Elastic NV reported a strong fiscal first quarter of 2027, highlighting accelerating enterprise demand for its search, observability and security platforms as artificial intelligence adoption expands across global organizations. The company’s latest results showed continued revenue growth, improving profitability and rising customer engagement with AI-powered solutions.

The performance comes as technology companies increasingly compete for enterprise spending in artificial intelligence infrastructure, cybersecurity and data management. Elastic’s results indicate that demand for platforms capable of processing, analyzing and securing large volumes of data remains a key priority for businesses undergoing digital transformation.

Revenue Growth and Enterprise Demand Strengthen Financial Performance

Elastic reported total revenue of $478 million for the quarter, representing growth of 15% both on a reported basis and constant currency basis. The company’s sales-led subscription revenue reached $399 million, increasing 18% year over year on a reported basis and 17% on a constant currency basis.

The company also reported strong future revenue visibility through contractual commitments. Current Remaining Performance Obligations (cRPO) increased 21% to $1.2 billion, while total Remaining Performance Obligations (RPO) grew 27% to $1.9 billion. These figures indicate continued customer commitment through longer-term agreements and expanding enterprise relationships.

Elastic’s profitability metrics also exceeded expectations. Non-GAAP subscription gross margin reached 81%, while total gross margin was 77%. The company reported a non-GAAP operating margin of 16.2%, outperforming its previous guidance.

AI Adoption Becomes a Major Growth Driver

A central theme of Elastic’s quarterly performance was the acceleration of artificial intelligence adoption among enterprise customers. More than 37% of customers spending over $100,000 annually are now using Elastic for AI-related applications, compared with approximately 21% one year earlier.

The increase reflects growing demand for enterprise search, AI-powered analytics and security applications. Elastic continues positioning its platform as a foundation for organizations seeking to integrate AI capabilities into their existing data environments while maintaining security and operational efficiency.

The company also expanded its technology portfolio through product developments, including Columnar Mode for metrics, native Prometheus ingestion capabilities and the acquisition of Deductive AI. These initiatives are designed to strengthen Elastic’s position in observability, AI-driven operations and security markets.

Customer Expansion and Strategic Positioning Support Future Growth

Elastic achieved a record quarter for customer additions, adding more than 80 net new customers spending at least $100,000 annually. The company now serves more than 1,800 high-value customers, with this segment representing approximately 90% of sales-led subscription revenue.

The company’s Net Expansion Rate (NER) remained strong at 111%, although slightly below the previous quarter’s 112%. The metric indicates that existing customers continue expanding their usage of Elastic’s products, supporting recurring revenue growth.

Elastic also returned capital to shareholders through approximately $40 million in share repurchases, representing around 800,000 shares. At the same time, management raised fiscal 2027 guidance, projecting total revenue growth of approximately 15.2% and sales-led subscription revenue growth of 17.4% at the midpoint.

What Investors Should Monitor as AI Competition Intensifies

Elastic’s future growth will depend on its ability to maintain enterprise adoption, expand AI-related workloads and compete in increasingly crowded technology markets. Investors will closely monitor customer growth, AI product adoption, security market expansion and the company’s ability to sustain profitability while continuing innovation.

The broader opportunity remains linked to the growing demand for AI infrastructure, cybersecurity and data intelligence solutions. However, competitive pressure from specialized technology providers, changing enterprise budgets and the pace of AI implementation will remain important factors shaping Elastic’s long-term market position.