Atlassian (NASDAQ:TEAM) stock climbed 6% in premarket trading Tuesday following the company’s announcement to retire its Data Center products over the next six years, a move analysts say could accelerate cloud adoption and revenue growth.
The transition begins in March 2026, when new Data Center license sales will end. Existing licenses and app sales will be gradually phased out in 2028, with product end-of-life slated for 2029 and full support concluding in 2032.
Data Center represented $1.5 billion, roughly 28% of Atlassian’s revenue in fiscal 2025.
Truist noted that Atlassian will change how it recognizes revenue from Data Center subscriptions, booking more of the contract value upfront. The bank said this shift could introduce short-term volatility but may also create upside potential.
“In the near term, we expect these changes to add noise to the financial model,” said a Truist analyst.
The firm added that cloud migrations, driven by new pricing adjustments and enterprise-grade features, are likely to become the primary growth engine.
Raymond James analysts stated the move should encourage more customers to switch to the cloud, supporting Atlassian’s long-term revenue growth above 20%. They highlighted that customer retention has remained strong despite prior price increases, minimizing churn risk.
“While this does not directly impact Cloud revenue growth, a key metric for the stock, we assume a mid-single digit contribution from Data Center migrations, slightly below FY25, which would also appear quite conservative considering customers have an increased incentive to migrate,” the Raymond James team said.
Execution on cloud growth will remain a crucial metric for investors, according to Wall Street analysts.
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