Elastic N.V., a provider of enterprise-grade search software, saw its shares fall in extended trading today despite posting fiscal first-quarter financial results that beat expectations.

The company reported a loss before certain costs such as stock compensation of 15 cents per share, coming in ahead of Wall Street analysts’ consensus estimate of a 17-cent-per-share loss. Meanwhile, Elastic’s revenue grew by 30% year-over-year, to $250.1 million, beating the consensus estimate of $246.2 million. On a constant currency basis, Elastic’s revenue rose 34%.

Altogether, Elastic posted a net loss of $69.6 million, more than double the $34.4 million loss it reported in the year-ago period. Elastic’s stock fell more than 5% in extended trading following the report. Earlier in the day, the stock had gained just over 2% on an up day for the overall stock market, especially tech companies.

The company sells a commercial version of the popular open-source Elasticsearch platform. Elasticsearch is used by enterprises to store, search and analyze massive volumes of structured and unstructured data. It allows them to do this very quickly, in close to real time.

The platform serves as the underlying engine for millions of applications that have complex search features and requirements. In addition to Elasticsearch, Elastic also sells application observability tools that help companies to track network performance, as well as threat detection software.

The company was keen to highlight the growth of its cloud-based business. It said Elastic Cloud revenue rose by 59% from a year ago, to $97.7 million. Elastic Chief Executive Ash Kulkarni (pictured) said Elastic Cloud now accounts for 39% of the firm’s total revenue, up from 32% one year earlier.

“Despite increased foreign exchange headwinds, we are executing well against our plan to achieve $2 billion in total revenue in fiscal year 2025,” Kulkarni said. “We remain confident in our outlook given our belief in the mission-criticality of our solutions to our customers, and our momentum in Elastic Cloud, and we are raising our constant-currency revenue growth guidance for the year.”

Elastic said it ended the quarter with over 19,300 subscription customers, up from 18,600 in the previous quarter and 16,000 one year ago. Of those customers, 1,010 are generating annual revenue of at least $100,000 a year, compared with 960 that were doing so at the end of the previous quarter, and 780 one year before.

Constellation Research Inc. analyst Holger Mueller said Elastic’s growth is being fueled by the need of enterprises to make sense of data at cloud scale. However, he noted that the company’s costs are rising faster than revenue, meaning its losses doubled compared to the year ago period.

“The losses still seem to be manageable though, and Elastic is on track to hit the important $1 billion revenue milestone,” Mueller added.

For its fiscal second quarter 2023, Elastic said it anticipates a loss of between nine and 11 cents per share, with revenue in a range of $260 million to $262 million. Wall Street is looking for a nine-cent-per-share loss on sales of $260.67 million. For the full year, Elastic said it’s looking at a loss of between 25 and 31 cents per share on sales of $1.08 billion to $1.086 billion, versus the consensus of a 31-cent loss on revenue of $1.08 billion.

In other news, Elastic said it has hired Ken Exner as its new chief product officer. Exner is a 16-year veteran of Amazon Web Services Inc., where his most recent role was vice president and general manager of AWS Developer tools.

“It’s good to see the appointment of AWS veteran Ken Exner, as this may point to a greater developer focus going forward,” Mueller said.

Photo: SiliconANGLE