Elastic N.V.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Management’s Discussion and Analysis of Financial Condition and Results of Operations and audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2025 filed with the SEC on June 10, 2025 (the “Company’s Annual Report on Form 10-K”). As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such difference include, but are not limited to, those identified below and those discussed in our risk factors disclosed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Management’s Discussion and Analysis of Financial Condition and Results of Operations and audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2025 filed with the SEC on June 10, 2025 (the “Company’s Annual Report on Form 10-K”). As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such difference include, but are not limited to, those identified below and those discussed in our risk factors disclosed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K and in “Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q.

Previous wording

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 and centralized management capabilities, our platform gives developers a full suite of sophisticated retrieval algorithms and the ability to integrate with large language models (“LLM”). It delivers the comprehensive set of capabilities developers need to build, maintain, and secure next-generation applications and services. Our platform can be used by developers and IT decision makers to power a variety of use cases.

Current wording

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 and centralized management capabilities, our platform gives developers a full suite of sophisticated retrieval algorithms and the ability to integrate with large language models. It delivers the comprehensive set of capabilities developers need to build, maintain, and secure next-generation applications and services. Our platform can be used by developers and IT decision makers to power a variety of use cases.

Previous wording

We generate revenue primarily from sales of subscriptions to our platform. 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. 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. We sell subscriptions in various currencies, with the majority of our subscriptions contracted in U.S. dollars, and a smaller portion contracted in Euro, British Pound Sterling, and other currencies. 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 94% and 93% of total revenue for the three months ended July 31, 2025 and 2024, respectively. We also generate revenue from consulting and training services.

Current wording

We generate revenue primarily from sales of subscriptions to our platform. 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. 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. We sell subscriptions in various currencies, with the majority of our subscriptions contracted in U.S. dollars, and a smaller portion contracted in Euro, British Pound Sterling, and other currencies. 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 94% and 93% of total revenue for the six months ended October 31, 2025 and 2024, respectively. We also generate revenue from consulting and training services.

Previous wording

Many of these customers start with limited initial spending on our products but can significantly increase their spending over time. We drive high-touch engagement with qualified prospects and customers to drive further awareness, adoption, and expansion of our products with paid subscriptions. Expansion includes increasing the number of developers and practitioners using our products, increasing the utilization of our products for a particular use case, and utilizing our products to address new use cases. The number of customers who represented greater than $100,000 in annual contract value (“ACV”) was over 1,550 and over 1,370 as of July 31, 2025 and 2024, respectively. 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. Month-to-month subscriptions are not included in the calculation of ACV.

Current wording

Many of these customers start with limited initial spending on our products but can significantly increase their spending over time. We drive high-touch engagement with qualified prospects and customers to drive further awareness, adoption, and expansion of our products with paid subscriptions. Expansion includes increasing the number of developers and practitioners using our products, increasing the utilization of our products for a particular use case, and utilizing our products to address new use cases. The number of customers who represented greater than $100,000 in annual contract value (“ACV”) was over 1,600 and over 1,420 as of October 31, 2025 and 2024, respectively. 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. Month-to-month subscriptions are not included in the calculation of ACV.

Previous wording

We continue to make substantial investments in developing our platform and expanding our global sales and marketing footprint. With a distributed team spanning over 40 countries, we are able to recruit, hire, and retain high-quality, experienced technical and sales personnel and operate at a rapid pace to drive product releases, fix bugs, and create and market new products. We had 3,711 employees as of July 31, 2025.

Current wording

We continue to make substantial investments in developing our platform and expanding our global sales and marketing footprint. With a distributed team spanning over 40 countries, we are able to recruit, hire, and retain high-quality, experienced technical and sales personnel and operate at a rapid pace to drive product releases, fix bugs, and create and market new products. We had 3,827 employees as of October 31, 2025.

Previous wording

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. 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. dollar. We continue to closely monitor the macroeconomic environment and its effects on our business and on global economic activity, including customer spending behavior. See “Item 1A. Risk Factors” of the Company's Annual Report on Form 10-K.

Current wording

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. 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 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. dollar. We continue to closely monitor the macroeconomic environment and its effects on our business and on global economic activity, including customer spending behavior. See “Item 1A. Risk Factors” of the Company's Annual Report on Form 10-K.

Previous wording

On July 4, 2025, OBBBA was enacted into law, introducing significant changes to U.S. federal tax law. The legislation includes provisions that impacted the Company in the three months ended July 31, 2025 and other provisions that will be effective in future periods. The Company will continue to assess the impact of the laws as further clarifications and interpretive guidance become available. See Note 13, “Income Taxes,” of our accompanying Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

Current wording

On July 4, 2025, OBBBA was enacted into law, introducing significant changes to U.S. federal tax law. The legislation includes provisions that impacted the Company in the six months ended October 31, 2025, and other provisions that will be effective in future periods. The Company will continue to assess the impact of the laws as further clarifications and interpretive guidance become available. See Note 13, “Income Taxes,” of our accompanying Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

Previous wording

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.

Current wording

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 in order to sustain our growth and improve our results of operations.

Previous wording

Developing new features for Elastic’s Search AI 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. 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. These investments may adversely affect our operating results prior to generating benefits, to the extent that they ultimately generate benefits at all.

Current wording

Developing new features for the Elastic Search AI 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. 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. These investments may adversely affect our operating results prior to generating benefits, to the extent that they ultimately generate benefits at all.

Previous wording

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 three months ended July 31, 2025 and 2024, Elastic Cloud contributed 47% and 45% 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.

Current wording

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 six months ended October 31, 2025 and 2024, Elastic Cloud contributed 48% and 46% 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.

Previous wording

Provision for 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 BEAT legislation in the United States.

Current wording

Provision for 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, one-time tax benefits, and the BEAT legislation in the United States.

Previous wording

Services revenue increased by $3.1 million, or 13%, for the three months ended July 31, 2025 compared to the same period of the prior year. The increase in services revenue was attributable to increased adoption of our services offerings.

Current wording

Services revenue increased by $1.2 million, or 5%, for the three months ended October 31, 2025 compared to the same period of the prior year. The increase in services revenue was attributable to increased adoption of our services offerings.

Previous wording

Cost of services revenue increased by $3.9 million, or 17%, for the three months ended July 31, 2025 compared to the same period of the prior year. This increase was primarily due to increases of $1.7 million in personnel and related costs, $1.4 million in travel expenses, and $0.7 million in subcontractor costs. Gross margin for services revenue was (2)% for the three months ended July 31, 2025 compared to 1% for the same period of the prior year. The decrease in gross margin was primarily attributable to personnel and related costs, travel expenses, and subcontractor costs growing at a higher rate than the growth in services revenue. We continue to make investments in our services organization that we believe will be needed to support our continued growth. Our gross margin for services may fluctuate or decline in the near term as we seek to expand our services business.

Current wording

Cost of services revenue increased by $2.3 million, or 10%, for the three months ended October 31, 2025 compared to the same period of the prior year. This increase was primarily due to increases of $1.6 million in personnel and related costs, $0.3 million in travel expenses, and $0.2 million in facilities-related costs. Gross margin for services revenue was 1% for the three months ended October 31, 2025 compared to 5% for the same period of the prior year. The decrease in gross margin was primarily attributable to higher personnel and related costs and travel expenses. We continue to make investments in our services organization that we believe will be needed to support our continued growth. Our gross margin for services may fluctuate or decline in the near term as we seek to expand our services business.

Previous wording

Subscription revenue increased by $64.8 million, or 20%, for the three months ended July 31, 2025 compared to the same period of the prior year. This increase was primarily driven by continued adoption of both Elastic Cloud and Other subscriptions, which grew 24% and 16%, respectively, over the prior year. The increase in Elastic Cloud revenue is primarily attributable to growth in revenue from Annual Elastic Cloud by 31%.

Current wording

Subscription revenue increased by $121.7 million, or 18%, for the six months ended October 31, 2025 compared to the same period of the prior year. This increase was primarily driven by continued adoption of both Elastic Cloud and Other subscriptions, which grew 23% 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 by 29% over the prior year.

Previous wording

Cost of subscription revenue increased by $1.1 million, or 2%, for the three months ended July 31, 2025 compared to the same period of the prior year. This increase was primarily due to an increase of $0.9 million in cloud infrastructure costs, $0.7 million in personnel and related costs, $0.7 million in third-party costs, and $0.7 million in travel and training expenses. These increases were partially offset by decreases of $1.7 million in intangible assets amortization and $0.3 million software and equipment costs. Subscription gross margin increased to 82% for the three months ended July 31, 2025 compared to 79% the same period of the prior year due to lower cloud infrastructure costs.

Current wording

Cost of subscription revenue increased by $7.7 million, or 6%, for the six months ended October 31, 2025 compared to the same period of the prior year. This increase was primarily due to an increase of $6.6 million in cloud infrastructure costs, $1.8 million in personnel and related costs, $1.2 million in third-party costs, and $0.7 million in travel expenses. These increases were partially offset by decreases of $2.4 million in intangible assets amortization and $0.6 million in software and equipment costs. Subscription gross margin increased to 81% for the six months ended October 31, 2025 compared to 79% the same period of the prior year primarily due to efficiencies realized in managing our cloud infrastructure costs relative to revenue growth.

Previous wording

Research and development expense increased by $19.8 million, or 22%, for the three months ended July 31, 2025 compared to the same period of the prior year as we continued to invest in the development of new and existing offerings. This increase was primarily due to increases of $12.3 million in personnel and related costs, $5.1 million in travel expenses, $1.1 million in cloud infrastructure costs, and $1.0 million in software and equipment costs. The increase in personnel and related costs included increases of $8.3 million in salaries and related taxes, $2.6 million in stock-based compensation, and $1.4 million in employee benefits expense.

Current wording

Research and development expense increased by $39.8 million, or 22%, for the six months ended October 31, 2025 compared to the same period of the prior year as we continued to invest in the development of new and existing offerings. The increase was primarily due to increases of $28.1 million in personnel and related costs, $5.9 million in travel expenses, $3.0 million in cloud infrastructure costs, and $2.1 million in software and equipment costs. The increase in personnel and related costs included increases of $18.0 million in salaries and related taxes, $5.9 million in stock-based compensation, and $3.7 million in employee benefits expense.

Previous wording

Sales and marketing expense increased by $16.7 million, or 11%, for the three months ended July 31, 2025 compared to the same period of the prior year. The increase was primarily due to increases of $15.3 million in personnel and related costs, $1.7 million in travel expenses, and $0.6 million in consulting fees. The increases were partially offset by a decrease of $1.3 million in marketing expenses. The increase in personnel and related costs included increases of $6.4 million in salaries and related taxes, $4.0 million in commission expense, $2.0 million in stock-based compensation, and $1.4 million in employee benefits expense.

Current wording

Sales and marketing expense increased by $46.0 million, or 15%, for the six months ended October 31, 2025 compared to the same period of the prior year. The increase was primarily due to increases of $34.4 million in personnel and related costs, $5.0 million in travel expenses, $4.1 million in marketing expenses, and $1.2 million in consulting fees. The increase in personnel and related costs included increases of $14.3 million in salaries and related taxes, $8.6 million in commission expense, $4.9 million in employee benefits expense, and $4.6 million in stock-based compensation.

Previous wording

General and administrative expense increased by $2.1 million, or 5%, for the three months ended July 31, 2025 compared to the same period of the prior year. This increase was primarily due to increases of $1.6 million in personnel and related costs and $1.1 million in legal and professional fees. These increases were partially offset by decreases of $0.4 million in non-income based taxes and $0.2 million in other miscellaneous expenses. The increase in personnel and related costs included increases of $1.2 million in stock-based compensation and $0.6 million in salaries and related taxes, partially offset by $0.2 million in other miscellaneous expenses.

Current wording

General and administrative expense increased by $6.0 million, or 7%, for the six months ended October 31, 2025 compared to the same period of the prior year. The increase was primarily due to increases of $5.0 million in personnel and related costs, $1.6 million in legal and professional fees, and $0.8 million in travel expenses. These increases were partially offset by decreases of $0.7 million in facilities-related costs, $0.5 million in non-income based taxes, and $0.2 million in bad debt expense. The increase in personnel and related costs included increases of $3.7 million in stock-based compensation and $1.5 million in salaries and related taxes, partially offset by $0.2 million in other miscellaneous employee expenses.

Previous wording

Other income, net increased by $4.6 million, or 41%, for the three months ended July 31, 2025 compared to the same period of the prior year. The increase was due to increases of $4.0 million in interest and other investment income primarily from our marketable securities and $0.6 million in net foreign currency exchange gains.

Current wording

Other income, net increased by $11.3 million, or 56%, for the six months ended October 31, 2025 compared to the same period of the prior year. The increase was due to increases of $8.0 million in interest and other investment income primarily from our marketable securities and $3.3 million in net foreign currency exchange gains.

Previous wording

The provision for income taxes increased by $4.5 million, or 23%, for the three months ended July 31, 2025 compared to the same period of the prior year. Our effective tax rate for the three months ended July 31, 2025 is not meaningful. Our interim tax provision excludes pre-tax losses in jurisdictions where a valuation allowance is maintained, which causes the provision to reflect only tax provisions in jurisdictions with profitable operations and results in a disproportionate effective tax rate. Our effective tax rate was (69)% of our net loss before income taxes for the three months ended July 31, 2024. 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.

Current wording

The provision for income taxes increased by $33.4 million, or 76%, for the six months ended October 31, 2025 compared to the same period of the prior year. Our effective tax rate for the six months ended October 31, 2025 was not meaningful due to near break-even income before income taxes. Our interim tax provision excludes pre-tax losses in jurisdictions where a valuation allowance is maintained, which causes the provision to reflect only tax provisions in jurisdictions with profitable operations and results in a disproportionate effective tax rate. Our effective tax rate was (141)% of our net loss before income taxes for the six months ended October 31, 2024. 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, one-time tax benefits or charges, and the BEAT legislation in the United States.

Previous wording

As of July 31, 2025, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1.494 billion. 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.

Current wording

As of October 31, 2025, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1.396 billion. 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.

Previous wording

We have generated significant operating losses from our operations as reflected in our accumulated deficit of $1.124 billion as of July 31, 2025. 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 our strategic initiatives to grow our business.

Current wording

We have generated significant operating losses from our operations as reflected in our accumulated deficit of $1.176 billion as of October 31, 2025. 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 our strategic initiatives to grow our business.

Previous wording

Net cash provided by operating activities during the three months ended July 31, 2025 was $104.8 million, which resulted from adjustments for non-cash charges of $120.8 million and a net cash inflow of $8.6 million from changes in operating assets and liabilities, partially offset by net loss of $24.6 million. Non-cash charges primarily consisted of $69.9 million for stock-based compensation expense, $26.2 million for amortization of deferred contract acquisition costs, and $21.6 million in deferred income taxes. The net cash inflow from changes in operating assets and liabilities resulted from a $154.0 million decrease in accounts receivable, net, which was partially offset by outflows from a $97.9 million decrease in deferred revenue, a $22.3 million increase in deferred contract acquisition costs, a $16.3 million net decrease in accounts payable, accrued expenses, and accrued compensation and benefits, a $6.1 million increase in prepaid expenses and other assets, and a $2.7 million decrease in operating lease liabilities.

Current wording

Net cash provided by operating activities during the six months ended October 31, 2025 was $131.4 million, which resulted from adjustments for non-cash charges of $259.3 million, partially offset by a net loss of $75.9 million and a net cash outflow of $52.0 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $142.8 million for stock-based compensation expense, $54.7 million for deferred income taxes, and $53.2 million for amortization of deferred contract acquisition costs. The net cash outflow from changes in operating assets and liabilities resulted from a $121.8 million decrease in deferred revenue, a $55.2 million increase in deferred contract acquisition costs, a $8.6 million net increase in prepaid expenses and other assets, and a $5.9 million decrease in operating lease liabilities. These outflows were partially offset by inflows from a $115.4 million decrease in accounts receivable, net and a $24.1 million net increase in accounts payable, accrued expenses, and accrued compensation and benefits.

Previous wording

Net cash provided by operating activities during the three months ended July 31, 2024 was $52.8 million, which resulted from adjustments for non-cash charges of $106.4 million, partially offset by net loss of $49.2 million and a net cash outflow of $4.4 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $63.5 million for stock-based compensation expense, $23.2 million for amortization of deferred contract acquisition costs, $14.7 million in deferred income taxes, $4.2 million of depreciation and intangible asset amortization expense, and $2.8 million in non-cash operating lease costs, the effects of which were partially offset by $2.2 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 a $69.3 million decrease in deferred revenue, a $43.2 million decrease in accounts payable, accrued expenses, and accrued compensation and benefits, a $13.9 million increase in deferred contract acquisition costs, a $3.4 million decrease in operating lease liabilities, and a $1.8 million increase in prepaid expenses and other assets. These outflows were partially offset by inflows from a $127.2 million decrease in accounts receivable, net.

Current wording

Net cash provided by operating activities during the six months ended October 31, 2024 was $91.1 million, which resulted from adjustments for non-cash charges of $225.0 million, partially offset by a net loss of $74.7 million and a net cash outflow of $59.2 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $127.6 million for stock-based compensation expense, $47.2 million for amortization of deferred contract acquisition costs, $38.4 million in deferred income taxes, and $7.7 million of depreciation and intangible asset amortization expense. The net cash outflow from changes in operating assets and liabilities resulted from a $51.4 million decrease in deferred revenue, a $37.2 million increase in deferred contract acquisition costs, a $32.0 million decrease in accounts payable, accrued expenses, and accrued compensation and benefits, and a $6.4 million decrease in operating lease liabilities. These outflows were partially offset by inflows from a $68.1 million decrease in accounts receivable, net.

Previous wording

Net cash used in investing activities of $170.4 million during the three months ended July 31, 2025 was primarily due to purchases of marketable securities of $248.6 million, business acquisitions, net of cash acquired, of $8.5 million, and purchases of property and equipment of $0.7 million, partially offset by sales, maturities, and redemptions of marketable securities of $87.4 million.

Current wording

Net cash provided by investing activities of $38.4 million during the six months ended October 31, 2025 was primarily due to sales, maturities, and redemptions of marketable securities of $366.6 million, partially offset by purchases of marketable securities of $289.6 million and business acquisitions, net of cash acquired, of $36.8 million.

Previous wording

Net cash used in investing activities of $3.5 million during the three months ended July 31, 2024 was primarily due to the purchase of marketable securities of $95.2 million andpurchases of property and equipment of$0.7 million. These expenditures were offset by cash provided by sales, maturities, and redemptions of marketable securities of $92.4 million.

Current wording

Net cash provided by investing activities of $10.8 million during the six months ended October 31, 2024 was primarily due to sales, maturities, and redemptions of marketable securities of $178.5 million, partially offset by cash used for the purchase of marketable securities of $166.3 million andcapital expenditures of$1.5 million.

Previous wording

Net cash provided by financing activities of $4.7 million during the three months ended July 31, 2024 wasdue to proceeds from stock option exercises.

Current wording

Net cash used in financing activities of $96.7 million during the six months ended October 31, 2025 wasdue to repurchases of ordinary shares of$109.2 million, partially offset by proceeds from stock option exercises and ESPP purchases of $12.5 million.

Previous wording

Net cash provided by financing activities of $0.3 million during the three months ended July 31, 2025 wasdue to proceeds from stock option exercises.

Current wording

Net cash provided by financing activities of $17.0 million during the six months ended October 31, 2024 wasdue to the proceeds from stock option exercises and ESPP purchases.