Elastic stock surges after announcing $500 million share repurchase program

Investing.com -- Elastic NV (NYSE:ESTC) stock surged 10.8% in after-hours trading Thursday after the Search AI Company announced a $500 million share repurchase program and launched a new GPU-accelerated inference service.

The company’s board of directors approved the share buyback program with no expiration date, allowing Elastic to repurchase its outstanding ordinary shares from time to time. The timing and amount of shares to be repurchased will depend on share price, business conditions, and other factors.

"Our share repurchase program reflects the Board and management team’s confidence in the strength of Elastic’s business, strategy and execution," said Navam Welihinda, Chief Financial Officer of Elastic. The company emphasized its disciplined capital allocation approach and strong balance sheet position.

Earlier in the day, Elastic also announced the launch of its Elastic Inference Service, a GPU-accelerated inference platform integrated into its Elastic Cloud offering. The new service, which utilizes NVIDIA GPUs, is designed for semantic search, vector search, and generative AI applications.

The platform provides inference capabilities directly within Elasticsearch and features Elastic’s built-in sparse vector model, Elastic Learned Sparse EncodeR (ELSER), as the first text-embedding model available in technical preview.

The inference service operates on consumption-based pricing, charging per model per million tokens. According to the company, the GPU-accelerated system delivers up to 10x higher throughput for data ingestion compared to CPU-based alternatives.

Elastic plans to add additional models for multilingual embeddings and reranking to the service, including models from its recent Jina acquisition in future updates.

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