Enterprise search company Elastic NV surprised investors with its latest earnings report today, posting an unexpected profit thanks to strong revenue growth.

For the quarter ended July 31, Elastic reported revenue jumped 50% from a year ago, to $193.1 million. It also reported a profit before costs such as stock compensation of $7.2 million or four cents per share. Analysts had been predicting a loss of 11 cents a share on revenue of $173.3 million.

Elastic saw strong growth across the board, led by Elastic Cloud at $61.5 million, up 89% over the same quarter of 2021. Calculated billings in the quarter rose 27% year-over-year, to $165 million, while deferred revenue rose 31%, to $364.4 million.

The company saw an increase in its total subscription customer count to over 16,000, up from 15,000 in its previous quarter and 12,100 in the same quarter of last year. Net expansion rate was consistent with the previous quarter and slightly below 130%.

Highlights in the quarter included the launch of Elastic 7.14, an update that features new capabilities across the company’s enterprise search, observability and security solutions.

Announced alongside the earnings report, Elastic also said it has entered an agreement to acquire security company Cmd for an undisclosed price. The acquisition is the latest for Elastic and follows an announcement on Aug. 23 that it had also entered an agreement to acquire build.security Ltd.

“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,” Shay Banon (pictured), founder and chief executive officer of Elastic, said in a statement.

Elastic said it expects revenue in the next quarter to be between $193 and $195 million with an adjusted loss per share of 15 to 19 cents. For the company’s fiscal year 2022 ending April 30, Elastic predicts revenue of $808 million and $814 million and an adjusted loss of 57 to 67 cents.

While the seemingly one-off profit may have come as a surprise, not everyone was impressed by the news. Elastic is said by some to be moving away from open source.

“Elastic’s move to prioritize profitability in lieu of a true, open-source nature, and writing code that no longer benefits the community was short-sighted,” Oskari Saarenmaa, CEO at database-as-a-service company Aiven Ltd., told SiliconANGLE. “It’s a similar scheme to what Microsoft did in the 1990s – changing their API so competitors couldn’t utilize their services. The death of open source business models is nowhere on the horizon and companies need to shift their stance now if they want to remain a trusted member of the open-source community.”

The better-than-expected revenue and earnings in the quarter were somewhat balanced by Elastic’s outlook. Shares in the company rose almost 2% in after-hours trading.

Photo: Elastic