Elastic N.V. (ESTC) reported solid second-quarter results that topped Wall Street's expectations on both the top and bottom lines, yet shares took a beating in after-hours trading following Thursday's release. It's one of those classic "good news, bad reaction" moments that keeps reminding us markets don't always follow the script.
The Numbers: Elastic posted adjusted earnings of 64 cents per share, handily beating analyst estimates of 58 cents. Revenue came in at $423.48 million, surpassing the Street's $418.16 million forecast.
The company delivered some impressive growth metrics across its business. Total subscription revenue hit $398 million, up 17% year-over-year (16% on a constant currency basis). Sales-led subscription revenue, which excludes Monthly Elastic Cloud, reached $349 million, climbing 18% compared to last year (17% on a constant currency basis).
Elastic Cloud revenue showed particular strength at $206 million, representing 22% year-over-year growth both as reported and on a constant currency basis. Current remaining performance obligations stood at $971 million, up 17% year-over-year (15% on a constant currency basis).
"Q2 was an outstanding quarter for Elastic. We beat the high end of our guidance across all metrics. Our strength was driven by robust growth across the company with AI positively impacting all areas of our business," said Ash Kulkarni, CEO of Elastic.
Looking Ahead: The company raised its fiscal 2026 guidance, projecting adjusted earnings per share between $2.40 and $2.46, above the previous $2.36 estimate. Revenue guidance also got a boost to a range of $1.715 billion to $1.721 billion, compared to the $1.7 billion consensus.
Despite all the positive news, Elastic shares fell 11.73% to $72.45 in extended trading Thursday. Sometimes the market has its own ideas about what good news should look like.
