Elastic N.V. (ESTC): Results of Operations and Financial Condition
Elastic N.V. (ESTC) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Elastic Reports First Quarter Fiscal 2027 Financial Results cRPO growth of 21% as reported and 20% on a constant currency basis Q1 net additions to our >$100K ACV customer cohort reach the highest level to date SAN FRANCISCO, Aug 27, 2026 -- Elastic (NYSE: ESTC), the
How this was made
The 30-second read
Why it matters
The earnings beat and forward‑looking guidance provide fresh data for valuation models and may trigger re‑rating by analysts.
Market read
Elastic's strong quarter and optimistic outlook could lift AI‑related SaaS stocks and influence sector sentiment.
What to watch
The share repurchase program could limit upside if cash burn accelerates later in the year.
Elastic Reports First Quarter Fiscal 2027 Financial Results cRPO growth of 21% as reported and 20% on a constant currency basis
Total revenue grew 15% year-over-year, sales-led subscription revenue grew 18%, cRPO grew 21%, and non-GAAP operating income and adjusted free cash flow increased from the prior-year period. The company also guided to positive GAAP operating margin for Q2 and fiscal 2027.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | $ 478,113 | 6% | 15% |
| Subscription revenueGAAP | $ 448,735 | 6% | 15% |
| Services revenueGAAP | $ 29,378 | – | – |
| Sales-led subscription revenuenon-GAAP | $ 398,533 | 6% | 18% |
| Annual Elastic Cloud revenueother | $ 185,003 | 9% | 27% |
| Monthly Elastic Cloud revenueother | $ 50,202 | 5% | 1% |
| Total Elastic Cloud revenueother | $ 235,205 | 8% | 20% |
| Other subscription revenueother | $ 213,530 | 4% | 11% |
| Total cost of revenueGAAP | 121,925 | – | – |
| Gross profitGAAP | $ 356,188 | – | – |
| GAAP gross marginGAAP | 74.5 % | – | – |
| Non-GAAP gross profitnon-GAAP | $ 366,424 | – | – |
| Non-GAAP gross marginnon-GAAP | 76.6 % | – | – |
| Research and development expenseGAAP | $ 112,493 | – | – |
| Sales and marketing expenseGAAP | $ 198,997 | – | – |
| General and administrative expenseGAAP | $ 48,352 | – | – |
| Restructuring and other related chargesGAAP | 19,920 | – | – |
| Total operating expensesGAAP | 379,762 | – | – |
| GAAP operating lossGAAP | $ (23,574) | – | – |
| GAAP operating marginGAAP | (4.9) % | – | – |
| Non-GAAP operating incomenon-GAAP | $ 77,262 | – | – |
| Non-GAAP operating marginnon-GAAP | 16.2 % | – | – |
| GAAP net lossGAAP | $ (16,729) | – | – |
| GAAP net loss per share attributable to ordinary shareholders, basic and dilutedGAAP | $ (0.16) | – | – |
| Non-GAAP net incomenon-GAAP | $ 73,549 | – | – |
| Non-GAAP earnings per share attributable to ordinary shareholders, basicnon-GAAP | $ 0.70 | – | – |
| Non-GAAP earnings per share attributable to ordinary shareholders, dilutednon-GAAP | $ 0.70 | – | – |
| Total deferred revenueother | $ 883,947 | (14)% | 17% |
| Total remaining performance obligationsother | $ 1,854,226 | (6)% | 27% |
| Remaining performance obligations due within 12 monthsother | $ 1,152,670 | (4)% | 21% |
| Net cash provided by operating activitiesGAAP | $ 132,004 | – | – |
| Adjusted free cash flownon-GAAP | $ 143,273 | – | – |
| Adjusted free cash flow marginnon-GAAP | 30 % | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Annual Elastic CloudAnnual Elastic Cloud represented 39 % of Total Revenue. | $ 185,003 | 9% | 27% |
| Monthly Elastic CloudMonthly Elastic Cloud represented 10 % of Total Revenue. | $ 50,202 | 5% | 1% |
| Other subscriptionOther subscription represented 45 % of Total Revenue. | $ 213,530 | 4% | 11% |
| ServicesServices represented 6 % of Total Revenue. | $ 29,378 | – | – |
Second quarter of fiscal 2027 (ending October 31, 2026) and fiscal 2027 (ending April 30, 2027) outlook
- RevenueSecond quarter of fiscal 2027: between $486 million and $487 million. Fiscal 2027: between $1.998 billion and $2.010 billion.
- NoteSecond quarter of fiscal 2027 sales-led subscription revenue is expected to be between $407.5 million and $408.5 million, representing 16.9% year-over-year growth at the midpoint (17.1% year-over-year constant currency growth at the midpoint).
- NoteSecond quarter of fiscal 2027 GAAP operating margin is expected to be positive.
- NoteSecond quarter of fiscal 2027 non-GAAP operating margin is expected to be approximately 19.0%.
- NoteSecond quarter of fiscal 2027 non-GAAP diluted earnings per share is expected to be between $0.80 and $0.82, assuming between 108.0 million and 109.0 million diluted weighted average ordinary shares outstanding.
- NoteFiscal 2027 sales-led subscription revenue is expected to be between $1.682 billion and $1.694 billion, representing 17.4% year-over-year growth at the midpoint (17.5% year-over-year constant currency growth at the midpoint).
- NoteFiscal 2027 GAAP operating margin is expected to be positive.
- NoteFiscal 2027 non-GAAP operating margin is expected to be approximately 19.4%.
- NoteFiscal 2027 non-GAAP diluted earnings per share is expected to be between $3.29 and $3.37, assuming between 108.5 million and 109.5 million diluted weighted average ordinary shares outstanding.
- NoteFiscal 2027 adjusted free cash flow margin is expected to be approximately 21.5%, excluding any acquisitions or other one-time charges.
Capital returns
- In October 2025, Elastic announced a share repurchase program pursuant to which the Company may repurchase up to $500 million of the Company’s outstanding ordinary shares.
- During the first quarter of fiscal 2027, Elastic repurchased approximately 0.8 million ordinary shares at an average price per share of $49.71 on the open market, representing an aggregate value of approximately $40 million.
- Repurchases of ordinary shares were $ (40,016).
What drove it
- Current remaining performance obligations were $1.153 billion, an increase of 21% year-over-year, or 20% on a constant currency basis.
- Remaining performance obligations were $1.854 billion, an increase of 27% year-over-year, as reported and on a constant currency basis.
- Total customer count with Annual Contract Value (ACV) greater than $100,000 was over 1,800 compared to over 1,720 in Q4 FY26, and over 1,550 in Q1 FY26.
- Net Expansion Rate was approximately 111%.
- The company acquired Deductive AI, an AI-powered investigation platform, to bring more AI-powered investigation and automation to Elastic Observability.
- The company announced its collaboration with OpenAI to bring OpenAI’s advanced reasoning models with governed enterprise context in Elasticsearch across AI applications, security operations, and observability.
Concerns
- GAAP operating loss was $ (23,574), compared to $ (9,440).
- GAAP gross margin was 74.5 %, compared to 76.7 %.
- Restructuring and other related charges were 19,920, compared to —.
- Total deferred revenue was $ 883,947 and declined (14)% quarter over quarter.
- Total remaining performance obligations were $ 1,854,226 and declined (6)% quarter over quarter.
What to watch
- Second quarter total revenue guidance of between $486 million and $487 million.
- Second quarter sales-led subscription revenue guidance of between $407.5 million and $408.5 million.
- Second quarter GAAP operating margin expected to be positive and non-GAAP operating margin expected to be approximately 19.0%.
- Fiscal 2027 adjusted free cash flow margin expected to be approximately 21.5%, excluding any acquisitions or other one-time charges.
- The trajectory of the >$100K ACV customer cohort, which reached over 1,800.
Balance sheet and cash flow
- Cash and cash equivalents were $ 879,869 as of July 31, 2026, compared to $ 768,725 as of April 30, 2026.
- Marketable securities were $ 581,173 as of July 31, 2026, compared to $ 601,537 as of April 30, 2026.
- Cash, cash equivalents, and marketable securities were $1.461 billion as of July 31, 2026.
- Long-term debt, net was 571,195 as of July 31, 2026, compared to 570,895 as of April 30, 2026.
- Net cash provided by operating activities was $ 132,004, compared to $ 104,835.
- Purchases of property and equipment were (590), compared to (656).
- Net cash provided by investing activities was 18,140, compared to net cash used in investing activities of (170,375).
- Net cash used in financing activities was (36,712), compared to net cash provided by financing activities of 326.
- Cash, cash equivalents, and restricted cash, end of period was $ 881,835, compared to $ 665,990.
Analysis
Elastic reported first-quarter fiscal 2027 total revenue of $ 478,113, up 15% year-over-year and 6% quarter over quarter. Subscription revenue was $ 448,735, also up 15% year-over-year, while sales-led subscription revenue was $ 398,533, up 18% year-over-year and 6% quarter over quarter. Annual Elastic Cloud revenue was $ 185,003, up 27% year-over-year, compared with 1% growth for Monthly Elastic Cloud and 11% growth for Other subscription revenue. Annual Elastic Cloud accounted for 39 % of Total Revenue, while Total Elastic Cloud accounted for 49 %.
Demand indicators remained constructive. Remaining performance obligations due within 12 months were $ 1,152,670, up 21% year-over-year and 20% year-over-year excluding currency changes. Total remaining performance obligations were $ 1,854,226, up 27% year-over-year. The company reported over 1,800 customers with ACV greater than $100,000, compared to over 1,720 in Q4 FY26 and over 1,550 in Q1 FY26, alongside a Net Expansion Rate of approximately 111%. Deferred revenue, total RPO, and cRPO each declined sequentially according to the reported quarter-over-quarter comparisons.
Profitability showed a divergence between GAAP and non-GAAP measures. GAAP gross margin was 74.5 %, compared to 76.7 %, and GAAP operating loss was $ (23,574), compared to $ (9,440). The period included 19,920 of restructuring and other related charges. Non-GAAP operating income was $ 77,262, compared to $ 65,126, and non-GAAP operating margin was 16.2 %, compared to 15.7 %. GAAP net loss was $ (16,729), compared to $ (24,603), while non-GAAP diluted earnings per share was $ 0.70, compared to $ 0.60.
Cash generation strengthened. Net cash provided by operating activities was $ 132,004, compared to $ 104,835, and adjusted free cash flow was $ 143,273, compared to $ 116,038. Adjusted free cash flow margin was 30 %, compared to 28 %. The company held $1.461 billion of cash, cash equivalents, and marketable securities as of July 31, 2026, while long-term debt, net was 571,195. Elastic also repurchased approximately 0.8 million ordinary shares at an average price per share of $49.71, representing an aggregate value of approximately $40 million.
The outlook calls for second-quarter revenue of between $486 million and $487 million and fiscal 2027 revenue of between $1.998 billion and $2.010 billion. Sales-led subscription revenue is guided to between $407.5 million and $408.5 million in the second quarter and between $1.682 billion and $1.694 billion for fiscal 2027. Management expects positive GAAP operating margin in both periods, with non-GAAP operating margin of approximately 19.0% in the second quarter and approximately 19.4% for fiscal 2027. The guide places emphasis on continued sales-led growth, conversion of the large-customer cohort, RPO trends, and the expected improvement in operating profitability.
Management, verbatim
Elastic delivered a strong start to fiscal 2027, beating our guidance across all key metrics.
Ash Kulkarni, chief executive officer, Elastic
Our record quarter-over-quarter net customer additions to our >$100K ACV cohort and continued strength in cRPO and RPO growth reflect the durability of that demand.
Ash Kulkarni, chief executive officer, Elastic
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so prior guidance comparisons are unavailable.
- GAAP net income was not reported because the company reported GAAP net loss.
- GAAP diluted earnings per share guidance was not provided.
- Forward gross margin guidance was not provided.
- Forward operating expenses guidance was not provided.
- Forward tax rate guidance was not provided.
- Dividend amount and dividend guidance were not provided.
- Prior-quarter figures for income statement metrics were not provided.
- Prior-year dollar amounts for sales-led subscription revenue, deferred revenue, total remaining performance obligations, and remaining performance obligations due within 12 months were not provided.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Elastic filed a Form 8‑K reporting its Q1 FY2027 earnings, including revenue, margins, cash flow, and guidance for the remainder of FY2027.
Ticker impact
Elastic reported Q1 FY2027 results with 15% revenue growth, beat guidance and issued upbeat Q2 guidance.
Potential price rally of 5-8% over the next few trading sessions.
Revenue and subscription growth exceed expectations; guidance is above consensus and includes a positive GAAP margin outlook.
Market effects
Strong AI‑driven search and observability demand may lift peer SaaS and cloud‑infrastructure stocks.
Positive for U.S. tech sector and European AI‑related equities.
Reinforces broader AI hype, supporting global AI‑focused ETFs.
Counterpoint
If the market has already priced in the AI tailwinds, the stock may face a short‑term pull‑back after the initial rally.
Key entities
- ExecutiveAsh Kulkarni
CEO of Elastic who commented on the results and AI strategy.
- Acquisition TargetDeductive AI
AI‑powered investigation platform acquired by Elastic.
