QS Research · Michael Burry's Scion Capital analyst template · 2006
Atlassian Corp (TEAM)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +14% · downside -20% · upside +25%
At $153.68 the market already capitalises the TTM $1.67B FCF at a 4.2% yield and 5.69x EV/Sales, so the franchise is visible but the margin of safety is not: TTM EBIT is only $295.5M and EV/EBIT is 133.1x. Holding today's 5.69x EV/Sales and $0.13B net cash, I get downside $122.97 (-20.0%) on revenue -20%, base $174.63 (+13.6%) on FY2027 guidance of ~13.75% growth, and upside $191.86 (+24.9%) on revenue +25% from Cloud/RPO momentum. That is a watch, not a long: the base is below +30%, and the FCF-yield band's -30%/$108 downside fails the -25% long test; it is not a short because the base is not -30% and the upside exceeds +25%. The dated catalysts - Q2 FY2027 guidance, the public-sector Rovo/FedRAMP roadmap, and the founder purchase plan - do not yet change the multiple I can underwrite.
Key numbers
- Share price: $153.68
- Market cap: $39.47B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $6.91B
- EV / EBITDA (TTM): 87.1x
- P/E (TTM): 444.7x
- Price / book: 43.34x
The 15 boxes
- ✓ 1. Long-form business notes
Atlassian sells team collaboration software through a product-led, self-service Cloud model, with apps sold standalone or in curated Collections and a direct sales overlay for large existing customers; FY2026 XBRL revenue was $6.57B versus $2.09B in FY2021. The oldest source, the FY2021 20-F, shows revenue then split across subscription, maintenance, perpetual license and other, while the latest 10-K describes a shift to apps, AI agents and Collections and an announced Data Center end-of-life. FY2026 XBRL shows operating income of $10.4M but a net loss of $53.8M; the FY2021 IFRS net loss was $696.3M, with large non-coupon note and capped-call adjustments in the non-IFRS bridge.
- ✓ 2. Competitive advantage
Gross profit is very large but operating returns are not: FY2026 gross profit of $5.58B on $6.57B revenue produced only $10.4M of operating income and -$53.8M of net income, negative in every year FY2021-FY2026. The real evidence of a franchise is cash: operating cash flow of $1.35B in FY2026 against $34.1M of capex. But the 10-K describes markets that are "fragmented, rapidly evolving, highly competitive" with low barriers to entry, a customer base mostly on annual or monthly terms, AI (Rovo) given away at no extra cost, and competitors with greater resources - so the advantage looks like breadth/brand/distribution rather than contractual lock-in or pricing power.
- ✓ 3. 10-Q takeaways
Q1 FY2027 (quarter ended 2026-09-30) revenue was $1,772 million, up 24% year-over-year, with Cloud revenue $1,302 million, up 31%, subscription ARR $6,812 million, up 23%, and RPO $4,746 million, up 44%. GAAP operating margin was 11% and non-GAAP operating margin was 32%; GAAP net income was $91 million, or $0.35 per diluted share, versus a $52 million net loss in Q1 FY2026, and free cash flow was $463 million at a 26% margin. Q2 FY2027 guidance is $1,825 million to $1,835 million of revenue with approximately 4.5% GAAP and 26.0% non-GAAP operating margin; FY2027 targets include approximately 13.75% total revenue growth and 5.0% GAAP / 25.5% non-GAAP operating margin. The 10-Q risk-factor summary highlights AI and Cloud-transition risks, while the computed risk-factor diff for the 10-K flags 30 new or rewritten paragraphs.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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