Atlassian grew revenue 24% last quarter, guided about 13.75% for the full year, and fell 13% on Friday. The guidance math says more than half of the slowdown comes from Data Center, the product line it stops supporting in 2029

Atlassian (TEAM) reported its fiscal Q1 (July–September) on Thursday. Revenue grew 24% to $1,772m, Cloud revenue grew 30.5%, and GAAP operating margin turned positive at 10.7%. Full-year guidance went up, from about 13% to about 13.75% revenue growth. The stock closed down about 13% on Friday (third-party data). The reason most coverage gave is the slowdown in the guidance. I wanted to see where that slowdown actually comes from. All figures below are from the 10-Q, the 10-K and the company's Q1 shareholder letter. 1. The guide implies about 11% growth for the rest of the year. Fiscal 2026 revenue was $6,572m. 13.75% growth means about $7,476m for fiscal 2027. Q1 was already $1,772m, so the remaining three quarters need about $5,704m, against $5,140m in the same three quarters last year. That's about 11% growth, after 24% in Q1. 2. Most of the drop is Data Center, and the company says why. Data Center is Atlassian's self-managed product. In September 2025 it announced the end of life: no new Data Center customers from March 2026, no new licenses or expansions for existing customers from March 2028, and support ends in March 2029. Data Center revenue by quarter: - Sept 2025: $373m - Dec 2025: $436m - Mar 2026: $561m (+44% year over year, the last quarter before new-customer sales stopped) - Jun 2026: $462m - Sept 2026: $391m The shareholder letter says the end-of-life announcement pulled customer purchases forward and caused a higher share of Data Center contract value to be recognized upfront as term-license revenue in fiscal 2026. It guides Data Center revenue down about 16% for fiscal 2027. With Q1 at $391m, that implies about −21% for the remaining three quarters. 3. How the slowdown splits. From Q1's 24% to the implied 11% is about 13 points. Data Center went from contributing about +1 point of growth in Q1 to about −6 points in the rest of the year. That swing is about 7 of the 13 points. The other 5–6 points are Cloud and Marketplace slowing, from about 22 points of growth in Q1 to about 17. 4. The part that isn't timing. The company points to Subscription ARR as the measure that strips out the revenue-recognition timing. That's still guided to slow, from 22.5% now to about 18.5% by the end of the fiscal year. Cloud is guided at about 26% for the year after 30.5% in Q1, which implies about 25% for the rest of the year. The letter says migrations from Data Center will contribute mid-to-high single digits of Cloud growth in fiscal 2027. So Cloud growth from customers who were not already paying for Data Center is closer to the high teens. The letter also expects the first half to grow faster than the second half, partly because the DX acquisition, which closed in the December 2025 quarter, starts showing up in the comparison. 5. Margins had the same timing effect. The letter says the Data Center timing lifted fiscal 2026 non-GAAP operating margin by about 4 points. It guides 25.5% for fiscal 2027 and says that also absorbs about 3 points from shifting pay from stock to cash. How I'd frame Friday: about 13.75% headline growth understates the Cloud business, because last year's Data Center rush is in the comparison. But it's not all accounting. ARR and Cloud are both guided to slow, and part of Cloud's growth is customers moving over from a product that's being shut down, a source that runs out by 2029. What I'd watch in the next report (Q2, quarter ending December): - Revenue against the $1,825–1,835m guide (about 15–16% growth) - Data Center against the guided −14% - Cloud against the guided 27%, and how much the company attributes to migrations - Subscription ARR, against the 18.5% year-end guide - Current RPO, which grew 28% this quarter For people who follow TEAM or other software names going through the same shift: which of these would you watch first, and is the migration contribution something you'd strip out when comparing Cloud growth with peers? Not investment advice.