Elastic 2025 Q4 Earnings Beats Expectations as Net Income Improves 60.1%
Daily EarningsFriday, May 30, 2025 1:35 am ET
4min readElastic (ESTC) reported its fiscal 2025 Q4 earnings on May 29th, 2025. The company exceeded expectations with quarterly earnings of $0.47 per share, surpassing the Zacks Consensus Estimate of $0.37 per share. This marks a significant improvement compared to earnings of $0.21 per share a year ago. Elastic's outlook for Q1 FY 2026 anticipates total revenue between $396 million and $398 million, reflecting a 14% year-over-year growth at the midpoint. The company's guidance for the full fiscal year 2026 projects revenue between $1.655 billion and $1.67 billion, with a 12% year-over-year growth at the midpoint.
Revenue
Elastic's total revenue for 2025 Q4 rose by 16% to reach $388.43 million, up from $335 million in the previous year's Q4. Subscription services contributed significantly to this growth, generating $361.74 million, while the services segment added $26.69 million. These combined efforts resulted in a total revenue of $388.43 million, showcasing solid growth driven by demand for Elastic's solutions.
Earnings/Net Income
Elastic narrowed its losses to $0.16 per share in 2025 Q4, showing a 61% improvement from a loss of $0.41 per share in 2024 Q4. The net loss for the quarter also improved significantly, reducing by 60.1% to $16.38 million compared to the previous year's $41.10 million net loss, highlighting a positive trend in the company's financial performance despite ongoing challenges. The EPS performance indicates a promising turnaround.
Price Action
The stock price of Elastic experienced a slight decrease of 0.87% during the latest trading day but showed resilience with a 1.52% increase over the past week and an impressive 8.53% jump month-to-date.
Post-Earnings Price Action Review
Investors adopting the strategy of buying Elastic shares following revenue raise announcements and holding for 30 days have seen positive returns over the past three years. The cumulative return of this approach was 22.78%, with an average annual return of 7.63%. This strategy appears to effectively leverage the optimistic market reactions typically associated with Elastic's revenue announcements, reflecting investor confidence in the company's growth trajectory. The consistent positive returns underscore the potential benefits of aligning investment strategies with Elastic's financial milestones and market reception.
CEO Commentary
Chief Executive Officer Ashutosh Kulkarni expressed satisfaction with the 16% revenue growth in Q4, attributing it to effective sales execution and strong demand for Elastic's solutions. He highlighted the expansion in enterprise and mid-market customers, noting the addition of over 210 customers with annual contract values exceeding one million dollars by the fiscal year's end. Kulkarni emphasized the strategic importance of Generative AI and technology consolidation in driving customer investments and expressed optimism about the company's innovative capabilities and growth potential.
Guidance
Navam Welihinda, Chief Financial Officer, provided guidance for Q1 FY 2026, projecting total revenue between $396 million and $398 million, which represents a 14% year-over-year growth at the midpoint. For the full fiscal year 2026, anticipated revenue ranges between $1.655 billion and $1.67 billion, indicating a 12% growth at the midpoint. The non-GAAP operating margin for FY 2026 is expected to be approximately 16%, with non-GAAP diluted earnings per share ranging from $2.24 to $2.32.
Additional News
In recent weeks, Elastic has completed the acquisition of Keep Alerting Ltd, an open-source AIOps platform aimed at improving operational efficiency and service reliability. The company also signed a five-year global Strategic Collaboration Agreement with Amazon Web Services (AWS) to enhance solution integrations and joint marketing initiatives. Additionally, Elastic welcomed Navam Welihinda as the new Chief Financial Officer, bringing his expertise from HashiCorp and IBM to lead the finance function and drive the company's growth. These strategic moves underscore Elastic's commitment to expanding its capabilities and strengthening its market position.
Revenue
Elastic's total revenue for 2025 Q4 rose by 16% to reach $388.43 million, up from $335 million in the previous year's Q4. Subscription services contributed significantly to this growth, generating $361.74 million, while the services segment added $26.69 million. These combined efforts resulted in a total revenue of $388.43 million, showcasing solid growth driven by demand for Elastic's solutions.
Earnings/Net Income
Elastic narrowed its losses to $0.16 per share in 2025 Q4, showing a 61% improvement from a loss of $0.41 per share in 2024 Q4. The net loss for the quarter also improved significantly, reducing by 60.1% to $16.38 million compared to the previous year's $41.10 million net loss, highlighting a positive trend in the company's financial performance despite ongoing challenges. The EPS performance indicates a promising turnaround.
Price Action
The stock price of Elastic experienced a slight decrease of 0.87% during the latest trading day but showed resilience with a 1.52% increase over the past week and an impressive 8.53% jump month-to-date.
Post-Earnings Price Action Review
Investors adopting the strategy of buying Elastic shares following revenue raise announcements and holding for 30 days have seen positive returns over the past three years. The cumulative return of this approach was 22.78%, with an average annual return of 7.63%. This strategy appears to effectively leverage the optimistic market reactions typically associated with Elastic's revenue announcements, reflecting investor confidence in the company's growth trajectory. The consistent positive returns underscore the potential benefits of aligning investment strategies with Elastic's financial milestones and market reception.
CEO Commentary
Chief Executive Officer Ashutosh Kulkarni expressed satisfaction with the 16% revenue growth in Q4, attributing it to effective sales execution and strong demand for Elastic's solutions. He highlighted the expansion in enterprise and mid-market customers, noting the addition of over 210 customers with annual contract values exceeding one million dollars by the fiscal year's end. Kulkarni emphasized the strategic importance of Generative AI and technology consolidation in driving customer investments and expressed optimism about the company's innovative capabilities and growth potential.
Guidance
Navam Welihinda, Chief Financial Officer, provided guidance for Q1 FY 2026, projecting total revenue between $396 million and $398 million, which represents a 14% year-over-year growth at the midpoint. For the full fiscal year 2026, anticipated revenue ranges between $1.655 billion and $1.67 billion, indicating a 12% growth at the midpoint. The non-GAAP operating margin for FY 2026 is expected to be approximately 16%, with non-GAAP diluted earnings per share ranging from $2.24 to $2.32.
Additional News
In recent weeks, Elastic has completed the acquisition of Keep Alerting Ltd, an open-source AIOps platform aimed at improving operational efficiency and service reliability. The company also signed a five-year global Strategic Collaboration Agreement with Amazon Web Services (AWS) to enhance solution integrations and joint marketing initiatives. Additionally, Elastic welcomed Navam Welihinda as the new Chief Financial Officer, bringing his expertise from HashiCorp and IBM to lead the finance function and drive the company's growth. These strategic moves underscore Elastic's commitment to expanding its capabilities and strengthening its market position.
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