Atlassian Corporation (TEAM) Cash Flow Statement

The gap between net income and operating cash flow is stark: OCF/NI ratios are deeply negative in most quarters, but this reflects accounting losses rather than cash burn. In 2026Q4, OCF of $1.4B versus a net loss of $53.8M implies that SBC and D&A are the primary drivers of cash generation, suggesting the business is more cash-generative than GAAP earnings suggest. Investors should monitor whether this cash flow can persist as SBC growth normalizes.

The trajectory of FCF is erratic, with a notable spike in 2026Q4 driven by a $1.4B operating cash flow quarter, but this appears to be an outlier. Excluding that quarter, FCF has averaged around $300-600M, suggesting a more moderate run-rate. The wide margin swings imply that quarterly FCF is not a reliable indicator of sustainable cash generation, and investors should focus on longer-term trends.

CapEx is consistently low, ranging from $6.2M to $34.1M per quarter, which is negligible relative to revenue. This suggests that the company relies on third-party cloud infrastructure, but investors should consider that capitalized software costs or data center leases may not be fully captured in CapEx. The low capital intensity supports high FCF conversion, but it also means that growth may require future investments in infrastructure.

The working capital line is a major source of variability in operating cash flow. For example, 2026Q4 saw a negative $203.7M working capital impact, while 2025Q3 had a positive $356.8M, suggesting that the company's cash conversion cycle is not stable. This may reflect changes in deferred revenue, billing practices, or vendor payments, and investors should monitor whether these swings indicate underlying operational issues or just timing.

The company has consistently used cash for buybacks and acquisitions, with cumulative buybacks exceeding $4B over the period and notable acquisition outflows in 2026Q2 and Q4. This suggests management is confident in the business's cash generation, but it also raises questions about capital allocation discipline given the negative net income. Investors should assess whether these investments are generating adequate returns, especially as ROIC remains low.

The cumulative gap between net income and operating cash flow is substantial, driven primarily by stock-based compensation and depreciation. This indicates that the company is generating significant cash despite reporting losses, which is typical for high-growth SaaS firms. However, investors should be cautious: if SBC growth slows or working capital dynamics reverse, the cash flow advantage could narrow, and the reported losses may become more representative of economic reality.