The San Francisco-based company reported a net loss of $65.2 million, or 28 cents per share. Non-GAAP earnings were 13 cents per share on revenue of $212.6 million, up 43 percent from a year ago.
Wall Street was expecting the company to report earnings of 12 cents per share on revenue of $204.5 million.
Atlassian said the sudden increase in its quarterly net loss was due to a non-cash charge to income tax expense of $47.3 million, the result of the write-down of Atlassian's deferred tax assets. A year earlier, Atlassian reported a net loss of just $1.7 million.
Atlassian's subscription revenue remained strong, rising to $95,793 million. The company grew its customer count on net by 4,825 for the quarter. It ended Q2 with a total customer count on an active subscription or maintenance agreement basis of 112,571.
The company reported a free cash flow of $67.8 million, an increase of 52 percent year over year.
For Q3, Atlassian is expecting revenue in the range of $217 million to $219 million. For the full fiscal year 2018, it's expecting revenue in the range of $853 million to $857 million, up from its previous range of $841 million to $847 million.