Elastic N.V.

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 six months ended October 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 nine months ended January 31, 2026 and 2025, 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 1,600 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.

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 1,660 and over 1,460 as of January 31, 2026 and 2025, 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 3,827 employees as of October 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 3,921 employees as of January 31, 2026.

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 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.

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 us in the nine months ended January 31, 2026, and other provisions that will be effective in future periods. We 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

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.

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 nine months ended January 31, 2026 and 2025, 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, one-time tax benefits, and the BEAT legislation in the United States.

Current wording

(Benefit from) 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 BEAT legislation in the United States.

Previous wording

Subscription revenue increased by $56.9 million, or 17%, for the three 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 22% and 12%, respectively, over the same period of the prior year. The increase in Elastic Cloud revenue was primarily attributable to growth in revenue from Annual Elastic Cloud by 27% over the same period of the prior year.

Current wording

Subscription revenue increased by $67.5 million, or 19%, for the three months ended January 31, 2026 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 21% and 16%, respectively, over the same period of the prior year. The increase in Elastic Cloud revenue was primarily attributable to an increase in revenue from Annual Elastic Cloud by 27%.

Previous 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.

Current wording

Services revenue increased by $0.3 million, or 1%, for the three months ended January 31, 2026 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 subscription revenue increased by $6.6 million, or 9%, for the three months ended October 31, 2025 compared to the same period of the prior year. The increase was primarily due to an increase of $5.7 million in cloud infrastructure costs and $1.1 million in personnel and related costs, partially offset by a decrease of $0.7 million in intangible assets amortization. Subscription gross margin increased to 81% for the three months ended October 31, 2025 compared to 79% for the same period of the prior year primarily due to efficiencies realized in managing our cloud infrastructure costs relative to revenue growth.

Current wording

Cost of subscription revenue increased by $9.1 million, or 13%, for the three months ended January 31, 2026 compared to the same period of the prior year. The increase was primarily due to an increase of $6.6 million in cloud infrastructure costs, $1.0 million in intangible assets amortization, $1.0 million in personnel and related costs, and $0.5 million in third-party costs. Subscription gross margin increased to 81% for the three months ended January 31, 2026 compared to 80% for the same period of the prior year primarily due to efficiencies realized in managing our cloud infrastructure costs relative to revenue growth.

Previous wording

Cost of services revenue increased by $6.2 million, or 13%, for the six months ended October 31, 2025 compared to the same period of the prior year. This increase was primarily due to increases of $3.3 million in personnel and related costs, $1.7 million in travel expenses, $0.9 million in subcontractor costs, and $0.2 million in facilities-related costs. Gross margin for services revenue was (1)% for the six months ended October 31, 2025 compared to 3% for the same period of the prior year. The decrease in gross margin was primarily attributable to higher 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.

Current wording

Cost of services revenue and gross margin for services revenue remained relatively flat for the three months ended January 31, 2026 compared to the same period of the prior year. 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

Research and development expense increased by $20.0 million, or 23%, for the three 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 $15.8 million in personnel and related costs, $1.9 million in cloud infrastructure costs related to our research and development activities, $1.1 million in software and equipment costs, and $0.7 million in travel expenses. The increase in personnel and related costs included increases of $9.7 million in salaries and related taxes, $3.3 million in stock-based compensation, and $2.3 million in employee benefits expense.

Current wording

Research and development expense increased by $20.8 million, or 22%, for the three months ended January 31, 2026 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 $17.1 million in personnel and related costs and $2.7 million in cloud infrastructure costs related to our research and development activities. The increase in personnel and related costs included increases of $11.0 million in salaries and related taxes, $4.5 million in stock-based compensation, and $1.6 million in employee benefits expense.

Previous wording

Sales and marketing expense increased by $29.3 million, or 20%, for the three months ended October 31, 2025 compared to the same period of the prior year. The increase was primarily due to an increase of $19.1 million in personnel and related costs, $5.4 million in marketing expenses, $3.3 million in travel expenses, and $0.7 million in software and equipment costs. The increase in personnel and related costs included increases of $7.8 million in salaries and related taxes, $4.6 million in commission expense, $3.5 million in employee benefits expense, and $2.6 million in stock-based compensation.

Current wording

Sales and marketing expense increased by $23.0 million, or 15%, for the three months ended January 31, 2026 compared to the same period of the prior year. The increase was primarily due to an increase of $19.4 million in personnel and related costs, $2.1 million in travel expenses, and $1.1 million in marketing expenses. The increase in personnel and related costs included increases of $10.6 million in salaries and related taxes, $4.5 million in commission expense, $2.1 million in employee benefits expense, and $2.0 million in stock-based compensation.

Previous wording

Other income, net increased by $6.7 million, or 74%, for the three months ended October 31, 2025 compared to the same period of the prior year. The increase was primarily due to an increase of $4.0 million in interest and other investment income primarily from our marketable securities and an increase of $2.7 million in net foreign currency exchange gains.

Current wording

Other income, net decreased by $3.4 million, or (22)%, for the three months ended January 31, 2026 compared to the same period of the prior year. The decrease was primarily due to an increase of $2.0 million in net foreign currency exchange losses and a decrease of $1.2 million in interest and other investment income primarily from our marketable securities.

Previous wording

The provision for income taxes increased by $28.9 million, or 122%, for the three months ended October 31, 2025 compared to the same period of the prior year. Our effective tax rate for the three months ended October 31, 2025 and 2024 was not meaningful due to near break-even income (loss) 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 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.

Current wording

The benefit from income taxes was $1.6 million for the three months ended January 31, 2026 compared to a provision for income taxes of $21.1 million for the same period of the prior year. Our effective tax rate was (26)% and 519% of our income before income taxes for the three months ended January 31, 2026 and 2025, respectively. 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 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 BEAT legislation in the United States.

Previous wording

We maintain a full valuation allowance against our deferred tax assets in the Netherlands, the United Kingdom, and certain states in the United States. 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. A release of 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.

Current wording

We maintain a full valuation allowance against our deferred tax assets in the Netherlands, the United Kingdom, and certain states in the United States. We have determined it is reasonably possible that within the next 12 months there may be sufficient positive evidence to release a portion or all of the valuation allowance in one or more future periods. A release of valuation allowance, if any, would result in the recognition of certain deferred tax assets and a material non-cash income tax benefit for the period in which such release is recorded, which could have a material impact on net income (loss). The timing and amount of a potential release of the valuation allowance are subject to significant management judgment regarding future earnings, future market conditions, and our ability to successfully execute our business plans and tax planning activities.

Previous 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.

Current wording

Subscription revenue increased by $189.2 million, or 19%, for the nine months ended January 31, 2026 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 22% and 15%, respectively, over the prior year. The increase in Elastic Cloud revenue was primarily attributable to an increase in revenue from Annual Elastic Cloud by 28% over the prior year.

Previous wording

Services revenue increased by $4.3 million, or 9%, for the six 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.

Current wording

Services revenue increased by $4.6 million, or 6%, for the nine months ended January 31, 2026 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 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.

Current wording

Cost of subscription revenue increased by $16.8 million, or 8%, for the nine months ended January 31, 2026 compared to the same period of the prior year. This increase was primarily due to an increase of $13.2 million in cloud infrastructure costs, $2.8 million in personnel and related costs, and $1.7 million in third-party costs. These increases were partially offset by a decrease of $1.4 million in intangible assets amortization. Subscription gross margin increased to 81% for the nine months ended January 31, 2026 compared to 79% for the same period of the prior year primarily due to efficiencies realized in managing our cloud infrastructure costs relative to revenue growth.

Previous 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.

Current wording

Cost of services revenue increased by $6.3 million, or 9%, for the nine months ended January 31, 2026 compared to the same period of the prior year. This increase was primarily due to increases of $4.0 million in personnel and related costs, $1.5 million in travel expenses, and $0.8 million in miscellaneous other expenses. Gross margin for services revenue was (2)% for the nine months ended January 31, 2026 compared to 1% for the same period of 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. Our gross margin for services may fluctuate or decline in the near term as we seek to expand our services business.

Previous 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.

Current wording

Research and development expense increased by $60.6 million, or 22%, for the nine months ended January 31, 2026 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 $45.2 million in personnel and related costs, $5.7 million in cloud infrastructure costs, $5.4 million in travel expenses, and $3.1 million in software and equipment costs. The increase in personnel and related costs included increases of $29.0 million in salaries and related taxes, $10.4 million in stock-based compensation, and $5.3 million in employee benefits expense.

Previous 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.

Current wording

Sales and marketing expense increased by $69.0 million, or 15%, for the nine months ended January 31, 2026 compared to the same period of the prior year. The increase was primarily due to increases of $53.7 million in personnel and related costs, $7.1 million in travel expenses, and $5.1 million in marketing expenses. The increase in personnel and related costs included increases of $24.8 million in salaries and related taxes, $13.1 million in commission expense, $6.9 million in employee benefits expense, and $6.6 million in stock-based compensation.

Previous 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.

Current wording

General and administrative expense increased by $15.4 million, or 12%, for the nine months ended January 31, 2026 compared to the same period of the prior year. The increase was primarily due to increases of $14.6 million in personnel and related costs and $2.1 million in legal and professional fees. These increases were partially offset by a decrease of $1.6 million in charitable donations. The increase in personnel and related costs included increases of $10.3 million in stock-based compensation and $3.5 million in salaries and related taxes.

Previous wording

Restructuring and other related charges decreased by $0.2 million for the six months ended October 31, 2025 compared to the same period of the prior year, as there were no employee-related severance and termination benefit charges pursuant to any restructuring plan for the six months ended October 31, 2025.

Current wording

Restructuring and other related charges decreased by $0.2 million for the nine months ended January 31, 2026 compared to the same period of the prior year, as there were no employee-related severance and termination benefit charges pursuant to any restructuring plan for the nine months ended January 31, 2026.

Previous wording

Interest expense remained relatively flat for the six months ended October 31, 2025 compared to the same period of the prior year.

Current wording

Interest expense remained relatively flat for the nine months ended January 31, 2026 compared to the same period of the prior year.

Previous 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.

Current wording

Other income, net increased by $7.9 million, or 22%, for the nine months ended January 31, 2026 compared to the same period of the prior year. The increase was due to increases of $6.8 million in interest and other investment income primarily from our marketable securities and $1.3 million in net foreign currency exchange gains.

Previous 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.

Current wording

The provision for income taxes increased by $10.7 million, or 17%, for the nine months ended January 31, 2026 compared to the same period of the prior year. Our effective tax rate for the nine months ended January 31, 2026 was not meaningful due to near break-even net income before income taxes. Our effective tax rate was (241)% of our net loss before income taxes for the nine months ended January 31, 2025. 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 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 BEAT legislation in the United States.

Previous wording

We maintain a full valuation allowance against our deferred tax assets in the Netherlands, the United Kingdom, and certain states in the United States. 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. A release of valuation allowance, if any, would result in the recognition of certain deferred tax assets and could result in a material income tax benefit for the period in which such release is recorded.

Current wording

We maintain a full valuation allowance against our deferred tax assets in the Netherlands, the United Kingdom, and certain states in the United States. We have determined it is reasonably possible that within the next 12 months there may be sufficient positive evidence to release a portion or all of the valuation allowance. A release of valuation allowance, if any, would result in the recognition of certain deferred tax assets and could result in a material non-cash income tax benefit for the period in which such release is recorded, which could have a material impact on net income (loss). The timing and amount of a potential release of the valuation allowance are subject to significant management judgment regarding future earnings, future market conditions, and our ability to successfully execute our business plans and tax planning activities.

Previous 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.

Current wording

As of January 31, 2026, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1.248 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 $1.176 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.

Current wording

We have generated significant operating losses from our operations as reflected in our accumulated deficit of $1.168 billion as of January 31, 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 our strategic initiatives to grow our business.

Previous wording

During the six months ended October 31, 2025, we repurchased 1.4 million of our outstanding ordinary shares for an aggregate purchase price of $114.1 million, excluding transaction costs associated with the repurchases, at a weighted-average price of $84.45 per share. All repurchases were made in open market transactions. As of October 31, 2025, $385.9 million remained available for future repurchases under the Share Repurchase Program. See Note 10, “Ordinary Shares,” to our accompanying Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional details.

Current wording

During the nine months ended January 31, 2026, we repurchased 3.8 million of our outstanding ordinary shares for an aggregate purchase price of $300.0 million, excluding transaction costs associated with the repurchases, at a weighted-average price of $79.62 per share. All repurchases were made in open market transactions. As of January 31, 2026, $200.0 million remained available for future repurchases under the Share Repurchase Program. See Note 10, “Ordinary Shares,” to our accompanying Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional details.

Previous 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.

Current wording

Net cash provided by operating activities during the nine months ended January 31, 2026 was $174.2 million, which resulted from adjustments for non-cash charges of $378.0 million, partially offset by a net loss of $68.1 million and a net cash outflow of $135.7 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $221.0 million for stock-based compensation expense, $81.3 million for amortization of deferred contract acquisition costs, and $61.1 million for deferred income taxes. The net cash outflow from changes in operating assets and liabilities resulted from a $97.2 million increase in deferred contract acquisition costs, a $51.0 million decrease in deferred revenue, a $14.2 million net increase in prepaid expenses and other assets, and a $8.3 million decrease in operating lease liabilities. These outflows were partially offset by inflows from a $20.6 million decrease in accounts receivable, net and a $14.4 million net increase in accounts payable, accrued expenses, and accrued compensation and benefits.

Previous 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.

Current wording

Net cash provided by operating activities during the nine months ended January 31, 2025 was $179.2 million, which resulted from adjustments for non-cash charges of $334.0 million, partially offset by a net loss of $91.7 million and a net cash outflow of $63.1 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $192.2 million for stock-based compensation expense, $71.5 million for amortization of deferred contract acquisition costs, $56.2 million in deferred income taxes, and $10.0 million of depreciation and intangible asset amortization expense. The net cash outflow from changes in operating assets and liabilities resulted from a $67.0 million increase in deferred contract acquisition costs as our sales commissions increased due to increased business volume, a $39.7 million decrease in accounts payable, accrued expenses, and accrued compensation and benefits, a $15.6 million increase in prepaid expenses and other assets, and a $9.5 million decrease in operating lease liabilities. These outflows were partially offset by inflows from a $51.5 million decrease in accounts receivable, net and a $17.2 million increase in deferred revenue.

Previous 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.

Current wording

Net cash provided by investing activities of $121.7 million during the nine months ended January 31, 2026 was primarily due to sales, maturities, and redemptions of marketable securities of $523.7 million, partially offset by purchases of marketable securities of $362.4 million and cash paid for business acquisitions, net of cash acquired, of $36.8 million.

Previous 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.

Current wording

Net cash used in investing activities of $148.0 million during the nine months ended January 31, 2025 was primarily due to purchases of marketable securities of $388.8 million, partially offset by sales, maturities, and redemptions of marketable securities of $243.0 million.

Previous 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.

Current wording

Net cash used in financing activities of $287.1 million during the nine months ended January 31, 2026 wasdue to repurchases of ordinary shares of$300.1 million, partially offset by proceeds from stock option exercises and ESPP purchases of $13.0 million.

Previous 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.

Current wording

Net cash provided by financing activities of $18.5 million during the nine months ended January 31, 2025 wasdue to the proceeds from stock option exercises and ESPP purchases.