Elastic N.V. Reports 17% Revenue Growth and Net Loss in Q3 Fiscal 2025

Elastic N.V. reported its financial results for the third quarter of fiscal 2025, revealing a total revenue of $382.1 million for the three months ended January 31, 2025, a 17% increase from $328.0 million in the same period last year. Subscription revenue, which constitutes the majority of the company's income, rose by 16% to $358.2 million, driven by a 26% growth in Elastic Cloud offerings, which accounted for 47% of total revenue. However, the company recorded a net loss of $17.1 million, compared to a net income of $176.1 million in the prior year, primarily due to increased operating expenses and a significant tax provision.

In terms of operational metrics, Elastic's customer base grew to approximately 21,350 as of January 31, 2025, up from 20,800 a year earlier. The number of customers generating over $100,000 in annual contract value also increased to 1,460, reflecting the company's success in expanding its existing customer relationships. The company’s total assets increased to $2.33 billion, up from $2.24 billion at the end of the previous fiscal year, with cash and cash equivalents rising to $584.0 million.

Elastic's operating expenses for the quarter were $289.6 million, a 7% increase from $269.7 million in the same quarter last year. This rise was attributed to higher costs in research and development, sales and marketing, and general administrative expenses. The company continues to invest heavily in its product offerings and sales capabilities, which it believes are essential for long-term growth. Notably, the company completed the acquisition of Opster Ltd. for $23 million in November 2023, which is expected to enhance its technology and service offerings.

Looking ahead, Elastic anticipates continued growth in its subscription revenue, particularly from its cloud-based services. The company expects that the increasing adoption of Elastic Cloud will contribute positively to its financial performance, although it may also exert pressure on gross margins due to associated third-party hosting costs. The company remains cautious about macroeconomic conditions, including inflation and geopolitical tensions, which could impact customer spending and sales cycles. Despite these challenges, Elastic believes its current cash reserves and market position will support its strategic initiatives over the next 12 months.