Summary
Elastic reported second quarter fiscal 2025 revenue of $365.36 million, up 17.6% from the prior-year quarter. Gross profit was $272.18 million, up 18.1%, and gross margin was 74.5%, up 0.3 percentage points. The operating loss was $4.43 million, a narrowed loss compared with the prior-year quarter, and operating margin was -1.2%, up 5.7 percentage points. Net loss was $25.45 million, a widened loss, and diluted EPS was -$0.25, flat year over year. For the first six months of fiscal 2025, revenue was $712.78 million, up 17.9%. The year-to-date operating loss was $38.26 million, a narrowed loss, while the year-to-date net loss was $74.68 million, a widened loss.
Cash generation improved sharply. Operating cash flow was $38.38 million for the quarter and $91.13 million for the first six months, up 157.3% year over year on a year-to-date basis. Capital expenditures were $0.72 million, down 20.2% from the prior-year quarter. Deferred revenue was $608.16 million, up 19.0% from the prior-year quarter, and remaining performance obligations were $1.266 billion, up 13.3%. On a non-GAAP basis, operating income was $64 million with an operating margin of 18%, gross margin was 76.9%, net income was $62.9 million, and diluted EPS was $0.59. Adjusted free cash flow was $37.7 million and adjusted free cash flow margin was 10%.
Operational metrics pointed to steady expansion. Elastic Cloud revenue grew 25% year over year and accounted for 46% of total revenue, up from 43%. Customers with annual contract value above $100,000 numbered over 1,420, compared with over 1,220 in the prior-year quarter, and total subscription customers were approximately 21,300 versus approximately 20,700 a year earlier. The Net Expansion Rate was approximately 112%, and headcount stood at 3,372 as of October 31, 2024. Product work in the quarter included Better Binary Quantization in Elasticsearch, AutoOps from the Opster acquisition, Cloud Detection and Response, OpenTelemetry native observability, and an expanded AI Ecosystem. Elastic also announced that Janesh Moorjani will leave as chief financial officer on December 13, 2024, with Eric Prengel becoming interim chief financial officer on December 14, 2024.
Guidance for the third quarter of fiscal 2025 calls for growth of 12% year over year at the midpoint, or 13% in constant currency, with a non-GAAP operating margin of approximately 15% and non-GAAP diluted earnings per share of $0.46 to $0.48. For the full fiscal year 2025, the company expects growth of 15% year over year at the midpoint, or 15% in constant currency, a non-GAAP operating margin of approximately 13.5%, and non-GAAP diluted earnings per share of $1.68 to $1.72. The outlook assumes exchange rates of 1 Euro to 1.060 US Dollars and 1 Great British Pound to 1.267 US Dollars. Management does not reconcile forward-looking non-GAAP operating margin or non-GAAP earnings per share to GAAP figures, citing uncertainty around the excluded items.
The company listed several risks around that outlook: macroeconomic uncertainty, inflation, geopolitical unrest, longer and more unpredictable sales cycles, increased scrutiny of deals, slowing consumption, and foreign exchange rate fluctuations. It also noted that a growing share of Elastic Cloud revenue tends to pressure gross margin because of third-party hosting costs, and that services gross margin may fluctuate or decline in the near term. Elastic maintains a full valuation allowance against deferred tax assets in the Netherlands and the UK and said a release could produce a material income tax benefit.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $365.4M | — | — | $310.6M | +17.6% |
| Gross profit | $272.2M | — | — | $230.5M | +18.1% |
| Gross margin | 74.5% | — | — | 74.2% | +0.3 pp |
| Research & development | $88.2M | — | — | $80.1M | +10.1% |
| Sales & marketing | $144.3M | — | — | $133.2M | +8.3% |
| General & administrative | $44.1M | — | — | $38.7M | +13.9% |
| Total operating expenses | $276.6M | — | — | $252.1M | +9.7% |
| Operating income (loss) | -$4.4M | — | — | -$21.5M | +79.5% |
| Operating margin | -1.2% | — | — | -6.9% | +5.7 pp |
| Net income (loss) | -$25.4M | — | — | -$24.8M | -2.6% |
| Net margin | -7.0% | — | — | -8.0% | +1.0 pp |
| Diluted EPS | -$0.25 | — | — | — | — |
| Customers | 21,300 | — | — | 20,700 | +2.9% |
Risks
Elastic states that macroeconomic events including a possible resurgence in inflation, fluctuations in economic growth and political unrest continue to affect worldwide activity, and that it has experienced and may continue to experience longer and more unpredictable sales cycles, increased scrutiny of deals, slowing consumption and overall customer expenditures. The filing notes these conditions would continue to affect the macroeconomic environment.
Growing Elastic Cloud contribution (46% of total revenue for the six months ended October 31, 2024 versus 42% in the prior-year period) is expected to continue to have a modest adverse impact on gross margin due to third-party hosting costs. Services gross margin fell to 5% for the quarter and 3% for the six months ended October 31, 2024 from 12% and 13% respectively, and the company says services gross margin may fluctuate or decline in the near term.
The provision for income taxes increased 360% to $23.7 million for the quarter and 138% to $43.7 million for the six months ended October 31, 2024, driven by growth in business operations in jurisdictions where Elastic generates taxable income without credits or net operating losses to offset it, plus a one-time $2.2 million acquisition-related integration charge year to date.
Elastic reported an accumulated deficit of $1.066 billion as of October 31, 2024 and net losses for the quarter and year-to-date periods (with the quarterly net loss widening to $25.5 million from $24.8 million year over year). The company states it has historically incurred and expects to continue to incur operating losses and may generate negative cash flows from operations in the future.
Elastic added the AGPL as a license option for the free part of Elasticsearch and Kibana source code and acknowledges that, subject to AGPL compliance, anyone may redistribute its software in modified or unmodified form or use it to provide a competitive product or service offering, which could pressure its commercial model.
Future growth and profitability depend on driving additional sales within the existing customer base; the Net Expansion Rate was approximately 112% as of October 31, 2024, and contraction or attrition in customer spend would adversely affect it. Customer count grew to approximately 21,300 from approximately 20,700 a year earlier, with over 1,420 customers above $100,000 in annual contract value.
SaaS KPIs
All quarters →Net Expansion Rate
Non-GAAP Operating Margin
Adjusted Free Cash Flow
Adjusted Free Cash Flow Margin
Total subscription customer count
Non-GAAP Operating Income
Summary, forecast, risks and KPIs are extracted from Elastic N.V.'s SEC filings for Q2 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.