Elastic N V (ESTC)

Elastic N.V (ESTC) stock declined by 12.56% following its fiscal 2024 third-quarter earnings report, despite beating expectations. The enterprise data software company reported adjusted earnings of 36 cents per share on sales of $328 million, surpassing analysts' projections of 31 cents per share on sales of $321 million. However, the stock decline was attributed to investors' high expectations following a recent rally.

• Slower Growth in Cloud Business Raises Concerns: Analysts flagged slower growth in Elastic's cloud business, Elastic Cloud, which offers a suite of data search, cybersecurity, and observability tools. While cloud revenue for the quarter increased by 29% year over year to $143 million, it marked a slower rate of growth compared to the 31% growth in the previous quarter. This led some analysts to caution that investors' expectations for cloud growth needed to "settle down" post-Q3.
• Management Guidance and Future Outlook: For the current quarter, Elastic management guided for sales of $329 million, slightly above analysts' projections of $327 million. CEO Ash Kulkarni highlighted a trend among enterprise customers towards leveraging AI to improve business processes and customer experiences while remaining focused on cost reduction. Elastic believes its cloud solution can help companies operate more efficiently.