Summary
Elastic's third-quarter fiscal 2025 revenue was $382.1 million, up 16.5% from the prior-year quarter. Gross profit rose 17.1% to $284.9 million, and gross margin edged up to 74.6%. The GAAP operating loss narrowed to $4.6 million, and operating margin improved to -1.2%. Elastic Cloud represented 47% of total revenue and grew 26% year over year, according to the MD&A. The company continued to lean on its Search AI platform, with product launches including Elastic Cloud Serverless on AWS in 4 regions and a technical preview on Azure.
The bottom line swung to a GAAP net loss of $17.1 million from net income a year earlier. Diluted GAAP loss per share was $0.16, down from positive earnings a year earlier. The swing reflected a tax provision compared with a prior-year tax benefit that included a valuation allowance release, which did not repeat. Non-GAAP operating income was $64 million and non-GAAP operating margin was 17%. Non-GAAP diluted earnings per share was $0.63. Operating cash flow was $88.1 million, up 68.1% from the prior-year quarter. Adjusted free cash flow, a non-GAAP measure, was $99 million. Capital expenditures were $0.77 million, down 28.9%.
Customer metrics showed expansion. Total customers with annual contract value above $100,000 were over 1,460, compared with over 1,420 in Q2 FY25 and over 1,270 in Q3 FY24. Total subscription customers were approximately 21,350, compared with approximately 21,300 in Q2 FY25 and approximately 20,800 in Q3 FY24. Net Expansion Rate was approximately 112%. The company appointed Navam Welihinda as chief financial officer. It announced general availability of Elastic Cloud Serverless on AWS in 4 regions and a technical preview on Azure. Other launches included the Elastic Rerank Model, which aims to improve search accuracy and relevance, and the logsdb index mode in the Enterprise tier for security and observability teams. Elastic also added the Affero General Public License as an option for its Elasticsearch and Kibana source code.
For the fourth quarter of fiscal 2025, Elastic expects revenue of $379 million to $381 million, representing 13% year-over-year growth at the midpoint, or 15% constant currency growth. Non-GAAP operating margin is expected to be approximately 13.5%, and non-GAAP diluted earnings per share is expected to be $0.36 to $0.37. For fiscal 2025, the company guides revenue of $1.474 billion to $1.476 billion, 16% year-over-year growth at the midpoint, or 17% constant currency growth. Full-year non-GAAP operating margin is expected to be approximately 14.7%, with non-GAAP diluted earnings per share of $1.91 to $1.96. The guidance assumes exchange rates of 1 Euro to 1.040 US Dollars and 1 Great British Pound to 1.260 US Dollars.
Deferred revenue was $660.9 million, up 17.7% from the prior-year quarter, and remaining performance obligations were $1.35 billion, up 15.1%. Those metrics suggest a healthy pipeline. Risks remain. The MD&A cites macroeconomic events, including a possible resurgence in inflation, fluctuations in economic growth, and political unrest. Those factors can lead to longer and more unpredictable sales cycles, increased scrutiny of deals, slowing consumption, and changes in customer spending. The company also notes that growing Elastic Cloud could have a modest adverse impact on gross margin because of third-party hosting costs. Elastic increased its non-cancelable cloud hosting capacity commitments to $875.6 million over the next five years. The company had 3,403 employees as of January 31, 2025. It maintains a full valuation allowance against deferred tax assets in the Netherlands and the UK, and a release of that allowance could materially affect future tax benefits. Management also warns that investments in sales and marketing may adversely affect near-term operating results.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $347.4M | $365.4M | -4.9% | $328.0M | +5.9% |
| Gross profit | $255.7M | $272.2M | -6.1% | $243.3M | +5.1% |
| Gross margin | 73.6% | 74.5% | -0.9 pp | 74.2% | -0.6 pp |
| Research & development | $89.3M | $88.2M | +1.3% | $87.2M | +2.4% |
| Sales & marketing | $157.4M | $144.3M | +9.1% | $141.6M | +11.1% |
| General & administrative | $42.7M | $44.1M | -3.2% | $40.9M | +4.3% |
| Total operating expenses | $289.5M | $276.6M | +4.7% | $269.7M | +7.3% |
| Operating income (loss) | -$33.8M | -$4.4M | -664.5% | -$26.4M | -28.2% |
| Operating margin | -9.7% | -1.2% | -8.5 pp | -8.1% | -1.7 pp |
| Net income (loss) | -$49.2M | -$25.4M | -93.4% | $176.1M | -128.0% |
| Net margin | -14.2% | -7.0% | -7.2 pp | 53.7% | -67.9 pp |
| Diluted EPS | -$0.48 | -$0.25 | -$0.23 | $1.69 | -$2.17 |
| Customers | 21,200 | 21,300 | -0.5% | 20,800 | +1.9% |
Risks
Effective February 2025, non-cancelable cloud hosting capacity commitments increased to $875.6 million over the next five years, creating a fixed obligation that could pressure margins and cash if cloud demand or consumption slows.
MD&A states the company has experienced and may continue to experience longer and more unpredictable sales cycles, increased scrutiny of deals, slowing consumption and overall customer expenditures amid macroeconomic events, possible inflation resurgence, changing interest rates, and political unrest.
Elastic Cloud contributed 47% of total revenue for the three months ended January 31, 2025, up from 44% in the prior-year period, and management expects its increasing mix to continue having a modest adverse impact on gross margin due to third-party hosting costs.
Services gross margin was (4)% for the three months ended January 31, 2025 compared to (2)% in the prior-year period, and 1% for the nine months ended January 31, 2025 compared to 9% in the prior-year period, with management noting it may fluctuate or decline in the near term.
The recent addition of AGPL as a licensing option for the free part of Elasticsearch and Kibana source code allows anyone to redistribute modified or unmodified software or use it to provide a competitive product or service offering.
SaaS KPIs
All quarters →Net Expansion Rate
Non-GAAP Operating Margin
Adjusted Free Cash Flow
Adjusted Free Cash Flow Margin
Total subscription customer count
Total remaining performance obligations
Summary, forecast, risks and KPIs are extracted from Elastic N.V.'s SEC filings for Q3 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.