Atlassian CEO Mike Cannon-Brookes says software not dead despite shares slumping 69 per cent

Atlassian co-founder Mike Cannon-Brookes told sceptical investors it’s building a “f..king great business” as its shares slumped another 6.3 per on Wall Street on Thursday to take its 12-month fall to close to 70 per cent.

On Friday morning the Sydney-founded software business posted sales up 23 per cent to $US1.6 billion ($2.3 billion) for the quarter ending December 31. Its net loss finished at $US42.6 million for the quarter, although on an adjusted basis backing out certain costs it flagged a profit of $US320.9 million. It also lifted its guidance for total revenue growth of 22 per cent in its financial year 2026 that ends on June 30.

AI risk and opportunity

The share marker sellers are worried that Atlassian’s corporate customers will not need its flagship Jira product in the future as they use artificial intelligence (AI) to replace it and take cost out of their own profit and loss statements.

“I’m convinced AI is great for Atlassian. Others think software is dead,” Mr Cannon-Brookes told shareholders. “In this environment it seems that noise swamps signal, nuance gets lost.”

However, the stock tumbled another 6 per cent in after-hours markets as free cashflow plunged 51 per cent to $US168.5 million in an outcome it blamed on the timing of billings and other one-off payments in the quarter.

In his statements to the market on Friday, Mr Cannon-Brookes acknowledged AI will be the single biggest factor shaping the future of Atlassian.

“AI is the most important technology of our generation,” he said. “And you’ve heard me say AI is the best thing to happen to Atlassian. At the same time you’ve probably heard a lot of people say SaaS (software-as-a-service) is over, and software is dead.

“Well I want to take the opportunity to share a few thoughts about why AI is great for Atlassian.....For most people AI becomes most valuable when it shows up inside the workflows, business processes and applications that they run their business on, or choose to use run their business on and that’s exactly what we’re doing today.”

Share buyback

The company’s cratering share price has also hit employee wealth as it relies heavily on non-cash stock-based compensation as a form of remuneration. SBC for the December quarter to staff totalled $US452.6 million. In 2025 the homegrown software giant reported around 13,800 employees.

A staff member with $1 million in vested and unvested stock has seen the value of that fall to around $300,000 over the horror 12-month run for the share price. Mr Cannon-Brookes is estimated to have seen $19 billion wiped off his own personal fortune over the last year.

In its quarterly update the company said it will increase its policy of buying back its own shares by two to three times the amount of volume over the second half of its financial year that ends June 30. I share buy back like this should theoretically support the company’s valuation.

“We believe our shares are significantly undervalued. We’re using our strong free cash flow to opportunistically repurchase our stock,” it said.

For the quarter its earnings per share of $US1.22 came in ahead of the sell-side consensus forecast of $US1.14. Earnings per share is also affected by the amount of stock it issues to staff as compensation, versus how much it buys back using its own free cash flow.

Atlassian is not alone in being caught up in a global sell-off of software businesses as investors worry their customers will need their products less in a future of AI agents.

Much of the selling is focused around fear AI agents such as Claude from Anthropic, or Gemini Enterprise from Google-parent Alphabet will soon reduce corporations’ needs for employees that use products such as Jira by Atlassian.

Atlassian said neither Mr Cannon-Brookes or other senior staff are available for interview.