However, despite the fact the business is clearly quite healthy for ESTC, the stock is selling off sharply this morning, down as much as 11%. The main cause for the weakness, in our view, is simply that the stock had sky-rocketed by nearly 60% over the past couple of months as investors anticipated a strong quarter. So, heading into the print, many people were already sitting on sizable gains, itching for a profit-taking excuse.
The launch higher also created an ultra-rich valuation as shares were trading with a 1-year forward P/S of about 20x heading into yesterday's report. Therefore, unless ESTC really crushed it, the stock was poised for a "sell the news" reaction, which is what we are seeing this morning. Simply put, ESTC was priced for perfection, and as we explain below, there are a couple fundamental blemishes that investors could use as an excuse to sell the stock.
For the quarter, ESTC posted a loss per share of ($0.16), easily beating the ($0.31) consensus. In addition to the robust topline growth (+70%), the company stated that overall spending was lower than it had planned -- mostly due to slower than expected headcount increases. Also, there was some timing related push out of expenses into Q4.
This helped ESTC exceed analysts' bottom line expectations for this quarter, but, investors shouldn't expect the slow down in spending to continue. In fact, management stated last night that it intends to expand its sales team as its main goal right now continues to be expanding its market penetration. Consequently, investors also shouldn't expect ESTC to make meaningful improvements in terms of profitability any time soon. For FY20, analysts are forecasting the company to lose ($1.26)/share, only a slight improvement from the company's ($1.13)-($1.11) guidance for FY19.
This could be construed as one of those fundamental blemishes we noted, especially in light of the meteoric valuation. However, since ESTC is still in the early innings of its growth curve, its focus is on winning new customers, market expansion, and topline growth.
On the topic of growth, revenue surged by 70% to $70.8 million, beating the $65.8 million consensus. Since its October 2018 IPO, the company has reported earnings twice, and both occasions it handily outperformed the Street's top and bottom line expectations.
Both revenue and billings growth remained steady, barely decelerating at all. Specifically, revenue was up 72% last quarter, while billings grew by 76% last quarter, compared to 68% this quarter. ESTC also continues to have success adding larger accounts with its total customer count with an annual contract value greater than $100K now topping 380. That is up from 340 at the end of last quarter.
And, lastly, its net expansion rate continues to be very healthy, once again coming in above 130% for the ninth quarter in a row.
Broadly speaking, there are a few primary trends and tailwinds that are providing a boost for ESTC. For instance, there has been an explosion of apps, particularly in the arena of social networking, which has created increased demand for search technology for enterprises.
Also, managing and analyzing large sets of data, in order to derive better business decisions, has become a major focus for companies across all industries. In recent years, demands for more intelligence and analytics have elevated to require real-time, actionable insights from various data sources to benefit multiple functions across an organization. Search is what makes that possible.
At the same time, advances in data analytics have also ramped significantly. Over the past decade, advances in computer engineering have resulted in increased availability of powerful analytical techniques such as machine learning and natural language processing.