Shares in Elastic N.V. surged by over 14% in late trading after the enterprise-grade search software company today reported strong beats across the board in its latest quarterly earnings report.

For its fiscal first quarter that ended July 31, Elastic reported adjusted earnings per share of 25 cents, up from a loss of 15 cents per share in the same quarter of last year. Revenue rose 17% from a year ago, to $294 million. Both were solid beats, as analysts had expected earnings per share of 11 cents on revenue of $284.81 million.

Elastic Cloud revenue rose 24%, to $121 million in the quarter, driven by subscription customers growing to about 20,500 from 20,200 in the previous quarter and 19,300 the same time last year. As of the end of July, Elastic has 1,190 customers with an annual contract value of more than $100,000, up from 1,010 at the same time last year.

Business highlights in the quarter include the introduction of Elastic AI Assistant in June, an open, generative artificial intelligence “sidekick” powered by the ElasticSearch Relevance Engine to “democratize cybersecurity and enable users of every skill level.” The AI feature delivers capabilities for creating highly relevant AI search applications.

Elastic delivered new hybrid search capabilities with Reciprocal Rank Fusion, a part of ESRE, to combine vector, keyword and semantic techniques for better results. The company also announced improved performance for the Elasticsearch platform, including faster search aggregations, cross-cluster search and dense vector search acceleration for semantic search.

“We had a strong start to the fiscal year and delivered better than expected results as customers continued to consolidate vendors and adopt Elastic as their AI-powered data analytics platform of choice for addressing multiple real-time search use cases,” Chief Executive Ash Kulkarni said in the company’s earnings release. “In Q1, we saw growing use of Elasticsearch as a vector database and significant activity around generative AI.”

For its fiscal second quarter of 2024, Elastic said it expected adjusted earnings of 23 to 25 cents per share on revenue of $303 million to $305 million. Both were again beats, as analysts were expecting 20 cents and $302.4 million.

The company’s full-year outlook was closer to expectations, with Elastic expecting adjusted earnings per share of $1.01 to $1.11, while analysts had expected $1.01 on revenue of $1.24 billion to $1.25 billion versus an expected $1.24 billion.

Kathleen Walker, senior director of product marketing at Elastic, along with Sujith Joseph, principal and chief enterprise search, AI and cloud architect/director at Cisco Systems Inc., spoke with theCUBE, SiliconANGLE Media Inc.’s livestreaming studio this week to discuss how both companies are harnessing generative AI.

In the interview, Walker noted that although Elasticsearch seeks to capitalize on AI search capabilities, the company recognizes the potential scope of usefulness AI offers. With generative AI, Walker explained, Elasticsearch has empowered its engineers to play around and experiment with the technology to see what they could create beyond the search platform.

Photo: Elastic