November 21, 2025 — Leads & Copy — Elastic (NYSE: ESTC) has released its financial results for the second quarter of fiscal year 2026, which ended on October 31, 2025.
Key financial highlights for the quarter include total revenue of $423 million, a 16% year-over-year increase, or 15% on a constant currency basis. Subscription revenue reached $398 million, up 17% year-over-year (16% on a constant currency basis). Sales-led subscription revenue (excluding Monthly Elastic Cloud) was $349 million, reflecting an 18% increase year-over-year (17% on a constant currency basis).
Elastic Cloud revenue totaled $206 million, a 22% year-over-year increase as reported and on a constant currency basis. Current remaining performance obligations were $971 million, up 17% year-over-year, or 15% on a constant currency basis.
GAAP operating loss was $8 million, with a GAAP operating margin of -2%. Non-GAAP operating income was $70 million, with a non-GAAP operating margin of 16.5%. GAAP net loss per share was $0.48, while non-GAAP diluted earnings per share was $0.64.
The company’s operating cash flow was $27 million, with an adjusted free cash flow of $26 million. As of October 31, 2025, Elastic held $1.396 billion in cash, cash equivalents, and marketable securities.
Elastic CEO Ash Kulkarni stated that the second quarter was outstanding, with the company exceeding guidance across all metrics. He attributed this success to robust growth across the company and the positive impact of AI on all areas of the business. Kulkarni emphasized Elastic’s expertise in managing unstructured data, its product differentiation, and its leadership in context engineering, positioning Elastic as a leader in search, AI, observability, and security.
Key customer metrics for the quarter include a total customer count with an Annual Contract Value (ACV) greater than $100,000, which exceeded 1,600, compared to over 1,550 in Q1 FY26 and over 1,420 in Q2 FY25. The Net Expansion Rate was approximately 112%.
Product innovations and updates include the launch of Agent Builder in technical preview, the introduction of Streams, and the introduction of Elastic Inference Service (EIS). Cloud-connected AutoOps and improved vector storage and search with DiskBBQ were also delivered. Additionally, a fully managed OpenTelemetry Protocol endpoint in Elastic Observability was launched, and new capabilities were added in Elastic Distribution of OpenTelemetry (EDOT).
Elastic also integrated Azure AI Foundry with Elastic Observability and announced that the Elasticsearch Open Inference API now supports integration with Gemini through Google Vertex AI. Device control capabilities were introduced in its XDR offering.
Other business highlights included the acquisition of Jina AI, the launch of a $500 million share repurchase program, and recognition as a Leader in multiple IDC MarketScape reports.
For the third quarter of fiscal year 2026, the company expects total revenue between $437 million and $439 million, representing 15% year-over-year growth at the midpoint (13% year-over-year constant currency growth at the midpoint). Sales-led subscription revenue is expected to be between $364 million and $366 million, representing 17% year-over-year growth at the midpoint (16% year-over-year constant currency growth at the midpoint). Non-GAAP operating margin is expected to be approximately 17.5%, and non-GAAP diluted earnings per share are expected to be between $0.63 and $0.65.
For the full fiscal year 2026, Elastic anticipates total revenue between $1.715 billion and $1.721 billion, representing 16% year-over-year growth at the midpoint (15% year-over-year constant currency growth at the midpoint). Sales-led subscription revenue is expected to be between $1.417 billion and $1.423 billion, representing 18% year-over-year growth at the midpoint (17% year-over-year constant currency growth at the midpoint). Non-GAAP operating margin is expected to be approximately 16.25%, and non-GAAP diluted earnings per share are expected to be between $2.40 and $2.46.
Elastic’s executive management team hosted a conference call to discuss the financial results and business outlook. A live audio webcast of the conference call is available through Elastic’s Investor Relations website at ir.elastic.co.
Elastic integrates its expertise in search technology with AI to help everyone transform data into answers, actions, and outcomes. Its Search AI Platform is used by many companies, including more than 50% of the Fortune 500.
Elastic and associated marks are trademarks or registered trademarks of Elastic N.V. and its subsidiaries.
Elastic Investor Relations can be contacted at ir@elastic.co and Elastic Corporate Communications at PR-Team@elastic.co.
Source: Elastic
