Elastic (ESTC) Q2 Earnings Report Preview: What To Look For
Search software company Elastic (NYSE:ESTC) will be reporting earnings tomorrow after the bell. Here's what to look for.
Last quarter Elastic reported revenues of $293.8 million, up 17.5% year on year, beating analyst revenue expectations by 3.3%. It was a mixed quarter for the company, with revenue and non-GAAP operating profit exceeding Wall Street's expectations. Next quarter's guidance was largely ahead, and the full year outlook was raised as well. On the other hand, its net revenue retention fell. The company added 30 enterprise customers paying more than $100,000 annually to a total of 1,190.
Is Elastic buy or sell heading into the earnings? Read our full analysis here, it's free.
This quarter analysts are expecting Elastic's revenue to grow 15% year on year to $304.1 million, slowing down from the 28.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.24 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.8%.
Looking at Elastic's peers in the data and analytics software segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Teradata delivered top-line growth of 5% year on year, beating analyst estimates by 0.4% and Confluent reported revenues up 31.9% year on year, exceeding estimates by 2.6%. Teradata traded up 1.1% on the results, Confluent was down 19.9%.
Read our full analysis of Teradata's results here and Confluent's results here.
There has been positive sentiment among investors in the data and analytics software segment, with the stocks up on average 11.8% over the last month. Elastic is up 4.3% during the same time, and is heading into the earnings with analyst price target of $83.1, compared to share price of $78.2.
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The author has no position in any of the stocks mentioned.
