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Elastic (NYSE:ESTC) is slated to report second-quarter results on November 30 and investment firm Monness, Crespi, Hardt is expecting its cloud and new partnership with Amazon (AMZN) Web Services to be in focus.
Analyst Brian White, who has a neutral rating on Elastic (ESTC) shares, said the Dutch-American company is well positioned to benefit from a number of key tech trends, as well as expanding its margins and monetizing its portfolio, including Elastic Cloud.
He expects Elastic Cloud to account for $132.9M in revenue for the period, with total subscription revenue accounting for $285M of the expected $309M in sales during the period. Wall Street analysts expect $304.1M in total revenue for the period.
White is expecting earnings of 29 cents per share, above the estimate of 25 cents per share.
The analyst also said the recently announced deal with AWS, which will make it easier to use Elastic Cloud and let customers pursue generative artificial intelligence initiatives, could be in focus.
"More specifically, Elastic expects the agreement 'will accelerate the integration of Amazon Bedrock into the Elastic AI Assistant, enabling customers to get richer and more contextualized and relevant results by using their preferred large language models coupled with the organization’s unique IT environment and proprietary data sets,'" White wrote in an investor note. "Elastic plans to begin leveraging this relationship around use cases related to security, and then expand into observability."
White also noted that recent results from Elastic competitor Datadog (DDOG) bode well. "Datadog indicated that customer cost optimization efforts had moderated and trends in October were encouraging," he explained.
Looking ahead, White is expecting fiscal third-quarter revenue of $327M, up 19% year-over-year, above the Wall Street estimate of $318.4M. He expects full-year revenue to be $1.287B, above the company's own estimate of $1.242B and $1.25B and above Wall Street's estimate of $1.247B.