Summary
Elastic closed fiscal 2024 with total revenue of $335.0 million in the fourth quarter, up 19.7% from $279.94 million a year earlier. Full-year revenue reached $1.27 billion, up 18.6% from $1.07 billion. Gross profit rose 19.8% to $247.13 million in the quarter and 21.3% to $937.24 million for the year. Quarterly gross margin was 73.8%, flat versus 73.7% a year ago. Full-year gross margin was 74.0%, up 1.7 percentage points from 72.3%.
Profitability remained mixed. The fourth-quarter operating loss widened to $45.71 million from $40.16 million, with the loss increasing by 13.8%. The full-year operating loss narrowed to $129.90 million from $219.17 million, a 40.7% improvement. The quarterly operating margin was -13.6%, up 0.7 percentage points from -14.3%. The full-year operating margin was -10.3%, up 10.3 percentage points from -20.5%. Net loss for the quarter narrowed to $41.10 million from $46.73 million, up 12.0%. For the full year, net income was $61.72 million, a swing to a profit and an increase of 126.1%. Full-year diluted EPS was $0.59 compared with -$2.47, up $3.06.
Cash generation improved sharply. Operating cash flow was $60.95 million in the quarter, up 121.2% from $27.56 million. Full-year operating cash flow was $148.76 million, up 317.1% from $35.66 million. Capital expenditures were $0.84 million in the quarter, down 49.2% from $1.66 million, and $3.45 million for the year, up 28.5% from $2.68 million. The press release also reported adjusted free cash flow of $60 million for the quarter and $169 million for the full year. Deferred revenue, current portion, was $663.85 million, up 25.6% from $528.70 million. Remaining performance obligations were $1.35 billion, up 22.5% from $1.10 billion.
Customer metrics showed expansion. The number of customers with annual contract value over $100,000 was over 1,330, compared with over 1,270 in Q3 FY24 and over 1,160 in Q4 FY23. Total subscription customers were approximately 21,000, compared with approximately 20,800 in Q3 FY24 and approximately 20,200 in Q4 FY23. Net Expansion Rate was approximately 110%. Elastic Cloud revenue grew 32% year over year, and the company introduced Search AI Lake, launched a technical preview of Elastic Cloud Serverless, and announced Attack Discovery.
Elastic provided guidance for the first quarter of fiscal 2025 and the full fiscal year 2025. For the next quarter, total revenue is expected to be between $343 million and $345 million, representing 17% year-over-year growth at the midpoint. Non-GAAP operating margin is expected to be between 9.2% and 9.4%, and non-GAAP diluted earnings per share is expected to be between $0.24 and $0.26. For the full fiscal year 2025, total revenue is expected to be between $1.468 billion and $1.480 billion, representing 16% year-over-year growth at the midpoint. Non-GAAP operating margin is expected to be between 11.7% and 12.3%, and non-GAAP diluted earnings per share is expected to be between $1.35 and $1.47.
Several risks weigh on the outlook. Management cited continued inflation, slower economic growth, political unrest, rising interest rates, unpredictable and decreased spending, layoffs, longer and more unpredictable sales cycles, increased scrutiny of deals, slowing consumption, and foreign exchange rate fluctuations. Elastic Cloud is a growing share of revenue, and the company expects the mix shift to have a modest adverse impact on gross margin because of third-party hosting costs. During the fourth quarter, the company initiated a restructuring plan to realign business and strategic priorities and reduce its workforce, with execution expected to be substantially completed in the first quarter of fiscal 2025. The company also had an accumulated deficit from prior losses and may incur net losses in the future. It believes existing cash, cash equivalents, and marketable securities and future operations will be sufficient to fund operating and capital needs for at least the next 12 months.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $335.0M | $328.0M | +2.1% | $279.9M | +19.7% |
| Gross profit | $247.1M | $243.3M | +1.6% | $206.3M | +19.8% |
| Gross margin | 73.8% | 74.2% | -0.4 pp | 73.7% | +0.1 pp |
| Research & development | $94.0M | $87.2M | +7.7% | $81.8M | +14.9% |
| Sales & marketing | $151.6M | $141.6M | +7.1% | $123.6M | +22.6% |
| General & administrative | $43.1M | $40.9M | +5.4% | $39.5M | +9.0% |
| Total operating expenses | $292.8M | $269.7M | +8.6% | $246.4M | +18.8% |
| Operating income (loss) | -$45.7M | -$26.4M | -73.1% | -$40.2M | -13.8% |
| Operating margin | -13.7% | -8.1% | -5.6 pp | -14.3% | +0.7 pp |
| Net income (loss) | -$41.1M | $176.1M | -123.3% | -$46.7M | +12.0% |
| Net margin | -12.3% | 53.7% | -66.0 pp | -16.7% | +4.4 pp |
| Diluted EPS | -$0.40 | $1.69 | -$2.09 | -$0.49 | +$0.09 |
| Customers | 21,000 | 20,800 | +1.0% | 20,200 | +4.0% |
Risks
The filing cites continued inflation, slower economic growth and political unrest, including the Israel and Gaza conflict and Russia's war with Ukraine, as factors causing longer and more unpredictable sales cycles, increased scrutiny of deals, slowing consumption and overall customer expenditure. MD&A states the company may continue to experience these impacts if economic conditions do not reflect a sustained recovery.
Sales cycles can extend to more than a year for some customers, especially larger enterprise and channel deals, and the company has experienced longer and more unpredictable cycles. Customers have been scrutinizing spending and reducing consumption, and MD&A expects this caution to continue, which could delay large transactions and pressure cash flows.
Although net income was $61.7 million for FY2024 year to date, the Risk Factors state the company expects to incur net losses in future years and may not achieve profitability or positive operating cash flow on a consistent basis. Operating expenses are expected to continue to increase substantially as it invests in offerings, sales and marketing and hiring.
The company plans continued investment in AI and generative AI, but says it may incur substantial costs and may not achieve significant AI-related revenue for several years, if at all. Competitors may incorporate AI into their products more quickly or more successfully, which could impair Elastic's ability to compete effectively.
Future success depends significantly on adoption of Elastic Cloud, and the company has entered non-cancelable multi-year cloud hosting capacity commitments that require payment irrespective of actual usage. Management expects Elastic Cloud to become a larger part of revenue mix and to continue to have a modest adverse impact on gross margin due to third-party hosting costs.
Because Elastic Cloud consumption-based revenue is recognized based on actual customer usage, it is less predictable than subscription revenue recognized on a predetermined schedule. The company has experienced slowing consumption as customers optimize usage, and newer customers have increased consumption more slowly than more tenured customers, making revenue more variable.
The dual Elastic License and SSPL model may reduce adoption and create uncertainty, while Amazon and other competitors have forked Elasticsearch and Kibana, including OpenSearch. These offerings can compete for customers and put pricing pressure on Elastic's subscriptions, and the company says there are limited technological barriers to entry into its markets.
As a security solutions provider, Elastic has been and may continue to be specifically targeted by threat actors seeking to circumvent its security capabilities as an entry point into customers' endpoints, networks or systems. A compromise could damage its reputation, lead to loss of customer data, remediation costs and significant liabilities.
Social, ethical and regulatory issues around AI and generative AI may lead to new or enhanced government scrutiny, reputational harm, compliance failures and additional research, development and compliance costs. Evolving laws and regulations could affect customer adoption of Elastic's AI-enabled solutions.
The company has substantial Senior Notes indebtedness with restrictive covenants that limit its ability to incur liens, grant subsidiary guarantees and merge or sell assets. A change of control could require repurchase of the notes, and failure to comply with covenants or generate sufficient cash to service debt could adversely affect liquidity and financial condition.
During the quarter ended April 30, 2024, the company initiated a plan to realign business and strategic priorities that resulted in a workforce reduction. Execution is expected to be substantially completed in the first quarter of fiscal 2025, and failure to manage the restructuring could disrupt operations or fail to achieve intended cost savings.
The company depends on senior management, particularly CEO Ashutosh Kulkarni and CTO, co-founder and former CEO Shay Banon, as well as engineering and sales personnel. The loss of key personnel or an inability to attract and retain highly skilled employees could delay development and strategic objectives.
New stringent climate-related reporting requirements under California statutes and the EU Corporate Sustainability Reporting Directive will require detailed annual disclosures about greenhouse gas emissions and climate risks. The company expects substantial preparation costs and could face fines, sanctions and reputational harm if it fails to report timely and in accordance with mandatory standards.
The customer base has grown to approximately 21,000 as of April 30, 2024, and this rapid growth places continuous strain on management, operational and financial resources. Failure to improve information technology, financial infrastructure, administrative systems and headcount management could increase costs and harm customer satisfaction.
SaaS KPIs
All quarters →Net Expansion Rate
Non-GAAP Operating Margin
Adjusted Free Cash Flow
Adjusted Free Cash Flow Margin
Non-GAAP gross margin
Customers with ACV > $100,000
Non-GAAP Operating Income
Elastic Cloud Revenue
Total Subscription Customers
Summary, forecast, risks and KPIs are extracted from Elastic N.V.'s SEC filings for Q4 FY2024 (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.