During the first quarter of fiscal year 2026, the Company initiated a restructuring plan to reduce capacity that was no longer necessary due to the increased ability, accessibility, performance, stability, and supportability of its products.

During the third quarter of fiscal year 2026, the Company initiated another restructuring plan to accelerate building the future of teamwork in the AI era. This includes self-funding further investment in key strategic priorities, such as AI and enterprise sales, reorganizing its teams to move with more focus and speed across the Atlassian System of Work, and optimizing for long-term operational efficiency and sustainability. This initiative resulted in the elimination of certain roles, which impacted approximately 10% of the Company’s workforce.

As a result, the Company recorded total severance and other termination benefits of $203.9 million, and additional stock-based compensation of $1.4 million for the affected employees during fiscal year 2026.

In addition, during fiscal year 2026, the Company exited certain leased properties to optimize its real estate footprint and has entered, or plans to enter, into sublease agreements for these locations. As a result, the Company recorded total impairment charges of $80.0 million associated with the optimization of its leased facilities, primarily for operating lease right-of-use assets and leasehold improvements for the fiscal year 2026. The fair values of the impaired assets were estimated using discounted cash flow models (income approach) based on market participant assumptions with Level 3 fair value inputs. The assumptions used in estimating fair value include the expected downtime prior to the commencement of future subleases, projected sublease income over the remaining lease periods, and discount rates that reflect the level of risk associated with receiving future cash flows.


	Severance and Other Termination Benefits		Stock-based Compensation		Lease Consolidation		Total
Cost of revenue	$	45,185	$	1,432	$	6,647	$	53,264
Research and development	108,844		—		35,650		144,494
Marketing and sales	25,110		—		26,421		51,531
General and administrative	24,778		—		11,303		36,081
Total	$	203,917	$	1,432	$	80,021	$	285,370

The following table is a summary of the changes in the liabilities, included within accrued expenses and other current liabilities on the consolidated balance sheets as of June 30, 2026, related to the restructuring charges (in thousands):


	Severance and Other Termination Benefits		Stock-based Compensation		Lease Consolidation		Total
Charges	$	203,917	$	1,432	$	80,021	$	285,370
Payments	(188,526)		—		(70)		(188,596)
Non-cash items	(446)		(1,432)		(79,951)		(81,829)
Effect of change in exchange rates	(2,094)		—		—		(2,094)
Restructuring provision as of June 30, 2026	$	12,851	$	—	$	—	$	12,851