INVESTOR ALERT: Pomerantz Law Firm Announces the Filing of a Class Action Against Elastic N.V. and Certain Officers - ESTC

PRNewswire 18-Feb-2025 6:21 PM

NEW YORK, Feb. 18, 2025 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Elastic N.V. ("Elastic" or the "Company") (NYSE:ESTC) and certain officers. The class action, filed in the United States District Court for the Eastern District of New York, and docketed under 25-cv-00785, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Elastic securities between May 31, 2024 and August 29, 2024, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.

If you are an investor who purchased or otherwise acquired Elastic securities during the Class Period, you have until April 14, 2025 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Danielle Peyton at newaction@pomlaw.com or 646-581-9980 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased. 

[Click here for information about joining the class action]

Elastic describes itself as "the Search AI [artificial intelligence] Company[.]" Its platform, available as both a hosted, managed service via cloud servers and self-managed software, purportedly allows customers to find insights and drive AI and machine learning use cases from large amounts of data, with solutions separated into three categories: Search, Observability, and Security.

Elastic's sales teams are organized primarily by geography and secondarily by customer segments. The Company offers its products and services to both the private and public sectors in the Americas and internationally, including in Europe, the Middle East and Africa.

Elastic's Americas business has consistently accounted for the largest proportion of the Company's revenue, with the U.S. alone accounting for approximately $730.488 million, or nearly 58%, of Elastic's total approximate $1.267 billion in revenue earned in its fiscal year ("FY") 2024. Likewise, the U.S. alone accounted for nearly 59% and 56% of the Company's total revenue earned in its FYs 2023 and 2022, respectively.

On May 30, 2024, during after-market hours, Elastic issued a press release announcing its fourth quarter and FY 2024 financial results. That press release provided financial guidance for the Company's FY 2025, including, inter alia, revenue of $1.468 billion to $1.48 billion, representing 16% year-over-year growth at the midpoint.

The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Elastic had implemented significant changes to its sales operations, particularly with respect to its customer segments in the Americas; (ii) the foregoing changes were likely to, and did, disrupt Elastic's sales operations during the first quarter of its FY 2025; (iii) accordingly, Defendants had overstated the stability of Elastic's sales operations; (iv) as a result of all the foregoing, Elastic was unlikely to meet its own previously issued revenue guidance for its FY 2025; and (v) as a result, Defendants' public statements were materially false and misleading at all relevant times.

On August 29, 2024, during after-market hours, Elastic issued a press release announcing its financial results for the first quarter of its FY 2025. Therein, Defendants disclosed that they had slashed the Company's FY 2025 revenue guidance to a range of $1.436 billion to $1.444 billion, representing 14% year-over-year growth at the midpoint—significantly down from their prior FY 2025 revenue guidance of $1.468 billion to $1.48 billion, or 16% year-over-year growth at the midpoint—citing "a slower start to the year with the volume of customer commitments impacted by segmentation changes that we made at the beginning of the year, which are taking longer than expected to settle."

The same day, also during after-market hours, Defendants hosted a conference call with investors and analysts to discuss Elastic's first quarter financial results for its FY 2025. During that call, Defendants provided more detail concerning the nature, scope, and timing of the "segmentation changes" that had so drastically impacted Elastic's FY 2025 revenue guidance. In particular, Defendants disclosed, inter alia, that they had "created more focus on selling into our largest accounts by reducing the number of accounts per sales rep and created distinct greenfield territories to focus on landing new customers, both in the enterprise and commercial segments"; that they had implemented these changes too suddenly; that these changes had impacted "all verticals" and "pretty much all [of] the [Company's] teams" in the Americas, apart from the U.S. public sector; that they had been aware of these changes when they issued their initial FY 2025 revenue guidance at the beginning of the Class Period; and that they had implemented these changes at the beginning of May 2024, i.e., before the start of the Class Period.

Following these disclosures, Elastic's ordinary share price fell $27.45 per share, or 26.49%, to close at $76.19 per share on August 30, 2024.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.

Attorney advertising. Prior results do not guarantee similar outcomes.

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SOURCE Pomerantz LLP