What happened

Shares of Elastic N.V. (ESTC -2.61%), an enterprise software company, were falling lower today after the company reported its second-quarter results. While Elastic beat Wall Street's top- and bottom-line expectations, the company also cut its full-year sales guidance.

As a result, the tech stock was down 7.4% as of 1:20 p.m. ET. 

So what 

Elastic reported non-GAAP (adjusted) earnings that were flat in the second quarter, which was an improvement from a loss of $0.09 in the year-ago quarter and ahead of analysts' consensus estimate of a loss of $0.10 per share. 

The company's sales of $264.4 million were up 28% from the year-ago quarter and beat Wall Street's average estimate of $261.4 million for the quarter. 

"In Q2, we exceeded both our revenue and profitability targets, demonstrating the operating leverage inherent in our business model," Elastic's CEO Ash Kulkarni said in a press release. 

But investors looked past some of Elastic's solid performance in the quarter and instead focused on the company's fiscal 2023 revenue outlook. Elastic's management cut its sales guidance to $1.07 billion -- down from its previous guidance of $1.08 billion (both at the midpoint of guidance) -- and below analysts' consensus estimate of $1.08 billion.  

Now what 

While Elastic lowered its revenue guidance for the fiscal year, the company actually raised its earnings guidance to a range of a loss of $0.03 to a gain of $0.03, which is far ahead of analysts' consensus estimate of a loss of $0.28 per share. 

But technology investors are especially skeptical of any company that's cutting sales guidance right now. As tech stocks have suffered over the past year among rising inflation and an increasingly difficult economic environment, investors have become more cautious about any perceived slowdown in a company's sales. 

All of which means that while Elastic's second-quarter results weren't bad, its share price could remain volatile as investors try to determine how well the company will weather any potential economic slowdown.