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

Elastic (NYSE:ESTC) announced its quarterly earnings results on Thursday. The company reported $0.73 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.64 by $0.09, Briefing.com reports. Elastic had a negative net margin of 6.79% and a negative return on equity of 2.02%. The company had revenue of $449.88 million for the quarter, compared to analysts’ expectations of $438.37 million. During the same quarter in the previous year, the company earned $0.63 earnings per share. Elastic’s quarterly revenue was up 17.7% on a year-over-year basis. 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 Down 15.5%

Elastic stock traded down $9.54 during mid-day trading on Friday, reaching $52.04. The stock had a trading volume of 7,383,348 shares, compared to its average volume of 2,071,573. Elastic has a one year low of $49.90 and a one year high of $117.49. The company has a 50-day moving average price of $68.90 and a two-hundred day moving average price of $77.96. The company has a market capitalization of $5.48 billion, a price-to-earnings ratio of -50.52, a PEG ratio of 235.94 and a beta of 0.93. The company has a debt-to-equity ratio of 0.64, a current ratio of 1.97 and a quick ratio of 1.97.

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

Wall Street Analyst Weigh In

ESTC has been the subject of several research reports. Royal Bank Of Canada decreased their target price on Elastic from $115.00 to $95.00 and set an “outperform” rating for the company in a research report on Monday, January 5th. Truist Financial decreased their price objective on Elastic from $105.00 to $80.00 and set a “buy” rating for the company in a report on Friday. Wells Fargo & Company dropped their target price on shares of Elastic from $75.00 to $60.00 and set an “equal weight” rating on the stock in a report on Friday. Barclays reduced their target price on shares of Elastic from $78.00 to $76.00 and set an “overweight” rating on the stock in a research report on Friday. Finally, Cantor Fitzgerald decreased their price target on shares of Elastic from $94.00 to $85.00 and set a “neutral” rating for the company in a research note on Friday, November 21st. Seventeen investment analysts have rated the stock with a Buy rating, eleven have given a Hold rating and one has given a Sell rating to the company’s stock. According to MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $96.17.

Insiders Place Their Bets

In related news, insider Carolyn Herzog sold 5,353 shares of the company’s stock in a transaction that occurred on Tuesday, December 9th. The stock was sold at an average price of $75.05, for a total value of $401,742.65. Following the transaction, the insider directly owned 89,324 shares of the company’s stock, valued at approximately $6,703,766.20. This represents a 5.65% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, Director Paul R. Auvil III bought 10,000 shares of Elastic stock in a transaction on Monday, December 1st. The stock was acquired at an average cost of $71.02 per share, with a total value of $710,200.00. Following the acquisition, the director owned 37,956 shares in the company, valued at approximately $2,695,635.12. This represents a 35.77% increase in their position. The SEC filing for this purchase provides additional information. In the last three months, insiders sold 61,828 shares of company stock valued at $4,641,010. 12.70% of the stock is owned by company insiders.

Institutional Investors Weigh In On Elastic

Large investors have recently added to or reduced their stakes in the stock. AQR Capital Management LLC lifted its holdings in shares of Elastic by 153.4% during the 4th quarter. AQR Capital Management LLC now owns 7,545,081 shares of the company’s stock valued at $569,201,000 after buying an additional 4,567,720 shares during the period. FIL Ltd increased its position in Elastic by 36.9% during the fourth quarter. FIL Ltd now owns 3,628,748 shares of the company’s stock valued at $273,753,000 after acquiring an additional 977,578 shares during the last quarter. Alyeska Investment Group L.P. lifted its holdings in Elastic by 490.4% in the third quarter. Alyeska Investment Group L.P. now owns 1,113,503 shares of the company’s stock valued at $94,080,000 after acquiring an additional 924,911 shares during the period. Goldentree Asset Management LP purchased a new position in Elastic in the fourth quarter worth about $49,323,000. Finally, BNP Paribas Financial Markets grew its stake in shares of Elastic by 305.9% during the 2nd quarter. BNP Paribas Financial Markets now owns 832,353 shares of the company’s stock valued at $70,192,000 after purchasing an additional 627,284 shares during the period. Institutional investors own 97.03% of the company’s stock.

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.