On Feb 26th, Elastic reported strong FQ3' 20 earnings, with total revenue growing 61% YoY, SaaS revenue 118% YoY, and calculated billing 54% YoY. The company finally closed a portion of the federal deals that slipped last quarter. However, despite the strong results, investors seem still concerned about the rapid slowdown of “organic RPO-based booking growth” (around 22% YoY). The management explained that the slowdown was mostly due to shorter contract duration and that monthly SaaS has no remaining performance obligation (RPO).

Elastic also announced the departure of CRO Aaron Katz. Justin Hoffman, a 7-year veteran at Elastic search, will lead the global sales for now. In addition to the CRO transition, Elastic brought in Sally Jenkins (previously marketing leader @ VMware and Symantec) as CMO. We view the development as positive news since Elastic needs to scale its business beyond $1 billion in revenue.

In terms of product offerings, the company continues to innovate at a fast pace. It released version 7.6 for Elastic Stack on Feb 11th, which enables faster search queries. The latest version is well received among developers according to our channel checks. The company also released several proprietary features to Elastic Cloud, such as App search and Elastic Cloud on Kubernetes. The management continues to downplay the AWS’s Open Distro’s threat to Elastic SaaS business, “when it comes to Open Distro. We see very little adoption of it. When it comes to SaaS, the answer is the same. We're driving for product differentiation.”

Elasticsearch is widely popular among Chinese developers. For our readers who can read mandarin, we collect some links to Elasticsearch’s product roll-outs and coming online conferences in China below:

• Elastic 7.6 roll-outs in China. Link

• Elastic Endpoint online conference. Link

• AliCloud contribution to Elastic search. Link