector and ChairAugust 14, 2026 Shona L. Brown /s/ Scott BelskyDirectorAugust 14, 2026 Scott Belsky /s/ Karen DykstraDirectorAugust 14, 2026 Karen Dykstra /s/ Scott FarquharDirectorAugust 14, 2026 Scott Farquhar /s/ Anil SabharwalDirectorAugust 14, 2026 Anil Sabharwal /s/ Christian SmithDirectorAugust 14, 2026 Christian Smith /s/ Steven SordelloDirectorAugust 14, 2026 Steven Sordello /s/ Jason WarnerDirectorAugust 14, 2026 Jason Warner /s/ Michelle ZatlynDirectorAugust 14, 2026 Michelle Zatlyn 114