Elastic N.V. (NYSE:ESTC) shares are trading lower Friday. The company reported second quarter financial results on Thursday after the market closed.
What To Know: The company reported adjusted earnings per share of 64 cents, beating the consensus estimate of 58 cents. In addition, Elastic reported revenue of $423.48 million, beating the consensus estimate of $418.15 million.
Elastic highlighted strong subscription trends in the quarter, noting that Elastic Cloud revenue rose 22% year-over-year. Current remaining performance obligations climbed 17% year-over-year, supported by increased customer commitments.
The company reported non-GAAP operating income of $70 million with a non-GAAP operating margin of 16.5%. Operating cash flow came in at $27 million, and cash, cash equivalents and marketable securities totaled $1.396 billion at the end of the quarter.
CEO Ash Kulkarni said the company "beat the high end of guidance across all metrics," pointing to broad demand and AI-driven growth across its product portfolio. Elastic also announced new AI and observability features, customer metric gains and continued product expansions during the quarter.
Q3 Outlook: The company sees adjusted earnings per share between 63 cents and 65 cents, versus the consensus estimate of 60 cents. Furthermore, Elastic anticipates revenue between $437.00 million and $439.00 million, versus the consensus estimate of $430.34 million.
FY26 Outlook: Elastic raised its adjusted earnings per share guidance from between $2.29 and $2.35 to between $2.40 and $2.46, versus the consensus estimate of $2.36. It also raised its revenue guidance from between $1.69 billion and $1.70 billion to between $1.71 billion and $1.72 billion, versus the consensus estimate of $1.70 billion.
Analyst Changes: Following the earnings report, multiple analysts issued price target adjustments.
- B of A Securities analyst Koji Ikeda maintained a Neutral rating on Elastic and lowered the price target from $111 to $90.
- Stifel analyst Brad Reback maintained a Buy rating on Elastic and lowered the price target from $134 to $108.
- Rosenblatt analyst Blair Abernethy maintained a Buy rating on Elastic and maintained a $130 price target.
- Wedbush analyst Daniel Ives maintained an Outperform rating on Elastic and lowered the price target from $110 to $90.
- Morgan Stanley analyst Sanjit Singh maintained an Overweight rating on Elastic and lowered the price target from $120 to $110.
See Also: Dow Surges Over 200 Points; BJ’s Wholesale Posts Upbeat Q3 Earnings
ESTC Price Action: At the time of writing, Elastic shares are trading 12.86% lower at $71.53, according to data from Benzinga Pro.
This illustration was generated using artificial intelligence via Midjourney.
