Elastic Stock Plummets 12.90% in Three Days Despite Record Revenue Growth and 232nd Highest Trading Volume

On May 30, 2025, Elastic (ESTC) experienced a significant decline, dropping 12.13% over three consecutive days, resulting in a total decrease of 12.90%. The trading volume reached $709 million, making it the 232nd highest in the market that day.

Elastic reported strong financial results for the fourth quarter and fiscal year 2025. The company's revenue for Q4 reached $388 million, marking a 16% year-over-year increase. Elastic Cloud revenue grew by 23%, totaling $182 million. The company's total revenue for the fiscal year 2025 is projected to be between $1.655 billion and $1.670 billion, representing a 12% growth.

Elastic's subscription revenue for Q4 was $362 million, with a 16% growth as reported and 17% in constant currency. The company's non-GAAP operating margin for Q4 and the fiscal year 2025 was 15%, while the adjusted free cash flow margin for the fiscal year 2025 was 19%. Current remaining performance obligations (CRPO) stood at approximately $1 billion, showing an 18% year-over-year growth.

Elastic added 45 net new customers with over $1 million in annual contract value (ACV) and 180 net new customers with over $100,000 in ACV. The company's guidance for Q1 fiscal 2026 revenue is $396 million to $398 million, with a 14% year-over-year growth at the midpoint. For the fiscal year 2026, revenue guidance is $1.655 billion to $1.670 billion, with a 12% year-over-year growth at the midpoint.

Despite the strong performance, Elastic faced challenges in the US public sector, which impacted sales cycles, particularly in federal civilian agencies. The company is approaching fiscal year 2026 with caution due to potential macroeconomic uncertainties. Elastic also noted a sequential headwind due to fewer days in Q4, affecting revenue comparisons. The company acknowledged potential uncertainty amidst evolving macro conditions and slower sequential cloud growth in fiscal Q1, attributed to seasonal patterns and consumption headwinds.