Can atlasing also decrease performance?

Hi!

I currently develope an asset where I need to render many quads at the same time. They are dynamically batched together and modified by vertex shader. To increase performance i decided to create atlases so that all quads share the same material. I recognize, that the setpass calls lowered 50 percent but my scene containing around 10000 quads (not all rendered one time) started to lag and the frames dropped from 60-100 to 30-50. Can atlasing be the reason?

Best,
Andre

Okay, I think I will let the user decide wether to use atlasing or not and maybe there will be improvements in this case. In other scenarios with many different materials and maybe less quads atlasing really helps.
Thanks!