Elastic Earnings Were Better Than Expected. The Company Sees $1 Billion in Revenue for Fiscal 2023.
Enterprise search and security software provider Elastic reported better-than-expected results for the company’s fiscal fourth-quarter ended April 30.
For the quarter, Elastic (ticker: ESTC) posted revenue of $177.6 million, up 44% from the year-ago quarter and ahead of both the company’s guidance range of $158 million to $159 million and the Street consensus of $157.9 million. On a non-GAAP basis, the company lost 8 cents a share, narrower than the company’s projected loss of 15 to 18 cents a share and the Street consensus of a 16-cent loss. Under generally accepted accounting principles, known as GAAP, the company lost $37.1 million or 48 cents a share.
For the full fiscal year, Elastic had revenue of $608.5 million, up 42%, with losses of 9 cents a share on a non-GAAP basis and $1.48 on a GAAP basis.
For the July quarter, Elastic sees revenue of between $171 million and $173 million, with a non-GAAP loss of 10 to 13 cents a share. Street consensus had called for $169 million in revenue and a loss of 12 cents.
Elastic projects revenue for the April 2022 fiscal year of between $782 million and $788 million, ahead of the Street consensus at $743.3 million. The company’s guidance would be up 29% from the recently completed year at the middle of the given range. The company sees a full-year non-GAAP loss of 51 to 60 cents a share, a little wider than the Street consensus at a loss of 48 cents.
The company also said it expected to surpass $1 billion in revenue in fiscal 2023.
Elastic, best known for providing enterprise search software, also does business in markets for both observability—tools for tracking network performance—and threat detection. Elastic noted the company has a customer count of more than 15,000, versus 13,800 a quarter earlier and 11,300 a year ago.
“We had a strong fourth quarter capping off an exceptional year, due in large part to the continued adoption of Elastic Cloud and broad-based demand for our enterprise search, observability and security solutions,” Elastic founder and CEO Shay Banon said. “Data volumes keep increasing as companies become more digital and move to the cloud, and our customers are seeing that the ability to search, observe and protect this ever-increasing amount of data is critical to their success.”
In an interview with Barron’s, Banon noted the company’s security software business is now the fastest-growing part of the business, accounting for about 20% of revenue. Search software makes up nearly a third of the company’s revenue, while observability is now a little more than 40%, he said. Banon noted that all three services build on the same set of data; he said the company has a saying internally, “While you observe, why not protect?”
Banon also said Elastic’s free cash flow was positive in the latest fiscal year for the first time. Asked about the fact that the company’s projected non-GAAP loss for the quarter is wider than the Street had expected, Banon said the company is investing aggressively in the business across all functions, with considerable additions in head count expected this year.
Elastic shares in Wednesday’s regular session were down about 0.3%, to $118.02. Shares were 7.3% higher in after-hours trading. The stock is off about 33% since its peak in January at $176.49.
Write to Eric J. Savitz at [email protected]
