Elastic (NYSE:ESTC) Releases Earnings Results, Beats Expectations By $0.09 EPS

Elastic (NYSE:ESTC) issued its quarterly earnings results on Thursday. The company reported $0.73 EPS for the quarter, topping analysts’ consensus estimates of $0.64 by $0.09, Briefing.com reports. The firm had revenue of $449.88 million for the quarter, compared to analyst estimates of $438.37 million. Elastic had a negative net margin of 6.79% and a negative return on equity of 2.02%. The business’s revenue for the quarter was up 17.7% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $0.63 EPS. Elastic updated its FY 2026 guidance to 2.500-2.540 EPS and its Q4 2026 guidance to 0.550-0.570 EPS.

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

• Beat Q3 expectations — total revenue of $450M (+18%), sales-led subscription revenue of $376M (+21%), non-GAAP operating margin of 18.6%, and CRPO of ~$1.06B.
• Raised full‑year outlook — company increased FY26 revenue and sales‑led subscription targets and now expects ~16.3% non‑GAAP operating margin, while guiding Q4 revenue to $445–$447M.
• AI product and adoption momentum — Agent Builder is GA, Elastic Inference Service expanded with Jina re‑rankers, Elastic Workflows (preview) and Cloud Connect launched, and Elastic now has >2,700 Elastic Cloud customers using it as a vector DB and >3,000 total AI customers.
• Large‑deal and competitive wins — commitments >$1M ACV grew >30% YoY with multiple seven‑figure net‑new and expansion deals displacing legacy vendors and OpenSearch/MongoDB, citing performance advantages (company claims up to 8x faster vector search).
• Q4 guidance includes a three‑day calendar headwind (~$14–$15M) and guides Q4 non‑GAAP operating margin to ~14.5%, which may pressure near‑term sequential revenue and margin comparisons despite the stronger full‑year outlook.

Elastic Stock Performance

Shares of Elastic stock traded down $9.54 on Friday, hitting $52.04. 7,383,348 shares of the company’s stock were exchanged, compared to its average volume of 2,071,573. Elastic has a 1 year low of $49.90 and a 1 year high of $117.49. The company has a 50-day simple moving average of $68.90 and a 200-day simple moving average of $77.96. The company has a debt-to-equity ratio of 0.64, a quick ratio of 1.97 and a current ratio of 1.97. The stock has a market capitalization of $5.48 billion, a PE ratio of -50.52, a PEG ratio of 235.94 and a beta of 0.93.

Insider Activity

In other Elastic news, CEO Ashutosh Kulkarni sold 20,413 shares of the stock in a transaction on Tuesday, December 9th. The stock was sold at an average price of $75.05, for a total value of $1,531,995.65. Following the completion of the sale, the chief executive officer owned 431,901 shares in the company, valued at approximately $32,414,170.05. This represents a 4.51% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, insider Carolyn Herzog sold 5,353 shares of the company’s stock in a transaction dated Tuesday, December 9th. The stock was sold at an average price of $75.05, for a total value of $401,742.65. Following the completion of the transaction, the insider directly owned 89,324 shares of the company’s stock, valued at approximately $6,703,766.20. This trade represents a 5.65% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders sold 61,828 shares of company stock worth $4,641,010. 12.70% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Elastic

A number of hedge funds have recently bought and sold shares of the business. Focus Partners Wealth bought a new position in Elastic in the 1st quarter valued at $494,000. Northwestern Mutual Wealth Management Co. increased its stake in Elastic by 17.3% in the 2nd quarter. Northwestern Mutual Wealth Management Co. now owns 1,159 shares of the company’s stock worth $98,000 after buying an additional 171 shares during the period. Invesco Ltd. lifted its holdings in 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 buying an additional 9,990 shares in the last quarter. EverSource Wealth Advisors LLC boosted its position in Elastic by 400.0% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 2,110 shares of the company’s stock valued at $178,000 after buying an additional 1,688 shares during the period. Finally, Cerity Partners LLC boosted its position in 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 buying an additional 6,056 shares during the period. Hedge funds and other institutional investors own 97.03% of the company’s stock.

Elastic News Summary

Here are the key news stories impacting Elastic this week:

• Positive Sentiment: Company beat revenue expectations and reported 18% year‑over‑year revenue growth; management emphasized AI expansion and subscription growth, which supports longer‑term demand assumptions. Elastic Reports Third Quarter Fiscal 2026 Financial Results
• Positive Sentiment: Management raised forward guidance sharply: FY26 and Q4 EPS guidance well above Street consensus and revenue guidance roughly in line — a sign the company expects stronger profitability going forward (this is a bullish catalyst if execution continues). Elastic Reports Third Quarter Fiscal 2026 Financial Results
• Neutral Sentiment: Detailed materials and call transcripts were published (earnings deck and conference call transcripts) — useful for investors who want to dig into non‑GAAP vs GAAP items, margin drivers, and AI product commentary. Q3 2026 Earnings Call Transcript
• Negative Sentiment: Market reaction focused on an apparent earnings/methodology gap: some reports showed adjusted profits above estimates while GAAP/other EPS metrics missed — this disconnect likely triggered selling despite the revenue beat. Elastic Q3 Results and Transcript (MarketBeat)
• Negative Sentiment: Multiple sell‑side firms cut price targets this morning (Canaccord, Wells Fargo, Truist, Piper Sandler, Oppenheimer, Barclays), reducing near‑term analyst support and dragging sentiment lower. The coordinated downgrades are a primary driver of the intraday selloff. Analyst price target updates (Benzinga)
• Negative Sentiment: News coverage highlights that shares fell sharply despite beating revenue estimates — suggesting investors are focused on margins, EPS presentation, and the quick profit‑taking after recent gains. Elastic shares tumble despite beating third quarter estimates

Analyst Ratings Changes

A number of research analysts recently issued reports on the company. Guggenheim reiterated a “buy” rating and issued a $116.00 price target on shares of Elastic in a report on Wednesday, February 18th. Scotiabank dropped their target price on shares of Elastic from $90.00 to $76.00 and set a “sector perform” rating for the company in a research report on Friday, November 21st. TD Cowen reaffirmed a “hold” rating on shares of Elastic in a research note on Monday. DA Davidson decreased their price target on shares of Elastic from $100.00 to $80.00 and set a “neutral” rating for the company in a research note on Friday, November 21st. Finally, Morgan Stanley set a $80.00 price objective on shares of Elastic in a report on Thursday, February 19th. Seventeen research analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus target price of $96.17.

About Elastic

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.