Not sure anyone still follows ESTC here. I have continued to keep it as I have not seen business slowing much, well at least not till now. It reports next week, so it is any body’s guess.

The stock recently hit an ATH. Pull a 1-year stock chart of AYX, CRWD, ESTC - Surprise, surprise. ESTC wins hands down! In the most recent Q, it grew 53% and analyst expectation is only 35% for this Q. It competes in many of the same markets as DDOG but also offers search. But unlike DDOG which is a complete ready-to-use product, ESTC offers developers tools to build products. So, that has dampened its multiples a bit. It has had a lot of new releases this week.…


Not sure anyone still follows ESTC here

Still following with a 4.6% holding right now. My overall returns haven’t been great and have been a drag on my portfolio. With that caveat out of the way, I’m holding through earnings. I don’t see the issues of “increasing losses”. Operating losses as a percent of revenue have come down.

That said, I don’t like the spate of press releases before earnings. But that is just my personality which I don’t need to explain further as one anecdote means nothing.

I will say that Elastic appears to innovate very quickly. I’ve heard at least one person suggest their “innovation” feels like Elastic is just trying to catch up to others (see DataDog). I respect that person’s opinion and can’t suggest it is assuredly inaccurate.

“Selling” to developers seems analogous to Twilio. I like that model, but Elastic seems much more difficult to implement. I’m going to see what happens this quarter and make my decision then. That decision may very well be to do nothing.

The stock is up into earnings but who knows why that may be as it has been range bound for a long time.



Everything about ESTC says it’s a fine company, but ESTC the stock is not moving like others we are following here with the same growth cohorts. I have been in and out few times, frustrated - it always looks promising - only to see the stock price falls after every earnings. When I look at the market caps of our stocks, growth rates and valuation, ESTC is a no brainer; we should be investing in this company. Others say it’s investing in hope, or CHEAP for a reason or perhaps it’s because of its open source model. Growth rate is very good, but slowing:

79 72 70 63
58 59 60 53

And they keep adding customers

88K 97K 10.5K 11.3K

I got back in with a 2% position couple weeks back in high eighties but still thinking whether to hold through earnings again after the recent bump.


I’m still in ESTC too. It’s been a reasonably easy ‘trading’ type stock, since the market seems to have a love/hate relationship with it, bouncing the price around a lot even before COVID. I’ve moved in and out for a long time around a core holding and have made reasonable returns. Not the same as putting it all into FSLY or DDOG however.

It’s definitely not a Datadog, and their go-to-market struggles a bit (Texmexs not a “ready-to-use” product hits the nail on the head) and a place I’d hope they put considerable effort.

As Legoabs points out, theres nothing (afaics) ‘wrong’ with ESTC other than the size of the losses and the increase in SBC. But the market has disagreed in the past, and the market is smarter than I am. Its come up a lot in the last few days which maybe is a reflection of everything else have appreciated recently.

I’m treating ESTC as an educational stock. Why does the market disagree? Why do the experts on Saul’s board disagree? It’s also interesting to compare to MDB, on the core metrics they’re almost identical. MDB however is increasing revenue per share at a consistently faster rate, because their share count is not increasing as fast.

They’re unlikely IMO to have any sort of COVID push, but I think they’ll just keep on doing their thing. I’ll cover the earnings call when it comes out.



Last Q they improved on the operating margins and cash flow metrics. If I recall they talked about break-even CF by 2022. SBC was only 1.7% QOQ which is quite reasonable. Previous Qs they had the impact of the Endpoint acquisition so that may explain the higher SBC. But yes something to be watched. EMEA recovered from Covid faster. So, that bodes well. FWIW Poffringa thinks ESTC is sticky due to its platform approach and companies putting in so much effort on learning it and building their products on it.


I held this for a bit and was building a position. But the more I looked at it, the more I had issues with the hodgepodge of products. They seem to be competing against stronger competitors in a number of areas. But what ultimately convinced me to sell was the fact that there are no opensource software companies that have grown into massive businesses. Redhat sold to IBM for only $34 billion. That’s the largest I could come up with. If anyone has a better example, please share it. Mongo DB is opensource, but that wasn’t convincing enough for me. And I may get into it still.

This doesn’t mean that it doesn’t still have a big growth trajectory, it may. And I have no idea what earnings will look like. It just wasn’t a fit for me and my portfolio.

FWIW Poffringa thinks ESTC is sticky due to its platform approach and companies putting in so much effort on learning it and building their products on it.

Thanks for pointing out Offringa’s take. Just read it this morning and noticed that he makes the same Twilio analogy. He presents a very balanced take on Elastic. To me, the risk reward set up here is good and worth holding through earnings. I’d encourage folks to read what Offringa has to say on ESTC if interested in the name.

Last quarter was an excellent quarter by all accounts. Guidance was conservative due to Covid though management didn’t see a big impact in April after things paused in mid March. Last quarter could have been even better without that pause. Again, I like the set up, but we shall see.



I am in the middle of a quarterly hold of ESTC. I run a partially mechanical screen of top earnings-surprisers and revenue growers in top industries, with 10-ish positions. It has, of course, turned up some of the “Saul” stocks, ESTC being one of the current picks (ZS, ZM, CRWD notable others).

(Aside - APPS, the previously dismissed-here Digital Turbine, has quadrupled in price in the 5 months since the March CV19 low.)


“Pull a 1-year stock chart of AYX, CRWD, ESTC - Surprise, surprise. ESTC wins hands down!”

My YTD and 1 year shows CRWD outperforming ESTC.

And until 2 weeks ago before AYX blew up, even AYX was ahead of ESTC as well.

Comparing ANYstock (let alone a good growth one) to AYX right after it lost ~40%, leans just a weeeee bit on cherry picking stats.


Funny I see ESTC just slightly ahead of CRWD on the 1 year.

Way behind CRWD on the YTD, though.

1 Like

I expect it is close enough that it depends on the exact day one chooses for a year ago.,CRWD&n=…

(Years tend to have 250 trading days)

1 Like

CRWD was $96.58 on 8/21/19 and closed $112.02 on 8/21/20. Gain 16%
ESTC was $84.07 and $105.94 for corresponding dates. Gain 26%

So, ESTC has done better than CRWD.

AYX was $142.65 on 8/21/19 and closed $169 on 8/6/20 (the day of its earnings release). Gain 18%!

So, even if you want to discount the 40% tumble that AYX has taken in the last 2 weeks, ESTC has done better than AYX.

I am not a fan of comparing stocks over periods in general. But still, it is interesting to note that ESTC has beat out 2 highly owned stocks in these boards over a 1-year period. That is the point I was trying to make there. Also, a 1-year period is general enough as opposed to say a 4 month period.


To paraphase youjust after last Q,
‘ESTC derives a portion of its rev (they say less than a third) from search which maybe on less firm ground. Think Uber, Tinder but then Insta cart is doing good. So, search is not all bad but it seems to be linked to macro more like AYX, and SMAR. ESTC derives more than 1/3rd from logging which comes under observability which is safer.

ESTC which did 53% is guiding for 35%. I see as conservative guide. Let us say ESTC has low billings next Q as they fear and just do 35-40%. What is such a company with break even cash flow worth? Just compare with other SAAS companies. I don’t think it is likely to crash much,
maybe even expand the ps multiple a little.

One final note. In terms of mission critical security is most important, then observability, then enterprise search.‘

Me here: my understanding is that because ESTC is usage based they’ll get a bump in Revenues, not as big as FSLY. And because they dare I say ‘bundle’ their products (including their security with their observability) they might also get a bump due to their relative affordability, compared to DDOG and SPLK. As a 4.5% position in my portfolio, I’m betting they get both.

We’ll see Wednesday,



From the last call:
SaaS revenue (Elastic Cloud revenue )in the fourth quarter was $29 million, up 110% year-over-year or 120% on a constant currency basis. Saas revenue for FY 2020 was $92.3 million, up 101% year-over-year or 109% on a constant currency basis. We saw strength in both our annual SaaS business as well as our monthly SaaS business. Our rapid growth in SaaS reflects the success of our strategy to widen our competitive moat with proprietary features and to leverage our partnerships.

I have in my notes that Saas is 24% of total revenue. This makes sense to me.

My question is how does the above reconcile with what I have below from Stocknovic’s post below?

Subcriptions % Revs
Q1 Q2 Q3 Q4. YR
2017 88.7% 89.9% 91.0% 91.4% 90.4%
2018 92.9% 93.9% 93.6% 93.1% 93.4%
2019 91.1% 91.9% 91.2% 91.3% 91.4%
2020 91.8% 90.7% 92.1% 92%

Thanks for anyone’s help…Stocknovice?

1 Like

Thanks for anyone’s help…Stocknovice?

ESTC reports both subscription revenues and SaaS revenues. Here’s what I have:

Subscription Revs							%YoY					
	Q1	Q2	Q3	Q4	YR			Q1	Q2	Q3	Q4	YR
2017	$14.70	$19.16	$21.06	$24.82	$79.75		2017					0
2018	$29.39	$34.78	$39.03	$46.18	$149.38		2018	99.9%	81.5%	85.4%	86.0%	87.3%
2019	$51.61	$58.44	$64.59	$73.62	$248.25		2019	75.6%	68.0%	65.5%	59.4%	66.2%
2020	$82.39	$91.68	$104.20	$113.90	$392.17		2020	59.6%	56.9%	61.3%	54.7%	58.0%
2021							2021	-100.0%	-100.0%	-100.0%	-100.0%	-100.0%
SaaS Revs (webcast slides)							%YoY					
	Q1	Q2	Q3	Q4	YR			Q1	Q2	Q3	Q4	YR
2017							2017					0
2018				$8.15			2018					
2019	$10.28	$10.03	$11.74	$13.77	$45.82		2019				69.0%	
2020	$17.58	$20.65	$25.10	$29.00	$92.33		2020	71.0%	105.9%	113.8%	110.6%	101.5%
2021							2020	-100.0%	-100.0%	-100.0%	-100.0%	-100.0%
Subcriptions % Revs							SaaS % Revs					
	Q1	Q2	Q3	Q4	YR			Q1	Q2	Q3	Q4	YR
2017	88.7%	89.9%	91.0%	91.4%	90.4%		2017	0.0%	0.0%	0.0%	0.0%	0.0%
2018	92.9%	93.9%	93.6%	93.1%	93.4%		2018	0.0%	0.0%	0.0%	16.4%	0.0%
2019	91.1%	91.9%	91.2%	91.3%	91.4%		2019	18.1%	15.8%	16.6%	17.1%	16.9%
2020	91.8%	90.7%	92.1%	92.1%	91.7%		2020	19.6%	20.4%	22.2%	23.5%	21.6%
2021	0.0%	#DIV/0!	#DIV/0!	#DIV/0!	0.0%		2021	0.0%	#DIV/0!	#DIV/0!	#DIV/0!	0.0%


Thanks Stocknovice for the numbers all together. I’m assuming that their self-managed offering is subscription-based and charged based on usage and their SaaS, Elastic Cloud, handles hosting for you and that can be charged both annually and monthly, but is also subscription based. This would reconcile the numbers; but, I just wanted to confirm with those here that are, in my opinion, more adept at this kind of analysis.

Is the above correct or do I have it wrong?

Please and thank you,


If revenue growth for observability (30+% of ESTC earnings)drops 20%, like DDOg did this Q (which I believe it will despite the affordability provided by ESTC relative to DDOG or SPLK). And if‘Search For ESTC is tied to economic growth more like SMAR and AYX’(and I believe it is). And 75% of Total revenues for ESTC are recognized as subscription but not Saas and thus will decline disproportionately, given ASC606 treatment(as I concluded in the other thread here titled ‘Subscription vs Saas’). And I’m not thinking the usage based bump in revenue growth possible for ESTC will be anything like it was for FSLY.

Then I’m thinking ESTC revenue growth is going to hit the brakes pretty hard for the quarter reporting tomorrow. With the big run up in the last two weeks, I believe share price will come down after earnings.

Unless anyone here seeing something missing in my thinking here, I may trim some of my 4.5% position tomorrow.




If ESTC reports rev grth of about 40% it will be inline with the rate of DDOG’s reported QoQ slow down (87 to 67%). Anything different raises some interesting questions though 1 Quarter does not make a trend.

1 Like

After listening to the call I was unimpressed and after 18 months of in and out, mostly in, I sold my 4.5% position in ESTC. I added to Slack seeing as the effects of ASC606 on Subscription vs Saas didn’t seem to be at play with ESTC.

I can’t say that the usage based pricing didn’t make up the difference for ESTC; but, I just love Slacks Margins and their advent of Channels and purchase of Remito. I do agree With Bert that Slack is the standard for what they do and they do not compete with MS Teams. And I agree with many here that Slack will become the social network as a platform for enterprises, in short order.

I meant to add the following, in order State at least one of the reasons I was not impressed with the ESTC Q.

From the call:
Turning to guidance, for Q2 we expect revenue in the range of $129 million to $131 million, representing a growth rate of 29% year-over-year at the midpoint. We expect non-GAAP operating margin in the range of negative 11.5% to negative 10.5% and non-GAAP net loss per share in the range of $0.22 to $0.20, using between 86 million and 87 million ordinary shares outstanding. For fiscal '21, we expect revenue in the range of $544 million to $550 million, representing a growth rate of 28% year-over-year at the midpoint. We expect non-GAAP operating margin in the range of negative 13.5% to negative 11.5% and non-GAAP net loss per share in the range of $0.83 to $0.69, using between 87 and 89 million ordinary shares outstanding. In closing, we delivered another strong quarter, executing well and delivering growth, while investing to address the rich market opportunity ahead of us across our three solutions. I look forward to sharing our progress with you as we move forward.