Elastic vs Microsoft: Revenue, Profit and Business Model
Elastic had $1.7B of annual revenue in FY2026 and $367.8M of net income. Microsoft had $331.8B of annual revenue in FY2026 and $133.7B of net income.
Latest financial snapshot
Financial summary
Elastic
Elastic's revenue grew from $862 million in fiscal 2022 to $1.739 billion in fiscal 2026. FY2026 subscription revenue was $1.634 billion (+18%), and sales-led subscription revenue, which excludes monthly self-serve cloud, was $1.438 billion (+20%). Non-GAAP operating income reached $285 million (16.4% margin) and adjusted free cash flow $346 million (20% margin), though GAAP operating loss was $33 million. GAAP net income of $367.8 million was lifted by a fourth-quarter income tax benefit, since the company's operations were not profitable on a GAAP basis. In Q1 FY2027 (ended July 31, 2026) revenue rose 15% to $478 million, cRPO grew 21% to $1.153 billion, and Elastic raised FY2027 revenue guidance to $1.998-$2.010 billion. Elastic N.V. is a major search and observability enterprise software company, sustaining a market valuation typically over $7 billion.
Microsoft
Microsoft's FY2026 revenue rose 17.8% to $331.8 billion, operating income rose 21% to $155.2 billion, and GAAP net income rose 31% to $133.7 billion. Fourth-quarter revenue was $90.0 billion (up 18%) with net income of $35.8 billion, helped by a $3.2 billion gain on its Anthropic investment. Microsoft Cloud revenue reached $59.3 billion in Q4, up 27%. The main pressure point is capital intensity: AI data center spending has pushed free cash flow growth well below earnings growth. Microsoft crossed the $3 trillion market valuation threshold in 2024, driven by its leadership in cloud computing and artificial intelligence.
Revenue and profit by year
Elastic
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2026 | $1.7B | $367.8M | 21.1% | +17.3% | Source |
| FY2025 | $1.5B | -$108.1M | -7.3% | +17.0% | Source |
| FY2024 | $1.3B | $61.7M | 4.9% | +18.6% | Source |
| FY2023 | $1.1B | -$236.2M | -22.1% | +24.0% | Source |
| FY2022 | $862.4M | -$203.8M | -23.6% | +41.7% | Source |
| FY2021 | $608.5M | -$129.4M | -21.3% | +42.3% | Source |
| FY2020 | $427.6M | -$167.2M | -39.1% | +57.4% | Source |
| FY2019 | $271.7M | -$102.3M | -37.7% | +69.9% | Source |
| FY2018 | $159.9M | -$52.7M | -33.0% | +81.4% | Source |
| FY2017 | $88.2M | -$52M | -58.9% | — | Source |
Microsoft
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2026 | $331.8B | $133.7B | 40.3% | +17.8% | Source |
| FY2025 | $281.7B | $101.8B | 36.1% | +14.9% | Source |
| FY2024 | $245.1B | $88.1B | 36.0% | +15.7% | Source |
| FY2023 | $211.9B | $72.4B | 34.1% | +6.9% | Source |
| FY2022 | $198.3B | $72.7B | 36.7% | +18.0% | Source |
| FY2021 | $168.1B | $61.3B | 36.5% | +17.5% | Source |
| FY2020 | $143B | $44.3B | 31.0% | +13.6% | Source |
| FY2019 | $125.8B | $39.2B | 31.2% | +14.0% | Source |
| FY2018 | $110.4B | $16.6B | 15.0% | +14.3% | Source |
| FY2017 | $96.6B | $25.5B | 26.4% | — | Source |
Where the revenue comes from
Elastic
- Subscriptions (Elastic Cloud and self-managed)~94%
FY2026 subscription revenue of $1.634 billion from managed Elastic Cloud on AWS, Azure and Google Cloud and from self-managed licenses with support.
- Professional services~6%
Consulting, implementation and training, about $105 million in FY2026.
Microsoft
- Productivity And Business ProcessesMajor
Office, Microsoft 365, LinkedIn, Dynamics, and related cloud services.
- Intelligent CloudMajor
Azure, server products, enterprise services, and cloud infrastructure.
- More Personal ComputingMajor
Windows, devices, gaming, search, and advertising.
- AI Services And CopilotsGrowth
AI features and model-powered services embedded across Azure, Microsoft 365, GitHub, security, and developer tools.
Business model and strategy
Elastic
How it makes money
Elastic is a B2B software company with an open-core model. Its core Elasticsearch and Kibana code is free to download, and the company makes money by selling paid subscriptions that add advanced features (machine learning, security analytics, AI assistants, enterprise support) and by running the software for customers as Elastic Cloud on AWS, Microsoft Azure and Google Cloud.
Growth strategy
Elastic's strategy is to make Elasticsearch the retrieval layer for enterprise AI while consolidating observability and security tools onto the same platform. Recent moves include buying Jina AI (embeddings and rerankers) and Keep (AIOps alert management) in 2025, launching Elastic Workflows and Agent Builder for agentic automation, and releasing a serverless vector database in September 2026.
Competitive advantage
Elastic's main edge is that one data store handles text search, vector search, analytics, logs and security events. Elasticsearch is built on Apache Lucene's inverted index, which makes full-text search across very large unstructured datasets fast, and the company has added dense vector search, hybrid ranking (BM25 plus vectors with reciprocal rank fusion), the ES|QL query language and Jina AI embedding and reranker…
Microsoft
How it makes money
Microsoft reports three segments. Intelligent Cloud covers Azure, SQL Server, Windows Server, GitHub, Nuance, and enterprise services; server products and cloud services alone brought in $129.4 billion in FY2026, and Azure passed $100 billion in annual revenue for the first time.
Growth strategy
Microsoft's growth plan centers on AI capacity and AI subscriptions. It is spending heavily on data centers and chips to meet Azure demand that management says remains capacity constrained, and it is selling Microsoft 365 Copilot as a paid add-on, which passed 30 million paid seats by the end of FY2026.
Competitive advantage
Microsoft's main advantage is distribution inside enterprises. Identity (Entra), email and documents (Microsoft 365), collaboration (Teams), developer tools (GitHub, Visual Studio), and cloud infrastructure (Azure) are often bought together, which raises switching costs and lets Microsoft attach new products such as Copilot to existing contracts.
Questions about Elastic vs Microsoft
Which company has higher revenue — Elastic or Microsoft Corporation?
Elastic had $1.7B (FY2026), while Microsoft Corporation had $331.8B (FY2026). By latest annual revenue, Microsoft Corporation is the larger business, with Elastic showing a smaller revenue base.
What is the market cap of Elastic vs Microsoft Corporation?
Elastic's market capitalisation stands at $9.3B, while Microsoft Corporation's is $3.83T. Microsoft Corporation carries the higher market valuation, reflecting investors' expectations of its future earnings power relative to Elastic.
How does revenue per employee compare for Elastic and Microsoft Corporation?
Elastic has $433k / employee in revenue per employee, while Microsoft Corporation has $1.49M / employee. Headcounts may use different dates, so the ratio alone does not establish which business operates more efficiently.
How do Elastic and Microsoft Corporation make money?
Elastic and Microsoft Corporation generate revenue in fundamentally different ways. Elastic: Elastic is a B2B software company with an open-core model. Microsoft Corporation: Microsoft reports three segments.
Which company is valued higher relative to revenue — Elastic or Microsoft Corporation?
On a price-to-sales (P/S) basis, Elastic trades at 5.3x P/S and Microsoft Corporation at 11.5x P/S. Microsoft Corporation commands a higher revenue multiple, typically indicating that investors expect faster growth or higher future margins compared to Elastic. A higher multiple is not inherently better — it may also signal that the stock is priced for perfection.
Is Elastic bigger than Microsoft Corporation?
By last reported revenue, Microsoft Corporation ($331.8B (FY2026)) is the larger company compared to Elastic ($1.7B (FY2026)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Elastic vs Microsoft overview