With a deep understanding of the cloud provider landscape and a sharp eye for how enterprises apply new technologies, Maryanne Baines has become a leading authority in the field. Her expertise is particularly relevant today as we delve into Atlassian’s latest financial disclosures. The company finds itself at a fascinating crossroads, simultaneously celebrating massive adoption of its new AI tools and a landmark $1 billion cloud revenue quarter, while also grappling with a share price that its leadership feels is deeply undervalued. Our conversation will explore the operational strategies underpinning this growth, the defensive moats Atlassian is building against new AI challengers, and the fundamental business strengths that justify its accelerated stock buyback program.
With five million users now on the Rovo AI offering, how has your team managed to deliver this new service while also improving gross margins? Could you walk through the key operational optimizations that have made this cost control possible?
It’s a huge achievement, and frankly, it speaks volumes about the maturity of our engineering and cloud operations teams. When you onboard five million users to a new, resource-intensive AI service, the immediate fear is that your cloud bill will explode and your margins will shrink. We’ve managed to avoid that by focusing relentlessly on optimization. This isn’t about finding a cheaper cloud provider; it’s about being smarter with the resources we use. We are constantly refining our architecture to run more efficiently on public clouds. It proves we can innovate and add significant AI-driven value for the vast majority of our customers without having to pass on exorbitant costs or sacrifice our financial health.
As your cloud products cross the $1 billion quarterly revenue mark fueled by healthy migrations from on-prem data centers, what are the primary challenges in this transition? Can you share a metric or an example of how you ensure a smooth migration for large enterprise clients?
Reaching $1 billion in quarterly cloud revenue is a major milestone, but it also represents an immense responsibility. These “healthy cloud migrations” involve moving the central nervous system of large, complex enterprises. The primary challenge isn’t just technical; it’s about trust. When we’re migrating a customer, they need absolute certainty that their platform will be secure, compliant, and reliable from day one. There is so much noise and uncertainty in the market right now, but we are seeing customers consolidate on our platform because of that trust. They aren’t just buying a tool; they’re investing in a stable, enterprise-grade hub for their most critical work, and we see that reflected in their willingness to adopt more of our stack and sign longer-term commitments.
New AI tools are emerging that appear to compete with established software like Jira. How does Atlassian’s platform strategy create a defensible advantage, and what specific steps are you taking to ensure your products remain the central hub for enterprise customers?
It’s true, there’s a lot of noise out there, with some even claiming that traditional software is dead. I’m convinced AI is actually a tremendous tailwind for Atlassian. A new product might pop up that looks like a Jira competitor, but it ultimately needs to connect to the systems where work and knowledge are already stored. Our advantage is that we are that system. When I talk to enterprise customers, they’re looking to us to help them cut through that noise. They want a single, trustworthy platform where they can manage security and compliance. Our strategy is to be the indispensable core, the platform that other tools need to plug into, ensuring that all roads lead back to the Atlassian ecosystem.
Considering the recent acceleration of stock buybacks, what fundamental aspects of the business do you believe are being undervalued? Beyond financial metrics, what upcoming product or strategic milestones should people be watching that will demonstrate the company’s long-term growth potential?
Honestly, it’s frustrating to see the disconnect between our performance and the share price. We believe our shares are significantly undervalued, which is why we’re accelerating buybacks. The market seems to be missing the signal for the noise. We just posted Q2 revenue of $1.6 billion, which is up 23 percent year over year, and we narrowed our operating losses. People should look beyond the daily stock fluctuations and watch how deeply we’re embedding ourselves into our customers’ operations. The real story is in the increasing adoption of our full platform and the success of our AI initiatives like Rovo, which demonstrate our ability to innovate and scale profitably.
What is your forecast for the future of enterprise collaboration software in an agentic AI-driven world?
I believe the future is less about discrete tools and more about an intelligent, unified platform that acts as a true partner in work. Agentic AI will weave through every part of the collaboration fabric, from planning projects in Jira to summarizing knowledge in Confluence. The winning platform won’t be the one with the flashiest AI demo, but the one that enterprise customers trust with their data and can rely on for security and compliance. The core human need for collaboration and organization won’t disappear; it will be amplified by AI, and we are building the foundational platform where that future of work will happen.
