Shares of Elastic N.V. jumped more than 16% in late trading today after the enterprise search software company solidly beat earnings and revenue expectations in its fiscal 2025 second quarter.

For the quarter ended Oct. 31, Elastic reported adjusted earnings per share of 50 cents, up from 37 cents in the same quarter of the previous year, on revenue of $365 million, up 18% year-over-year. Both figures were well ahead of the 38 cents per share and revenue of $354.3 million expected by analysts.

Total subscription revenue in the quarter came in at $341 million, 18% year-over-year and Elastic Cloud revenue rose 25%, to $169 million. Professional services revenue rounded out the figures, rising 7%, to $25 million.

Elastic’s customers are also spending more, with the number of customers with an annual contract value of $10,000 or more hitting 4,480, up from 4,230 in the second quarter of the previous fiscal year, while customers with an ACV of $100,000 or more grew to more than 1,420, up from 1,220 the year prior. The company’s overall net expansion rate, which indicates revenue growth from existing customers by factoring in increased usage and upselling minus churn, came in at 112%.

Business highlights in the quarter included product innovations aimed at enhancing performance and user experience. Elastic introduced Better Binary Quantization in Elasticsearch, an approach that reduces memory usage to enable cost-efficient vector searches without compromising accuracy. Additionally, the company launched AutoOps, a tool developed from its acquisition of Opster in November 2023, that offers Elastic Cloud users streamlined cluster management, real-time issue detection and cost and performance optimization insights.

Elastic also advanced its artificial intelligence-driven solutions with key integrations and updates. The integration of cloud detection and response into its security platform enhanced threat detection by combining cloud telemetry with security information and event management logs for efficient investigations.

“In Q2, we saw strong customer commitments with key wins across all our solution areas, with continued momentum in generative AI and platform consolidation,” Chief Executive Ash Kulkarni said in the company’s earnings release. “Our clear product differentiation and our relentless pace of innovation is helping us become a natural choice for customers building gen AI applications.”

For its fiscal third quarter, Elastic expects adjusted earnings per share of 46 to 48 cents on revenue of $367 million to $369 million. Both outlooks were ahead of the consensus estimate of 41 cents and $366.7 million.

For the full year, the company expects adjusted earnings per share of $1.68 to $1.72 on revenue of $1.451 billion to $1.457 billion.

Photo: Elastic/X