Elastic N.V.

Q4 FY26 total revenue was $451 million, up approximately 16% as reported and 14% constant currency. Sales-led subscription revenue was $375 million, up 19% reported and 16% constant currency. CRPO grew to $1.2 billion, up 20%, and RPO grew to $1.98 billion, up 28% reported and 27.4% constant currency. Full-year FY26 total revenue grew 17% and non-GAAP operating margin was 16.4%; Q4 non-GAAP operating margin was 14.8%. Navam said FY26 adjusted free cash flow margin was approximately 20%. For Q1 FY27, guidance is total revenue of $469 million to $470 million, sales-led subscription revenue of $392 million to $393 million, non-GAAP operating margin of approximately 14%, and non-GAAP EPS of $0.57 to $0.59. For FY27, guidance is total revenue of $1.985 billion to $2.0 billion, sales-led subscription revenue of $1.673 billion to $1.688 billion, non-GAAP operating margin of approximately 19%, and non-GAAP EPS of $3.21 to $3.29. The company also expects FY27 adjusted free cash flow margin of 21.5% excluding acquisitions or one-time charges.

Ash Kulkarni framed the quarter as proof that Elastic is becoming a core platform for AI, search, observability, and security, saying customers are making larger multiyear commitments and standardizing on the platform. He highlighted four strategic strengths: data gravity, context, specialized agents, and platform consolidation, and pointed to wins like CISA, a Fortune 50 financial services firm, and a large workplace AI software company. His tone was confident and expansive, emphasizing that AI adoption is broadening Elastic’s addressable market and that the company expects FY27 to show accelerating quarterly revenue growth.

Navam Welihinda emphasized that FY26 execution laid the groundwork for FY27 acceleration, with stronger CRPO and RPO reflecting higher customer commitments. He cited Q4 CRPO of $1.2 billion, RPO of $1.98 billion, and noncurrent RPO growth of 43%, saying the business secured multiyear commitments without any material change in discounting. He also noted a one-time $435 million benefit to GAAP net income from a valuation allowance release, said FY26 adjusted free cash flow margin was about 20%, and outlined capital return progress: about $40 million repurchased in Q4, roughly 68% of the $500 million buyback authorization used by year-end, and about 4.4 million shares repurchased since October. For FY27, he guided to 19% non-GAAP operating margin, 21.5% adjusted free cash flow margin, and a raised FY29 non-GAAP operating margin target of approximately 25%.

Analysts focused on what was driving the CRPO/RPO acceleration, whether AI was the main unlock, and how the FY27 guide fits with the path to the company’s 20%+ sales-led subscription target. Management said the main drivers are Elastic’s role as a data store, context layer, and AI-enabled security/observability platform, with AI and multiyear commitments broadening across the customer base. Questions also centered on go-to-market changes, cloud versus self-managed mix, public sector momentum, and the Splunk displacement opportunity; management said there are no major GTM changes planned, monthly cloud remains relatively flat, annual cloud is strong, and federal adoption through CISA is expanding. They also said the guide assumes no new products or acquisitions and includes conservative risk adjustments for consumption, FX, deal timing, and mix.