Elastic's Stock Soars on Strong Earnings and AI-Driven Growth

Elastic Stock Surges on Strong Earnings, Outlook Amid AI Boom

Shares of Elastic surged Friday and have added about 15% since the start of the year. Elastic (ESTC) shares jumped Friday after the data analytics software provider reported better-than-expected earnings on strong demand for products related to artificial intelligence. The company posted adjusted earnings per share (EPS) of 63 cents for the fiscal third quarter, above analysts' estimates compiled by Visible Alpha. Revenue was up about 17% year-over-year to $382.1 million, also ahead of expectations. Elastic said the gains came as its total subscription customers grew about 3% to approximately 21,300. Customers with an annual contract value greater than $100,000 rose 15% to 1,460. "Continued interest from customers building Generative AI applications and consolidating onto a single platform helped drive our outperformance during the quarter," CEO Ash Kulkarni said in a release. The company projected current-quarter EPS of 36 cents to 37 cents and revenue of $379 million to $381 million, above the analyst consensus. Its full-year outlook of $1.91 to $1.96 in EPS, and revenue of $1.474 billion to $1.476 billion also exceeded expectations. Shares of Elastic surged close to 13% in intraday trading Friday and have added about 15% since the start of the year.

Elastic's Cloud Revenue Jumps 26% | The Motley Fool

Elastic reported earnings that significantly exceeded both analyst and management expectations, showcasing robust cloud and subscription growth. Elastic (ESTC 13.58%) is a provider in search AI technology, offering solutions for search, observability, and security. On Feb. 27, 2025, it released its third-quarter earnings for fiscal 2025, showcasing standout results that surpassed both internal and analyst forecasts. The company reported a non-GAAP earnings per share (EPS) of $0.63 and revenue of $382M, both outperforming management guidance and analyst predictions significantly. This robust performance, amid market trends favoring elastic cloud adoption, signals a strong operational quarter. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in 2024-11-21 earnings report. Elastic offers a platform combining search, observability, and security solutions, powered by its Elastic Stack, which includes products like Elasticsearch and Kibana for real-time data analysis. This core technology supports a wide range of applications, from search functions to security threat detection. Recently, Elastic has focused on expanding cloud adoption and enhancing its subscription-based model. Its business leverages cloud growth through strategic partnerships with major providers, facilitating elastic, scalable solutions. Its pricing strategy, which ties costs to resource usage, supports deep integration across customer operations. In Q3 FY2025, Elastic reported a Non-GAAP EPS of $0.63, significantly exceeding the analyst expectation of $0.47. This robust earnings result was supported by a revenue of $382 million, outpacing analyst estimates of $368 million and notably surpassing management's guidance of up to $369 million. Key growth drivers included a 26% increase in Elastic Cloud revenue year over year, highlighting its strong market presence and adoption within its cloud offerings. Elastic's non-GAAP operating margin improved to 17%, outperforming the anticipated 15% set by management. This improvement reflects strong operational execution and the company's focus on optimizing its cloud and subscription services, which now account for 94% of total revenue. Notably, Elastic Cloud saw revenue climb to $180 million, marking a 26% year-over-year growth. The quarter also highlighted Elastic's innovation in product offerings with the introduction of the Elastic Rerank Model and the general availability of Elastic Cloud Serverless. These product advancements emphasize its place in search AI technology. Additionally, subscription revenue sustained its position with a steady customer base, reaching approximately 21,350, bolstering recurring revenue streams. On a quarterly comparison, Elastic increased its total customer count to 1,460 with annual contract values surpassing $100,000, further cementing its strategic footprint and customer loyalty. While the financial metrics remain strong, potential competition in the cloud and AI sectors requires Elastic to maintain its differentiation strategies. Looking ahead to Q4, Elastic projects revenue between $379 million and $381 million, sustaining a trajectory of double-digit growth of 13% compared to the prior year. The full fiscal 2025 revenue guidance remains between $1.474 billion and $1.476 billion. The company is committed to continuing its efforts in cloud adoption and advanced AI driven solutions.

Elastic delights investors with earnings and revenue beats - SiliconANGLE

Elastic delights investors with earnings and revenue beats The enterprise search technology company Elastic N.V. is getting a lot of attention today after delivering an explosive earnings and revenue beat and forecasting more of the same in the current quarter. The company reported third-quarter earnings before certain costs such as stock compensation of 63 cents per share, crushing the analyst consensus target of 47 cents. Revenue for the period grew 17%, to $382.1 million, far ahead of the Street's $368.3 million forecast. Elastic's growth was even stronger when looking at its cloud revenue, which rose 26% from a year ago, to $180 million. As a result, its stock shot up more than 14% after-hours, completely erasing a 2% drop in the hours before its report came out. Investors were even willing to overlook the company's slide into the red, as it reported a net loss of $17 million in the quarter, compared with a profit of $176.1 million one year ago. Elastic Chief Executive Ash Kulkarni (pictured) said the company exceeded guidance across all of its key revenue and profitability metrics. "Our results reflect ongoing momentum across all aspects of our business, led by strong sales execution, continued market demand for our products, and our relentless pace of innovation," he said. The company is the creator of an enterprise-grade search platform that's based on the open-source Elasticsearch tool, which is used by companies to store, search and analyze large volumes of both structured and unstructured data. It does this in real time, and it has become a key platform for enterprises whose applications demand complex search features. In addition, Elastic also sells tools relating to application observability and threat detection, making it easier for organizations to visualize and monitor their applications and networks. In recent months, Elastic has been looking to position itself as a mainstay of the enterprise artificial intelligence revolution. It says its platform is ideal for large language models, enabling them to search through enormous amounts of information to deliver more accurate, reliable and up-to-date responses based on the latest data available. It has even built a more specialized tool for LLMs known as Elastic Search AI Lake, which decouples storage from compute. It's an approach that allows it to scale search across exponentially larger data volumes with rapid query performance for both traditional structured data and unstructured information represented as vectors. It's a product that has been getting a lot of attention lately, Kulkarni revealed. "Continued interest from customers building generative AI applications and consolidating onto a single platform helped drive our outperformance during the quarter," he pointed out. The company expects more of the same in the weeks to come. Looking to the current quarter, it says it's expecting to generate revenue of between $379 million and $381 million. That would mean growth of about 13% at the midpoint, and is well ahead of the Street's forecast of $374.2 million. In a second announcement today, Elastic said it has hired former Grammarly Inc. and HashiCorp Inc. executive Navam Welihinda as its new chief financial officer. The company cited his experience in helping HashiCorp scale its initial public offering and his knowledge of making money from open-source products.