Elastic (NYSE:ESTC) Posts Quarterly Earnings Results, Beats Estimates By $0.09 EPS

Elastic (NYSE:ESTC) posted its quarterly earnings data on Thursday. The company reported $0.73 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.64 by $0.09, Briefing.com reports. The company had revenue of $449.88 million for the quarter, compared to the consensus estimate of $438.37 million. Elastic had a negative net margin of 5.04% and a negative return on equity of 2.25%. The firm’s revenue was up 17.7% compared to the same quarter last year. During the same period last year, the company earned $0.63 earnings per share. 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%

Shares of ESTC opened at $52.04 on Friday. The firm’s 50-day simple moving average is $68.42 and its 200 day simple moving average is $77.82. 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 firm has a market cap of $5.48 billion, a P/E ratio of -65.05, a price-to-earnings-growth ratio of 250.50 and a beta of 0.93. Elastic has a 52 week low of $49.90 and a 52 week high of $117.49.

Key Headlines Impacting Elastic

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

Analysts Set New Price Targets

Several equities research analysts have issued reports on the stock. JPMorgan Chase & Co. lowered their price target on shares of Elastic from $113.00 to $98.00 and set an “overweight” rating on the stock in a research note on Friday, February 20th. UBS Group dropped their target price on Elastic from $125.00 to $110.00 and set a “buy” rating on the stock in a report on Friday, November 21st. Guggenheim restated a “buy” rating and issued a $116.00 price target on shares of Elastic in a research note on Wednesday, February 18th. Truist Financial dropped their price objective on Elastic from $105.00 to $80.00 and set a “buy” rating on the stock in a research note on Friday. Finally, DA Davidson decreased their target price 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. Seventeen equities research analysts have rated the stock with a Buy rating, eleven have given a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $96.17.

Insider Activity at Elastic

In other news, CAO Jane E. Bone sold 1,187 shares of the stock in a transaction that occurred on Friday, January 9th. The stock was sold at an average price of $80.31, for a total transaction of $95,327.97. Following the transaction, the chief accounting officer owned 43,171 shares in the company, valued at approximately $3,467,063.01. This trade represents a 2.68% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CTO Shay Banon sold 4,552 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 $341,627.60. Following the transaction, the chief technology officer owned 4,359,228 shares in the company, valued at $327,160,061.40. The trade was a 0.10% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 61,828 shares of company stock valued at $4,641,010. Insiders own 12.70% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the business. Orion Porfolio Solutions LLC increased its holdings in shares of Elastic by 1.4% during the third quarter. Orion Porfolio Solutions LLC now owns 8,593 shares of the company’s stock worth $726,000 after purchasing an additional 118 shares during the period. Northwestern Mutual Wealth Management Co. increased its stake in Elastic by 17.3% during the 2nd quarter. Northwestern Mutual Wealth Management Co. now owns 1,159 shares of the company’s stock worth $98,000 after acquiring an additional 171 shares during the period. Public Employees Retirement System of Ohio increased its stake in Elastic by 0.6% during the 3rd quarter. Public Employees Retirement System of Ohio now owns 28,323 shares of the company’s stock worth $2,393,000 after acquiring an additional 175 shares during the period. California State Teachers Retirement System raised its holdings in Elastic by 0.3% in the 2nd quarter. California State Teachers Retirement System now owns 83,403 shares of the company’s stock valued at $7,033,000 after acquiring an additional 219 shares in the last quarter. Finally, Fred Alger Management LLC lifted its position in shares of Elastic by 11.6% during the 3rd quarter. Fred Alger Management LLC now owns 3,347 shares of the company’s stock valued at $283,000 after acquiring an additional 347 shares during the period. Institutional investors and hedge funds 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.