Elastic N.V.
Loading chart...
Item 1. Business
Overview
Elastic, the Search AI Company, enables its customers to transform data into answers, actions, and outcomes with Search AI. While search technology revolutionized information retrieval through its ability to instantly return relevant results from massive datasets, it struggles when it comes to understanding context and generating insights. AI, on the other hand, excels at analyzing complex patterns and generating insights, but it lacks the ability to find and access specific information within vast data stores. The Elasticsearch Platform (“our platform”) combines the precision of search with the intelligence of AI to help our customers and community solve real-time business problems, unlock potential value, and achieve better outcomes. Our platform, available as either a cloud service or a self-managed software, allows our customers to find insights and drive AI and machine learning use cases from large amounts of data.
We offer three Elasticsearch-powered solutions—Search & AI, Elastic Observability, and Elastic Security—that are built on our platform. We help organizations, their employees, and their customers find what they need faster, while keeping mission-critical applications and infrastructure running smoothly and protecting against cyber threats.
As digital transformation continues to drive mission-critical business functions towards increasingly complex data landscapes, we believe that every company must incorporate search AI capabilities across IT and line-of-business organizations to find the answers that matter from all of its data in real time and at scale.
Our platform is able to ingest data from any source, in any format, and perform search, analysis, and visualization of that data. With Elasticsearch at its core, our platform is a highly scalable document store, columnar database, and search engine and is the unified data store for all of our solutions and use cases. Featuring a common, solution-agnostic user interface with an embedded AI agent and support for third-party AI agents, our platform offers powerful drag-and-drop visual analytics, centralized management capabilities, and the world's most downloaded open source vector database, which gives developers a full suite of sophisticated retrieval algorithms and the ability to integrate with large language models (“LLM”). It delivers the comprehensive set of capabilities developers need to build, maintain, and secure next-generation applications and services. In addition, our out-of-the-box solutions (Elastic Observability and Elastic Security) deliver fast time-to-value for common use cases and, paired with our developer-centric platform which is extensible and customizable, allow us to innovate quickly and differentiate our offerings at every level.
We make our platform available as a service across major cloud providers (consisting of Amazon Web Services (“AWS”), Google Cloud Platform (“GCP”), and Microsoft Azure (“Azure”)) in more than 55 public cloud regions globally. Customers can also deploy our platform across hybrid clouds, public or private clouds, and multi-cloud environments.
Our business model is based primarily on a combination of paid service offerings (Elastic Cloud Hosted and Elastic Cloud Serverless) and free and paid proprietary self-managed software (Elastic Self-Managed). Our paid offerings for our platform are sold via subscription through resource-based pricing, and all customers and users have access to varying levels of features across all solutions. In Elastic Cloud, our family of cloud-based offerings, we offer various subscription tiers tied to different features. For users who download our software, we make some of the features of our software available free of charge, allowing us to engage with a broad community of developers and practitioners and introduce them to the value of our platform.
We believe in the importance of an open software development model, and we develop the majority of our software in public repositories under an open source GNU Affero General Public License v3 (“AGPL”) license, as well as under a proprietary license. Unlike some companies, we do not build an enterprise version that is separate from our free distribution. We maintain a single code base across both our self-managed software and Elastic-hosted services. All of these actions help us build a powerful commercial business model that we believe is optimized for product-driven growth. Elastic has always been committed to open source and an open development process with transparent and direct engagement with our community. The core of Elasticsearch and Kibana (a user interface) are open source under an AGPL license, and our open source code is housed in public repositories.
Our customers often significantly expand their usage of our products and services over time. Expansion includes increasing the number of developers and practitioners using our products, increasing the utilization of our products for a particular use case, and utilizing our products to address new use cases. We focus some of our direct sales efforts on encouraging this type of expansion within our customer base, both within as well as across solutions. Because our business model provides access to all solutions with resource-based pricing, we make it easy for customers to expand across use cases.
5
Our business has experienced significant growth around the world. Our total revenue was $1.739 billion, $1.483 billion, and $1.267 billion for the years ended April 30, 2026, 2025, and 2024, respectively, representing year-over-year growth of 17% for the years ended April 30, 2026 and 2025. Subscriptions accounted for 94% of our total revenue for the year ended April 30, 2026 and 93% of our total revenue for the years ended April 30, 2025 and 2024. Revenue from customers located outside the United States accounted for 46%, 44%, and 42% of our total revenue for the years ended April 30, 2026, 2025, and 2024, respectively.
We recorded net income of $367.8 million for the year ended April 30, 2026, net loss of $108.1 million for the year ended April 30, 2025, and net income of $61.7 million for the year ended April 30, 2024. We may incur net losses in the future. Our net cash provided by operating activities was $326.9 million, $266.2 million, and $148.8 million for the years ended April 30, 2026, 2025, and 2024 respectively.
Our Products
Our products enable our customers and users to find relevant information and insights nearly instantly in large amounts of data across a broad range of business and consumer use cases.
Our platform includes a powerful set of solutions able to ingest and store data from any source, in any format, and perform search, analysis, and visualization, usually in milliseconds. Our platform can be used by developers and IT decision makers to power a variety of use cases. We also offer software solutions built on our platform that address a wide variety of use cases. Our platform and each of our solutions (Search & AI, Elastic Observability, and Elastic Security) are designed to run as self-managed software or as a cloud service (in public or private clouds, in hybrid environments, or in multi-cloud environments).
Elasticsearch Platform
At its core, our platform is powered by Elasticsearch—a distributed, real-time vector database and analytics engine and data store for all types of data, including textual, numerical, geospatial, structured, and unstructured. Our platform includes a user interface (known as “Kibana”) that is the visualization layer for data stored in Elasticsearch; this layer is also the management and configuration interface for all parts of our platform.
Elastic has spent years infusing its platform with a strong foundational suite of AI and machine learning capabilities—from support for external machine learning models to native vector search capabilities, supervised and unsupervised machine learning, and solution capabilities that improve search relevance and identify anomalies. Elastic enables organizations by providing the most complete data platform for context engineering and AI. Our commitment to transparency and flexibility ensures that organizations have the visibility and control necessary to integrate AI into workflows with confidence.
Paid features enable capabilities such as automating anomaly detection on time-series data at scale through machine learning, generating embeddings using state-of-the-art models, and performing inference with LLMs. Our platform further facilitates compliance with data security and privacy regulations, supporting search across low-cost cold and frozen data tiers, and allowing real-time notifications and alerts. The source code of features included as part of our platform is generally visible to the public in the form of “open source.”
Our Solutions
We have built a number of solutions into our platform to make it easier for organizations to use our software for common use cases. Our solutions include the following:
•Search & AI. Powered by Elasticsearch, Search & AI includes context engineering and AI, combining a scalable distributed data store, vector database, hybrid search, embedding and reranking AI models, and an agent builder. Elasticsearch simplifies building search, AI, and agentic applications by unifying structured and unstructured data, along with vectors into a single, low-latency engine that delivers precise relevance. Built for production, Elasticsearch scales with near real-time performance and cost efficiency, powering high-throughput ingestion and supporting petabyte-scale datasets.
6
•Elastic Observability. Our agentic observability platform brings logs, metrics, and traces into a unified datastore so SRE/Operations teams and AI agents can investigate, correlate, and resolve issues across applications, networks, and infrastructure. Observability includes log analytics, to search, analyze, and visualize petabytes of structured and unstructured logs; infrastructure monitoring, for visibility across cloud, on-premises, Kubernetes, serverless, and hosts; Application Performance Monitoring (“APM”), support for native production-grade OpenTelemetry without proprietary agents and broad language support to pinpoint code issues and debug faster; digital experience monitoring, to improve user experience with synthetic testing and real user monitoring (“RUM”); Streams, which parse and structure raw telemetry data without rebuilding pipelines and Significant Events, which surface critical errors, anomalies, and system changes, cutting time to root cause and giving AI agents the grounded context they need to triage alerts, run investigations, and propose remediations; and LLM observability, to track latency, errors, prompts, responses, usage, and costs across major LLM services and agent frameworks.
•Elastic Security. Elastic Security is an agentic security operations platform where agents handle the full lifecycle from data ingestion through response, and human analysts handle judgment, verification, and approval. Built on the Elasticsearch data and AI platform, it provides unified protection to prevent, detect, and respond to threats. The solution combines Security Information and Event Management (“SIEM”), Extended Detection and Response (“XDR”), endpoint security with third-party integrations and first-party protections, cloud security, and native Security Orchestration, Automation, and Response (“SOAR”) capabilities in a single platform, with integrations across network, host, user, cloud, and endpoint data sources. It enables investigations, incident management, shareable analytics, and workflow automation with AI-driven detection, investigation, and response.
Our Deployment Options
Our platform is available either as self-managed software or a cloud service. With Elastic Self-Managed, users can also download and manage their own deployments of our platform and our solutions. To help with more complex deployment scenarios, we offer paid proprietary products to deliver centralized provisioning, management, and monitoring across multiple deployments. Elastic Cloud, our family of cloud-based offerings (including both Elastic Cloud Hosted and Elastic Cloud Serverless) is hosted on major public cloud providers. We also partner with other cloud providers that offer our software to users on their cloud platform as a hosted offering.
Strengths of our Products
The strengths of our products include the following:
•Speed. Our platform can find matches for search criteria in milliseconds within even the largest structured and unstructured datasets. Its schemaless structure and inverted indices enable real-time search of high volumes of structured, unstructured, and time series data.
•Scale. Our platform is a distributed system and can scale. It has the ability to subdivide search indices into multiple pieces called shards, which enables data volume to be scaled horizontally and operations to be distributed across hundreds of systems or more. A developer running hundreds of nodes has the same user experience as a developer running a single node on a laptop.
•Relevance. Our platform uses multiple analytical techniques, including both traditional and AI-powered relevance techniques, to determine the similarity between stored data and queries, generating highly relevant results reflecting a deep understanding of text and context. Its sophisticated yet developer-friendly query language permits advanced search and analytics. Additionally, the speed of our platform permits query iteration, further enhancing the relevance of search results.
•Ease of Use. Our platform is engineered to take a user from data to dashboard or inquiry to insight in minutes. It offers an easy getting-started experience, featuring streamlined download and deployment, sensible defaults, a simple and intuitive query language, and no need to define a schema up front. Administrative tasks such as securing the platform are intuitive and integrated into the user experience, as are investigative tasks such as data visualization.
•Flexibility. Our platform is able to ingest, filter, store, search, and analyze data in any form, whether structured or unstructured. These capabilities enable our platform to generate insights from a wide variety of data sources for a broad range of use cases. The flexibility of our platform also enables users to begin using our products along with their existing systems, which lowers barriers to adoption.
7
•Extensibility. Our platform can be used by developers as a foundation for addressing a wide variety of use cases. Our open approach to building our platform empowers developers to innovate and utilize it to fit their specific needs. Additionally, our developer community actively engages with us to improve and expand our platform.
Our Growth Strategies
We pursue the following growth strategies:
•Extend our product leadership through continued investment in our technology. We continue to invest in our platform, solutions, and services to extend into new use cases, industries, geographies, and customers. We regularly deliver new and enhanced capabilities to our customers, such as the enhanced AI technology integrated in our platform, through regular releases, to which everyone has access based on our subscription model. We continue to offer comprehensive AI capabilities in several key areas, providing organizations with tools and infrastructure to leverage AI, including vector search capabilities, inference and retrieval application programming interfaces (“APIs”), embedding and relevance models, agentic workflows, data ingestion, data management, and domain-specific applications. We view our AI capabilities as a major competitive differentiator for our products and intend to continue to invest in additional features and functionality related to AI. We also offer Elastic Cloud Serverless, a fully-managed, stateless architecture that auto-scales with customer usage. We manage the underlying deployment and customers benefit from automatic upgrades. Our technology investments include foundational platform capabilities as well as solution enhancements for our target use cases.
•Increase product adoption by improving ease of use and growing our user community. With our engineering efforts focused on the user experience, we continue to develop software that makes our products easier to use and adopt for both developers and non-developers. We plan to continue to engage with developers globally to grow our user community through a wide range of touch points such as community meetups, global community groups, hackathons, our global events, our user conferences, which we call ElasticON, and engagement on our website, user forums, and code repositories.
•Expand our customer base by acquiring new customers. We engage our community and our partners to drive awareness and invest in our sales and marketing team to grow our customer base. We offer varied deployment options, including Elastic Self-Managed, Elastic Cloud Hosted, and Elastic Cloud Serverless, to cater to a wide range of customer use cases. Our sales and marketing team conducts campaigns to drive further awareness and adoption within the user community. As a result, many of our sales prospects, including those in executive-level conversations, are already familiar with our technology before entering into a commercial relationship with us. Additionally, we leverage our network of partners to drive awareness and expand our sales and marketing reach to target new customers.
Loading financial statements...
Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
| Line item |
|---|
| Period ending |
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in Part II, Item 8 of this Annual Report on Form 10-K. As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such difference include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K. Our fiscal year end is April 30.
This section of our Annual Report on Form 10-K discusses our financial condition and results of operations for the years ended April 30, 2026, 2025, and 2024, and year-to-year comparisons between the years ended April 30, 2026 and 2025. A discussion of our financial condition and results of operations for the year ended April 30, 2024 and year-to-year comparisons between the years ended April 30, 2025 and 2024 that are not included in this Annual Report on Form 10-K can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended April 30, 2025, filed with the SEC on June 10, 2025.
Overview
Elastic, the Search AI Company, enables its customers to transform data into answers, actions, and outcomes with Search AI. Our platform combines the precision of search with the intelligence of AI to help our customers and community solve real-time business problems, unlock potential value, and achieve better outcomes. Our platform, available as either a cloud service or a self-managed software, allows our customers to find insights and drive AI and machine learning use cases from large amounts of data.
We offer three Elasticsearch-powered solutions—Search & AI, Elastic Observability, and Elastic Security—that are built on our platform. We help organizations, their employees, and their customers find what they need faster, while keeping mission-critical applications and infrastructure running smoothly and protecting against cyber threats.
Our platform is able to ingest data from any source, in any format, and perform search, analysis, and visualization of that data. With Elasticsearch at its core, our platform is a highly scalable document store, columnar database, and search engine and is the unified data store for all of our solutions and use cases. Featuring a common, solution-agnostic user interface with an embedded AI agent and support for third-party AI agents, our platform offers powerful drag-and-drop visual analytics, centralized management capabilities, and the world's most downloaded open source vector database, which gives developers a full suite of sophisticated retrieval algorithms and the ability to integrate with LLMs. It delivers the comprehensive set of capabilities developers need to build, maintain, and secure next-generation applications and services. Our platform can be used by developers and IT decision makers to power a variety of use cases.
We make our platform available as a service across major cloud providers. Customers can also deploy our platform across hybrid clouds, public or private clouds, and multi-cloud environments. As digital transformation continues to drive mission-critical business functions towards increasingly complex data landscapes, we believe that every company must incorporate search AI capabilities across IT and line-of-business organizations to find the answers that matter from all of its data in real time and at scale.
Our business model is based primarily on a combination of paid service offerings (Elastic Cloud Hosted and Elastic Cloud Serverless) and free and paid proprietary self-managed software (Elastic Self-Managed). Our paid offerings for our platform are sold via subscription through resource-based pricing, and all customers and users have access to varying levels of features across all solutions. In Elastic Cloud, our family of cloud-based offerings, we offer various subscription tiers tied to different features. For users who download our software, we make some of the features of our software available free of charge, allowing us to engage with a broad community of developers and practitioners and introduce them to the value of our platform.
We believe in the importance of an open software development model, and we develop the majority of our software in public repositories under an open source AGPL license, as well as under a proprietary license. Unlike some companies, we do not build an enterprise version that is separate from our free distribution. We maintain a single code base across both our self-managed software and Elastic-hosted services. All of these actions help us build a powerful commercial business model that we believe is optimized for product-driven growth. Elastic has always been committed to open source and an open development process with transparent and direct engagement with our community. The core of Elasticsearch and Kibana (a user interface) are open source under an AGPL license, and our open source code is housed in public repositories.
54
We generate revenue primarily from sales of subscriptions to our platform. We offer various paid subscription tiers that provide different levels of rights to use proprietary features and access to support. We do not sell support independently. Our subscription agreements typically range from one to three years and are usually billed annually in advance. Our subscription agreements are either term-based or consumption-based, with the vast majority of Elastic Cloud subscriptions being consumption-based. We sell subscriptions in various currencies, with the majority of our subscriptions contracted in U.S. dollars, and a smaller portion contracted in Euro, British Pound Sterling, and other currencies. Elastic Cloud customers may also purchase subscriptions on a month-to-month basis without a commitment, with usage billed at the end of each month. Subscriptions accounted for 94% and 93% of total revenue for the years ended April 30, 2026 and 2025, respectively. We also generate revenue from consulting and training services.
We make it easy for users to begin using our products in order to drive rapid adoption. Users can either sign up for a free trial on Elastic Cloud or download our software directly from our website without any sales interaction, and immediately begin using the full set of features. Users can also sign up for Elastic Cloud through public cloud marketplaces. We conduct low-touch campaigns to keep users and customers engaged once they have begun using Elastic Cloud or have downloaded our software. We define a customer as an entity that generated revenue in the quarter ending on the measurement date from an annual or month-to-month subscription. Affiliated entities are typically counted as a single customer.
Many of these customers start with limited initial spending on our products but can significantly increase their spending over time. We drive high-touch engagement with qualified prospects and customers to drive further awareness, adoption, and expansion of our products with paid subscriptions. Expansion includes increasing the number of developers and practitioners using our products, increasing the utilization of our products for a particular use case, and utilizing our products to address new use cases. The number of customers who represented greater than $100,000 in annual contract value (“ACV”) was over 1,720 and over 1,510 as of April 30, 2026 and 2025, respectively. In addition, we had over 240 customers who represented greater than $1.0 million in ACV as of April 30, 2026. The ACV of a customer’s commitments is calculated based on the terms of that customer’s subscriptions and represents the total committed annual subscription amount as of the measurement date. Month-to-month subscriptions are not included in the calculation of ACV.
Our sales teams are organized primarily by geography and secondarily by customer segments. They focus on both seeking to obtain new customers and on pursuing additional sales to existing customers. In addition to our direct sales efforts, we maintain partnerships to further extend our reach and awareness of our products around the world.
We have experienced significant growth, with revenue increasing to $1.739 billion for the year ended April 30, 2026 from $1.483 billion for the year ended April 30, 2025 and $1.267 billion for the year ended April 30, 2024, representing year-over-year growth of 17% for the years ended April 30, 2026 and 2025. For the years ended April 30, 2026, 2025, and 2024, revenue from outside the United States accounted for 46%, 44%, and 42% of our total revenue, respectively.
We recorded net income of $367.8 million and $61.7 million for the years ended April 30, 2026 and 2024, respectively, while we incurred a net loss of $108.1 million for the year ended April 30, 2025. Our net cash provided by operating activities was $326.9 million, $266.2 million, and $148.8 million for the years ended April 30, 2026, 2025, and 2024, respectively. We had an accumulated deficit of $732.0 million as of April 30, 2026 due to losses in all but two fiscal years since our inception. We may incur net losses in the future and there can be no assurance whether, or when, we may become profitable on a consistent basis.
We continue to make substantial investments in developing our platform and expanding our global sales and marketing footprint. With a distributed team spanning over 40 countries, we are able to recruit, hire, and retain high-quality, experienced technical and sales personnel and operate at a rapid pace to drive product releases, fix bugs, and create and market new products. We had 4,019 employees as of April 30, 2026.
Current Economic Conditions
Macroeconomic events, including a resurgence in inflation, fluctuations in economic growth, changes in and uncertainty of international trade policies, and geopolitical turmoil, continue to evolve and impact worldwide economic activity. Governmental and corporate responses to these factors, including changing interest rates and unpredictable and decreased spending, will continue to affect the macroeconomic conditions. We have experienced and, if economic conditions remain uncertain or deteriorate, may continue to experience longer and more unpredictable sales cycles, increased scrutiny of prospective sales, slowing consumption and overall customer expenditures, and the impacts of changing foreign exchange rates with a strengthening or weakening U.S. dollar. We continue to closely monitor the macroeconomic environment and its effects on our business and on global economic activity, including customer spending behavior. See “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of additional risks.
55
Recent Developments
On July 4, 2025, OBBBA was enacted into law, introducing significant changes to U.S. federal tax law. The legislation includes provisions that impacted us in the year ended April 30, 2026, and the tax effects of those provisions have been reflected in our benefit from income taxes. Additional provisions become effective in future periods and we are continuing to evaluate their impacts as regulatory guidance and interpretive clarifications emerge. See Note 13, “Income Taxes,” of our accompanying Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.
Key Factors Affecting our Performance
We believe that the growth and future success of our business depend on many factors, including those described below. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address to sustain our growth and improve our results of operations.
Developing new features for the Elasticsearch Platform. Our platform is applied to various use cases by customers, including through the solutions we offer. Our revenue is derived primarily from subscriptions of Search & AI, Elastic Observability, and Elastic Security built into our platform. We believe that releasing additional features of our platform, including our solutions, drives usage of our products and ultimately drives our growth. To that end, we plan to continue to invest in building new features and solutions that expand the capabilities of our platform, specifically including investments in context engineering, AI models, and agentic workflows. We also intend to continue to pursue acquisitions selectively to enhance the technology in our platform and our solutions. These investments may adversely affect our operating results prior to generating benefits, to the extent that they ultimately generate benefits at all.
Growing the Elastic community. Our strategy consists of providing access to source available software, on both a paid and free-of-charge basis, and fostering a community of users and developers. Our strategy is designed to pursue what we believe to be significant untapped potential for the use of our technology. After developers begin to use our software and start to participate in our developer community, they become more likely to apply our technology to additional use cases and promote our technology within their organizations. This reduces the time required for our sales force to educate potential customers on our solutions. To capitalize on our opportunity, we intend to make further investments to keep our platform accessible and well known to software developers around the world. We intend to continue to invest in our products and support and engage our user base and developer community through content, events, and conferences in the United States and internationally. Our results of operations may fluctuate as we make these investments.
Growing our customer base by acquiring new customers. Our financial performance depends on growing our paid customer base by acquiring new customers. We have invested, and expect to continue to invest, heavily in sales and marketing efforts and leverage our network of partners to target new customers and drive further awareness and adoption within our user community. Our investment in sales and marketing is significant given our large and diverse user base and our efforts to engage prospects in executive-level conversations. Because these investments are likely to occur before we realize the anticipated benefits of such investments, they may adversely affect our operating results in the near term.
On November 12, 2024, we added the AGPL as an option to license the free part of our Elasticsearch and Kibana source code that has been available under the Elastic License 2.0 and SSPL. AGPL is an Open Source Initiative-approved open source license. We anticipate that the addition of this license will drive further engagement and adoption of our software in areas such as vector search within our large community, further increasing our appeal for driving AI and machine learning use cases from large amounts of data. Subject to compliance with the conditions of AGPL, anyone may also redistribute our software in modified or unmodified form or use it to provide a competitive product or service offering.
Expanding within our current customer base. Our future growth and profitability depend on our ability to drive additional sales to existing customers. Customers often expand the use of our software within their organizations by increasing the number of developers using our products, increasing the utilization of our products for a particular use case, and expanding use of our products to additional use cases. We focus some of our direct sales efforts on encouraging these types of expansion within our customer base.
56
We believe that a useful indication of how our customer relationships have expanded over time is through our Net Expansion Rate, which is based upon trends in the rate at which customers increase their spend with us. To calculate an expansion rate as of the end of a given month, we start with the annualized spend from all such customers as of twelve months prior to that month end, which we refer to as Prior Period Value. A customer’s annualized spend is measured as its ACV, or in the case of customers charged on usage-based arrangements, by annualizing the usage for that month. We then calculate the annualized spend from these same customers as of the given month end, which we refer to as Current Period Value, which includes any growth in the value of their subscriptions or usage and is net of contraction or attrition over the prior twelve months. We then divide the Current Period Value by the Prior Period Value to arrive at an expansion rate. The Net Expansion Rate at the end of any period is the weighted average of the expansion rates as of the end of each of the trailing twelve months. The Net Expansion Rate includes the dollar-weighted value of our subscriptions or usage that expand, renew, contract, or experience attrition. For instance, if each customer had a one-year subscription and renewed its subscription for the same amount, the Net Expansion Rate would be 100%. Customers who reduced their annual subscription dollar value (contraction) or did not renew their annual subscription (attrition) would adversely affect the Net Expansion Rate. Our Net Expansion Rate was approximately 112% as of April 30, 2026.
As large organizations expand their use of our platform across multiple use cases, projects, divisions, and users, they often begin to require centralized provisioning, management and monitoring across multiple deployments. To satisfy these requirements, our Enterprise subscription tier provides access to key orchestration and deployment management capabilities. We will continue to focus some of our direct sales efforts on driving adoption of our paid offerings.
Expanding our penetration in enterprise and commercial customer accounts. Our future growth depends on our ability to successfully target strategic enterprise and high-propensity commercial customers using a sales-led motion. We meet our customers where they are, selling Elastic Self-Managed, Elastic Cloud Hosted, and Elastic Cloud Serverless deployments, focusing on high-value existing and new customers.
Components of Results of Operations
Revenue
Subscription. Our revenue is primarily generated through the sale of subscriptions to software, which is either self-managed by the user or hosted and managed by us in the cloud. Subscriptions provide the right to use paid proprietary software features and access to support for our paid and unpaid software. Our subscription agreements are either term-based or consumption-based, with the vast majority of Elastic Cloud subscriptions being consumption-based.
A portion of the revenue from self-managed subscriptions is generally recognized up front at the point in time when the license is delivered and the remainder is recognized ratably over the subscription term. Revenue from subscriptions that require access to the cloud or that are hosted and managed by us is recognized ratably over the subscription term or on a usage basis for consumption-based arrangements. Both are presented within Subscription revenue in our consolidated statements of operations.
Services. Services is composed of implementation and other consulting services as well as public and private training. Revenue for services is recognized as these services are delivered.
Cost of Revenue
Subscription. Cost of subscription consists primarily of cloud hosting costs, personnel and related costs for employees associated with supporting our subscription arrangements, certain third-party expenses associated with our customer support, and amortization of certain intangible and other assets. Personnel and related costs comprise cash compensation, benefits and stock-based compensation to employees, costs of third-party contractors, and allocated overhead costs. We expect our cost of subscription to increase in absolute dollars as our subscription revenue increases.
Services. Cost of services revenue consists primarily of personnel costs directly associated with delivery of training, implementation and other services, costs of third-party contractors, facility rental charges and allocated overhead costs. We expect our cost of services to increase in absolute dollars as we invest in our business and as services revenue increases.
57
Gross profit and gross margin. Gross profit represents revenue less cost of revenue. Gross margin, or gross profit as a percentage of revenue, has been and will continue to be affected by a variety of factors, including the timing of our acquisition of new customers and our renewals with existing customers, the average sales price of our subscriptions and services, the amount of our revenue represented by hosted services, the mix of subscriptions sold, the mix of revenue between subscriptions and services, the mix of services between consulting and training, transaction volume growth, and support case volume growth. We expect our gross margin to fluctuate over time depending on the factors described above. We expect our revenue from Elastic Cloud to continue to increase as a percentage of total revenue, which we expect will continue to have a modest unfavorable impact on our gross margin as a result of the associated third-party cloud hosting costs.
Operating Expenses
Research and development. Research and development expense primarily consists of personnel and related costs, cloud hosting costs, and allocated overhead costs. We expect our research and development expense to increase in absolute dollars for the foreseeable future as we continue to develop new technology and invest further in our existing products.
Sales and marketing. Sales and marketing expense primarily consists of personnel and related costs, commissions, allocated overhead costs, and costs related to marketing programs and user events. Marketing programs consist of advertising, events, brand-building, and customer acquisition and retention activities. We expect our sales and marketing expense to increase in absolute dollars as we expand our sales force and increase our investments in marketing resources. We capitalize sales commissions and associated payroll taxes paid to internal sales personnel that are related to the acquisition of certain customer contracts. Deferred contract acquisition costs are amortized over the expected benefit period.
General and administrative. General and administrative expense primarily consists of personnel and related costs for our management, finance, legal, human resources, and other administrative employees. Our general and administrative expense also includes professional fees, accounting fees, audit fees, tax services, and legal fees, as well as insurance, allocated overhead costs, and other corporate expenses. We expect our general and administrative expense to increase in absolute dollars as we increase the size of our general and administrative functions to support the growth of our business.
Restructuring and other related charges. Restructuring and other related charges primarily consist of employee-related severance and other termination benefits as well as lease impairment and other facilities-related charges.
Other Income, Net
Interest expense. Interest expense primarily consists of interest on our Senior Notes.
Other income, net. Other income, net primarily consists of interest income, gains and losses from transactions denominated in a currency other than the functional currency, and miscellaneous other non-operating gains and losses.
(Benefit from) Provision for Income Taxes
(Benefit from) provision for income taxes consists primarily of income taxes related to the Netherlands, U.S. federal and state jurisdictions, and foreign jurisdictions in which we conduct business. Our effective tax rate is affected by recurring items, such as tax rates in jurisdictions outside the Netherlands and the relative amounts of income we earn in those jurisdictions, non-deductible stock-based compensation, BEAT legislation in the United States, and one-time tax benefits, such as the release of a valuation allowance, or charges.
58
Results of Operations
The following table sets forth our results of operations for the periods presented:
| Year Ended April 30, | |||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||
| Subscription | $ | 1,634,455 | $ | 1,384,520 | $ | 1,176,606 | |||||||||||||||||||||
| Services | 104,876 | 98,776 | 90,715 | ||||||||||||||||||||||||
| Total revenue | 1,739,331 | 1,483,296 | 1,267,321 | ||||||||||||||||||||||||
Cost of revenue (1)(2) | |||||||||||||||||||||||||||
| Subscription | 310,169 | 282,585 | 246,285 | ||||||||||||||||||||||||
| Services | 106,103 | 97,288 | 83,794 | ||||||||||||||||||||||||
| Total cost of revenue | 416,272 | 379,873 | 330,079 | ||||||||||||||||||||||||
| Gross profit | 1,323,059 | 1,103,423 | 937,242 | ||||||||||||||||||||||||
Operating expenses (1)(2)(3) | |||||||||||||||||||||||||||
| Research and development | 451,925 | 365,758 | 341,951 | ||||||||||||||||||||||||
| Sales and marketing | 710,188 | 617,176 | 559,648 | ||||||||||||||||||||||||
| General and administrative | 194,422 | 175,186 | 160,628 | ||||||||||||||||||||||||
| Restructuring and other related charges | — | 225 | 4,917 | ||||||||||||||||||||||||
| Total operating expenses | 1,356,535 | 1,158,345 | 1,067,144 | ||||||||||||||||||||||||
Operating loss (1)(2)(3) | (33,476) | (54,922) | (129,902) | ||||||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||||||
| Interest expense | (25,142) | (25,307) | (26,132) | ||||||||||||||||||||||||
| Other income, net | 56,317 | 48,660 | 33,278 | ||||||||||||||||||||||||
| Loss before income taxes | (2,301) | (31,569) | (122,756) | ||||||||||||||||||||||||
| (Benefit from) provision for income taxes | (370,067) | 76,545 | (184,476) | ||||||||||||||||||||||||
| Net income (loss) | $ | 367,766 | $ | (108,114) | $ | 61,720 | |||||||||||||||||||||
(1) Includes stock-based compensation expense and related employer taxes as follows:
| Year Ended April 30, | |||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||||||
| Subscription | $ | 10,710 | $ | 10,161 | $ | 9,378 | |||||||||||||||||||||
| Services | 16,793 | 15,669 | 13,365 | ||||||||||||||||||||||||
| Research and development | 116,370 | 102,180 | 98,174 | ||||||||||||||||||||||||
| Sales and marketing | 98,371 | 90,973 | 82,023 | ||||||||||||||||||||||||
| General and administrative | 65,998 | 50,932 | 47,519 | ||||||||||||||||||||||||
| Total stock-based compensation expense and related employer taxes | $ | 308,242 | $ | 269,915 | $ | 250,459 | |||||||||||||||||||||
(2) Includes amortization of acquired intangible assets as follows:
| Year Ended April 30, | |||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||||||
| Subscription | $ | 8,795 | $ | 9,213 | $ | 12,353 | |||||||||||||||||||||
| Sales and marketing | — | — | 2,143 | ||||||||||||||||||||||||
| Total amortization of acquired intangibles | $ | 8,795 | $ | 9,213 | $ | 14,496 | |||||||||||||||||||||
59
(3) Includes acquisition-related expenses as follows:
| Year Ended April 30, | |||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||
| Research and development | $ | 540 | $ | 76 | $ | 1,385 | |||||||||||||||||||||
| General and administrative | 1,213 | 606 | 1,065 | ||||||||||||||||||||||||
| Total acquisition-related expenses | $ | 1,753 | $ | 682 | $ | 2,450 | |||||||||||||||||||||
The following table sets forth selected consolidated statements of operations data for each of the periods indicated as a percentage of total revenue:
| Year Ended April 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | ||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Subscription | 94 | % | 93 | % | 93 | % | ||||||||||||||||||||
| Services | 6 | % | 7 | % | 7 | % | ||||||||||||||||||||
| Total revenue | 100 | % | 100 | % | 100 | % | ||||||||||||||||||||
Cost of revenue (1)(2) | ||||||||||||||||||||||||||
| Subscription | 18 | % | 19 | % | 19 | % | ||||||||||||||||||||
| Services | 6 | % | 7 | % | 7 | % | ||||||||||||||||||||
| Total cost of revenue | 24 | % | 26 | % | 26 | % | ||||||||||||||||||||
| Gross profit | 76 | % | 74 | % | 74 | % | ||||||||||||||||||||
Operating expenses (1)(2)(3) | ||||||||||||||||||||||||||
| Research and development | 26 | % | 25 | % | 27 | % | ||||||||||||||||||||
| Sales and marketing | 41 | % | 41 | % | 44 | % | ||||||||||||||||||||
| General and administrative | 11 | % | 12 | % | 13 | % | ||||||||||||||||||||
| Restructuring and other related charges | — | % | — | % | — | % | ||||||||||||||||||||
| Total operating expenses | 78 | % | 78 | % | 84 | % | ||||||||||||||||||||
Operating loss (1)(2)(3) | (2) | % | (4) | % | (10) | % | ||||||||||||||||||||
| Other income, net | ||||||||||||||||||||||||||
| Interest expense | (1) | % | (1) | % | (2) | % | ||||||||||||||||||||
| Other income, net | 3 | % | 3 | % | 3 | % | ||||||||||||||||||||
| Loss before income taxes | — | % | (2) | % | (9) | % | ||||||||||||||||||||
| (Benefit from) provision for income taxes | (21) | % | 5 | % | (14) | % | ||||||||||||||||||||
| Net income (loss) | 21 | % | (7) | % | 5 | % | ||||||||||||||||||||
60
(1) Includes stock-based compensation expense and related employer taxes as follows:
| Year Ended April 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | ||||||||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||||
| Subscription | — | % | 1 | % | 1 | % | ||||||||||||||||||||
| Services | 1 | % | 1 | % | 1 | % | ||||||||||||||||||||
| Research and development | 7 | % | 7 | % | 8 | % | ||||||||||||||||||||
| Sales and marketing | 6 | % | 6 | % | 6 | % | ||||||||||||||||||||
| General and administrative | 4 | % | 3 | % | 4 | % | ||||||||||||||||||||
| Total stock-based compensation expense and related employer taxes | 18 | % | 18 | % | 20 | % | ||||||||||||||||||||
(2) Includes amortization of acquired intangible assets as follows:
| Year Ended April 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | ||||||||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||||
| Subscription | 1 | % | 1 | % | 1 | % | ||||||||||||||||||||
| Sales and marketing | — | % | — | % | — | % | ||||||||||||||||||||
| Total amortization of acquired intangibles | 1 | % | 1 | % | 1 | % | ||||||||||||||||||||
(3) Includes acquisition-related expenses as follows:
| Year Ended April 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | ||||||||||||||||||||||||
| Research and development | — | % | — | % | — | % | ||||||||||||||||||||
| General and administrative | — | % | — | % | — | % | ||||||||||||||||||||
| Total acquisition-related expenses | — | % | — | % | — | % | ||||||||||||||||||||
Comparison of Fiscal Years Ended April 30, 2026 and 2025
Revenue
| Year Ended April 30, | Change | ||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-09 | Kulkarni Ashutosh | Chief Executive Officer | Sell | -40,373 | $60.61 | -$2,447,008 |
| 2026-06-09 | Bone Jane E | GVP & CAO | Sell | -1,104 | $60.61 | -$66,913 |
| 2026-06-09 | Dodds Mark Eugene | Chief Revenue Officer | Sell | -18,439 | $60.61 | -$1,117,588 |
| 2026-06-09 | Herzog Carolyn | Chief Legal Officer | Sell | -9,485 | $60.61 | -$574,886 |
| 2026-06-09 | Exner Ken | Chief Product Officer | Sell | -18,449 | $60.61 | -$1,118,194 |
| 2026-06-09 | Welihinda Navam | Chief Financial Officer | Sell | -12,961 | $60.61 | -$785,566 |
| 2026-06-09 | Banon Shay | Chief Technology Officer | Sell | -9,288 | $60.61 | -$562,946 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-28 10-Q expected by 2026-09-08 (in 65 days)
- ~2026-11-23 10-Q expected by 2026-12-04 (in 152 days)
- ~2027-02-26 10-Q expected by 2027-03-09 (in 247 days)
- ~2027-06-06 10-K expected by 2027-06-17 (in 347 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-06-24 8-K Costs Associated with Exit; Officer/Director Change
- 2026-06-08 10-K Annual Report
- 2026-05-28 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-27 10-Q Quarterly Report
- 2026-02-26 8-K Earnings Release; Financial Statements and Exhibits
- 2025-11-24 10-Q Quarterly Report
- 2025-11-20 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-15 8-K Officer/Director Change
- 2025-10-09 8-K Other Events
- 2025-08-29 10-Q Quarterly Report
- 2025-08-28 8-K Earnings Release; Officer/Director Change; Financial Statements and Exhibits
- 2025-06-10 10-K Annual Report
- 2025-05-29 8-K Earnings Release; Financial Statements and Exhibits
- 2025-02-28 10-Q Quarterly Report
- 2025-02-27 8-K Earnings Release; Officer/Director Change; Financial Statements and Exhibits