Elastic: Bouncing Along

October 12, 2022

It seems like open-source search is under pressure. We learn from SiliconAngle that “Elastic Delivers Strong Revenue Growth and Beats Expectations, but Its Stock is Down.” For anyone unfamiliar with Elastic, writer Mike Wheatley describes the company’s integral relationship with open-source software:

“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.”

Could it be that recent concerns about open-source security issues are more important to investors than fiscal success? The write-up shares some details from the company’s press release:

“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 emphatically accentuates the positive—like the dramatic growth of its cloud-based business and its flourishing subscription base. See the source article or the press release for more details. We are curious to see whether the company’s new chief product officer Ken Exner can find a way to circumvent open-source’s inherent weaknesses. Exner used to work at Amazon overseeing AWS Developer Tools. Founded in 2012, Elastic is based in Mountain View, California.

Cynthia Murrell, October 12, 2022

Written by Stephen E. Arnold · Filed Under Financial, News, Search

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.