Start here if you're new
what it is
Elastic sells software that helps companies search data, watch systems, and spot attacks.
how it gets paid
Last year Elastic N.V made $1.5B in revenue.
why it's growing
Revenue grew 326.9% last year. Revenue rose 16% vs. prior year. The miss was in profit.
what just happened
Elastic posted $424M in revenue, while EPS came in at -$0.48 versus -$0.15 expected.
At a glance
B balance sheet — gets the job done, barely
10/100 earnings predictability — expect surprises
5.7% return on capital — nothing to write home about
xvary composite: 38/100 — weak
-$0.50 fy2026 eps est
What they do
Elastic sells software that helps companies search data, watch systems, and spot attacks.
21,500 customers in 100 countries run on one stack. If you leave, you are not swapping one app. You are moving search, security, and observability at the same time. Elastic spent 25% of 2024 revenue on R&D, so your replacement project faces a product that keeps changing under it.
How they make money
$1.5B
annual revenue · their business grew +326.9% last year
total revenue
$1.5B
+326.9%
The products that matter
core search and analytics platform
Enterprise Search
$1.5B total revenue base
this is the foundation under the full $1.5B business. if search demand softens, the rest of the story feels it.
core
managed cloud service
Elastic Cloud
16% growth last quarter
this is the line investors care about most. 16% growth is solid. the catch is that it has to keep distancing itself from 4.2% company growth, or the rerating case fades.
growth
observability and security tools
Observability & Security
inside a $1.5B revenue company
Elastic does not break this out here. That is useful information by itself. You are being asked to judge a major strategic bet without clean segment math.
strategic
Key numbers
$1.5B
annual revenue
That is a real software business, not a hobby. You are looking at scale, even if profits are still thin.
76.3%
gross margin
Elastic keeps 76.3 cents of each sales dollar after direct costs. That leaves room for R&D, sales, and a lot of internal arguing.
1.0%
operating margin
This is the ugly part. You get software-level gross margins, then almost all of it disappears into operating spend.
21,500
customers
A 21,500-customer base spreads risk across 100 countries. Losing one client hurts less when the crowd is this wide.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 4 — safer than 20% of stocks
- price stability 10 / 100
- long-term debt $570M (6% of capital)
- net profit margin 4.9% — keeps 5 cents of every dollar in revenue
- return on equity 8% — $0.08 profit for every $1 investors have put in
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in ESTC 3 years ago → it's now worth $15,080.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
Elastic posted $424M in revenue, while EPS came in at -$0.48 versus -$0.15 expected.
Revenue rose 16% vs. prior year. The miss was in profit, not demand.
$424M
revenue
-$0.48
eps
76.3%
gross margin
the number that mattered
The 16% revenue gain matters more than the EPS miss. It says customers still pay, even when spending keeps profits thin.
-
elastic n.v. shares have cooled a bit over the past three months.
-
the stock of the it data analysis provider is down roughly 15% in value since our early october review.investor sentiment soured of late, likely due to softer metrics surrounding the adoption of the company’s generative ai tools, as well as broader concerns over increasing competition in the observability arena. at this time, the equity remains unfavorably ranked for relative year-ahead price action (timeliness: 4).
-
fiscal second-quarter results were a mixed bag (year ends april 30, 2026).
-
october-period revenues of $424 million rose 16% vs. prior year, thanks to solid subscription growth and strong demand for elastic cloud and ai-related offerings.the customer count for clients with annual contract value greater than $100,000 surpassed 1,600 during the period. on the other hand, elastic registered share losses of $0.48, which came in wider than anticipated owing to elevated operating expenses. for the full fiscal year, we now think the company will report revenues of $1.705 billion (up from our previous call of $1.685 billion) and a share deficit of $1.10 (up from a loss of $0.80).
-
the company is buying back stock.in october, elastic announced a first-ever share-repurchase program with a total authorization of $500 million.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
Elastic is asking you to trust that 16% Elastic Cloud growth will eventually pull a 4.2% broader business into a better margin story. If that bridge never gets built, the multiple has less to stand on.
med
cloud stops carrying the narrative
Elastic Cloud grew 16% while the broader business was only moving 4.2%. That spread is the bull case. If cloud slows without the rest of the company speeding up, the best part of the story gets smaller.
impact: the market is watching the faster-growing piece. If that edge fades, a $500M buyback will not rescue the thesis.
med
large-customer traction stops converting into profits
Customers with annual contract value above $100,000 moved past 1,600. That is good. The problem is that the October-period loss was still -$0.48 per share.
impact: if bigger customers do not show up in the income statement, investors start treating growth as expensive rather than valuable.
med
the loss outlook keeps moving the wrong way
The revised full-year loss view moved to -$1.10 from -$0.80. That is a wider hole, not a smaller one. This is what investors mean when they say execution needs to improve.
impact: if the loss outlook worsens again, the stock stops looking like a scaling software name and starts looking like a patience test.
med
volatility keeps punishing timing
A 1.65 beta and a 10 / 100 price stability score tell you this name moves hard. The 34% drop from the $119 high already showed what that looks like in practice.
impact: you can be right on the business over time and still hate the path the stock takes to get there.
with a 1.65 beta and a 10 / 100 price stability score, this stock gives you very little cover if growth slips again.
source: institutional data · regulatory filings · risk analysis
Pay attention to
key metric
Elastic Cloud growth versus 4.2% company growth
This is the simplest read on the thesis. If cloud keeps creating distance, you have a reason to stay patient. If the gap closes for the wrong reason, the stock loses its best argument.
earnings
the next earnings print
Watch revenue, the loss line, and whether management sounds more convincing than it did after the mixed October-period results.
customer trend
large-customer count above 1,600
That figure is one of the cleaner signals that Elastic is still winning enterprise budgets, not just telling a good story on the call.
risk check
whether the buyback starts to look cosmetic
A $500M repurchase helps only if losses stabilize. If the deficit keeps widening, the buyback reads like confidence without enough evidence behind it.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts think this stock has more near-term chop than near-term momentum.
risk profile
below average
stability score 4 — safer than just 20% of stocks. You should expect bigger swings here than in the average software name.
chart momentum
average
technical score 3 — there is no strong signal here. The chart is not rescuing the thesis.
earnings predictability
10 / 100
predictability score 10 / 100. Translation: quarters can surprise you, and not always in the fun direction.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 249 buyers vs. 198 sellers in 3q2025. total institutional holdings: 89.4M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$48
$139
$78
current price
$94
target midpoint · +20% from current · 3-5yr high: $190 (+140% · 25% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive