Signal brief

Despite beats on EPS and revenue and a raised FY26 guide, the ~11.7% after-hours selloff indicates the market expected stronger forward signals or faster growth. Key drivers: subscription growth at 17% may be perceived as slowing for a high-growth cloud/security observability name; billings or margin commentary (not detailed here) could have disappointed investors; modest guidance raises can fail to offset valuation and momentum concerns. Historical analogs: Snowflake and Datadog have experienced post-earnings drops after otherwise solid results when guidance, billings, or implied growth trajectories underwhelmed. The RPO increase is supportive long-term, but near-term investor reaction suggests sentiment and multiple compression dominate price moves.