What happened

After fast-growing software company Elastic N.V. (NYSE:ESTC) reported top- and bottom-line financial results for its fiscal first quarter that surpassed expectations, its shares are surging 14.7% higher at noon EDT.

So what

Elastic markets a suite of products that help companies capture, analyze, and visualize data. Elastic's ability to cull information that could otherwise be overlooked to produce better insights has led to its being labeled the Google of corporate search.

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In its fiscal first quarter, Elastic enjoyed significant growth. Its net expansion rate -- a measure that compares spending by existing clients now versus one year ago -- exceeded 130% for the 12th straight quarter and its customer count increased to over 8,800 from over 8,100 in its fiscal fourth quarter. As a result, revenue clocked in at $89.7 million, up 58.4% year over year, which was $6 million above analysts consensus forecast. If you back out currency conversion (international revenue represents 45% of sales), then Elastic's revenue increased over 60% compared to one year ago. 

Progress was made toward profitability in the quarter, too. Adjusted net loss improved to $0.32 per share, up from a loss of $0.38 per share last year, and that was $0.10 better than industry watchers' outlook.

Now what

Elastic is investing heavily in research and development, so losses are likely to continue for a while. Nevertheless, it's encouraging to see losses shrinking, especially since revenue is expected to keep climbing.

For the full fiscal year, Elastic's management is targeting revenue of between $406 million to $412 million, up 51% year over year at the midpoint. It also estimates operating losses will be between $1.40 to $1.24 per share. Previously, its guidance was for sales of between $397 million to $403 million, and its bottom-line guidance was for a loss of between $1.49 to $1.33 per share.

Given that businesses are producing data at a record pace and Elastic's carved out a leadership position in corporate search, investors are right to be increasingly optimistic about the company's future.

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