Elastic — First Quarter Fiscal 2027 Earnings Summary

Financial Performance

• Total revenue was $478 million, a 15% year-over-year increase.
• Total subscription revenue was $449 million, a 15% year-over-year increase.
• Sales-led subscription revenue was $399 million, an 18% year-over-year increase (17% constant currency).
• Current remaining performance obligations (cRPO) were $1.153 billion, a 21% year-over-year increase (20% constant currency).
• Remaining performance obligations (RPO) were $1.854 billion, a 27% year-over-year increase.
• GAAP operating loss was $24 million with a -5% operating margin.
• Non-GAAP operating income was $77 million with a 16.2% operating margin.
• GAAP net loss per share was $0.16; non-GAAP diluted earnings per share was $0.70.
• Operating cash flow was $132 million; adjusted free cash flow was $143 million.
• Cash, cash equivalents, and marketable securities totaled $1.461 billion as of July 31, 2026.
• Total deferred revenue was $883.9 million, a 17% year-over-year increase.

Guidance and Future Outlook

• Q2 Fiscal 2027 total revenue guidance is $486 million to $487 million (14.9% YoY growth at midpoint).
• Q2 Fiscal 2027 sales-led subscription revenue guidance is $407.5 million to $408.5 million (16.9% YoY growth at midpoint).
• Q2 Fiscal 2027 GAAP operating margin is expected to be positive.
• Q2 Fiscal 2027 non-GAAP operating margin is expected to be approximately 19.0%.
• Q2 Fiscal 2027 non-GAAP diluted EPS is expected to be $0.80 to $0.82.
• Fiscal 2027 total revenue guidance is $1.998 billion to $2.010 billion (15.2% YoY growth at midpoint).
• Fiscal 2027 sales-led subscription revenue guidance is $1.682 billion to $1.694 billion (17.4% YoY growth at midpoint).
• Fiscal 2027 GAAP operating margin is expected to be positive.
• Fiscal 2027 non-GAAP operating margin is expected to be approximately 19.4%.
• Fiscal 2027 non-GAAP diluted EPS is expected to be $3.29 to $3.37.
• Fiscal 2027 adjusted free cash flow margin is expected to be approximately 21.5%.

Business Segments and Product Lines

• Total customer count with ACV greater than $100,000 reached over 1,800, up from over 1,720 in Q4 FY26 and over 1,550 in Q1 FY26.
• Net Expansion Rate was approximately 111%.
• Annual Elastic Cloud revenue was $185 million (27% YoY growth); Monthly Elastic Cloud revenue was $50 million (1% YoY growth).
• Other subscription revenue was $214 million (11% YoY growth).
• Launched general availability of native Prometheus and PromQL support, out-of-the-box Kubernetes agentic investigations, and automated migration features.
• Introduced Columnar Mode in technical preview for improved cost and performance in metrics and log analytics.
• General availability of VectorDB index mode and Auto Calibration for DiskBBQ for instant vector search.
• Delivered Jina AI embedding and reranker models for on-premises and air-gapped environments.
• Introduced agentic Kubernetes investigation workflow and MCP-based observability skills.
• Expanded Attack Discovery, endpoint protection, and Alert Zero AI-driven alert triage.

Market and Competitive Landscape

• Recognized as a Leader in the Gartner Magic Quadrant for Observability Platforms for the third consecutive year.
• Recognized as a Leader in the IDC MarketScape: Worldwide SIEM 2026.
• Recognized as a Strong Performer in The Forrester Wave: Extended Detection And Response Platforms, Q2 2026.
• Achieved the industry's 100% malware protection score in AV-Comparatives 2026 Business Security Test.
• Earned the AV-Comparatives Approved Business Product Award with a 99.8% protection rate in the Real-World Protection Test.
• Announced collaboration with OpenAI to integrate advanced reasoning models with governed enterprise context in Elasticsearch.
• Achieved the AI Security distinction in the Amazon Web Services (AWS) Security Competency.

Risks and Challenges

• Forward-looking statements involve risks including uncertainties regarding future financial performance, cost of revenue, gross margin, and operating expenses.
• Risks include the success of AI initiatives, competition in the AI landscape, and market valuation of AI technologies.
• Potential impacts from evolving macroeconomic and geopolitical environments on business operations, hiring, and customer spending.
• Risks related to foreign currency exchange rate fluctuations, inflation, interest rates, and international trade policies.
• Risks associated with the ability to deliver new offerings, customer acceptance, and international expansion.
• Risks affecting the continuation of the share repurchase program and the realization of value from acquisitions.

Management Commentary and Tone

• CEO Ash Kulkarni stated the company delivered a strong start to fiscal 2027, beating guidance across all key metrics.
• Management noted that AI is reshaping the enterprise technology stack and organizations are making deliberate choices regarding application and data security.
• Management highlighted record quarter-over-quarter net customer additions to the >$100K ACV cohort and continued strength in cRPO and RPO growth.
• Management expressed confidence in the trajectory of the business with growing momentum across Search & AI, Security, and Observability.

Other Key Points

• Acquired Deductive AI, an AI-powered investigation platform for engineering teams.
• Share repurchase program authorized for up to $500 million; approximately 0.8 million shares were repurchased in Q1 FY27 at an average price of $49.71, totaling approximately $40 million.
• Diluted weighted average ordinary shares outstanding reflect share buybacks completed as of July 31, 2026.
• Guidance assumes exchange rates of 1 Euro = 1.166 US Dollars and 1 Great British Pound = 1.361 US Dollars.
• Conference call and webcast were hosted on August 27, 2026, at 2:00 p.m. PT / 5:00 p.m. ET.