Summary
Elastic closed fiscal 2026 with fourth quarter revenue of $450.7 million, up 16.0% from $388.4 million a year earlier, and full year revenue of $1.739 billion, up 17.3%. Gross margin improved to 75.4% in the quarter from 74.8%, and to 76.1% for the year from 74.4%. Gross profit was $339.6 million for the quarter, up 16.8%, and $1.32 billion for the fiscal year, up 19.9%. Non-GAAP operating income was $67 million in the quarter for a 14.8% margin, and $285 million for the year for a 16.4% margin.
GAAP profitability is more mixed. The quarterly operating loss widened 36.5% to $16.4 million from $12.0 million, and the quarterly operating margin slipped to -3.6% from -3.1%. The full year moved the other way, with the operating loss narrowing to $33.5 million from $54.9 million and the full year operating margin improving to -1.9% from -3.7%. Operating expenses rose across every line. Research and development, sales and marketing, and general and administrative spending all grew year over year, and research and development posted the largest increase.
Net income was $435.9 million for the quarter, a swing to profit from a net loss in the prior-year quarter, driven by a one-time income tax benefit from the release of valuation allowances against deferred tax assets in the Netherlands, the United Kingdom, and California. That benefit did not affect operating results, non-GAAP diluted earnings per share, adjusted free cash flow, or cash balances. Full year net income was $367.8 million against a net loss of $108.1 million a year earlier, and full year diluted earnings per share was $3.43 versus a loss of $1.04 per share. Non-GAAP diluted earnings per share was $0.61 for the quarter and $2.57 for the year.
Demand metrics were the brighter part of the release. Remaining performance obligations rose 28.3% to $1.982 billion, and the portion due within twelve months was $1.203 billion, up 20% year over year as reported and in constant currency. Current deferred revenue reached $973.8 million, up 21.4%, and the Net Expansion Rate was approximately 112%. Customers spending more than $100,000 in annual contract value grew to over 1,720 from over 1,660 in the prior quarter and over 1,510 a year earlier. More than 240 customers now spend above $1.0 million in annual contract value.
Cash generation improved. Operating cash flow was $152.7 million in the quarter, up 75.6%, and $326.9 million for the fiscal year, up 22.8%. Capital expenditures were $2.9 million for the quarter, up 36.8%, and $5.1 million for the year, up 17.2%. Adjusted free cash flow, a non-GAAP measure, was $150 million in the quarter and $346 million for the year, and cash, cash equivalents, and marketable securities totaled $1.370 billion as of April 30, 2026. The company repurchased about 0.7 million shares at an average price of $61.28 for roughly $40 million in the quarter and 4.4 million shares at an average of $76.91 for about $340 million over the fiscal year, leaving roughly $160.0 million available under the program.
The outlook covers the next quarter and the full fiscal year. For the first quarter of fiscal 2027, revenue is expected between $469 million and $470 million, or 13.1% growth at the midpoint, with a non-GAAP operating margin of about 14.0% and non-GAAP diluted earnings per share of $0.57 to $0.59. For fiscal 2027, revenue is guided to $1.985 billion to $2.000 billion, or 14.6% growth at the midpoint, with a non-GAAP operating margin near 19.0%, non-GAAP diluted earnings per share of $3.21 to $3.29, and an adjusted free cash flow margin of roughly 21.5%.
Risks remain. Management cites an uncertain macroeconomic and geopolitical backdrop, longer and less predictable sales cycles, more scrutiny of prospective purchases, slowing consumption, foreign exchange swings, tariffs and shifting trade policy, and competition in the AI landscape. Elastic carries an accumulated deficit of $732.0 million and has posted net losses in all but two fiscal years since inception, and it says it may incur net losses again. Purchase commitments for cloud hosting were $613.6 million as of April 30, 2026, with another $96.0 million tied to other contracts. Headcount was 4,019 employees at year end.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2026 | Q3 FY2026 | QoQ | Q4 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $450.7M | $449.9M | +0.2% | $388.4M | +16.0% |
| Gross profit | $339.6M | $343.4M | -1.1% | $290.6M | +16.8% |
| Gross margin | 75.4% | 76.3% | -1.0 pp | 74.8% | +0.5 pp |
| Research & development | $120.3M | $114.4M | +5.1% | $94.7M | +27.0% |
| Sales & marketing | $185.8M | $176.8M | +5.1% | $161.8M | +14.8% |
| General & administrative | $50.0M | $51.6M | -3.2% | $46.2M | +8.2% |
| Total operating expenses | $356.0M | $342.8M | +3.9% | $302.7M | +17.6% |
| Operating income (loss) | -$16.4M | $611.0K | -2785.9% | -$12.0M | -36.5% |
| Operating margin | -3.6% | 0.1% | -3.8 pp | -3.1% | -0.6 pp |
| Net income (loss) | $435.9M | $7.8M | +5522.3% | -$16.4M | +2761.0% |
| Net margin | 96.7% | 1.7% | +95.0 pp | -4.2% | +100.9 pp |
| Diluted EPS | $4.07 | $0.07 | +$4.00 | -$0.16 | +$4.23 |
| Customers | 24,000 | 3 | +799900.0% | 21,500 | +11.6% |
Risks
The filing expands AI risk, noting rapid progress in generative and agentic AI may require additional investment and that competitors may incorporate AI more quickly or successfully. It also warns that AI-enabled development tools could change how developers select databases or data platforms, reducing engagement with Elastic's platform.
FY2026 net income of $367.8 million swung to a profit from a FY2025 net loss of $108.1 million, but MD&A states the benefit from income taxes was driven primarily by releases of valuation allowances in the Netherlands, United Kingdom, and California totaling $390.5 million, $23.7 million, and $20.7 million, respectively. Without such releases, the company would have incurred net losses, and it had an accumulated deficit of $732.0 million as of April 30, 2026.
The vast majority of Elastic Cloud subscriptions are consumption-based, and MD&A notes revenue is recognized based on actual customer consumption, making timing less predictable. The filing says the company has experienced and may continue to experience slowing consumption as customers optimize usage, and newer customers increase consumption more slowly than tenured customers.
As a security solutions provider to U.S. government agencies, defense contractors, and non-U.S. governments, Elastic says it has been and may continue to be specifically targeted by nation-state actors. The filing expands this risk to AI-specific attack vectors, including deep fake impersonation, automated vulnerability exploitation, and AI supply-chain attacks.
MD&A says macroeconomic events including inflation, trade policy uncertainty, and geopolitical turmoil continue to evolve, and the company has experienced and may continue to experience longer and more unpredictable sales cycles, increased scrutiny of prospective sales, and slowing consumption. Risk factors also note customers reducing technology expenditures and competitors lowering prices.
Elastic Cloud contributed 48% of total revenue for FY2026, up from 46% in FY2025 and 43% in FY2024, and MD&A expects this mix shift to continue to have a modest unfavorable impact on gross margin due to third-party cloud hosting costs. The company has non-cancelable multi-year cloud hosting capacity commitments requiring payment irrespective of actual usage.
The EU AI Act and a patchwork of U.S. state-level AI legislation create evolving compliance obligations, and Elastic currently deploys general purpose AI systems subject to heightened requirements. The company may need to limit or restrict AI use, increasing operating expenses.
The filing highlights competition for skilled AI workers and sales personnel, and notes that the loss of key engineering or senior management personnel could delay strategic objectives. It also says hybrid and remote work has expanded the pool of companies competing for employees.
As of April 30, 2026, Elastic had $575.0 million aggregate principal amount of 4.125% Senior Notes due 2029, with restrictive covenants and a change of control repurchase right at 101% of principal. Failure to comply could result in acceleration of substantially all indebtedness.
Revenue from U.S. and non-U.S. government entities is increasing, and sales are subject to certification and security requirements, budgetary cycles, and termination for convenience. Pressure to reduce government spending could delay or reduce purchases.
SaaS KPIs
All quarters →Net Expansion Rate
Non-GAAP Operating Margin
Adjusted Free Cash Flow
Adjusted Free Cash Flow Margin
Non-GAAP Operating Income
Sales-led Subscription Revenue
Summary, forecast, risks and KPIs are extracted from Elastic N.V.'s SEC filings for Q4 FY2026 (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 2, 2026.