Earnings: Elastic reports in-line loss for Q4; revenue up 63%

Open source search service provider Elastic (NYSE: ESTC), which debuted on the New York Stock Exchange in October last year, reported a sharp increase in fourth-quarter revenues, which also surpassed expectations. The company reported a loss that matched analysts’ forecast.

Total revenues were $80.6 million in the fourth quarter, up 63% from the corresponding period of last year. Analysts were looking for slower growth. Calculated billings climbed 57% year-over-year to $115.4 million during the three-month period when the total subscription customer count stood at 8,100.

On an adjusted basis, the Amsterdam-based company posted a net loss of $0.28 per share, in line with the estimates. Net loss, on an unadjusted basis, widened to $34.84 million or $0.48 per share from $21.4 million or $0.66 per share a year earlier.

Calculated billings climbed 57% year-over-year during the three-month period when the total subscription customer count was over 8,100

“Q4 was an incredible ending to a strong fiscal year. We are seeing strong demand across our products and solutions worldwide. We continue to invest heavily across all parts of the business to drive growth and we look forward to continued momentum in fiscal 2020,” said CEO Shay Banon.

Outlook

For its first quarter of fiscal 2020, the company expects total revenues between $82 million and $84 million and adjusted operating margin in the range of -34% to -32%. It expects to record an adjusted loss of $0.44-$0.42 per share for the quarter.

In the whole of 2020, revenue is expected to be between $397 million and $403 million. The forecast for adjusted operating margin is between -25% and -23. The company sees a full-year loss in the range of $1.49 per share to $1.33 per share.

Acquisition

Separately, the management said it entered into a definitive agreement to acquire Endgame, a security company focused on endpoint protection, detection, and response, for $234 million.

Elastic offers search services primarily through the cloud divisions of Amazon (AMZN) and Google (GOOGL), though it competes with the latter in certain areas of the business. The other competitors include Micro Focus and Splunk.

Shares of Elastic have moved up 18% in the past twelve months and 25% since the beginning of the year. The stock closed Wednesday’s trading session slightly higher.

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