Elastic N.V.
ESTCBusiness Overview
ticker: ESTC step: 01 generated: 2026-05-13 source: quick-research
Elastic N.V. (ESTC) — Business Overview
Business Description
Elastic is an enterprise search, observability, and security analytics platform built on the open-source Elasticsearch engine. The ELK stack (Elasticsearch, Logstash, Kibana) became the dominant enterprise log analytics solution organically, and Elastic has monetized it through a cloud-managed service (Elastic Cloud) and enterprise subscriptions with advanced security, alerting, and machine learning features. With 21,500+ customers including 50%+ of the Fortune 500, FY2025 (ended April 2025) revenue was $1.483B (+17% YoY). Elastic Cloud now exceeds half of total revenue and is the primary growth engine.
Revenue Model
Subscription-based (~93% of revenue) with Elastic Cloud (managed service on AWS, Azure, GCP) as the highest-growth component and self-managed enterprise licenses as the installed base. Cloud is consumption-based — customers pay for the compute and storage they use. Land: developers adopt the open-source ELK stack → Expand: production use cases trigger Elastic Cloud or enterprise subscriptions → Monetize: observability, security, and AI search features drive ARPU expansion. Professional services (~7%) supplement large enterprise deployments.
Products & Services
- Elasticsearch — distributed search and analytics engine; the market-leading enterprise search database
- Elastic Observability — unified log analytics, infrastructure metrics, APM, distributed tracing; competes with Datadog, Splunk
- Elastic Security — SIEM, endpoint security, threat detection; competes with CrowdStrike, Microsoft Sentinel
- Elastic Cloud — fully managed Elasticsearch on AWS/Azure/GCP; Serverless option (50% higher throughput, 37% lower latency, launched 2025)
- Vector Search — native vector similarity search integrated into Elasticsearch; enables RAG pipelines using existing enterprise data
- Kibana — visualization and dashboard layer; included with all subscriptions
Customer Base & Go-to-Market
21,500+ customers; 1,510 with $100K+ ACV (+13% YoY); 50%+ of Fortune 500. Developer-led adoption via open-source Elasticsearch → enterprise conversion. Key use cases: log analytics/SIEM, application performance monitoring, internal enterprise search (documents, knowledge bases), and increasingly AI/RAG applications using Vector Search. Strong in financial services, healthcare, government, and technology verticals.
Competitive Position
Elastic competes against Splunk/Cisco (SIEM + observability), Datadog (observability), Microsoft Sentinel (SIEM), and AWS OpenSearch (Amazon's fork of Elasticsearch). Elastic's differentiation: the unified search + observability + security platform shares one data schema, reducing data duplication and integration cost vs. deploying three separate tools. Vector Search integration means enterprises can use existing Elasticsearch infrastructure for AI/RAG applications without a separate vector database. The open-source community creates organic adoption that enterprise sales converts to paid.
Key Facts
- Founded: 2012 (Amsterdam, Netherlands)
- Headquarters: San Francisco, California (operational HQ)
- Employees: ~3,500
- Exchange: NYSE
- Sector / Industry: Technology / Enterprise Search & Observability
- Market Cap: ~$7B (at ~$62/share)
Financial Snapshot
ticker: ESTC step: 04 generated: 2026-05-13 source: quick-research
Elastic N.V. (ESTC) — Financial Snapshot
Note: Elastic's fiscal year ends April 30. FY2025 = May 2024 – April 2025.
Income Statement Summary
| Metric | FY2023 | FY2024 | FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.069B | ~$1.27B | $1.483B | +17% |
| Gross Margin | ~73% | ~74% | ~74% | stable |
| GAAP Operating Margin | ~-27% | ~-15% | ~-8% | improving |
| Non-GAAP Operating Margin | ~12% | ~18% | ~22% | improving rapidly |
| GAAP Net Income | ~-$0.3B | ~-$0.2B | ~-$0.12B | improving |
Q1 FY2026 (ended July 2025): Revenue $415.3M (+20% YoY, re-accelerating). Gross margin ~75%. Operating margin up 9+ points YoY. FCF margin surpassed 20% in recent quarters. Elastic Cloud now >50% of revenue, growing 22%+ YoY. 1,510 customers with $100K+ ACV.
Cash Flow & Balance Sheet (FY2025)
| Metric | Value |
|---|---|
| Operating Cash Flow | ~$250–280M |
| Free Cash Flow | ~$230–260M (~15–18% FCF margin) |
| Capital Expenditures | ~$25M |
| Cash & Equivalents | ~$1.0B |
| Total Debt | ~$575M (convertible notes) |
Net cash positive. FCF trajectory improving rapidly — from near-zero (FY2022) to ~18% margins (FY2025), reflecting SaaS operating leverage. Q1 FY2026 FCF: $64M on $415M revenue (15%). Non-GAAP operating margins have expanded 10+ points in 2 years — approaching 20%+ on a sustainable basis. GAAP losses narrowing rapidly as SBC (~15% of revenue) stays flat while revenue scales.
Key Ratios (approximate)
- P/E: ~35–45x (non-GAAP FY2026E) | EV/Sales: ~4–5x | FCF Yield: ~3.5%
- Revenue Growth (TTM): ~17–20% | Non-GAAP Operating Margin: ~22%
Growth Profile
Elastic grew from $1.07B (FY2023) to $1.48B (FY2025) — 39% in 2 years — with growth decelerating from 24% (FY2023) to 17% (FY2025) before re-accelerating to 20% in Q1 FY2026. The re-acceleration is driven by Elastic Cloud growth and Vector Search adoption by AI application developers. FCF margin expansion from near-zero to 18%+ is the key financial story — demonstrating that Elastic's business model has inherent operating leverage as the installed base scales.
Forward Estimates
- FY2026: Revenue ~$1.7–1.8B (+15–20% YoY); Elastic Cloud growth 22–25%
- Non-GAAP EPS: improving toward $3–4/share as margins expand
- FCF margin: targeting 20–25% as non-GAAP operating margin reaches 22–25%
- Analyst median PT: $106.50 (range $75–119; 39 analysts, Strong Buy consensus)
- Implied upside: ~72% from ~$62 stock price
Deeper Financial Analysis
The fundamental tier adds 9 additional research dimensions for $ESTC.