What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-06-08 compared with 2025-06-10 · 110 added, 96 removed, 371 unchanged (36% of the section changed)

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Our platform, available as either a cloud service or a self-managed software, allows our customers to find insights and drive AI and machine learning use cases from large amounts of data.

We offer three Search AI-powered solutions—Elasticsearch, Elastic Observability, and Elastic Security—that are built on our platform.

We offer three Elasticsearch-powered solutions—Search & AI, Elastic Observability, and Elastic Security—that are built on our platform.

We help organizations, their employees, and their customers find what they need faster, while keeping mission-critical applications and infrastructure running smoothly and protecting against cyber threats.

Our platform is able to ingest data from any source, in any format, and perform search, analysis, and visualization of that data.

With Elasticsearch at its core, our platform is a highly scalable document store and search engine, and is the unified data store for all of our solutions and use cases.

Featuring a common, solution-agnostic user interface with powerful drag-and-drop visual analytics, centralized management capabilities, and the world's most downloaded open source vector database, our platform gives developers a full suite of sophisticated retrieval algorithms and the ability to integrate with large language models (“LLM”).

With Elasticsearch at its core, our platform is a highly scalable document store, columnar database, and search engine and is the unified data store for all of our solutions and use cases.

Featuring a common, solution-agnostic user interface with an embedded AI agent and support for third-party AI agents, our platform offers powerful drag-and-drop visual analytics, centralized management capabilities, and the world's most downloaded open source vector database, which gives developers a full suite of sophisticated retrieval algorithms and the ability to integrate with LLMs.

It delivers the comprehensive set of capabilities developers need to build, maintain, and secure next-generation applications and services.

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Customers can also deploy our platform across hybrid clouds, public or private clouds, and multi-cloud environments.

As digital transformation continues to drive mission-critical business functions to the cloud, we believe that every company must incorporate search AI capabilities across IT and line-of-business organizations to find the answers that matter from all of its data in real time and at scale.

As digital transformation continues to drive mission-critical business functions towards increasingly complex data landscapes, we believe that every company must incorporate search AI capabilities across IT and line-of-business organizations to find the answers that matter from all of its data in real time and at scale.

Our business model is based primarily on a combination of paid service offerings (Elastic Cloud Hosted and Elastic Cloud Serverless) and free and paid proprietary self-managed software (Elastic Self-Managed).

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We offer various paid subscription tiers that provide different levels of rights to use proprietary features and access to support.

We do not sell support separately.

We do not sell support independently.

Our subscription agreements typically range from one to three years and are usually billed annually in advance.

Our subscription agreements are both term-based and consumption-based, with the vast majority of Elastic Cloud subscriptions being consumption-based.

Our subscription agreements are either term-based or consumption-based, with the vast majority of Elastic Cloud subscriptions being consumption-based.

We sell subscriptions in various currencies, with the majority of our subscriptions contracted in U.S.

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Elastic Cloud customers may also purchase subscriptions on a month-to-month basis without a commitment, with usage billed at the end of each month.

Subscriptions accounted for 93% of total revenue for the years ended April 30, 2025 and 2024.

Subscriptions accounted for 94% and 93% of total revenue for the years ended April 30, 2026 and 2025, respectively.

We also generate revenue from consulting and training services.

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We conduct low-touch campaigns to keep users and customers engaged once they have begun using Elastic Cloud or have downloaded our software.

As of April 30, 2025, we had approximately 21,500 customers compared to approximately 21,000 customers as of April 30, 2024.

The majority of our new customers use Elastic Cloud.

We define a customer as an entity that generated revenue in the quarter ending on the measurement date from an annual or month-to-month subscription.

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The number of customers who represented greater than $100,000 in annual contract value (“ACV”) was over 1,720 and over 1,510 as of April 30, 2026 and 2025, respectively.

In addition, we had over 240 customers who represented greater than $1.0 million in ACV as of April 30, 2026.

The ACV of a customer’s commitments is calculated based on the terms of that customer’s subscriptions and represents the total committed annual subscription amount as of the measurement date.

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In addition to our direct sales efforts, we maintain partnerships to further extend our reach and awareness of our products around the world.

We have experienced significant growth, with revenue increasing to $1.483 billion for the year ended April 30, 2025 from $1.267 billion for the year ended April 30, 2024 and $1.069 billion for the year ended April 30, 2023, representing year-over-year growth of 17% for the year ended April 30, 2025 and 19% for the year ended April 30, 2024.

We have experienced significant growth, with revenue increasing to $1.739 billion for the year ended April 30, 2026 from $1.483 billion for the year ended April 30, 2025 and $1.267 billion for the year ended April 30, 2024, representing year-over-year growth of 17% for the years ended April 30, 2026 and 2025.

For the years ended April 30, 2026, 2025, and 2024, revenue from outside the United States accounted for 46%, 44%, and 42% of our total revenue, respectively.

We incurred net losses of $108.1 million and $236.2 million for the years ended April 30, 2025 and 2023, respectively, while we had net income of $61.7 million for the year ended April 30, 2024.

We recorded net income of $367.8 million and $61.7 million for the years ended April 30, 2026 and 2024, respectively, while we incurred a net loss of $108.1 million for the year ended April 30, 2025.

Our net cash provided by operating activities was $326.9 million, $266.2 million, and $148.8 million for the years ended April 30, 2026, 2025, and 2024, respectively.

We had an accumulated deficit of $1.100 billion as of April 30, 2025 due to losses in all but one of our prior years.

We had an accumulated deficit of $732.0 million as of April 30, 2026 due to losses in all but two fiscal years since our inception.

We may incur net losses in the future and there can be no assurance whether, or when, we may become profitable on a consistent basis.

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Current Economic Conditions

Macroeconomic events, including a possible resurgence in inflation, fluctuations in economic growth, changes in and uncertainty of international trade policies, and political unrest, continue to evolve and impact worldwide economic activity.

Macroeconomic events, including a resurgence in inflation, fluctuations in economic growth, changes in and uncertainty of international trade policies, and geopolitical turmoil, continue to evolve and impact worldwide economic activity.

Governmental and corporate responses to these factors, including changing interest rates and unpredictable and decreased spending, will continue to affect the macroeconomic conditions.

We have experienced and, if economic conditions deteriorate, may continue to experience longer and more unpredictable sales cycles, increased scrutiny of prospective sales, slowing consumption and overall customer expenditures, and the impacts of changing foreign exchange rates with a strengthening or weakening U.S.

We have experienced and, if economic conditions remain uncertain or deteriorate, may continue to experience longer and more unpredictable sales cycles, increased scrutiny of prospective sales, slowing consumption and overall customer expenditures, and the impacts of changing foreign exchange rates with a strengthening or weakening U.S.

We continue to closely monitor the macroeconomic environment and its effects on our business and on global economic activity, including customer spending behavior.

See “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of additional risks.

Recent Developments

On July 4, 2025, OBBBA was enacted into law, introducing significant changes to U.S.

federal tax law.

The legislation includes provisions that impacted us in the year ended April 30, 2026, and the tax effects of those provisions have been reflected in our benefit from income taxes.

Additional provisions become effective in future periods and we are continuing to evaluate their impacts as regulatory guidance and interpretive clarifications emerge.

See Note 13, “Income Taxes,” of our accompanying Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.

Key Factors Affecting our Performance

We believe that the growth and future success of our business depends on many factors, including those described below.

While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations.

Developing new features for Elastic’s Search AI Platform.

We believe that the growth and future success of our business depend on many factors, including those described below.

While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address to sustain our growth and improve our results of operations.

Developing new features for the Elasticsearch Platform.

Our platform is applied to various use cases by customers, including through the solutions we offer.

Our revenue is derived primarily from subscriptions of Search, Observability and Security built into our platform.

Our revenue is derived primarily from subscriptions of Search & AI, Elastic Observability, and Elastic Security built into our platform.

We believe that releasing additional features of our platform, including our solutions, drives usage of our products and ultimately drives our growth.

To that end, we plan to continue to invest in building new features and solutions that expand the capabilities of our platform.

To that end, we plan to continue to invest in building new features and solutions that expand the capabilities of our platform, specifically including investments in context engineering, AI models, and agentic workflows.

We also intend to continue to pursue acquisitions selectively to enhance the technology in our platform and our solutions.

These investments may adversely affect our operating results prior to generating benefits, to the extent that they ultimately generate benefits at all.

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Our results of operations may fluctuate as we make these investments.

Growing our customer base by converting users of our software to paid subscribers.

Our financial performance depends on growing our paid customer base by converting free users of our software into paid subscribers.

Our distribution model has resulted in rapid adoption by developers around the world.

We have invested, and expect to continue to invest, heavily in sales and marketing efforts to convert additional free users to paid subscribers.

Our investment in sales and marketing is significant given our large and diverse user base.

These investments are likely to occur before we realize the anticipated benefits of such investments, such that they may adversely affect our operating results in the near term.

We recently added the Affero General Public License as an option to license the free part of our Elasticsearch and Kibana source code that has been available under the Elastic License 2.0 and Server Side Public License Version 1.0.

Growing our customer base by acquiring new customers.

Our financial performance depends on growing our paid customer base by acquiring new customers.

We have invested, and expect to continue to invest, heavily in sales and marketing efforts and leverage our network of partners to target new customers and drive further awareness and adoption within our user community.

Our investment in sales and marketing is significant given our large and diverse user base and our efforts to engage prospects in executive-level conversations.

Because these investments are likely to occur before we realize the anticipated benefits of such investments, they may adversely affect our operating results in the near term.

On November 12, 2024, we added the AGPL as an option to license the free part of our Elasticsearch and Kibana source code that has been available under the Elastic License 2.0 and SSPL.

AGPL is an Open Source Initiative-approved open source license.

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We believe that a useful indication of how our customer relationships have expanded over time is through our Net Expansion Rate, which is based upon trends in the rate at which customers increase their spend with us.

To calculate an expansion rate as of the end of a given month, we start with the annualized spend from all such customers as of twelve months prior to that month end, or Prior Period Value.

To calculate an expansion rate as of the end of a given month, we start with the annualized spend from all such customers as of twelve months prior to that month end, which we refer to as Prior Period Value.

A customer’s annualized spend is measured as its ACV, or in the case of customers charged on usage-based arrangements, by annualizing the usage for that month.

We then calculate the annualized spend from these same customers as of the given month end, or Current Period Value, which includes any growth in the value of their subscriptions or usage and is net of contraction or attrition over the prior twelve months.

We then calculate the annualized spend from these same customers as of the given month end, which we refer to as Current Period Value, which includes any growth in the value of their subscriptions or usage and is net of contraction or attrition over the prior twelve months.

We then divide the Current Period Value by the Prior Period Value to arrive at an expansion rate.

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We will continue to focus some of our direct sales efforts on driving adoption of our paid offerings.

Increasing adoption of Elastic Cloud.

Elastic Cloud, our family of cloud-based offerings, is an important growth opportunity for our business.

Organizations are increasingly looking for hosted deployment alternatives with reduced administrative burdens.

In some cases, users of our source available software that have been self-managing deployments of our platform subsequently become paying subscribers of Elastic Cloud.

For the years ended April 30, 2025 and 2024, Elastic Cloud contributed 46% and 43% of our total revenue, respectively.

We believe that offering Elastic Cloud is important for achieving our long-term growth potential, and we expect Elastic Cloud’s contribution to our subscription revenue to continue to increase over time.

However, we expect that an increase in the relative contribution of Elastic Cloud to our business will continue to have a modest adverse impact on our gross margin as a result of the associated third-party hosting costs.

Expanding our penetration in enterprise and commercial customer accounts.

Our future growth depends on our ability to successfully target strategic enterprise and high-propensity commercial customers using a sales-led motion.

We meet our customers where they are, selling Elastic Self-Managed, Elastic Cloud Hosted, and Elastic Cloud Serverless deployments, focusing on high-value existing and new customers.

Components of Results of Operations

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Subscription.

Cost of subscription consists primarily of personnel and related costs for employees associated with supporting our subscription arrangements, certain third-party expenses, and amortization of certain intangible and other assets.

Cost of subscription consists primarily of cloud hosting costs, personnel and related costs for employees associated with supporting our subscription arrangements, certain third-party expenses associated with our customer support, and amortization of certain intangible and other assets.

Personnel and related costs comprise cash compensation, benefits and stock-based compensation to employees, costs of third-party contractors, and allocated overhead costs.

Third-party expenses consist of cloud hosting costs and other expenses directly associated with our customer support.

We expect our cost of subscription to increase in absolute dollars as our subscription revenue increases.

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We expect our gross margin to fluctuate over time depending on the factors described above.

We expect our revenue from Elastic Cloud to continue to increase as a percentage of total revenue, which we expect will continue to have a modest unfavorable impact on our gross margin as a result of the associated third-party hosting costs.

Operating Expenses

Research and development.

Research and development expense primarily consists of personnel and related costs and allocated overhead costs.

Research and development expense primarily consists of personnel and related costs, cloud hosting costs, and allocated overhead costs.

We expect our research and development expense to increase in absolute dollars for the foreseeable future as we continue to develop new technology and invest further in our existing products.

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Other income, net primarily consists of interest income, gains and losses from transactions denominated in a currency other than the functional currency, and miscellaneous other non-operating gains and losses.

Provision for (Benefit from) Income Taxes

Provision for (benefit from) income taxes consists primarily of income taxes related to the Netherlands, U.S.

federal and state, and foreign jurisdictions in which we conduct business.

Our effective tax rate is affected by recurring items, such as tax rates in jurisdictions outside the Netherlands and the relative amounts of income we earn in those jurisdictions, non-deductible stock-based compensation, and one-time tax benefits, such as the release of a valuation allowance, or charges as well as the BEAT legislation in the United States.

(Benefit from) Provision for Income Taxes

(Benefit from) provision for income taxes consists primarily of income taxes related to the Netherlands, U.S.

federal and state jurisdictions, and foreign jurisdictions in which we conduct business.

Our effective tax rate is affected by recurring items, such as tax rates in jurisdictions outside the Netherlands and the relative amounts of income we earn in those jurisdictions, non-deductible stock-based compensation, BEAT legislation in the United States, and one-time tax benefits, such as the release of a valuation allowance, or charges.

Results of Operations

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Loss before income taxes (2,301) (31,569) (122,756)

Provision for (benefit from) income taxes 76,545 (184,476) 19,284

Net (loss) income $ (108,114) $ 61,720 $ (236,161)

(Benefit from) provision for income taxes (370,067) 76,545 (184,476)

Net income (loss) $ 367,766 $ (108,114) $ 61,720

(1) Includes stock-based compensation expense and related employer taxes as follows:

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Loss before income taxes — % (2) % (9) %

Provision for (benefit from) income taxes 5 % (14) % 1 %

Net (loss) income (7) % 5 % (22) %

(Benefit from) provision for income taxes (21) % 5 % (14) %

Net income (loss) 21 % (7) % 5 %

(1) Includes stock-based compensation expense and related employer taxes as follows:

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Subscription revenue increased by $249.9 million, or 18%, for the year ended April 30, 2026 compared to the prior year.

This increase was primarily driven by continued adoption of Elastic Cloud, which grew 26% over the prior year and increased to 46% of total revenue for the year ended April 30, 2025 from 43% for the year ended April 30, 2024.

This increase was primarily driven by continued adoption of both Elastic Cloud and Other subscriptions, which grew 22% and 14%, respectively, over the prior year.

The increase in Elastic Cloud revenue was primarily attributable to an increase in revenue from Annual Elastic Cloud, which grew by 28% over the prior year.

Services revenue increased by $6.1 million, or 6%, for the year ended April 30, 2026 compared to the prior year.

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Cost of subscription revenue increased by $27.6 million, or 10%, for the year ended April 30, 2026 compared to the prior year.

This increase was primarily due to an increase of $38.4 million in cloud infrastructure costs, partially offset by a decrease of $3.1 million in intangible assets amortization.

Subscription gross margin increased nominally to 80% for the year ended April 30, 2025 compared to 79% the prior year.

This increase was primarily due to an increase of $20.6 million in cloud hosting costs, $4.2 million in personnel and related costs, and $2.0 million in third-party costs.

Subscription gross margin increased to 81% for the year ended April 30, 2026 compared to 80% for the prior year primarily due to efficiencies realized in managing our cloud hosting costs relative to revenue growth.

Cost of services revenue increased by $8.8 million, or 9%, for the year ended April 30, 2026 compared to the prior year.

This increase was primarily due to increases of $6.8 million in personnel and related costs and $6.4 million in subcontractor costs.

Gross margin for services revenue was 2% for the year ended April 30, 2025 compared to 8% for the same period of the prior year.

The decrease in gross margin was primarily attributable to personnel and related costs and subcontractor costs growing at a higher rate than the growth in services revenue.

This increase was primarily due to increases of $6.0 million in personnel and related costs, $1.8 million in travel expenses, and $1.0 million in miscellaneous other expenses.

Gross margin for services revenue was (1)% for the year ended April 30, 2026 compared to 2% for the prior year.

The decrease in gross margin was primarily attributable to increases in travel expenses and personnel and related costs.

We continue to make investments in our services organization that we believe will be needed to support our continued growth.

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Research and development expense increased by $86.2 million, or 24%, for the year ended April 30, 2026 compared to the prior year as we continued to invest in the development of new and existing offerings.

This increase was primarily due to increases of $22.2 million in personnel and related costs and $4.7 million in cloud infrastructure costs related to our research and development activities.

These increases were partially offset by a decrease of $3.4 million in travel costs.

The increase in personnel and related costs included increases of $16.5 million in salaries and related taxes, $3.8 million in stock-based compensation, and $3.1 million in employee benefits expense, partially offset by a decrease of $1.4 million in acquisition-related compensation.

The increase was primarily due to increases of $64.2 million in personnel and related costs, $8.9 million in cloud hosting costs, $7.1 million in travel expenses, and $4.0 million in software and equipment costs.

The increase in personnel and related costs included increases of $39.8 million in salaries and related taxes, $15.2 million in stock-based compensation, and $7.5 million in employee benefits expense.

Sales and marketing

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Sales and marketing expense increased by $93.0 million, or 15%, for the year ended April 30, 2026 compared to the prior year.

This increase was primarily due to an increase of $55.8 million in personnel and related costs.

The increase in personnel and related costs included increases of $22.4 million in salaries and related taxes, $15.5 million in commission expense, $8.7 million in stock-based compensation, and $6.8 million in employee benefits expense.

The increase was primarily due to increases of $75.6 million in personnel and related costs, $9.5 million in travel expenses, and $4.3 million in marketing expenses.

The increase in personnel and related costs included increases of $37.6 million in salaries and related taxes, $17.0 million in commission expense, $10.7 million in employee benefits expense, and $8.2 million in stock-based compensation.

General and administrative

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General and administrative expense increased by $19.2 million, or 11%, for the year ended April 30, 2026 compared to the prior year.

This increase was primarily due to increases of $11.8 million in personnel and related costs and $2.0 million in software and equipment expense.

The increase in personnel and related costs included increases of $5.8 million in salaries and related taxes, $3.2 million in stock-based compensation, and $1.5 million in employee benefits expense.

The increase was primarily due to increases of $19.3 million in personnel and related costs.

The increase in personnel and related costs included increases of $15.4 million in stock-based compensation and $3.8 million in salaries and related taxes.

Restructuring and other related charges

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(in thousands)

Restructuring and other related charges $ 225 $ 4,917 $ (4,692) (95) %

Restructuring and other related charges decreased by $4.7 million for the year ended April 30, 2025 compared to the prior year due to lower employee-related severance and termination benefit charges.

Restructuring and other related charges $ — $ 225 $ (225) NM

NM = Not Meaningful

Restructuring and other related charges decreased by $0.2 million for the year ended April 30, 2026 compared to the prior year, as there were no employee-related severance and termination benefit charges pursuant to any restructuring plan for the year ended April 30, 2026.

Other Income, Net

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The increase was due to increases of $4.8 million in interest and other investment income, primarily from our marketable securities and $2.4 million in net foreign currency exchange gains.

Provision for (Benefit from) Income Taxes

(Benefit from) Provision for Income Taxes

Year Ended April 30, Change

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(in thousands)

Provision for (benefit from) income taxes $ 76,545 $ (184,476) $ 261,021 (141) %

The provision for income taxes was $76.5 million for the year ended April 30, 2025 compared to a benefit from income taxes of $184.5 million for the prior year.

Our effective tax rate was (242)% and 150% of our net loss before income taxes for the years ended April 30, 2025 and 2024, respectively.

Our effective tax rate is affected by recurring items, such as tax rates in jurisdictions outside the Netherlands and the relative amounts of income we earn in those jurisdictions and non-deductible stock-based compensation as well as one-time tax benefits or charges.

The benefit from income taxes for the year ended April 30, 2024 was driven primarily by a release of a valuation allowance against U.S.

federal and certain states’ deferred tax assets of $250.7 million.

We maintain a full valuation allowance against our deferred tax assets in the Netherlands and the United Kingdom.

To the extent sufficient positive evidence becomes available, the Company may release all or a portion of the Netherlands valuation allowance in one or more future periods.

A release of the valuation allowance, if any, would result in the recognition of certain deferred tax assets and a material income tax benefit for the period in which such release is recorded.

(Benefit from) provision for income taxes $ (370,067) $ 76,545 $ (446,612) NM

The benefit from income taxes was $370.1 million for the year ended April 30, 2026 compared to a provision for income taxes of $76.5 million for the prior year.

Our effective tax rate for the year ended April 30, 2026 was not meaningful due to near break-even net loss before income taxes.

Our effective tax rate for the year ended April 30, 2025 was (242)% of our net loss before income taxes.

Our effective tax rate is affected by recurring items, such as tax rates in jurisdictions both within and outside the Netherlands and the relative amounts of income that is earned in those jurisdictions, non-deductible stock-based compensation, BEAT legislation in the United States, and one-time tax benefits or charges.

The benefit from income taxes for the year ended April 30, 2026 was driven primarily by the release of valuation allowances against deferred tax assets in the Netherlands, the United Kingdom, and California for $390.5 million, $23.7 million, and $20.7 million, respectively, partially offset by tax expense in jurisdictions where we are not subject to a valuation allowance or NOLs.

We assess the need for a valuation allowance against our deferred tax assets on a quarterly basis.

In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of our deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all our deferred tax assets will not be realized.

As of April 30, 2026, we determined that, based on the weight of all available positive and negative evidence, it is more likely than not that our Netherlands, United Kingdom, and California deferred tax assets will be realizable.

The release of the valuation allowance in the Netherlands and California was supported by the implementation of a committed tax planning action in fiscal 2027 that is expected to generate future taxable income in each jurisdiction.

The release of the valuation allowance in the United Kingdom was attributable to achieving three years cumulative income during the three months ended April 30, 2026 as well as forecasts of future taxable income.

As of April 30, 2026, we have a remaining valuation allowance of $4.2 million related to certain U.S.

states and foreign jurisdictions.

Liquidity and Capital Resources

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Our cash, cash equivalents, and marketable securities consist of highly liquid investment-grade fixed-income securities.

We believe that the credit quality of the securities portfolio is strong and diversified among industries and individual issuers.

We have generated significant operating losses from our operations as reflected in our accumulated deficit of $1.100 billion as of April 30, 2025.

We believe that the credit quality of the securities portfolio, which is diversified among industries and individual issuers, is strong.

We have generated significant operating losses from our operations as reflected in our accumulated deficit of $732.0 million as of April 30, 2026.

We have historically incurred, and expect to continue to incur, operating losses and may generate negative cash flows from operations in the future due to the investments we intend to make.

As a result, we may require additional capital resources to execute on our strategic initiatives to grow our business.

As a result, we may require additional capital resources to execute our strategic initiatives to grow our business.

We believe that our existing cash, cash equivalents, and marketable securities and cash from our future operations will be sufficient to fund our operating and capital needs for at least the next 12 months, despite the uncertainty in the changing market and macroeconomic conditions.

Our assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties.

Our actual results could vary as a result of, and our future capital requirements, both near-term and long-term, will depend on many factors, including our growth rate, the timing and extent of spending to support our research and development efforts, the expansion of sales and marketing activities, the timing of new introductions of solutions or features, and the continuing market acceptance of our solutions and services.

We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights.

We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

Our actual results could vary as a result of, and our future both near-term and long-term capital requirements will depend on, many factors including our growth rate, the timing and extent of spending to support our research and development efforts, the expansion of sales and marketing activities, the timing of new introductions of solutions or product features, and the continuing market acceptance of our solutions and services.

We may enter into arrangements in the future to acquire or invest in complementary businesses, services and technologies, including intellectual property rights.

We have based our estimate of the adequacy of our financial resources on assumptions that may prove to be wrong, and we could use our available resources sooner than we currently expect.

In July 2021, we issued long-term debt of $575.0 million, represented by our Senior Notes, and we may be required to seek additional equity or debt financing.

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If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, operating results and financial condition would be adversely affected.

Share Repurchase Program

In October 2025, our board of directors authorized the Share Repurchase Program for up to $500.0 million of our outstanding ordinary shares.

Repurchases may be effected, from time to time, through open market purchases, block trades, accelerated or other structured share repurchase programs, or through other transactions in accordance with applicable securities laws.

The timing and amount of any repurchases will be determined by management based on the share price, business and market conditions, and other factors.

The Share Repurchase Program does not obligate us to acquire any particular amount of ordinary shares, and the program may be modified, suspended, or terminated at any time at our discretion.

During the year ended April 30, 2026, we repurchased 4.4 million of our outstanding ordinary shares for an aggregate purchase price of $340.0 million, excluding transaction costs associated with the repurchases, at a weighted-average price of $76.91 per share.

All repurchases were made in open market transactions.

As of April 30, 2026, $160.0 million remained available for future repurchases under the Share Repurchase Program.

See Note 10, “Ordinary Shares,” to our accompanying Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for additional details.

The following table summarizes our cash flows for the periods presented:

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Net cash provided by operating activities $ 326,894 $ 266,168 $ 148,762

Net cash used in investing activities $ (118,668) $ (287,960) $ (272,952)

Net cash provided by financing activities $ 40,947 $ 40,054 $ 17,471

Net cash provided by (used in) investing activities $ 26,071 $ (118,668) $ (287,960)

Net cash (used in) provided by financing activities $ (312,269) $ 40,947 $ 40,054

Net Cash Provided By Operating Activities

Net cash provided by operating activities during the year ended April 30, 2026 was $326.9 million, which resulted from adjustments for non-cash charges of $30.2 million and net income of $367.8 million, partially offset by a net cash outflow of $71.1 million from changes in operating assets and liabilities.

Non-cash charges primarily consisted of $298.4 million for stock-based compensation expense, $111.1 million for amortization of deferred contract acquisition costs, and $11.8 million for depreciation and intangible asset amortization expense, partially offset by $398.6 million in deferred income taxes.

The net cash outflow from changes in operating assets and liabilities resulted from a $163.7 million increase in deferred contract acquisition costs as our sales commissions increased due to increased business volume, a $86.8 million increase in accounts receivable, net, a $9.8 million decrease in operating lease liabilities, and a $6.7 million net increase in prepaid expenses and other assets.

These outflows were partially offset by inflows from a $168.6 million increase in deferred revenue and a $27.3 million net increase in accounts payable, accrued expenses, and accrued compensation and benefits .

Net cash provided by operating activities during the year ended April 30, 2025 was $266.2 million, which resulted from adjustments for non-cash charges of $430.4 million, partially offset by net loss of $108.1 million and a net cash outflow of $56.2 million from changes in operating assets and liabilities.

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These outflows were partially offset by inflows from a $147.1 million increase in deferred revenue.

Net cash provided by operating activities during the year ended April 30, 2024 was $148.8 million, which resulted from net income of $61.7 million and adjustments for non-cash charges of $123.7 million, partially offset by a net cash outflow of $36.6 million from changes in operating assets and liabilities.

Non-cash charges primarily consisted of $239.1 million for stock-based compensation expense, $78.5 million for amortization of deferred contract acquisition costs, $18.0 million of depreciation and intangible asset amortization expense, $11.0 million in non-cash operating lease costs, $1.9 million from foreign currency transaction loss, and $1.1 million for amortization of debt issuance costs, the effects of which were partially offset by $217.2 million in deferred income taxes primarily related to the release of a valuation allowance, net and $8.8 million from amortization of premium and accretion of discount on marketable securities, net .

The net cash outflow from changes in operating assets and liabilities resulted from an increase in deferred contract acquisition costs of $119.8 million as our sales commissions increased due to increased business volume, an increase of $63.5 million in accounts receivable, a decrease of $12.4 million in operating lease liabilities, and an increase of $1.0 million in prepaid expenses and other assets .

These outflows were partially offset by inflows from a $134.6 million increase in deferred revenue and a net increase of $25.5 million in accounts payable, accrued expenses, and accrued compensation and benefits.

Net Cash Used In Investing Activities

Net Cash Provided By (Used In) Investing Activities

Net cash provided by investing activities of $26.1 million during the year ended April 30, 2026 was primarily due to sales, maturities, and redemptions of marketable securities of $597.4 million, partially offset by purchases of marketable securities of $528.9 million, cash paid for business acquisitions, net of cash acquired, of $36.8 million, and purchases of property and equipment of $5.1 million.

Net cash used in investing activities of $118.7 million during the year ended April 30, 2025 was primarily due to purchases of marketable securities of $549.6 million and purchases of property and equipment of $4.3 million, partially offset by sales, maturities, and redemptions of marketable securities of $435.3 million.

Net cash used in investing activities of $288.0 million during the year ended April 30, 2024 was primarily due to the purchase of marketable securities of $536.8 million, business acquisitions, net of cash acquired, of $19.1 million, and purchases of property and equipment of $3.5 million .

These expenditures were offset by cash provided by maturities and redemptions of marketable securities of $271.4 million.

Net Cash Provided By Financing Activities

Net cash provided by financing activities of $40.9 million during the year ended April 30, 2025 was due to proceeds from stock option exercises and purchases under our employee stock purchase plan.

Net cash provided by financing activities of $40.1 million during the year ended April 30, 2024 was due to proceeds from stock option exercises and purchases under our employee stock purchase plan.

Net Cash (Used In) Provided By Financing Activities

Net cash used in financing activities of $312.3 million during the year ended April 30, 2026 was due to repurchases of ordinary shares of $340.1 million, partially offset by proceeds from stock option exercises and ESPP purchases of $27.8 million .

Net cash provided by financing activities of $40.9 million during the year ended April 30, 2025 was due to proceeds from stock option exercises and ESPP purchases.

Contractual Obligations and Commitments

Our principal commitments consist of our purchase obligations under non-cancelable agreements for cloud hosting, subscription software, sales and marketing, and general corporate services, future non-cancelable minimum rental payments under operating leases for our offices, and interest payments due on our Senior Notes.

Our principal commitments consist of our purchase obligations under non-cancelable agreements primarily for cloud hosting, subscription software, sales and marketing, and general corporate services, future non-cancelable minimum rental payments under operating leases for our offices, and interest payments due on our Senior Notes.

As of April 30, 2026, we had purchase commitments of $613.6 million related to cloud hosting services, future minimum lease payment commitments of $24.2 million, and purchase commitments of $96.0 million related to other contracts.

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Critical Accounting Policies and Estimates

In preparing our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, we are required to make estimates, assumptions and judgments that affect the amounts reported on our financial statements and the accompanying disclosures.

In preparing our consolidated financial statements in accordance with U.S.

GAAP, we are required to make estimates, assumptions, and judgments that affect the amounts reported on our financial statements and the accompanying disclosures.

Estimates and assumptions about future events and their effects cannot be determined with certainty and, therefore, require the exercise of judgment.

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If one of the performance obligations is outside of the SSP range, we allocate the transaction price considering the midpoint of the SSP range.

We also consider whether there are any additional material rights inherent in a contract and, if so, we allocate a portion of the transaction price to such rights based on the relative SSP.

We also consider whether there are any material rights inherent in a contract and, if so, we allocate a portion of the transaction price to such rights based on the relative SSP.

Deferred Contract Acquisition Costs

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Acquired Intangible Assets

We apply significant judgment in determining the fair value of the intangible assets acquired, which involves the use of significant estimates and assumptions.

We apply significant judgment in determining the fair value of intangible assets acquired, which involves the use of significant estimates and assumptions.

These estimates can include, but are not limited to, future expected cash flows from acquired customers and acquired technology from a market participant perspective, costs to rebuild developed technology, useful lives, and discount rates.

1 unchanged sentence

Deferred income tax balances reflect the effects of temporary differences between the financial reporting and tax bases of our assets and liabilities using enacted tax rates expected to apply when taxes are actually paid or recovered.

In addition, deferred tax assets are recorded for net operating loss and credit carryforwards.

In addition, deferred tax assets are recorded for NOL and credit carryforwards.

A valuation allowance is provided against deferred tax assets unless it is more likely than not that they will be realized based on all available positive and negative evidence.

1 unchanged sentence

To the extent sufficient positive evidence becomes available, we may release all or a portion of our valuation allowance in one or more future periods.

Future valuation allowance releases, if any, would result in the recognition of certain deferred tax assets which may include a material income tax benefit for the period in which such release is recorded.

Future valuation allowance releases, if any, would result in the recognition of certain deferred tax assets which may include an immaterial income tax benefit for the period in which such release is recorded.

See Note 13, “Income Taxes” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis