Shares in Elastic N.V. dropped slightly in late trading after the enterprise-grade search software company reported beats in its latest quarterly earnings but missed on outlook.

For the quarter that ended on Jan. 31, Elastic reported earnings before costs such as stock compensation of 17 cents a share, up from a loss of 12 cents per share a year ago, on revenue of $275 million, up 23%. Analysts had been expecting earnings of five cents a share on revenue of $270.76.

Elastic Cloud revenue in the quarter rose 38%, to $111 million, with cloud revenue now accounting for 40% of Elastic’s income, up from 36% this time last year. Operating cash flow was $7 million in the quarter and the company had $878 million in cash and equivalents on hand as of the end of January.

Elastic had 19,900 subscribers as of the end of the quarter, up from 19,700 in the second quarter and 17,900 a year ago. Customers with an annual contract value greater than $100,000 topped 1,100, up from 890 in January last year. The net retention rate was about 120%.

Highlights in the quarter included Elastic doubling revenue from hyperscaler partner marketplaces, including multiple transactions with more than $1 million in annual contract value. The company also introduced new tools to implement and manage natural language processing across search indices to accelerate time to value and provide higher-quality search results.

“Against a challenging macro backdrop, our platform capabilities address customer priorities as they look to drive efficiencies while increasing visibility, security and data insights across their business,” Ash Kulkarni, chief executive officer of Elastic, said in the company’s earnings release. “Customers made strong contractual commitments to us during the quarter and we remain confident in the long-term market opportunity and the core fundamental strengths of our business.”

For its fiscal fourth quarter of 2023, adjusted earnings are expected to be between eight and 10 cents a share on revenue of $276 million to $278 million. Analysts had been expecting eight cents a share on $282.9 million.

For its full fiscal year 2023, the company expects earnings of 11 to 14 cents a share on revenue of $1.065 billion to $1.067 billion. Similarly to the quarterly outlook, it was a hit and a miss, with analysts having expected an adjusted loss of a penny a share on revenue of $1.09 billion.

The revenue misses in outlook were not particularly bad, but it was enough to see some investors sell Elastic stock in late trading. Elastic shares were down 2.5% after-hours.

In an interview with theCUBE, SiliconANGLE Media’s livestreaming studio in December, Ken Exner, chief product officer of Elastic, spoke about how businesses are continuing to drown in a mountain of data and how Elastic aims to help them deal with it:

Photo: Elastic