Elastic NV (NYSE: ESTC) ended its fiscal year 2020 on a strong note with double-digit increases in total revenue and strong gains in SaaS revenues. Total revenue in the fourth quarter of 2020 rose 53% to $123.6 million while SaaS revenue jumped 110% to $29 million. Calculated billings rose 52% year-over-year to $175.1 million.
The company witnessed strong renewal and expansion trends
despite COVID-19, ending the quarter with over 610 customers with annual
contract values above $100,000.
Elastic believes the business environment is evolving with an
increased shift towards virtual workplaces and cloud solutions along with more
pressure to consolidate tooling. The company feels it is well-positioned to
address these changes through its free and open distribution model.
Enterprise search
The company is seeing good momentum in its enterprise search
business. The ability to put a fast and scalable search box on websites and
applications has helped Elastic expand its customer base across various
industries such as ecommerce, technology and financial services.
During the quarter, the company released version 7.7 of the
Elastic Stack, which provides employees with a single point of search across
common workplace tools such as Microsoft 365, G Suite or GitHub, making the search
process easier.
On its quarterly conference call, Elastic stated that according
to Forrester, the enterprise search market is expected to see a three-fold
growth over the coming three years as companies look to replace their old
search technologies.
Elastic believes that as observable systems and services
continue to increase in order to meet the requirements of businesses, there
will be a rising need to consolidate tools to optimize costs and increase
efficiency.
“Our approach to observability eliminates data silos, reduces mean time to resolution, and allows customers to control costs without compromising on visibility.” – Shay Banon, CEO
Cloud
Elastic continues to invest in its cloud offerings. During
the quarter, the company released its Elastic Cloud Enterprise 2.5 and rolled
out expanded capabilities on Elastic Cloud. Elastic Cloud is available on AWS,
Azure, JCP, Tencent Cloud and Alibaba.
The company is expanding its cloud partnerships with Google
Cloud and Microsoft by extending its workplace search products with G Suite and
making its annual subscription offerings available via the Google Cloud
Marketplace.
Outlook
Looking ahead, Elastic expects to see strong growth in its SaaS business but the company expects to face challenges in terms of its calculated billings due to a slow recovery from the tough economic environment brought on by the pandemic. The company is focused on investing significantly in areas that will help drive growth in the long-term.
Elastic expects revenues of $119-122 million for the first quarter of 2021 and $530-540 million for fiscal year 2021.
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