Atlassian (TEAM) risk factors, FY2026 10-K

Risks Related to Our Business and Industry

1. 01Our historical rapid growth makes it difficult to evaluate our future prospects, and we may not be able to sustain our revenue growth rate or achieve long-term profitability in the future23% rewritten
2. 02The markets in which we participate are intensely competitive, and if we do not compete effectively, our business, results of operations, and financial condition could be harmed
3. 03Our AI offerings and investments may not be successful, which could adversely affect our business or financial results
4. 04We may encounter challenges as we continue to transition our business to focus on Cloud offerings68% rewritten
5. 05Our business depends on our customers renewing their subscriptions and purchasing additional licenses or subscriptions from us, and any decline in our customer retention or expansion could harm our future results of operations
6. 06If we are unable to develop or package new apps, agents and enhancements to our existing offerings that achieve market acceptance and that keep pace with technological developments, our business and results of operations could be harmed
7. 07We may encounter challenges as we develop our sales force and sales strategy
8. 08Our business model for our low-touch customers is based in part on a high volume of transactions and organic expansion
9. 09If we are unable to develop and maintain successful relationships with our solution partners, our business, results of operations, and financial condition could be harmed
10. 10Any failure to offer high-quality product support could harm our relationships with our customers and our business, results of operations, and financial condition
11. 11We invest significantly in research and development, and to the extent our research and development investments do not translate into new offerings or material enhancements to our current offerings, or if we do not use those investments efficiently, our business and results of operations would be harmed
12. 12If we fail to integrate our apps, agents, and products with a variety of operating systems, software applications, platforms and hardware that are developed by others, our products may become less marketable, less competitive, or obsolete and our results of operations could be harmed
13. 13We derive a majority of our revenue from Jira, Confluence, and Jira Service Management
14. 14Acquisitions, strategic investments or partnerships could disrupt our business, and we may be unable to integrate our acquisitions successfully or achieve the expected benefits of such transactions68% rewritten
15. 15If we cannot continue to expand the use of our offerings beyond our initial focus on software developers, our ability to grow our business could be harmed
16. 16Our corporate values have contributed to our success, and if we cannot maintain these values as we grow, we could lose the innovative approach, creativity, and teamwork fostered by our values, and our business could be harmed
17. 17If we are not able to maintain and enhance our brand, our business, results of operations, and financial condition could be harmed
18. 18If we fail to effectively manage our growth, our business and results of operations could be harmed
19. 19If the Atlassian Marketplace does not continue to be successful, our business and results of operations could be harmed

Risks Related to Information Technology, Intellectual Property, and Data Security and Privacy

1. 20If our security controls are compromised, leading to unauthorized or inappropriate access to customer data, our products could be perceived as insecure, and such perception may result in the loss of existing customers, hinder our ability to attract new ones, and expose us to significant liabilities28% rewritten
2. 21Interruptions or performance problems associated with our technology and infrastructure could harm our business and results of operations
3. 22Real or perceived errors, failures, vulnerabilities, or bugs in our offerings or in the apps on Atlassian Marketplace could harm our business and results of operations
4. 23Privacy concerns and laws as well as evolving regulation of cloud computing, AI products and services, cross-border data transfers and other domestic or foreign regulations may limit the use and adoption of our services and adversely affect our business and results of operation94% rewritten
5. 24(“CPRA”), and similar laws that have passed, gone into effect, or are being considered in many other U.S. states, impose obligations on us and many of our customers, potentially as both businesses and service providersNew
6. 25We have been and may be sued by third parties for alleged infringement or misappropriation of their intellectual property rights
7. 26Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses
8. 27We use open source software in our products that may subject our products to general release or require us to re-engineer our products, which could harm our business
9. 28Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand

Risks Related to Financial Matters

1. 29Our quarterly results have fluctuated in the past and may fluctuate significantly in the future and may not fully reflect the underlying performance of our business
2. 30We recognize certain revenue streams over the term of our subscription contracts
3. 31Seasonality may cause fluctuations in our revenue
4. 32We may require additional capital to support our operations or the growth of our business and we cannot be certain that we will be able to secure this capital on favorable terms, or at all
5. 33Our current and future indebtedness may limit our flexibility in obtaining additional financing and in pursuing other business opportunities or operating activities
6. 34We are subject to risks associated with our strategic investments, including partial or complete loss of invested capital. Significant changes in the value of this portfolio could negatively impact our financial results
7. 35Our global operations and structure subject us to potentially adverse tax consequences30% rewritten
8. 36Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value-added or similar taxes, and we could be subject to liability with respect to past or future sales, which could harm our results of operations36% rewritten
9. 37If we are unable to maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A Common Stock could be negatively affected
10. 38We face exposure to foreign currency exchange rate fluctuations
11. 39We are exposed to credit risk and fluctuations in the market values of our investment portfolio
12. 40If we are deemed to be an investment company under the Investment Company Act of 1940, our results of operations could be harmed

Risks Related to Legal and Regulatory Matters

1. 41Our development and use of AI technologies may expose us to operational, legal, regulatory, reputational and other risks that may adversely affect our business74% rewritten
2. 42We and our customers are subject to increasing and changing laws and regulations that may expose us to liability and increase our costs
3. 43Our sales to U.S. government entities and contractors are subject to additional challenges and risks, including those related to FedRAMP compliance
4. 44Adverse litigation results could have a material adverse impact on our business25% rewritten
5. 45There is an increasing focus from certain regulators, investors, customers, employees, and other stakeholders concerning sustainability matters. Any failure to meet the sustainability standards set by various constituencies may damage our reputation or otherwise harm our business or financial conditionNew

Risks Related to Ownership of Our Class A Common Stock

1. 46The dual class structure of our common stock has the effect of concentrating voting control with our Co-Founders and their affiliates, which will limit our other stockholders’ ability to influence the outcome of important transactions, including a change in control
2. 47At times, Messrs
3. 48The market price of our Class A Common Stock is volatile, has fluctuated significantly in the past, and could continue to fluctuate significantly regardless of our operating performance resulting in substantial losses for the holders of our Class A Common Stock
4. 49Substantial future sales of our common stock could cause the market price of our Class A Common Stock to decline28% rewritten
5. 50We cannot guarantee that our Share Repurchase Program will be fully consummated or that it will enhance long-term stockholder value. Repurchases of shares of our Class A Common Stock could also increase the volatility of the trading price of our Class A Common Stock and could diminish our cash reserves35% rewritten
6. 51We do not expect to declare dividends in the foreseeable future31% rewritten
7. 52Our amended and restated certificate of incorporation and amended and restated bylaws contain, and the General Corporation Law of the State of Delaware (the “Delaware General Corporation Law”) contains, provisions which could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of directorsNew
8. 53These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management
9. 54Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law
10. 55While we have procured directors’ and officers’ liability insurance policies, such insurance policies may not be available to us in the future at a reasonable rate, may not cover all potential claims for indemnification, and may not be adequate to indemnify us for all liability that may be imposed

General Risk Factors

1. 56Global economic and political conditions, including macroeconomic and political events, have had, and may continue to have, an adverse impact on our business, results of operations and financial conditionNew
2. 57Our global operations subject us to risks that can harm our business, results of operations, and financial condition
3. 58We depend on our executive officers and other key employees and the loss of one or more of these employees or the inability to attract and retain highly skilled employees could harm our business27% rewritten
4. 59Catastrophic events may disrupt our business
5. 60Climate change may have a long-term impact on our business77% rewritten