Tired of losing money? Our Tech Contrarians team of Wall Street analysts sifts through the noise in the tech industry and captures outperformers through a coveted research process. We let the work speak for itself here .We picked up our coverage of Elastic (NYSE: ESTC ) in late October at a stock price of $77.61 per share based on our belief that there was a buying opportunity for Elastic at current levels after managementAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any ...

Revenue and Growth - Subscription revenue accounted for 93% and 92% of total revenue for the six months ended October 31, 2024 and 2023, respectively [101]. - Elastic Cloud contributed 46% and 42% of total revenue for the six months ended October 31, 2024 and 2023, respectively [106]. - Total revenue for the three months ended October 31, 2023, was $365,361 thousand, a 17.6% increase from $310,612 thousand in the same period last year [119]. - Subscription revenue accounted for 93% of total revenue for both the three months ended October 31, 2024, and 2023 [121]. - Subscription revenue increased by $53.1 million, or 18%, for the three months ended October 31, 2024, driven by a 25% growth in Elastic Cloud, which constituted 46% of total revenue [125]. - Total revenue for the three months ended October 31, 2024, was $365.4 million, an increase of $54.7 million, or 18%, compared to the same period in the prior year [125]. - Subscription revenue for the six months ended October 31, 2024, was $664.6 million, an increase of $106.6 million, or 19%, compared to the same period in the prior year [138]. Customer Metrics - The number of customers increased to approximately 21,300 as of October 31, 2024, compared to approximately 20,700 as of October 31, 2023 [103]. - The number of customers with annual contract value over $100,000 increased to over 1,420 as of October 31, 2024, from over 1,220 as of October 31, 2023 [103]. - The Net Expansion Rate was approximately 112% as of October 31, 2024 [108]. Financial Performance - Gross profit for the six months ended October 31, 2024, was $527,845 thousand, representing a gross margin of 74% [119]. - The net loss for the six months ended October 31, 2024, was $(74,677) thousand, compared to $(73,304) thousand in the same period last year [119]. - Total operating expenses for the three months ended October 31, 2023, were $276,608 thousand, an increase from $252,062 thousand in the same period last year [119]. - Other income, net increased by $0.9 million, or 11%, for the three months ended October 31, 2024, primarily due to a rise in interest and other investment income [134]. - Other income, net increased by $4.8 million, or 31%, for the six months ended October 31, 2024, primarily due to an increase in interest and other investment income [148]. Expenses - Research and development expenses for the three months ended October 31, 2023, were $88,163 thousand, up from $80,108 thousand in the same period last year, indicating a 10.3% increase [119]. - Research and development expenses increased by $8.1 million, or 10%, for the three months ended October 31, 2024, mainly due to a $7.5 million rise in personnel costs [128]. - Research and development expense increased by $16.7 million, or 10%, for the six months ended October 31, 2024, primarily due to increases in personnel and related costs [142]. - Sales and marketing expenses for the three months ended October 31, 2023, were $144,274 thousand, compared to $133,230 thousand in the same period last year, reflecting an 8.4% increase [119]. - Sales and marketing expenses grew by $11.0 million, or 8%, for the three months ended October 31, 2024, attributed to a $15.8 million increase in personnel costs [129]. - Sales and marketing expense increased by $35.2 million, or 13%, for the six months ended October 31, 2024, driven by personnel and related costs [143]. - General and administrative expense increased by $10.1 million, or 13%, for the six months ended October 31, 2024, mainly due to personnel and related costs [144]. Cash Flow and Financial Position - Net cash provided by operating activities was $91.1 million for the six months ended October 31, 2024, compared to $35.4 million for the same period in 2023 [154]. - Net cash provided by investing activities was $10.8 million for the six months ended October 31, 2024, primarily due to sales and maturities of marketable securities [155]. - As of October 31, 2024, the company had cash, cash equivalents, and marketable securities totaling $1.198 billion [151]. - The accumulated deficit was $1.066 billion as of October 31, 2024, reflecting significant operating losses [153]. - As of October 31, 2024, the company had cash, cash equivalents, restricted cash, and marketable securities totaling $1.201 billion [162]. Market and Economic Conditions - Macroeconomic conditions may impact sales cycles and customer spending behavior [104]. - Foreign currency transaction losses recognized were $2.0 million for the six months ended October 31, 2024, compared to $1.1 million for the same period in 2023 [163]. - A 10% increase or decrease in exchange rates would have impacted cash, cash equivalents, restricted cash, and marketable securities by approximately $10.7 million as of October 31, 2024 [165]. - The company has not had a formal hedging program for foreign currency but may consider one if exposure increases [163]. - The company has experienced fluctuations in operating results due to transaction gains or losses from remeasurement of certain asset and liability balances in foreign currencies [163]. Investment Activities - The primary objectives of the company's investment activities include capital preservation and liquidity fulfillment [162]. - The company does not enter into investments for trading or speculative purposes [162]. - An immediate 10% change in interest rates is not expected to materially affect the fair value of the company's investment portfolio [162]. - The fair market value of the Senior Notes is affected by interest rate changes but does not impact the company's financial position or cash flows [162]. - The company issued $575.0 million in Senior Notes in July 2021, which are subject to market and interest rate risk [162].

Enterprise software company Elastic (ESTC 3.78%) reported financial results for its fiscal second quarter of 2025 last week and the report was met with enthusiasm from investors. The stock gained over 20% last week primarily thanks to its Q2 report.Elastic stock is on the move again today thanks to some commentary from Wedbush analyst Dan Ives. According to The Fly, Ives basically believes that the moment has come for artificial intelligence (AI) to catalyze growth for software companies, including Elastic. ...

Key TakeawaysElastic handily surpassed Wall Street’s earnings expectations and lifted its outlook, sending shares in the enterprise data software company sharply higher. Today's earnings-driven jump adds to the stock’s bullish price momentum after it broke out from a descending channel ahead of earnings.Investors should watch key overhead levels on Elastic's chart around $118 and $133, while also keeping an eye on major support levels near $94 and $82. Elastic (ESTC) handily surpassed Wall Street’s earnings ...

Shares of enterprise software company Elastic (ESTC 14.80%) flew higher on Friday after it reported financial results for its fiscal second quarter of 2025. As of 10:15 a.m. ET, Elastic stock was up a strong 16%.A great quarter for ElasticElastic's financial report is turning heads because the numbers were far better than expected. Q2 revenue was up 18% year over year to $365 million, which was ahead of management's guidance of $353 million to $355 million. Moreover, it was an acceleration from its 17% grow ...

I'm calling Q3 the quarter of rebounds, as many previously punished stocks have seen their fortunes turn around considerably after posting Q3 results. This has been especially true in the tech sector, and Elastic (NYSE: ESTC ) is one of theWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular co ...

Michael Wiggins De Oliveira is an inflection investor. This means buying into cheap companies at the moment when their narrative is changing and the business is on a path toward becoming significantly more profitable over the next year.With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months. Through his 10+ years analyzing countless companies, Michael has accumulated outsta ...

Financial Data and Key Metrics Changes - Revenue grew by 18% year-over-year, totaling $365 million in Q2 [9][40] - Cloud revenue increased by 25% year-over-year, amounting to $169 million, representing 46% of total revenue [9][41] - Non-GAAP operating margin was 18%, with a diluted earnings per share of $0.59 [9][47][56] - Adjusted free cash flow was approximately $38 million, translating to a 10% adjusted free cash flow margin [47] Business Line Data and Key Metrics Changes - Subscription revenue totaled $341 million, up 18% year-over-year [40] - Professional services revenue grew by 7% year-over-year, reaching $25 million [42] - The search business saw significant growth, driven by generative AI, with new customer commitments nearly doubling in dollar volume compared to Q1 [12][40] Market Data and Key Metrics Changes - The Americas region experienced the fastest growth, followed by EMEA and APJ [44] - The company ended Q2 with over 1,420 customers with annual contract values exceeding $100,000, and over 4,480 customers above $10,000 in ACV [45] Company Strategy and Development Direction - The company is focusing on enterprise and high-potential mid-market customers, with a strategy to consolidate workloads onto the Elastic platform [10][15] - Innovations in generative AI and search capabilities are seen as key growth drivers, with a strong emphasis on becoming the platform of choice for AI applications [11][12][20] - The company plans to selectively increase investments in the second half of the year, particularly in areas driving growth, such as generative AI [54][155] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to historical levels of sales execution, citing strong performance in Q2 as a positive indicator [33][56] - The company raised its full-year total revenue outlook, expecting continued growth despite potential headwinds from prior customer commitment shortfalls [48][131] - Management noted that the current business environment is expected to remain stable, with a focus on maintaining strong execution [50][54] Other Important Information - Janesh Moorjani, the CFO, announced his departure, with Eric Prengel stepping in as Interim CFO [29][31] - The company introduced new AI capabilities and features to enhance its vector database performance, positioning itself as a leader in the market [20][21] Q&A Session Summary Question: Insights on larger enterprise consumption patterns - Management noted strong consumption across enterprise and commercial segments, with larger customers accelerating their usage of the Elasticsearch AI platform [58][59] Question: Factors driving better sales execution - Management attributed improved sales execution to changes made at the beginning of the fiscal year, focusing on enterprise and mid-market segments [62][64] Question: Clarification on cloud consumption trends - Management confirmed that the strong cloud consumption observed in Q2 was broad-based and not a one-time occurrence, reflecting ongoing customer commitments [86][87] Question: Competitive landscape and displacement opportunities - Management identified incumbent vendors like Splunk and QRadar as competitors, emphasizing their differentiation as a next-generation SIEM and security analytics product [124][126] Question: Metrics for tracking generative AI success - Management tracks customer usage specifically for generative AI and customer commitments related to AI use cases, although revenue from these applications is harder to disaggregate [146][148]

Elastic (ESTC) reported $365.36 million in revenue for the quarter ended October 2024, representing a year-over-year increase of 17.6%. EPS of $0.59 for the same period compares to $0.37 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $354.24 million, representing a surprise of +3.14%. The company delivered an EPS surprise of +55.26%, with the consensus EPS estimate being $0.38.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall S ...

Elastic (ESTC) came out with quarterly earnings of $0.59 per share, beating the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.37 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 55.26%. A quarter ago, it was expected that this software developer would post earnings of $0.25 per share when it actually produced earnings of $0.35, delivering a surprise of 40%.Over the last four quarters, the company ...