Q1 FY2027
Filed Aug 27, 2026Elastic 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.