Total Revenue

+16% (from $334,999K to $388,432K)

Strong revenue growth driven by increased subscription and services adoption, building off prior period momentum as the company expanded its customer base and enhanced consumption patterns. " "

Subscription Revenue

+16% (from $310,984K to $361,741K)

Robust subscription performance reflects effective customer retention and product innovation, with continued growth built upon the previous quarter’s strong figures and market demand for recurring revenue. " "

Services Revenue

+11% (from $24,015K to $26,691K)

Steady services revenue growth indicates sustained demand for professional support, albeit at a slightly lower pace than subscriptions, suggesting a strategic focus on high-margin subscription services from the prior period. " "

Gross Profit

+18% (from $247,128K to $290,647K)

Improved profitability arises from better cost management and a favorable revenue mix, as the gross margin benefits more significantly compared to revenue increases, highlighting enhanced cost efficiencies relative to Q4 2024. " "

Operating Loss

Narrowed from $(45,712)K to $(12,020)K

Significant operational efficiency gains were achieved through strict expense control and improved revenue performance, resulting in a much smaller operating loss compared to the previous period. " "

Net Income

Loss eased from $(41,100)K to $(16,381)K

Enhanced bottom-line performance is seen in the reduced net loss and improved diluted EPS (from –$0.42 to –$0.16), driven by better operating results and cost reductions relative to Q4 2024. " "

Cash Position

Increased to $731,214K

Improved liquidity was supported by higher cash generated from operations ($86,979K) and additional positive financing activities ($22,470K), reflecting stronger cash generation and strategic financial management compared to the previous period. "

Total Revenue (Quarterly)

Q1 2026

$379–$381 million "

$396–$398 million "

raised

Non‑GAAP Operating Margin (Quarterly)

Q1 2026

13.5% "

11.5% "

lowered

Non‑GAAP Diluted EPS (Quarterly)

Q1 2026

$0.36–$0.37 "

$0.41–$0.43 "

raised

Total Revenue (Annual)

FY 2026

$1.474–$1.476 billion "

$1.655–$1.67 billion "

raised

Non‑GAAP Operating Margin (Annual)

FY 2026

14.7% "

16% "

raised

Non‑GAAP Diluted EPS (Annual)

FY 2026

$1.91–$1.96 "

$2.24–$2.32 "

raised

Adjusted Free Cash Flow Margin (Annual)

FY 2026

Expected to be a few points above non‑GAAP operating margin "

no prior guidance

no prior guidance

Generative AI Adoption

Consistently highlighted across Q1–Q3 as a major growth engine with strong customer adoption, RAG applications, and initial strategic initiatives. " " "

Q4 emphasized strong momentum, deepened customer usage with 2,000+ Elastic Cloud customers, and introduced enhanced strategic partnerships (e.g., 5‑year AWS agreement) to accelerate GenAI innovation. " " " "

Consistent and growing – The focus on GenAI remains central, with more robust partnerships and integration details in Q4 indicating deeper market expansion and commitment.

Sales Execution and Go-to-Market Transformation

Q1 saw significant execution challenges due to sales segmentation changes causing delays, while Q2 and Q3 demonstrated improvements with better pipeline progression and a focus on enterprise and mid‐market accounts. " " " "

Q4 reported that the segmentation changes are finally paying off with record additions of million-dollar customers, improved productivity, and enhanced targeting aided by internal AI, reflecting a more stable sales process. " " "

Recovery and improvement – After early disruptions in Q1, corrective actions have resulted in stabilizing and even surpassing previous execution levels by Q4.

Cloud Revenue Growth and Sustainability

Q1–Q3 consistently reported robust cloud growth (25–30% YoY) with healthy consumption from enterprise customers but noted typical month-to-month flatness in the self-service segment. " " "

Q4 grew 23% YoY (normalized mid‑20s growth when adjusted for seasonality) with clear seasonal patterns and a focus on subscription revenue excluding monthly cloud, underscoring a sustainable growth outlook. " " " "

Consistently strong – While growth rates are slightly moderated seasonally in Q4, the overall sustainability remains firm, anchored by enterprise consumption and stable long‑term drivers.

Enterprise Customer Segmentation and Focus

Q1 had disruptive segmentation changes affecting deal closures and pipeline, while Q2 and Q3 saw emerging benefits with improved focus on high‑propensity and enterprise segments. " " "

Q4 saw the segmentation changes paying off with notable expansion in strategic accounts and high‑value customers, reinforcing the focus on enterprise and high‑potential mid‑market segments. " " " "

Turning point to positive momentum – Initial disruptions from Q1 have transitioned to measurable successes in customer segmentation and enterprise focus by Q4.

Strategic Partnerships and Ecosystem Integration

Q1 mentioned a notable Microsoft accolade underscoring early partnership success. " Q2 and Q3 did not elaborate on partnerships.

Q4 introduced several new and deepened partnerships (AWS 5‑year collaboration, enhanced Google Cloud integration, NVIDIA AI Factory plug‑in) reinforcing Elastic’s ecosystem strategy and its positioning as a vector database leader. " "

Emerging and intensifying – The breadth and depth of strategic partnerships have significantly increased in Q4, expanding the ecosystem and reinforcing Elastic’s market position.

Macro-Economic Uncertainty and Conservative Guidance

Q1 guidance was cautious due to EMEA budget constraints; Q2 also reflected a conservative tone because of consumption fluctuations, and Q3 noted currency headwinds and day‑count effects. " " " "

Q4 guidance remains prudent amid macro uncertainties—particularly extrapolating U.S. public sector pressures—despite strong pipeline visibility, keeping the outlook conservative for FY 2026. " "

Persistent caution – Across all periods, there is a steady, conservative approach influenced by macroeconomic factors, with Q4 marking explicit attention to potential headwinds.

Innovation in AI Workflows and Platform Evolution

Q1 showcased foundational innovations (Playground, semantic search enhancements, AI‐powered security), while Q2 and Q3 added improvements (advanced quantization, expanded GenAI integration). " " "

Q4 further advanced platform evolution with enhanced technologies (better binary quantization, deep integrations with NVIDIA and advanced retrieval focus), pushing AI workflows to new performance levels. " " " "

Consistent and accelerating – Innovations continue to evolve, with each quarter building on prior advancements and Q4 demonstrating significant technological integration and performance upgrades.

Pipeline Conversion and RPO Growth Concerns

Q1 faced substantial pipeline conversion challenges and lower RPO due to segmentation disruptions, whereas Q2 exhibited recovery with improved wins and sequential gains; Q3 focused on maintaining pipeline momentum. " " "

Q4 reflects improved conversion with robust pipeline visibility and healthy RPO growth ($1B, 18% YoY), signaling that earlier corrective measures are yielding positive financial metrics. " " "

Recovery and positive momentum – After significant challenges in Q1, improvements through Q2 and stable pipeline management by Q4 indicate a strengthening conversion process and RPO outlook.

US Public Sector Dynamics

Q1 reported no segmentation changes impacting the public sector; limited details in Q2 and Q3, where it was scarcely mentioned. " "

Q4 revealed emerging pressure in the U.S. public sector, particularly due to elongated sales cycles in federal civilian agencies, leading to cautious extrapolation for future guidance. " "

Emerging concerns – Historically stable, the U.S. public sector is now showing signs of pressure in Q4, prompting a more conservative outlook for this segment.

Regional Market Dynamics and EMEA Deal Delays

Q1 disclosed EMEA deal delays due to tighter customer budgets despite solid APJ growth and segmentation challenges in the Americas; Q2–Q3 did not highlight regional issues prominently. " " "

Q4 focused more on overall strong regional performance with diversified gains across APJ, EMEA, and Americas; specific mention of EMEA delays is absent, suggesting an improvement from earlier challenges. " "

Improved regional performance – Whereas EMEA delays were noted in Q1 due to budget constraints, Q4 emphasizes a balanced and strong regional growth, indicating recovery and improved market dynamics across regions.