Team pricing · Thursday, 29 October 2026

Back the usage add-on.

Recommendation: Option B, conditional on final economics and storage terms.

CFO and Head of Product: approve the direction and six-week billing build on Thursday; reserve customer pricing approval until the economics are complete.

A broad price rise offers faster recovery. Waiting protects near-term stability.

Heavy usage is eroding Team’s margin.

Gross margin fell nine percentage points; the top tenth of workspaces drives over half of usage costs.TEAM GROSS MARGIN · LAST 12 MONTHS78% →Then69%NowTop 10% of workspaces → 55% of usage costs55%45% · remaining 90%

Storage and AI usage drive most of the decline.

4,100 workspaces × 9 average seats × $12 ≈ $442,800 monthly revenue. At that revenue, nine margin points equal $39,852 monthly gross profit.

Three options trade recovery against customer disruption.

Rank margin recovery first, customer disruption second, delivery third: costs are rising unevenly.

CriterionA · Raise to $15B · Usage add-onC · Hold $12
Recovery+$110,700/mo
before churn		Depends on overagesNo price uplift
ExposureAll workspaces~12% affected¹No change
Billing build1 week6 weeksNone
Next step30-day notice30-day noticeReview in 6 months

¹ Finance estimate. Recovery figures exclude behavioral changes and implementation cost.

A offers clear uplift, with broad churn exposure.

Monthly revenue at current seats and with an illustrative six percent seat loss.MONTHLY REVENUE · ILLUSTRATIVE SCENARIOS$442,800 · Today$553,500 · $15, same seats$520,290 · $15, 6% fewer seats

The 2023 rise from $10 to $12 preceded 6% workspace loss within three months.

That is a precedent, not a forecast. Illustration assumes lost workspaces have average seats; actual seat loss may differ. Revenue uplift alone does not establish margin recovery.

B targets usage, but recovery remains unquantified.

Usage add-on thresholds and estimated workspace exposure.Keep $12 / seat / monthAbove 50 GB storageor 500 AI actions / seat / monthAI overage:$5 / extra 100 actionsFinance estimates ~12% affected ≈ 492 workspaces12%88% · unaffected

High-cost workspaces and affected workspaces may differ. Overages and storage charges determine revenue; the 12% estimate alone cannot establish margin recovery.

Notice timing determines when recovery can begin.

Build then notice takes 37 days for A and 72 for B; parallel notice reduces to 30 and 42 days.BUILD, THEN NOTICE · DAYS AFTER FINAL AUTHORIZATIONA730-day notice37 daysB42-day build30-day notice72 daysParallel build + notice: A = 30 days · B = 42 days

Sequential timing is the planning assumption. Parallel timing requires final terms before notice and billing readiness before charges begin. C creates no price uplift before its six-month review.

Waiting preserves stability while margin exposure continues.

The case for C

Keep pricing predictable through a six-month review.

Avoid billing work and a price-change event now.

The cost of C

No new price revenue to offset usage costs.

The past decline does not establish the next six months’ margin.

Two of the five largest Team customers asked Sales about annual price locks. Any lock decision should account for future usage exposure.

B gives up speed and adds billing complexity.

Best countercase
A delivers clearer uplift with one week of billing work.
Main risk
Show usage and bill previews to reduce surprises from new charges.
Reversibility
Direction can change before notice; billed charges make reversal harder.
Change the call
Favor A if add-on recovery is weak or metering is unreliable.

Keep A as the fallback. C remains defensible if retention risk outweighs near-term recovery.

Approve B’s direction and build on Thursday.

Decision
Will the CFO and Head of Product approve B’s direction and six-week billing build?
Customer terms
Reserve pricing approval until storage terms and recovery economics are defined.
Accountability
Who will own rollout readiness so notice and billing stay coordinated?
Price locks
Will you defer new annual locks to limit usage cost exposure?