Elastic's Q1 FY2026 Earnings Surge: AI-Driven Growth and Cloud Expansion Boost Performance

Elastic's stock jumps on impressive earnings and revenue beat - SiliconANGLE

Elastic's stock jumps on impressive earnings and revenue beat Enterprise data search company Elastic N.V. delighted Wall Street investors today as it delivered financial results that surpassed even the most optimistic forecasts. Its guidance for the current quarter was just as impressive, and the value of its stock soared in extended trading. The company reported fiscal 2026 first-quarter earnings before certain costs such as stock compensation of 60 cents per share, trouncing the Street's forecast of just 42 cents per share, while revenue increased 18% to $415 million, well ahead of the analyst's $397.2 million target. Elastic Cloud revenue, which is a key growth driver for the company, shot up 24% to $196 million in the quarter. The impressive results helped the company to slash its overall losses by half compared to one year earlier. It delivered a net loss of just $24.6 million, down from a loss of $49.2 million last year, boosting optimism that it will soon start generating a profit in the next few quarters. Elastic is the creator of the open-source Elasticsearch tool, which is used by companies to store, search and analyze large volumes of structured and unstructured data in real-time. Elastic sells an enterprise-grade version of the open-source offering, adding extra functionality and managed services on top. It's an ideal platform for businesses with applications that require sophisticated search capabilities. Besides its main offering, the company also has a growing business selling tools relating to application observability and threat detection, which make it easier for companies to visualize and monitor their business-critical apps. Given that it's all about data, Elastic has been looking to take advantage of the booming artificial intelligence industry, positioning Elasticsearch as a platform for feeding real-time data to large language models. Elastic Chief Executive Ash Kulkarni (pictured) said the company's growth stems from its highly differentiated technology and solid execution by its sales teams. "With AI now clearly reshaping technology decisions, our strong performance directly demonstrates the value that Elastic's Search AI platform delivers," he added. Looking to the second quarter, Elastic said it's anticipating revenue of between $415 million and $417 million, far ahead of Wall Street's $397.3 million estimate. As for earnings, it's looking at a range of 56 cents to 58 cents per share, again well ahead of the Street's target of a 42 cents profit. The company's full-year guidance is also in excess of most analyst's forecasts. Elastic said its subscription revenue grew 20% during the quarter to $389 million, and now accounts for 94% of its total sales. It also reported having 1,550 customers that deliver at least $100,000 in annual revenue, up from just 1,370 in the year-ago quarter. It also posted a net expansion rate of 112%, which indicates strong customer retention and upselling. With its business ticking over nicely, Elastic has been looking to strengthen its hand in AI. During the quarter, it launched a new tool called the Elastic AI SOC Engine, which provides enhanced threat detection, triage and investigation capabilities within its application monitoring tools. It also debuted an improved vector search function with faster query performance and superior ranking qualities. Elsewhere, the company announced the expanded availability of Elastic Cloud Serverless, a fully-managed version of the Elasticsearch platform, in six Amazon Web Services regions, three Google Cloud regions and one Microsoft Azure region. Elastic's stock jumped more than 19% in extended trading after its results were posted, although it's still down 11% in the year to date.

Elastic Cloud Revenue Jumps 20 Percent | The Motley Fool

Elastic(ESTC 5.71%) reported first quarter fiscal 2026 results on August 28, 2025, delivering $415 million in revenue (up 20% YoY) and a 16% non-GAAP operating margin. Management raised full-year revenue and EPS guidance, highlighting strong enterprise and AI-driven workload growth. The following insights detail Elastic's momentum in generative AI, security, and subscription revenue durability. Elastic Cloud surpassed 2,200 customers using the platform for generative AI (GenAI) workloads, with more than 330 spending over $100,000 annually. The company added more million-dollar average contract value (ACV) customers in this category than in the previous two quarters combined, reflecting increased AI workload intensity and early-stage consumption growth. "Now over 2,200 Elastic Cloud customers are using Elastic for Gen AI use cases, with over 330 of these customers spending $100,000 or more annually. In Q1, we added more million-dollar ACV Elastic Cloud customers using Elastic for JENNI use cases than the prior two quarters combined." -- Ashutosh Kulkarni, Chief Executive Officer This rapid expansion in high-value GenAI customers demonstrates Elastic's competitive positioning as a foundational platform for enterprise-scale AI, supporting a long-term revenue growth trajectory as adoption broadens. Security was a major growth driver, with one-third of new and expansion deals in the segment coming from competitive displacements. The launch of the Elastic AI SOC engine (EASE) further differentiated the offering by integrating advanced threat detection and alert correlation on top of existing security information and event management (SIEM) systems, and the company secured a seven-figure expansion with a leading U.S. academic health system. "In Q1, a third of our new and expansion wins in security involved competitive displacements. In one such deal from the quarter, one of the largest integrated academic health systems in The U.S., selected Elastic Security to replace its existing SIM solution. This 7-figure expansion deal marks the customer making a strategic shift from an incumbent solution towards a more scalable AI-driven security approach." -- Ashutosh Kulkarni, Chief Executive Officer Elastic's ability to win complex displacement deals and deliver differentiated AI-powered security capabilities positions it to capture market share as organizations consolidate legacy tools onto modern, unified platforms. Sales-led subscription revenue, defined as all subscription revenue excluding monthly Elastic Cloud, grew 22% YoY to $339 million, marking the fourth consecutive quarter of mid-to-high teens growth following sales segmentation changes. The self-managed segment also contributed meaningfully alongside continued cloud growth, reinforcing overall subscription resiliency. "Our sales-led subscription revenue grew 22% in Q2 2025, 18% in Q3 2025, 19% in Q4 2025, and now 22% this quarter. These consistent results demonstrate the durability of our team's execution." -- Navam Molyanda, Chief Financial Officer The sustained strength of sales-led subscriptions and diversified delivery models enhances Elastic's revenue visibility and business stability, supporting management's confidence in future performance. Elastic raised full-year revenue guidance to $1.679 billion to $1.689 billion (approximately 14% YoY growth at the midpoint), with a non-GAAP operating margin of 16% and non-GAAP diluted EPS between $2.29 and $2.35. Next quarter, revenue is expected to be $415 million to $417 million and non-GAAP EPS $0.56 to $0.58. Management expects to sustain recent adjusted free cash flow margin levels, notes anticipated seasonality, and will move to annual customer count disclosure going forward.

Elastic Posts 20% Revenue Jump in Q1 | The Motley Fool

Elastic (ESTC 5.39%), a software company known for its Search AI Platform that powers search, observability, and security solutions, reported earnings for the quarter ended July 31, 2025, on August 28, 2025. The company's results did not surpass Wall Street expectations for Q1 FY2026, with reported GAAP revenue of $415.3 million and non-GAAP earnings per share (EPS) of $0.60, compared to analyst estimates centering around $425.73 million in GAAP revenue and $0.64 non-GAAP diluted EPS. Performance was bolstered by robust growth in its cloud-based offerings and strong uptake from enterprise clients. Despite the beat, management set a more cautious tone for the next period, forecasting revenue growth to slow to the mid-teens in FY2026 and projecting nearly flat sequential revenue. Overall, the quarter showed notable progress in margins and cash generation, but forward guidance signals management is bracing for a more measured pace ahead. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q4 2025 earnings report. Elastic delivers software to help organizations search, observe, and secure their data. Its main Search AI Platform offers tools for real-time data exploration, security event detection, and application performance monitoring. The company's core products include Elasticsearch (search software) and Kibana (data visualization), available on a cloud subscription or for customers to run on their own systems. In recent years, Elastic has put emphasis on its cloud-based services and integrating artificial intelligence features into its platform. The key focus has been growing the Elastic Cloud business, expanding AI-driven capabilities like machine learning and vector search, and deepening partnerships with major cloud providers. Success for Elastic hinges on driving adoption among large enterprises, innovating with AI, and maintaining healthy expansion among existing customers. Elastic's GAAP revenue rose 20% year over year, with revenue exceeding its own forecasts and signaling continued demand for its data search and AI technologies. The cloud segment remained a highlight, with Elastic Cloud revenue growing by 24% year-over-year, accounting for 47% of total GAAP revenue. Operating income on a non-GAAP basis jumped 75% compared to Q1 FY2025, and the non-GAAP operating margin widened from 10.7% to 15.7%. Adjusted free cash flow, which essentially measures the cash left over after running the business and making capital investments, increased by 81.6% compared to Q1 FY2025 to $116.0 million, and growing sales to large business customers. Several key product milestones marked the period. The company launched the Elastic AI SOC Engine, an artificial intelligence-powered security tool that helps automate threat detection and investigation for enterprise customers. In its observability product family, Elastic introduced Logs Essentials, a new cloud-based tier for simplifying system monitoring. The company deployed advanced vector search algorithms -- BBQ and ACORN-1 -- which improve search results for AI and large language model workloads. These continued investments support Elastic's positioning as a leading provider in both the observability and security software markets. Elastic's go-to-market focus on enterprise accounts paid off, with the number of customers spending more than $100,000 per year rising to over 1,550. The company maintained a net expansion rate of approximately 112%, showing existing customers were continuing to grow their use of the platform. New partnerships also supported the period, including collaborations with large public-sector clients such as the U.S. General Services Administration and deeper technical ties with technology leaders like Dell and Nvidia. Industry recognition -- such as being named a leader in key analyst reports covering observability and security analytics -- added credibility to its approach. Despite the strong results, Elastic's management set a more restrained outlook for the upcoming quarter and FY2026. The company forecasts revenue in the range of $415 million to $417 million for Q2 FY2026, representing only 14% growth versus the same period last year and signaling almost no increase from the current quarter. Full-year revenue guidance was set at a midpoint of $1.684 billion for FY2026, up about 14% from last year, but indicates a slowing trend compared to the growth just posted. Management did not announce any plans to start or increase a dividend. Key areas to monitor include sustained cloud revenue growth and traction among smaller business customers.