Elastic late Thursday reported April-quarter earnings and sales ahead of analysts' expectations. Elastic stock gained, even though the data software company provided sales guidance slightly below consensus expectations.
San Francisco-based Elastic said that it earned an adjusted 21 cents per share on sales of $335 million for its fiscal fourth quarter. On average, analysts projected the company would post adjusted earnings of 20 cents per share on sales of $330 million, according to FactSet. For the same period a year earlier, Elastic posted adjusted earnings of 22 cents per share on sales of $280 million.
Additionally, revenue advanced 20% year over year. Sales for the closely watched Elastic Cloud business grew 32% year over year. That accelerated from 29% growth in Elastic's January quarter.
Elastic Chief Executive Ash Kulkarni said in a news release that the "strong and sustained adoption we are seeing for our generative AI capabilities" reinforces the company's "confidence in the enduring strength of our business."
On the stock market today, Elastic stock is up more than 6% at 99.05 in recent after-hours action.
Elastic's 'Better-Than-Peers' Quarter
For the current quarter, Elastic guided for sales of $344 million at the midpoint of its range. Analysts were projecting the software firm would tally $345 million in sales for the July-ending quarter, according to FactSet. Elastic projected adjusted earnings of 25 cents per share for the current quarter, ahead of analyst estimates for 24 cents per share.
Elastic provides Elasticsearch, a leading enterprise tool for developers to build search applications. The company has expanded to offer a broader cloud-based data analytics platform with cybersecurity software and data observability tools.
Prior to earnings, Elastic stock sank 9% in a broader software sell-off in Thursday trading. Disappointing sales growth and revenue guidance from Salesforce rippled across the broader software space.
Meanwhile, Barclays analyst Raimo Lenschow said Elastic delivered a "better-than-peers" quarter.
"Overall, this appears to be a solid quarter in a tough environment, and as such we think ESTC should be rewarded," Lenschow wrote to clients late Thursday.
Elastic Stock: Technical Ratings
Elastic shares are down 17% this year but up 35% over the past 12 months. The company is seen by some analysts as a likely AI winner. However, shares tumbled following Elastic's previous quarterly report in February.
Coming into the report, Elastic stock had an IBD Composite Rating of 96 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Elastic's IBD Relative Strength Rating was 84 out of 99.
