Elastic 2026 Q2 Earnings Beats Revenue Estimates, Net Loss Widens 101.5%

Elastic (ESTC) reported fiscal 2026 Q2 earnings on November 20, 2025, surpassing revenue expectations with a 15.9% year-over-year increase to $423.48 million and raising full-year revenue guidance. The company maintained a non-GAAP operating margin of 16.5%, driven by AI adoption and strategic sales execution.

Revenue

Elastic’s total revenue surged 15.9% year-over-year to $423.48 million, with Subscription revenue accounting for the majority of the increase at $397.70 million. Services revenue contributed an additional $25.78 million, rounding out the total. The performance underscores robust demand for Elastic’s AI-driven solutions, particularly in search, security, and observability.

Earnings/Net Income

Elastic’s financial losses expanded significantly, with a net loss of $51.28 million in Q2 2026—a 101.5% increase from $25.45 million in the prior year. On a per-share basis, losses widened to $0.48 from $0.25. Despite revenue growth, the company’s profitability remains under pressure, with losses persisting for nine consecutive years in the same quarter.

Post-Earnings Price Action Review

Following the earnings report, Elastic’s stock experienced a decline, with a 7.91% drop in a single trading day, a 10.10% decrease over the following week, and a 5.33% decline month-to-date. The price action reflects investor caution amid mixed financial results, including a widened net loss and ongoing operational challenges.

CEO Commentary

CEO Ashutosh Kulkarni highlighted Q2’s 16% revenue growth and a 16.5% non-GAAP operating margin, attributing success to AI adoption, strategic sales realignment, and the Jina AI acquisition. He emphasized 30+ $1M+ ACV deals, including 5 exceeding $10M, and underscored Elastic’s role in GenAI use cases, with 23% of $100K+ customers leveraging its platform.

Guidance

CFO Navam Welihinda outlined Q3 guidance: $437–439 million in total revenue (15% YoY growth) and $364–366 million in sales-led subscription revenue. For FY2026, total revenue is projected at $1.715–1.721 billion (16% growth), with non-GAAP operating margin targeting ~16.25%. The company plans $500 million in share repurchases.

Additional News

Elastic’s strategic momentum includes the acquisition of Jina AI, enhancing multilingual and multimodal embedding capabilities. The company also announced a $114 million share repurchase program, buying 1.4 million shares at an average price of $84.45. Additionally, the U.S. government shutdown delayed self-managed renewals, impacting Q2-to-Q3 transitions.