Elastic NV
(BSP:E2ST34)
R$
43.72
+6.9 (+18.74%)
Market Cap: 54.56 Bil
Enterprise Value: 50.54 Bil
PE Ratio: 28.41
PB Ratio: 8.16
GF Score: 77/100 
Q1 2027 Elastic N.V. Earnings Call Transcript
Aug 27, 2026 / 09:00PM GMT
Release Date Price:
R$36.82
(-2.18%)
Key Points
Positve
- Elastic NV (ESTC) reported strong Q1 fiscal 2027 results, beating all guided metrics with total revenue of $478 million, up 15% year-over-year, and sales-led subscription revenue of $399 million, up 18%.
- The company saw a record quarter for customer additions, with over 80 net new customers spending $100,000 or more in ACV, bringing the total to over 1,800, and this segment now represents 90% of sales-led subscription revenue.
- AI adoption is accelerating, with 37% of high-value customers now using Elastic for AI use cases, up from 21% a year ago, and the company continues to see strong demand for its AI-driven search and security solutions.
- Elastic NV (ESTC) is making significant product innovations, including the launch of Columnar Mode for metrics, native Prometheus ingestion, and the acquisition of Deductive AI, positioning the company to expand into new observability and AI SRE markets.
- The company raised its full-year fiscal 2027 guidance, reflecting confidence in continued revenue acceleration, with expectations for total revenue growth of approximately 15.2% and sales-led subscription revenue growth of 17.4% at the midpoint.
- Elastic NV (ESTC) delivered strong profitability, with non-GAAP operating margin of 16.2% in Q1, exceeding guidance, and expects to maintain GAAP operating margin profitability going forward.
- The company's cRPO growth of 21% and RPO growth of 27% indicate strong customer commitment and multi-year deals, supporting long-term revenue visibility.
- Elastic NV (ESTC) continues to win competitive deals against pure-play vector databases and other platform players, highlighting its differentiated hybrid search and agentic capabilities.
- The company's security business is gaining momentum, with recognition as a leader in the IDC MarketScape for SIEM and strong performance in the Forrester Wave for XDR, driving growth in both public and private sectors.
- Elastic NV (ESTC) is expanding its total addressable market with new capabilities in metrics and AI SRE, which are expected to drive future growth and strengthen its observability offering.
Negative
- Elastic NV (ESTC) reported a slight decline in net expansion rate (NER) to 111% from 112%, reflecting the impact of lower constant currency growth in the trailing four quarters, though the company expects improvement as revenue acceleration builds.
- The company incurred $20 million in restructuring-related charges in Q1, with an additional $2 million to $5 million expected for the remainder of the fiscal year, which could impact near-term profitability.
- Cloud growth, while strong at 27% annually, showed variability in monthly cloud growth, which remained flat, indicating potential challenges in the SMB segment.
- The company faces intense competition in the observability and security markets, particularly from incumbents and pure-play vendors, which could pressure pricing and market share.
- Elastic NV (ESTC) noted that its guidance is based on a prudent, risk-adjusted view, and any unexpected changes in customer consumption or pipeline could impact the ability to meet raised targets.
- The company's gross margins were slightly lower quarter-over-quarter, though management attributes this to normal fluctuations and expects long-term improvement from serverless scale.
- The company's reliance on large customer expansions and AI adoption means that any slowdown in AI spending or enterprise IT budgets could adversely affect growth.
- Elastic NV (ESTC) is investing heavily in new areas like metrics and AI SRE, which may take time to generate meaningful revenue, potentially diluting near-term profitability.
- The company's success in the public sector, particularly with the CISA contract, could be subject to government budget cycles and policy changes, creating uncertainty.
- The company's NER is expected to improve only within four quarters, indicating that the benefits of current growth acceleration may not be fully reflected in key metrics for some time.
Operator
Good afternoon And welcome to the elastic first-quarter fiscal 2027 earnings results conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Alex Kurtz, Vice President of Investor Relations. Please go ahead.
Alex Kurtz
Elastic N.V. - Vice President - Investor Relations
Good afternoon, and thank you for joining us on today's conference call to discuss Elastic's first-quarter fiscal 2027 financial results. On the call, we have Ash Karney, Chief Executive Officer; and Navam Welihinda, Chief Financial Officer.
Following the prepared remarks, we will take questions. A press release was issued today after the close of the market and it's posted on our website. Slides which are supplemental to the call can also be found on Elastic Investor Relations website at ir.elastic.com.
Our discussion will include forward-looking statements, which may include predictions, estimates, our expectations regarding the demand for our products and solutions, and our future revenue
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