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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

ir@elastic.co

Elastic Corporate Communications

PR-Team@elastic.co

Elastic N.V.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

Three Months Ended July 31,

 

2025

 

2024

Revenue

 

 

 

Subscription

$

388,583

 

 

$

323,774

 

Services

 

26,705

 

 

 

23,646

 

Total revenue

 

415,288

 

 

 

347,420

 

Cost of revenue

 

 

 

Subscription

 

69,418

 

 

 

68,347

 

Services

 

27,328

 

 

 

23,410

 

Total cost of revenue

 

96,746

 

 

 

91,757

 

Gross profit

 

318,542

 

 

 

255,663

 

Operating expenses

 

 

 

Research and development

 

109,122

 

 

 

89,332

 

Sales and marketing

 

174,054

 

 

 

157,357

 

General and administrative

 

44,806

 

 

 

42,673

 

Restructuring and other related charges

 

 

 

 

139

 

Total operating expenses

 

327,982

 

 

 

289,501

 

Operating loss

 

(9,440

)

 

 

(33,838

)

Other income, net

 

 

 

Interest expense

 

(6,351

)

 

 

(6,526

)

Other income, net

 

15,782

 

 

 

11,208

 

Loss before income taxes

 

(9

)

 

 

(29,156

)

Provision for income taxes

 

24,594

 

 

 

20,071

 

Net loss

$

(24,603

)

 

$

(49,227

)

Net loss per share attributable to ordinary shareholders, basic and diluted

$

(0.23

)

 

$

(0.48

)

Weighted-average shares used to compute net loss per share attributable to ordinary shareholders, basic and diluted

 

105,961,879

 

 

 

102,284,435

 

Elastic N.V.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

 

 

As of

July 31, 2025

 

As of

April 30, 2025

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

662,338

 

 

$

727,543

 

Restricted cash

 

3,652

 

 

 

3,671

 

Marketable securities

 

832,000

 

 

 

669,717

 

Accounts receivable, net of allowance for credit losses of $5,238 and $5,510 as of July 31, 2025 and April 30, 2025, respectively

 

221,989

 

 

 

375,613

 

Deferred contract acquisition costs

 

85,009

 

 

 

86,205

 

Prepaid expenses and other current assets

 

73,323

 

 

 

68,258

 

Total current assets

 

1,878,311

 

 

 

1,931,007

 

Property and equipment, net

 

6,335

 

 

 

6,589

 

Goodwill

 

326,081

 

 

 

319,417

 

Operating lease right-of-use assets

 

21,582

 

 

 

22,334

 

Intangible assets, net

 

13,828

 

 

 

11,404

 

Deferred contract acquisition costs, non-current

 

114,868

 

 

 

117,762

 

Deferred tax assets

 

146,506

 

 

 

168,045

 

Other assets

 

16,491

 

 

 

16,295

 

Total assets

$

2,524,002

 

 

$

2,592,853

 

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

26,513

 

 

$

17,150

 

Accrued expenses and other liabilities

 

73,295

 

 

 

86,347

 

Accrued compensation and benefits

 

82,826

 

 

 

93,714

 

Operating lease liabilities

 

8,043

 

 

 

8,928

 

Deferred revenue

 

710,136

 

 

 

802,117

 

Total current liabilities

 

900,813

 

 

 

1,008,256

 

Deferred revenue, non-current

 

44,519

 

 

 

50,340

 

Long-term debt, net

 

570,016

 

 

 

569,729

 

Operating lease liabilities, non-current

 

16,112

 

 

 

16,357

 

Other liabilities, non-current

 

21,186

 

 

 

20,937

 

Total liabilities

 

1,552,646

 

 

 

1,665,619

 

Shareholders’ equity:

 

 

 

Preference shares, €0.01 par value; 165,000,000 shares authorized, 0 shares issued and outstanding as of July 31, 2025 and April 30, 2025

 

 

 

 

 

Ordinary shares, par value €0.01 per share: 165,000,000 shares authorized; 106,268,106 shares issued and outstanding as of July 31, 2025 and 105,534,887 shares issued and outstanding as of April 30, 2025

 

1,120

 

 

 

1,112

 

Treasury stock

 

(369

)

 

 

(369

)

Additional paid-in capital

 

2,119,669

 

 

 

2,049,416

 

Accumulated other comprehensive loss

 

(24,740

)

 

 

(23,204

)

Accumulated deficit

 

(1,124,324

)

 

 

(1,099,721

)

Total shareholders’ equity

 

971,356

 

 

 

927,234

 

Total liabilities and shareholders’ equity

$

2,524,002

 

 

$

2,592,853

 

Elastic N.V.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Three Months Ended July 31,

 

2025

 

2024

Cash flows from operating activities

 

 

 

Net loss

$

(24,603

)

 

$

(49,227

)

Adjustments to reconcile net loss to cash provided by operating activities:

 

 

 

Depreciation and amortization

 

2,316

 

 

 

4,173

 

Amortization of premium and accretion of discount on marketable securities, net

 

(1,393

)

 

 

(2,200

)

Amortization of deferred contract acquisition costs

 

26,173

 

 

 

23,181

 

Amortization of debt issuance costs

 

287

 

 

 

275

 

Non-cash operating lease cost

 

2,316

 

 

 

2,838

 

Stock-based compensation expense

 

69,935

 

 

 

63,543

 

Deferred income taxes

 

21,562

 

 

 

14,723

 

Unrealized foreign currency transaction gain

 

(364

)

 

 

(181

)

Changes in operating assets and liabilities, net of impact of business acquisitions:

 

 

 

Accounts receivable, net

 

153,982

 

 

 

127,203

 

Deferred contract acquisition costs

 

(22,284

)

 

 

(13,900

)

Prepaid expenses and other current assets

 

(5,066

)

 

 

176

 

Other assets

 

(1,075

)

 

 

(1,939

)

Accounts payable

 

9,570

 

 

 

(16,400

)

Accrued expenses and other liabilities

 

(14,892

)

 

 

(9,028

)

Accrued compensation and benefits

 

(10,987

)

 

 

(17,789

)

Operating lease liabilities

 

(2,730

)

 

 

(3,374

)

Deferred revenue

 

(97,912

)

 

 

(69,320

)

Net cash provided by operating activities

 

104,835

 

 

 

52,754

 

Cash flows from investing activities

 

 

 

Purchases of property and equipment

 

(656

)

 

 

(747

)

Business acquisitions, net of cash acquired

 

(8,489

)

 

 

 

Purchases of marketable securities

 

(248,596

)

 

 

(95,163

)

Sales, maturities, and redemptions of marketable securities

 

87,366

 

 

 

92,390

 

Net cash used in investing activities

 

(170,375

)

 

 

(3,520

)

Cash flows from financing activities

 

 

 

Proceeds from issuance of ordinary shares upon exercise of stock options

 

326

 

 

 

4,745

 

Net cash provided by financing activities

 

326

 

 

 

4,745

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(10

)

 

 

1,239

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

(65,224

)

 

 

55,218

 

Cash, cash equivalents, and restricted cash, beginning of period

 

731,214

 

 

 

543,089

 

Cash, cash equivalents, and restricted cash, end of period

$

665,990

 

 

$

598,307

 

Elastic N.V.

Revenue by Type

(in thousands, except percentages)

(unaudited)

 

 

Three Months Ended July 31,

 

2025

 

2024

 

Amount

 

% of

Total

Revenue

 

Amount

 

% of

Total

Revenue

Annual Elastic Cloud

$

145,912

 

35

%

 

$

111,031

 

32

%

Monthly Elastic Cloud

 

49,862

 

12

%

 

 

46,250

 

13

%

Total Elastic Cloud

 

195,774

 

47

%

 

 

157,281

 

45

%

Other subscription

 

192,809

 

47

%

 

 

166,493

 

48

%

Total subscription

 

388,583

 

94

%

 

 

323,774

 

93

%

Services

 

26,705

 

6

%

 

 

23,646

 

7

%

Total revenue

$

415,288

 

100

%

 

$

347,420

 

100

%

Elastic N.V.

Reconciliation of GAAP to Non-GAAP Data

Supplementary Information

(in thousands, except percentages)

(unaudited)

 

 

Three Months

Ended


July 31, 2025

 

% Change

Year Over

Year

 

% Change

Year Over Year

Excluding Currency

Changes

 

% Change

Quarter

Over

Quarter

 

% Change

Quarter Over

Quarter Excluding

Currency Changes

Revenue

 

 

 

 

 

 

 

 

 

Annual Elastic Cloud

$

145,912

 

31%

 

31%

 

8%

 

8%

Monthly Elastic Cloud

 

49,862

 

8%

 

8%

 

6%

 

6%

Total Elastic Cloud

 

195,774

 

24%

 

24%

 

8%

 

7%

Other subscription

 

192,809

 

16%

 

14%

 

7%

 

4%

Total subscription

 

388,583

 

20%

 

19%

 

7%

 

6%

Total revenue

$

415,288

 

20%

 

18%

 

7%

 

5%

 

 

 

 

 

 

 

 

 

 

Total sales-led subscription revenue

$

338,721

 

22%

 

20%

 

8%

 

6%

 

 

 

 

 

 

 

 

 

 

Total deferred revenue

$

754,655

 

20%

 

19%

 

(11)%

 

(11)%

Total remaining performance obligations

$

1,460,676

 

16%

 

15%

 

(5)%

 

(6)%

Remaining performance obligations due within 12 months

$

956,494

 

18%

 

17%

 

(4)%

 

(4)%

Elastic N.V.

Reconciliation of GAAP to Non-GAAP Data

Adjusted Free Cash Flow

(in thousands, except percentages)

(unaudited)

 

 

Three Months Ended July 31,

 

2025

 

2024

Net cash provided by operating activities

$

104,835

 

 

$

52,754

 

Less: Purchases of property and equipment

 

(656

)

 

 

(747

)

Add: Interest paid on long-term debt

 

11,859

 

 

 

11,859

 

Adjusted free cash flow (1)

$

116,038

 

 

$

63,866

 

Net cash used in investing activities

$

(170,375

)

 

$

(3,520

)

Net cash provided by financing activities

$

326

 

 

$

4,745

 

Net cash provided by operating activities (as a percentage of total revenue)

 

25

%

 

 

15

%

Less: Purchases of property and equipment (as a percentage of total revenue)

 

%

 

 

%

Add: Interest paid on long-term debt (as a percentage of total revenue)

 

3

%

 

 

3

%

Adjusted free cash flow margin

 

28

%

 

 

18

%

(1) Adjusted free cash flow includes cash paid for restructuring and other charges of $3.0 million during the three months ended July 31, 2024. There were no cash payments for restructuring and other charges during the three months ended July 31, 2025.

Elastic N.V.

Reconciliation of GAAP to Non-GAAP Data

(in thousands, except percentages, share and per share data)

(unaudited)

 

 

Three Months Ended July 31,

 

2025

 

2024

Gross Profit Reconciliation:

 

 

 

GAAP gross profit

$

318,542

 

 

$

255,663

 

Stock-based compensation expense and related employer taxes

 

6,843

 

 

 

6,309

 

Amortization of acquired intangibles

 

1,576

 

 

 

3,275

 

Non-GAAP gross profit

$

326,961

 

 

$

265,247

 

Gross Margin Reconciliation(1):

 

 

 

GAAP gross margin

 

76.7

%

 

 

73.6

%

Stock-based compensation expense and related employer taxes

 

1.6

%

 

 

1.8

%

Amortization of acquired intangibles

 

0.4

%

 

 

0.9

%

Non-GAAP gross margin

 

78.7

%

 

 

76.3

%

Operating (Loss) Income Reconciliation:

 

 

 

GAAP operating loss

$

(9,440

)

 

$

(33,838

)

Stock-based compensation expense and related employer taxes

 

72,863

 

 

 

67,567

 

Amortization of acquired intangibles

 

1,576

 

 

 

3,275

 

Acquisition-related expenses

 

127

 

 

 

48

 

Restructuring and other related charges

 

 

 

 

139

 

Non-GAAP operating income

$

65,126

 

 

$

37,191

 

Operating Margin Reconciliation(1):

 

 

 

GAAP operating margin

 

(2.3

)%

 

 

(9.7

)%

Stock-based compensation expense and related employer taxes

 

17.5

%

 

 

19.4

%

Amortization of acquired intangibles

 

0.4

%

 

 

0.9

%

Acquisition-related expenses

 

%

 

 

%

Restructuring and other related charges

 

%

 

 

%

Non-GAAP operating margin

 

15.7

%

 

 

10.7

%

Net (Loss) Income Reconciliation:

 

 

 

GAAP net loss

$

(24,603

)

 

$

(49,227

)

Stock-based compensation expense and related employer taxes

 

72,863

 

 

 

67,567

 

Amortization of acquired intangibles

 

1,576

 

 

 

3,275

 

Acquisition-related expenses

 

127

 

 

 

48

 

Restructuring and other related charges

 

 

 

 

139

 

Income tax effects and adjustments(2)

 

14,902

 

 

 

15,314

 

Non-GAAP net income

$

64,865

 

 

$

37,116

 

Non-GAAP earnings per share attributable to ordinary shareholders, basic(1)

$

0.61

 

 

$

0.36

 

Non-GAAP earnings per share attributable to ordinary shareholders, diluted(1)

$

0.60

 

 

$

0.35

 

Weighted-average shares used to compute non-GAAP earnings per share attributable to ordinary shareholders, basic

 

105,961,879

 

 

 

102,284,435

 

Weighted-average shares used to compute non-GAAP earnings per share attributable to ordinary shareholders, diluted

 

107,891,810

 

 

 

105,964,740

 

(1) Totals may not sum, due to rounding. Gross margin, operating margin, and earnings per share are calculated based upon the respective underlying, non-rounded data.

(2) Effective May 1, 2025, we use a projected non-GAAP annual effective tax rate of 13% for the purpose of determining non-GAAP net income and non-GAAP earnings per share, basic and diluted, across the interim period. We believe this approach provides investors with a more consistent view of our underlying operating performance. Our annual projected non-GAAP tax rate excludes the impact from stock-based compensation expense and related employer taxes, amortization of acquired intangible assets, acquisition-related expenses, restructuring and other related charges, discrete tax items, releases of valuation allowance against deferred tax assets, and other non-recurring tax adjustments, which may vary in size and frequency. Our annual projected non-GAAP tax rate may change due to factors such as new tax legislation, shifts in the geographic mix of earnings, or other significant business developments. We assess this rate as needed to ensure it reflects current conditions. Applying a consistent annual rate improves comparability across reporting periods by excluding the effects of discrete or non-recurring tax items.

Elastic N.V.

Reconciliation of GAAP to Non-GAAP Data

(in thousands)

(unaudited)

 

 

Three Months Ended July 31,

 

2025

 

2024

Cost of revenue reconciliation:

 

 

 

GAAP subscription

$

69,418

 

 

$

68,347

 

Stock-based compensation expense and related employer taxes

 

(2,653

)

 

 

(2,520

)

Amortization of acquired intangibles

 

(1,576

)

 

 

(3,275

)

Non-GAAP subscription

$

65,189

 

 

$

62,552

 

GAAP services

$

27,328

 

 

$

23,410

 

Stock-based compensation expense and related employer taxes

 

(4,190

)

 

 

(3,789

)

Non-GAAP services

$

23,138

 

 

$

19,621

 

Operating expenses reconciliation:

 

 

 

GAAP research and development expense

$

109,122

 

 

$

89,332

 

Stock-based compensation expense and related employer taxes

 

(27,773

)

 

 

(25,722

)

Acquisition-related expenses

 

(8

)

 

 

(48

)

Non-GAAP research and development expense

$

81,341

 

 

$

63,562

 

GAAP sales and marketing expense

$

174,054

 

 

$

157,357

 

Stock-based compensation expense and related employer taxes

 

(24,069

)

 

 

(22,449

)

Non-GAAP sales and marketing expenses

$

149,985

 

 

$

134,908

 

GAAP general and administrative expense

$

44,806

 

 

$

42,673

 

Stock-based compensation expense and related employer taxes

 

(14,178

)

 

 

(13,087

)

Acquisition-related expenses

 

(119

)

 

 

 

Non-GAAP general and administrative expense

$

30,509

 

 

$

29,586

 

 

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