Software Company Elastic Down Premarket Friday Despite Earnings Beat: Details

Elastic NV ESTC shares are trading lower premarket today after it reported third-quarter FY24 results.

Revenue rose 19% Y/Y to $328.0 million, beating the consensus of $323.1 million. Elastic Cloud revenue increased 29% Y/Y to $143 million in the quarter.

The total subscription customer count stood at around 20,800, and the customer count with an Annual Contract Value (ACV) greater than $100,000 came in at over 1,270, with a net expansion rate of about 109%.

Adjusted operating income stood at $43 million, with a margin of 13% in the quarter. 

Operating cash flow stood at $52 million, with adjusted free cash flow of $63 million in the quarter.

Adjusted EPS of $0.36 exceeded the consensus of $0.32.

As of January 31, 2024, cash, cash equivalents, and marketable securities were $1.015 billion.

Ash Kulkarni, CEO, said, “Customer interest in Generative AI, platform consolidation, and stability in cloud consumption patterns continued to drive momentum in our business in Q3. This reinforces our confidence in the business, and in our future growth as more companies choose our search analytics platform as a core part of their IT infrastructure stack for building GenAI applications.”

Outlook: Elastic expects fourth-quarter revenue of $328 million-$330 million (vs. $329.4 million estimate) and adjusted EPS of $0.18-$0.20 (vs. $0.19 estimate).

For FY24, the company again raised the revenue outlook, revising the range to $1.260 billion-$1.262 billion (from $1.247 billion-$1.253 billion) vs. street view of $1.25 billion. 

Elastic boosted FY24 adjusted EPS outlook to $1.15-$1.18 from $1.06-$1.15 vs. consensus of $1.14. 

Price Action: ESTC shares are down 12.5% at $117.03 premarket on the last check Friday.