Title
Earning Preview: Elastic N.V. Q3 revenue is expected to increase by 18.90%, and institutional views are bullishAbstract
Elastic N.V. will report fiscal third-quarter 2026 results on February 26, 2026 Post Market, with consensus pointing to revenue of $438.32 million, adjusted EPS of $0.65, and EBIT of $76.25 million year over year growth expected to accelerate.Market Forecast
Based on the latest forecasts, Elastic N.V.’s current quarter revenue is estimated at $438.32 million, implied year over year growth of 18.90%, with adjusted EPS of $0.65 and EBIT of $76.25 million rising 37.60% and 37.53% year over year, respectively. While margin guidance for the quarter is not provided, the company’s prior report showed strong gross profit margin levels, and the mix remains concentrated in high-attachment subscription offerings that typically support robust unit economics.The main business is anchored by subscriptions, which generated $397.70 million last quarter and continue to underpin revenue visibility across cloud and self-managed deployments. The most promising driver remains the subscription portfolio, with company-wide revenue projected to rise 18.90% year over year from this base, reinforcing the critical role subscriptions play in sustaining growth.
Last Quarter Review
Elastic N.V. delivered previous quarter revenue of $423.48 million, a gross profit margin of 76.00%, GAAP net profit attributable to the parent of -$51.28 million, a net profit margin of -12.11%, and adjusted EPS of $0.64, up 8.48% year over year. EBIT reached $69.80 million, reflecting an 8.58% year over year increase, and the quarter-on-quarter change in GAAP net profit was -108.45%, illustrating a swing that likely reflects non-cash items typically excluded from adjusted measures.A key highlight was the outperformance versus consensus on both revenue and adjusted EPS in the prior quarter, supported by subscriptions providing a durable revenue base and underpinning strong gross margin levels. Subscriptions contributed $397.70 million, or 93.91% of total, with services at $25.78 million; overall revenue increased 15.91% year over year, indicating continued broad-based demand for the company’s offerings.
Current Quarter Outlook
Subscriptions: The Core Business
Subscriptions are the largest revenue component, contributing $397.70 million last quarter and accounting for 93.91% of total revenue. In the current quarter, consensus expects company-wide revenue to rise 18.90% year over year, and subscriptions are positioned to capture most of that growth given the breadth of use cases and the installed base across cloud and self-managed. The subscription model typically drives predictable cash flows and supports margins, which aligns with the prior quarter’s 76.00% gross profit margin and positive adjusted EPS performance. With consumption patterns steadily migrating toward cloud delivery, subscriptions should remain the foundation of both top-line expansion and operating leverage, even as GAAP results reflect items commonly excluded from adjusted metrics.Elastic’s pricing and packaging strategy—grouping capabilities into solutions that address search, observability, and security—creates cross-sell pathways inside the subscription umbrella, improving average revenue per customer. This should support a rising revenue mix from multi-solution deployments within the subscription base. Moreover, the momentum implied by EBIT growth of 37.53% year over year in the current quarter’s forecast suggests operating efficiency gains as subscription revenues scale, even without explicit current-quarter margin guidance. Subscription revenue’s scale also helps absorb variability in services activity and contributes to consistent quarter-over-quarter execution.
Most Promising Growth Driver: Cloud and Serverless Momentum
Cloud-delivered subscriptions are emerging as a key growth vector, with an infrastructure upgrade announced on January 20, 2026—new virtual compute units for Amazon Web Services-based serverless projects—aimed at boosting indexing throughput and reducing search latency. This upgrade is immediate and automatic for applicable projects, which could translate into improved performance for customers and potentially higher consumption. As Elastic invests in serverless capabilities, workloads that benefit from elastic scaling and consumption-based economics can expand, further anchoring revenue potential within the subscription category.The cloud upgrades serve as a product-led catalyst that may enhance perceived value in core use cases—real-time search, analytics, observability pipelines, and security analytics—by removing performance bottlenecks and simplifying deployment friction. In practical terms, better throughput and lower latency can encourage customers to push more data and queries into Elastic Cloud, lifting usage-driven revenue within subscriptions. Paired with the company-wide revenue growth forecast of 18.90% year over year and adjusted EPS forecast growth of 37.60%, these product improvements point to favorable unit economics that scale with customer adoption. The combination of performance gains and consumption alignment could also improve renewal dynamics, mitigating price sensitivity in high-value workloads.
Key Stock Price Drivers This Quarter
The first determinant is the magnitude of the revenue beat or miss versus $438.32 million and the quality of that revenue—particularly evidence of sustained consumption growth in cloud subscriptions. A performance that aligns with the 18.90% year over year revenue projection and the 37.60% adjusted EPS growth estimate would validate operating momentum, while any deviation will likely drive post-market volatility on February 26, 2026. Secondly, the progression of profitability metrics—EBIT at $76.25 million implied to grow 37.53% year over year—will influence investor interpretation of scalability and operating discipline, even without explicit current-quarter gross margin or net margin forecasts.Third, investor sentiment is currently sensitive to capital allocation and ownership signals. On January 27, 2026, Pictet Asset Management disclosed a 5% stake, which indicates institutional confidence in long-term value creation and can provide a stabilizing effect during earnings. Price target actions are another key input to sentiment; with RBC reaffirming Outperform ratings in January and February while adjusting targets, the direction of analyst commentary post-print will shape near-term multiples. Finally, the product release cadence—such as the AWS serverless upgrade on January 20, 2026—can reinforce a narrative of technical progress, supporting consumption-led growth and, by extension, the valuation framework investors apply to subscriptions.
Analyst Opinions
Across recent coverage within the current year-to-date window, opinions skew bullish. RBC Capital maintained an Outperform rating while revising price targets twice—on January 5, 2026 to $95 and on February 11, 2026 to $80—signaling continued positive stance on the company’s fundamental trajectory despite valuation and market dynamics. MT Newswires summarized that analysts surveyed by FactSet as of February 11, 2026 reflected an average rating of overweight and a mean price target of $100.55, indicating a conviction that the shares warrant above-market weighting in portfolios.The ratio of bullish to bearish opinions is overwhelmingly positive this period, reinforced by the January 27, 2026 disclosure that Pictet Asset Management acquired a 5% stake in Elastic N.V., a tangible commitment that typically correlates with constructive medium-term views. In this context, the majority view anticipates that subscriptions and cloud consumption will support the 18.90% year over year revenue growth forecast, with adjusted EPS projected up 37.60%—a combination that underscores operational scalability. RBC’s consistent Outperform stance, even with calibrated targets, suggests confidence that Elastic’s fundamentals—evidenced by last quarter’s 76.00% gross profit margin and adjusted EPS of $0.64—remain intact as management drives the business through product-led enhancements like the AWS serverless compute units.
Analysts highlight the importance of execution within subscriptions and cloud, where expanding workloads can compound revenue over time. They will likely look for concrete signals in the February 26, 2026 Post Market release: consumption trends in Elastic Cloud, progress on cross-sell across solutions, and steady EBIT trajectory in line with the forecasted 37.53% year over year growth. A print that substantiates these elements should reinforce the overweight consensus and support valuation resilience. Given the previous quarter’s outperformance versus consensus on both revenue and adjusted EPS and the evidence of ongoing product innovation, the prevailing institutional view remains constructive heading into the report, with attention focused on how consumption, margins, and operating efficiency translate into the fiscal third-quarter numbers and forward commentary.
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