Elastic Delivers Beat-and-Raise Quarter — But Stock Sells Off

Elastic N.V. (ESTC) reported a strong quarter with both revenue and earnings guidance topping expectations. However, the stock fell 13% as investors focused on the company’s accelerating losses rather than its upbeat forecast.

Losses Nearly Double Year Over Year

The enterprise search and AI software provider posted a $51.2M quarterly loss, nearly double the $25.4M loss reported a year ago.
Despite notable business momentum, the widening gap in profitability weighed heavily on market sentiment.

Revenue and EPS Outlook Exceeds Forecasts

Management highlighted it as an “outstanding quarter,” raising both near-term and full-year guidance:

Q3 revenue: $437M–$439M (vs. $429.9M expected)
Q3 adj. EPS: $0.63–$0.65 (vs. $0.60 consensus)
FY2026 revenue outlook raised by $18M:
- New range: $1.715B–$1.721B
- Prior consensus: $1.706B

Why Shares Still Dropped

Even with stronger projections, investors reacted negatively to:

Accelerating losses
Concerns over profitability trajectory
Uncertainty around cost structure as the company scales AI-driven features

The combination led to a sharp post-earnings selloff.