Elastic expects to achieve a positive free cash flow starting in the current fiscal year.
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The enterprise search and analytics software provider Elastic posted better-than-expected results, including an unexpected profit, for its fiscal first quarter, ended July 31.
Elastic (ticker: ESTC) reported revenue of $193.1 million, up 50% from a year ago, or 45% adjusted for currency. That was well ahead of both the company’s guidance range of $171 million to $173 million and the Street consensus estimate of $173.2 million.
The company turned in a non-GAAP profit of 4 cents a share, even though it had told investors to expect a loss of 10 to 13 cents a share. The Street consensus called for a loss of 10 cents. Under generally accepted accounting principles, the company lost 38 cents a share.
Elastic provides both enterprise search tools and security and “observability” software to help companies monitor and protect their networks.
Elastic said cloud revenue was $61.5 million, up 89%. Billings grew 27%, to $165 million. Total customer count was over 16,000, up about 1,000 from the April quarter. Customers with annual contract value of more than $100,000 increased to more than 780, up 50 from the fourth quarter, and 150 higher than a year ago.
“The first quarter was a strong start to the fiscal year driven by crisp execution, the continued robust growth of Elastic Cloud, and our investments against the rich market opportunity ahead of us,” founder and CEO Shay Banon said in a statement.
“As companies move to the cloud, they generate more and more data,” Banon added in an interview with Barron’s. “They want to search it. We satisfy that basic need.”
For the October quarter, Elastic projects revenue of $193 million to $195 million, with a non-GAAP loss of 15 to 19 cents a share. The Street consensus had been for $188.7 million of revenue and a loss of 13 cents.
The company now expects revenue for the April 2022 fiscal year of between $808 million and $814 million, up from a previous forecast of $782 million to $788 million. Elastic now sees a full-year non-GAAP loss of between 57 and 67 cents a share, slightly wider than the previous forecast of a loss of between 51 and 60 cents a share.
Banon said the unexpected non-GAAP profit in the quarter largely reflects the stronger-than-expected revenues in the quarter. The wider forecast full-year non-GAAP loss, he said, results from plans to invest for growth, including higher spending on sales and marketing. The company continues to expect to achieve positive free cash flow starting in the current fiscal year, he said.
Elastic also announced an agreement to acquire Cmd, a provider of “infrastructure detection and response” software for Linux based systems, on Wednesday afternoon. Elastic said the acquisition will “give customers deep visibility into cloud workloads and perform expert detection and prevention on cloud-native data.” Terms of the deal weren’t disclosed. According to Crunchbase, Vancouver-based Cmd has raised $21 million in venture capital.
Earlier this week, Elastic announced another acquisition: The company is buying Build.Security, an Israeli startup developing software to define and enforce security policy on corporate networks. The company had raised $6 million in venture financing. Terms of the deal weren’t announced.
Neither transaction is expected to have a material effect on near-term financial results.
Write to Eric J. Savitz at [email protected]
