Atlassian Corporation’s TEAM Service Collection momentum continues to build, reinforcing the view that the business can remain a key driver of growth in the coming years. The offering surpassed $1 billion in annual recurring revenue (ARR) in the third quarter of fiscal 2026 and is growing more than 30% year over year, making it one of Atlassian’s fastest-growing businesses. Demand remains strong across enterprises, with more than 65,000 customers, including over half of the Fortune 500, relying on the platform for IT, HR, legal, finance and customer service workflows.
The business is benefiting from Atlassian’s expanding AI capabilities. Customers using Service Collection’s AI tools resolve issues 13% faster and handle 20% more issues than non-AI users, while the segment accounts for roughly half of all agentic automation runs across Atlassian’s platform. The integration of Rovo AI and the Teamwork Graph is further enhancing productivity and creating a powerful data flywheel that improves customer outcomes and platform stickiness.
Another encouraging trend is the expansion of Service Collection beyond traditional IT use cases. More than 60% of deployments now support non-IT functions, significantly increasing Atlassian’s addressable market. Recent investments in AI agent orchestration and Rovo-powered service automation further strengthen the platform’s long-term opportunity.
With strong ARR growth, rising enterprise adoption and continued market-share gains, Service Collection appears well-positioned to support Atlassian’s revenue growth in the years ahead. The Zacks Consensus Estimate for TEAM’s fiscal 2026 and 2027 revenues is pegged at $6.46 and $7.32 billion, respectively, indicating year-over-year growth of 23.95% and 13.29%.
Competition Mounts for Atlassian’s Service Platform
Salesforce CRM is intensifying pressure on Atlassian’s service platform through its AI-powered Service Cloud and Agentforce ecosystem. CRM highlighted strong service adoption, growing AI-driven service deployments and advantages in deep customer data integration. While Atlassian benefits from developer-centric workflows, CRM offers broader customer engagement capabilities and larger enterprise relationships, creating a formidable challenge as organizations consolidate service and support operations.
ServiceNow NOW is emerging as the most formidable competitor to Atlassian's service management momentum. NOW emphasized its ITSM leadership, AI-native platform, governance controls, workflow automation and vast enterprise context engine. Unlike Atlassian’s collaborative approach, NOW promotes an end-to-end operating system for IT and business workflows. As enterprises seek unified service management and AI orchestration, NOW continues to leverage scale, automation and platform depth to gain share.
TEAM’s Price Performance, Valuation & Estimates
Year to date, TEAM shares have declined 49.9%, substantially underperforming both the Zacks Computer & Technology sector's 14.9% gain and the Internet – Software industry's 16.2% fall.
TEAM’s Price Performance
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In terms of valuation, TEAM is trading at a premium, as indicated by its Value Score D. The stock currently trades at a Price-to-Book (P/B) ratio of 23.49x, significantly above the industry average of 4.27x.
TEAM’s Valuation
Image Source: Zacks Investment Research
TEAM's earnings outlook continues to strengthen. The Zacks Consensus Estimate for fiscal 2026 earnings is currently pegged at $5.48 per share, remaining stable over the past month while rising 16.3% in the last 60 days. The projected figure represents a substantial 48.91% increase from the prior year.
EPS Trend of TEAM Stock
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TEAM stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).