Key Highlights

● First-quarter fiscal 2027 revenue was US$478 million, up 15% year on year.

● Sales-led subscription revenue grew 18% to US$399 million.

● Adjusted free cash flow was US$143 million, a 30% margin.

● Fiscal 2027 revenue guidance is US$1.998 billion to US$2.010 billion.

Latest verified development

Elastic N.V. (NYSE:ESTC) reported first-quarter fiscal 2027 results on 27 August 2026 for the quarter ended 31 July. Total revenue was US$478 million, up 15% both as reported and in constant currency. Subscription revenue also rose 15% to US$449 million, while sales-led subscription revenue, the measure management emphasises, grew 18% to US$399 million.

Elastic Cloud revenue was US$235 million, up 20%. Within that, annual cloud commitments grew 27% to US$185 million, whereas monthly, consumption-style cloud revenue rose only 1% to US$50 million. The gap shows customers favouring committed arrangements over pay-as-you-go use, although the release does not explain the reason.

Taken together, the mix is worth noting. Sales-led subscriptions, which exclude the more variable monthly cloud usage, grew faster than total revenue at 18% against 15%, which means headline revenue growth lags the committed portion of the business.

Profitability and cash flow

On a GAAP basis Elastic made an operating loss of US$24 million, a margin of about negative 5%, after a US$20 million restructuring charge. GAAP net loss per share was US$0.16. Non-GAAP operating income was US$77 million, a 16.2% margin, and non-GAAP diluted earnings per share were US$0.70.

Cash generation was stronger than the accounting result. Operating cash flow was US$132 million and adjusted free cash flow US$143 million, a 30% margin. Cash and marketable securities totalled US$1.461 billion. Adjusted free cash flow is a company-defined, non-GAAP measure, so comparisons with other firms need care.

Backlog, customers and guidance

Current remaining performance obligations, a measure of contracted revenue due within twelve months, were US$1.153 billion, up 21%, and total remaining performance obligations reached US$1.854 billion, up 27%. Customers with annual contract value above US$100,000 rose to more than 1,800 from more than 1,550 a year earlier, and the net expansion rate was about 111%.

For the second quarter, ending 31 October 2026, Elastic guided to revenue of US$486 million to US$487 million and non-GAAP earnings per share of US$0.80 to US$0.82. For fiscal 2027, ending 30 April 2027, it guided to revenue of US$1.998 billion to US$2.010 billion, a non-GAAP operating margin of about 19.4% and non-GAAP earnings per share of US$3.29 to US$3.37.

Margin path from first to second quarter

The first quarter's restructuring charge of US$20 million is a reminder that the GAAP and non-GAAP pictures differ materially. Management guides to a non-GAAP operating margin of about 19.0% for the second quarter, against 16.2% in the first.

It also says GAAP operating margin should be positive in both the second quarter and the year, which would be a clear change from the first-quarter GAAP margin of about negative 5% if delivered.