Company: TEAM
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0001650372-25-000068
Chunk: 361

Company: Atlassian Corp
Filing Date: 2025-10-31
Form: 10-Q
Item: Part I, Item 2
Chunk 361
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 continue to negatively impact our operating margins in the near term. Developing, maintaining, and deploying these technologies involves substantial risks, and we cannot guarantee that they will improve our offerings or provide benefits to our customers or business. As our business and offerings evolve to incorporate additional AI capabilities, we may be unable to effectively monetize our AI offerings or determine new methods for capitalizing on these opportunities. For example, we have made Rovo available at no additional cost to our premium, enterprise, and standard edition customers across Jira, Confluence, Jira Service Management and Teamwork Collection. If strategies like this are not successful in helping us win new customers and retain and expand within existing customers, we may not be able to offset the investments we have made in these technologies, which would adversely impact our results of operations and financial condition. 

Additionally, AI technology and services is a highly competitive and rapidly evolving market. Our competitors or other third parties may incorporate AI into their products and offerings more quickly or more successfully than we can. Our ability to compete in this space will also depend in part on our ability to attract and retain employees with AI expertise. We also rely on certain third-party AI models, products, and integration providers. Such providers may be prohibited from offering certain models or technologies in jurisdictions in which we operate, may terminate their relationships with us, or otherwise cease to make certain models or technologies available to us, or may make certain models or technologies more expensive for us to use. Additionally, it is possible that an increased prevalence of AI may impact the work practices of software teams, IT operations and support teams, leadership, and business teams, and therefore our market opportunity. Any of the foregoing could adversely affect our business, reputation, or financial results.

We may encounter challenges as we continue to transition our business to focus on Cloud offerings.

While a substantial majority of our business was historically generated from customers using Server products, which are no longer available, and Data Center products, over time, our Cloud offerings have become more central to our distribution model, and this trend will continue in the future. To support this transition, we have directed a significant portion of our financial and operating resources to implement robust Cloud offerings and to migrate our existing customers to our Cloud offerings, which impacts our results of operations, revenue recognition practices, and financial condition. For example, due to the higher fees associated with hosting our Cloud infrastructure, we have and expect to continue to see increased expenses and lower margins as customers transition to Cloud. Our strategy to provide our AI tools at no or low cost