Elastic N.V. (ESTC) shares rallied in Thursday's extended session after the artificial intelligence (AI)-enabled search company raised its quarterly revenue guidance and announced a new stock buyback authorization. 

As part of the presentation at the Financial Analyst Day held on Thursday, CFO Navam Welihinda said the second-quarter revenue guidance is now at $417 million to $419 million, according to a transcript provided by Koyfin. While announcing the first-quarter results in late August, the company had guided revenue to a range of $415 million to $417 million. The CFO attributed the revision to improved visibility into the demand environment.

The company also raised its fiscal year 2026 guidance to a range of $1.697 billion to $1.703 billion from a range of $1.679 billion to $1.689 billion, and also hiked its adjusted operating income margin target by 0.25 points to 16.25%.

Separately, San Francisco-based Elastic said its board has authorized the repurchase of up to $500 million of its stock. The buyback program does not have an expiration date, it added. Elastic stock ended Thursday's session down about 2% at $81.55 and rose an incremental 8% in the after-hours.

In a statement, Welihinda said,“Our share repurchase program reflects the Board and management team's confidence in the strength of Elastic's business, strategy and execution.”“Through our disciplined capital allocation approach and strong balance sheet, we are well-positioned to continue investing in our business while delivering value to our shareholders.”

Elastic announced in a separate release the unveiling of Elastic Inference Service (EIS), a GPU-accelerated inference-as-a-service solution for Elasticsearch semantic search, vector search, and generative AI workflows. It also announced the completion of the acquisition of Jina AI, a provider of open-source multimodal and multilingual embeddings and small language models.

On Stocktwits, retail sentiment toward Elastic stock improved to 'bullish' as of late Thursday, from 'neutral' the day before. The message volume on the stream rose 600% over the 24 hours leading up to late Thursday.

Elastic stock has lost about 18% this year, underperforming the SPDR S & P Software & Services ETF (XSW) (+7%) and the Invesco QQQ Trust (QQQ) (+20%). Wall Street analysts are rooting for a strong rebound, with the consensus stock price target compiled by Koyfin ($119.08) implying 46% upside potential.

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