NEW YORK, Feb. 12, 2025 (GLOBE NEWSWIRE) — Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Eastern District of New York on behalf of all persons or entities who purchased or otherwise acquired Elastic N.V. (“Elastic” or the “Company”) (NYSE: ESTC) securities between May 31, 2024 and August 29, 2024, inclusive (the “Class Period”). The lawsuit seeks to recover damages for the Company’s investors under the federal securities laws.
The Complaint alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, the Complaint alleges that the Defendants failed to disclose to investors 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.
According to the Complaint, 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. The Complaint alleges that 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 Complaint further alleges that 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. The Complaint alleges that 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. The Complaint alleges that 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.
According to the Complaint 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.
Investors who purchased or otherwise acquired shares of Elastic should contact the Firm prior to the April 14, 2025 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at [email protected] or [email protected].
Please visit our website at http://www.gme-law.com for more information about the firm.
