Elastic Reports First Quarter Fiscal 2026 Financial Results

Q1 Revenue of $415 million, up 20% year-over-year (18% in constant currency)

Elastic (NYSE:ESTC) ("Elastic"), the Search AI Company, announced financial results for its first quarter of fiscal 2026 ended July 31, 2025.

First Quarter Fiscal 2026 Financial Highlights

• Total revenue was $415 million, an increase of 20% year-over-year, or 18% on a constant currency basis
• Total subscription revenue was $389 million, an increase of 20% year-over-year, or 19% on a constant currency basis
• Sales-led subscription revenue (calculated as subscription revenue excluding monthly Elastic Cloud) was $339 million, an increase of 22% year-over-year, or 20% on a constant currency basis
• Elastic Cloud revenue was $196 million, an increase of 24% year-over-year, as reported and on a constant currency basis
• Current remaining performance obligations were $956 million, an increase of 18% year-over-year, or 17% on a constant currency basis
• GAAP operating loss was $9 million; GAAP operating margin was -2%
• Non-GAAP operating income was $65 million; non-GAAP operating margin was 16%
• GAAP net loss per share was $0.23; non-GAAP diluted earnings per share was $0.60
• Operating cash flow was $105 million with adjusted free cash flow of $116 million
• Cash, cash equivalents, and marketable securities were $1.494 billion as of July 31, 2025

"Elastic had an excellent Q1 and a strong start to the fiscal year surpassing the high end of our guidance across all metrics," said Ash Kulkarni, Chief Executive Officer, Elastic. "Our growth was supported by the ongoing demand for our highly differentiated technology, and our sales team's solid execution. With AI now clearly shaping technology decisions, our strong performance directly demonstrates the value that Elastic's Search AI Platform delivers to our customers."

First Quarter Fiscal 2026 Key Metrics and Recent Business Highlights

Key Customer Metrics

• Total customer count with Annual Contract Value (ACV) greater than $100,000 was over 1,550 compared to over 1,510 in Q4 FY25, and over 1,370 in Q1 FY25
• Net Expansion Rate was approximately 112%

Product Innovations and Updates

• Expanded Elastic Cloud Serverless, now generally available in 1 region on Microsoft Azure, 3 regions on Google Cloud, and 6 regions on AWS
• Launched Elastic AI SOC Engine (EASE), a new serverless security package that uses AI to enhance threat detection, triage, and investigation in existing SIEM and EDR tools
• Introduced Logs Essentials, a new observability tier within Elastic Cloud Serverless, which enables critical log capabilities powered by Elasticsearch without operational overhead
• Improved vector search with faster query performance and ranking quality through default availability of Better Binary Quantization (BBQ) and algorithm ACORN-1 in Elasticsearch
• Delivered the general availability of Cross Cluster Search in Elasticsearch Query Language (ES|QL) with major enhancements in data enrichment, resilience, monitoring, observability, and scaling capabilities

Other Business Highlights

• Recognized as a Leader in 2025 Gartner® Magic Quadrant™ for Observability Platforms
• Recognized as a Leader in The Forrester Wave™: Security Analytics Platforms, Q2 2025
• Ranked #1 in AV-Comparatives Business Security Test (March - April 2025) with a perfect score in both the real-world protection and malware protection tests
• Collaborated with Dell and NVIDIA to power the Dell AI Data Platform with Elasticsearch as the unstructured data engine
• Forged a strategic partnership with the U.S. General Services Administration (GSA) to enable federal agencies to modernize IT infrastructure using the Elastic's Search AI platform
• Achieved the Federal Risk and Authorization Management Program (FedRAMP) High "In Process" status on AWS GovCloud (US)
• Awarded the 2025 Google Cloud DORA Award for Architecting for the Future with AI

Financial Outlook

The Company is providing the following guidance:

For the second quarter of fiscal 2026 (ending October 31, 2025):

• Total revenue is expected to be between $415 million and $417 million, representing 14% year-over-year growth at the midpoint (14% year-over-year constant currency growth at the midpoint)
• Non-GAAP operating margin is expected to be approximately 16%
• Non-GAAP diluted earnings per share is expected to be between $0.56 and $0.58, assuming between 108.5 million and 109.5 million diluted weighted average ordinary shares outstanding

For fiscal 2026 (ending April 30, 2026):

• Total revenue is expected to be between $1.679 billion and $1.689 billion, representing 14% year-over-year growth at the midpoint (13% year-over-year constant currency growth at the midpoint)
• Non-GAAP operating margin is expected to be approximately 16%
• Non-GAAP diluted earnings per share is expected to be between $2.29 and $2.35, assuming between 109.0 million and 111.0 million diluted weighted average ordinary shares outstanding

The guidance assumes, among others, the following exchange rates: 1 Euro = 1.16 US Dollars; and 1 Great British Pound = 1.35 US Dollars.

See the section titled "Forward-Looking Statements" below for information on the factors that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. We present historical and forward-looking non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled "Statement Regarding Use of Non-GAAP Financial Measures" below for an explanation of these non-GAAP measures. A reconciliation of forward-looking non-GAAP measures to the corresponding GAAP measures for operating margin and net (loss)/earnings per share is not available without unreasonable effort due to the uncertainty regarding, and the potential variability of, many of the costs and expenses that may be incurred in the future. These items necessary to reconcile such non-GAAP measures could be material and have a significant impact on the Company's results computed in accordance with GAAP.

Conference Call and Webcast

As previously announced, Elastic's executive management team will host a conference call today at 2:00 p.m. PT / 5:00 p.m. ET to discuss the Company's financial results and business outlook. A live audio webcast of the conference call will be available through Elastic's Investor Relations website at ir.elastic.co. A presentation containing financial and operating information will be available at the same website. The replay of the webcast will also be available on the investor relations website.

About Elastic

Elastic (NYSE:ESTC), the Search AI Company, integrates its deep expertise in search technology with artificial intelligence to help everyone transform all of their data into answers, actions and outcomes. Elastic's Search AI Platform — the foundation for its search, observability, and security solutions — is used by thousands of companies, including more than 50% of the Fortune 500. Learn more at elastic.co.

Elastic and associated marks are trademarks or registered trademarks of Elastic N.V. and its subsidiaries. All other company and product names may be trademarks of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties, which include, but are not limited to, statements regarding our expected financial results for the fiscal quarter ending October 31, 2025 and fiscal year ending April 30, 2026, the expected performance or benefits of and demand for our offerings, our product strategy and innovation, our views on the impacts of AI in technology decision-making, and the value of our products. Actual outcomes and results may differ materially from those contemplated by these forward-looking statements due to uncertainties, risks, and changes in circumstances, including but not limited to, those related to: our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit or gross margin, operating expenses (which include changes in sales and marketing, research and development and general and administrative expenses), and our ability to achieve and maintain future profitability; the impact of the evolving macroeconomic and geopolitical environments on our business, operations, hiring and financial results, and on businesses and spending priorities of our customers and partners; the impact of our pricing model strategies on our business; the impact of foreign currency exchange rate fluctuations, the uncertain inflation and interest rate environment, and tariffs and other international trade policies on our results; our ability to continue to deliver and improve our offerings and develop new offerings (including innovations around AI use cases); customer acceptance and purchase of our new and existing offerings; the expansion and adoption of our Elastic Cloud offerings; our ability to realize value from investments in the business; our ability to maintain and expand our user and customer base; our international expansion strategy; the impact of our licensing model on the use and adoption of our software; our operating results and cash flows; the sufficiency of our capital resources; our ability to successfully execute our go-to-market strategy; our forecasts regarding our business; and general market, political, economic and business conditions.

Any additional or unforeseen effects from the evolving macroeconomic and geopolitical environments may exacerbate these risks. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those expressed or implied in our forward-looking statements are included in our filings with the Securities and Exchange Commission (the "SEC"), including our Annual Report on Form 10-K for the fiscal year ended April 30, 2025 and subsequent quarterly and current reports filed with the SEC. SEC filings are available on the Investor Relations section of Elastic's website at ir.elastic.co and the SEC's website at www.sec.gov. Elastic assumes no obligation to, and does not currently intend to, update any such forward-looking statements, except as required by law.

Statement Regarding Use of Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), we believe the non-GAAP measures discussed below are useful in evaluating our operating performance. We use these non-GAAP financial measures to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures and key metrics as analytical tools. Investors are encouraged to review the differences between GAAP financial measures and the corresponding non-GAAP financial measures, and not to rely on any single financial measure to evaluate our business and financial results.

Reconciliations of historical GAAP financial measures to their respective historical non-GAAP financial measures are included below. In relation to constant currency non-GAAP financial measures, the only reconciling item between GAAP financial measures and non-GAAP financial measures is the effect of foreign currency rate fluctuations. Further details on how we calculate such effects can be found in the definition of "Constant Currency" below.

Non-GAAP Gross Profit and Non-GAAP Gross Margin

We define non-GAAP gross profit and non-GAAP gross margin as GAAP gross profit and GAAP gross margin, respectively, excluding stock-based compensation expense and related employer taxes, and amortization of acquired intangible assets. We believe non-GAAP gross profit and non-GAAP gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these metrics generally eliminate the effects of certain variables from period to period for reasons unrelated to overall operating performance.

Non-GAAP Operating Income and Non-GAAP Operating Margin

We define non-GAAP operating income and non-GAAP operating margin as GAAP operating loss and GAAP operating margin, respectively, excluding stock-based compensation expense and related employer taxes, amortization of acquired intangible assets, acquisition-related expenses, and restructuring and other related charges. We believe non-GAAP operating income and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these metrics generally eliminate the effects of certain variables from period to period for reasons unrelated to overall operating performance.

Non-GAAP Net Income and Non-GAAP Earnings Per Share

We define non-GAAP net income as GAAP loss, excluding stock-based compensation expense and related employer taxes, amortization of acquired intangible assets, acquisition-related expenses, and restructuring and other related charges. Additionally, non-GAAP net income and non-GAAP earnings per share are adjusted for an assumed provision for income taxes based on a projected non-GAAP annual effective tax rate of 13%. We define non-GAAP earnings per share, basic, as non-GAAP net income divided by weighted average shares outstanding and non-GAAP earnings per share, diluted, as non-GAAP net income divided by weighted average diluted shares outstanding, which includes the potentially dilutive effect of the company's employee equity incentive plan awards. We believe non-GAAP earnings per share provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this metric generally eliminates the effects of certain variables from period to period for reasons unrelated to overall operating performance.

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin

Adjusted free cash flow is a non-GAAP financial measure that we define as net cash provided by operating activities adjusted for cash paid for interest on long-term debt less cash used for investing activities for purchases of property and equipment. Adjusted free cash flow margin is calculated as adjusted free cash flow divided by total revenue. Adjusted free cash flow does not represent residual cash flow available for discretionary expenditures since, among other things, we have mandatory debt service requirements.

Constant Currency

We compare the percent change in certain results from one period to another period using constant currency information to provide a framework for assessing how our business performed excluding the effect of foreign currency rate fluctuations. In presenting this information, current and comparative prior period results are converted into United States dollars at the exchange rates in effect on the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods.

Contact Information

Elastic Investor Relations

[email protected]

Elastic Corporate Communications

[email protected]

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Elastic Investor Relations

[email protected]

Elastic Corporate Communications

[email protected]