Elastic Ties Up With Microsoft To Beat Competition


According to a recent report, the global enterprise search market is expected to grow at 11% CAGR to $8 billion by 2027 from $3.8 billion in 2020. Elastic (NYSE: ESTC) is a leading player in the open source Big Data search sector that is seeing strong growth as well.

Elastic’s Financials

For the recently reported fourth quarter, Elastic’s revenues grew 44% over the year to $177.6 million driven by a 77% growth in SaaS revenues. GAAP net loss was $0.48 per share. Non-GAAP net loss was $0.08 per share. The market was looking for revenues of $158.87 million with a loss of $0.16 per share.

By segment, subscription revenues grew 44.84% over the year to $164.54 million. Within the segment, subscription, licensed, self-managed, and SaaS revenues grew 46.56% to $142.22 million. Professional services for the quarter grew 34.48% over the year to $13.1 million.

Among key metrics, calculated billings for the company grew 38% to $240.9 million. Total subscription customer count grew from 13,800 a quarter ago to over 15,000 at the end of the fourth quarter. Total customer count with Annual Contract Value (ACV) of more than $100,000 grew to 730 from 670 in the previous quarter. Net Expansion Rate continued to be more than 130%.

For the full year, Elastic reported revenues of $608.5 million, growing 42%, and a loss per share of $0.09.

Elastic expects to end the current quarter with revenues of $171-$173 million with a non-GAAP loss of $0.13-$0.10 per share. It expects to end the year with revenues of $782-$788 million and a non-GAAP loss of $0.60-$0.51 per share. The market was looking for revenues of $173.16 million for the quarter with a net loss of $0.10 per share and revenues of $788.92 million for the year with a net loss of $0.49 per share.

Elastic’s Product Upgrades

Elastic recently announced its expanded partnership with Microsoft. The partnership allows customers to find, deploy, and manage Elastic Search directly from the Azure portal, accelerating their time to value with Elastic Cloud solutions. Customers will be able to add powerful capabilities to applications and services that are run in Azure such as add search and visualization capabilities from Elastic Stack and Azure applications and websites, search across data in services like Microsoft Teams, OneDrive, and SharePoint with Workplace Search. They will also be able to gain visibility into the health and performance of the Azure environment when collecting and visualizing logs, metrics, and APM traces with Elastic Observability.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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