Elastic (NYSE:ESTC) Issues Quarterly Earnings Results

Elastic (NYSE:ESTC) issued its quarterly earnings results on Thursday. The company reported $0.70 earnings per share for the quarter, topping the consensus estimate of $0.58 by $0.12, FiscalAI reports. Elastic had a negative return on equity of 1.82% and a net margin of 21.14%.The business had revenue of $478.11 million during the quarter, compared to the consensus estimate of $469.75 million. During the same quarter last year, the company earned $0.60 earnings per share. The company’s quarterly revenue was up 15.2% on a year-over-year basis. Elastic updated its FY 2027 guidance to 3.290-3.370 EPS and its Q2 2027 guidance to 0.800-0.820 EPS.

Here are the key takeaways from Elastic’s conference call:

• Strong Q1 execution: Revenue increased 15% to $478 million, sales-led subscription revenue rose 18% to $399 million, and non-GAAP operating margin reached 16.2%, beating company guidance.
• Full-year outlook raised: Elastic now expects fiscal 2027 revenue of $1.998 billion-$2.010 billion, representing approximately 15.2% growth at the midpoint, with sales-led subscription revenue growth of approximately 17.4% and non-GAAP operating margin of 19.4%.
• Enterprise and AI adoption accelerated: Customers with at least $100,000 in annual contract value increased by more than 80 net additions, reaching over 1,800 and representing 90% of sales-led subscription revenue. AI usage among these customers rose to 37% from approximately 21% a year ago, while CRPO and RPO grew 21% and 27%, respectively.
• Product expansion is broadening growth opportunities: Elastic highlighted new vector-search and agent capabilities, its metrics-focused Columnar Mode, native Prometheus support, and the Deductive AI acquisition for agentic SRE. Management said security remained the fastest-growing solution area, with search and AI also strong and observability positioned for future growth.
• Near-term metrics remain mixed: Net expansion rate declined modestly to 111% from 112%, although management expects it to recover as revenue growth accelerates. The company also incurred approximately $20 million in first-quarter restructuring charges and expects an additional $2 million-$5 million during the remainder of the fiscal year.

Elastic Trading Up 5.8%

Shares of NYSE:ESTC opened at $83.88 on Friday. The company has a quick ratio of 1.68, a current ratio of 1.68 and a debt-to-equity ratio of 0.45. Elastic has a 52-week low of $42.05 and a 52-week high of $96.07. The stock has a market cap of $8.72 billion, a price-to-earnings ratio of 23.96, a PEG ratio of 19.77 and a beta of 0.98. The business has a 50-day moving average price of $67.44 and a 200-day moving average price of $58.76.

Insider Buying and Selling

In other Elastic news, CEO Ashutosh Kulkarni sold 40,373 shares of the firm’s stock in a transaction that occurred on Tuesday, June 9th. The shares were sold at an average price of $60.61, for a total transaction of $2,447,007.53. Following the completion of the transaction, the chief executive officer directly owned 628,752 shares of the company’s stock, valued at approximately $38,108,658.72. This trade represents a 6.03% decrease in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CRO Mark Eugene Dodds sold 18,439 shares of Elastic stock in a transaction that occurred on Tuesday, June 9th. The shares were sold at an average price of $60.61, for a total transaction of $1,117,587.79. Following the sale, the executive owned 298,211 shares of the company’s stock, valued at approximately $18,074,568.71. The trade was a 5.82% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 110,099 shares of company stock worth $6,673,100 in the last quarter. 12.70% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Elastic

Several hedge funds have recently added to or reduced their stakes in the business. Focus Partners Wealth purchased a new position in shares of Elastic during the 1st quarter valued at about $494,000. Northwestern Mutual Wealth Management Co. raised its position in Elastic by 17.3% during the second quarter. Northwestern Mutual Wealth Management Co. now owns 1,159 shares of the company’s stock valued at $98,000 after acquiring an additional 171 shares in the last quarter. Invesco Ltd. increased its holdings in shares of Elastic by 11.7% during the 2nd quarter. Invesco Ltd. now owns 95,332 shares of the company’s stock valued at $8,039,000 after purchasing an additional 9,990 shares in the last quarter. EverSource Wealth Advisors LLC increased its holdings in shares of Elastic by 400.0% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 2,110 shares of the company’s stock valued at $178,000 after purchasing an additional 1,688 shares in the last quarter. Finally, Cerity Partners LLC lifted its stake in shares of Elastic by 24.7% in the 2nd quarter. Cerity Partners LLC now owns 30,545 shares of the company’s stock valued at $2,576,000 after purchasing an additional 6,056 shares during the period. 97.03% of the stock is owned by hedge funds and other institutional investors.

Elastic News Roundup

Here are the key news stories impacting Elastic this week:

• Positive Sentiment: Earnings and revenue beat expectations: Elastic reported quarterly EPS of $0.70, above the $0.58 consensus, while revenue reached $478.1 million, up roughly 15% year over year and ahead of estimates near $470 million. Elastic Reports First Quarter Fiscal 2027 Financial Results
• Positive Sentiment: Raised outlook substantially: Fiscal 2027 EPS guidance of $3.29–$3.37 is well above the prior consensus of $2.64. Second-quarter EPS guidance of $0.80–$0.82 also exceeds the $0.66 estimate, while quarterly revenue guidance of $486–$487 million is above expectations. The upbeat outlook suggests improving operating leverage and continued demand for Elastic’s search, observability and AI software. Another Day, Another Software Stock Surging 20%
• Positive Sentiment: Cash generation remained solid: Operating cash flow increased to $132 million, and cash and equivalents rose to approximately $882 million, supporting financial flexibility as the company continues investing in growth. Elastic N.V. Stock Rises on Q1 2027 Earnings
• Positive Sentiment: Analyst support continues: Rosenblatt reaffirmed its Buy rating, and DA Davidson raised its price target to $80 from $60, reflecting improved expectations following the results. DA Davidson Raises Elastic Price Target
• Neutral Sentiment: While analyst sentiment is generally constructive, some published price targets remain below the stock’s recent trading level, suggesting valuation and expectations may become more demanding after the rally. Rosenblatt Reaffirms Buy Rating for Elastic
• Negative Sentiment: Third-party trading data indicates that Elastic insiders have recorded sales and no purchases during the past six months. This may temper enthusiasm, although the activity does not offset the immediate impact of the earnings beat and guidance increase. Elastic Insider Trading Activity

Wall Street Analyst Weigh In

Several brokerages recently commented on ESTC. Barclays increased their price objective on shares of Elastic from $68.00 to $94.00 and gave the company an “overweight” rating in a research report on Monday. William Blair assumed coverage on shares of Elastic in a research report on Friday, May 22nd. They set an “outperform” rating on the stock. Truist Financial upped their price target on shares of Elastic from $80.00 to $100.00 and gave the company a “buy” rating in a research note on Thursday, August 20th. Scotiabank decreased their price target on shares of Elastic from $61.00 to $58.00 and set a “sector perform” rating for the company in a report on Friday, May 29th. Finally, Rosenblatt Securities reaffirmed a “buy” rating and issued a $83.00 price target on shares of Elastic in a report on Wednesday. Seventeen analysts have rated the stock with a Buy rating and thirteen have assigned a Hold rating to the stock. Based on data from MarketBeat, Elastic presently has an average rating of “Moderate Buy” and a consensus price target of $88.07.

Elastic Company Profile

Elastic N.V. operates as a search and analytics company, offering a suite of open source and subscription-based solutions for search, observability and security use cases. Its flagship product, Elasticsearch, enables fast and scalable full-text search and analytics across large volumes of structured and unstructured data. Complementary tools such as Kibana provide visualization capabilities, while Beats and Logstash serve as lightweight data shippers and data processing pipelines, respectively.

The company was founded in 2012 by Shay Banon, who serves as chief technology officer, and Steven Schuurman.