Q3 Revenue of $223.9 million, Up 43%
year-over-year
Q3 Elastic Cloud Revenue of $80.4 million, Up
79% year-over-year
Elastic (NYSE: ESTC) (“Elastic”), the company behind
Elasticsearch and the Elastic Stack, announced strong results for
its third quarter of fiscal 2022 (ended January 31, 2022).
Third Quarter Fiscal 2022 Financial Highlights
- Total revenue was $223.9 million, an increase of 43%
year-over-year, as reported and on a constant currency basis
- Elastic Cloud revenue was $80.4 million, an increase of 79%
year-over-year, or 80% on a constant currency basis
- GAAP operating loss was $45.8 million; GAAP operating margin
was -20%
- Non-GAAP operating profit was $0.2 million; non-GAAP operating
margin was 0%
- GAAP net loss per share was $0.61; non-GAAP loss per share was
$0.12
- Operating cash flow was $5.1 million with adjusted free cash
flow of $15.8 million
- Cash and cash equivalents were $864.4 million as of January 31,
2022
"We delivered another record quarter and exceeded our revenue
expectations, fueled by increasing consumption trends in Elastic
Cloud. Our cloud business grew 79% year-over-year and now accounts
for 36% of total revenue,” said Ash Kulkarni, CEO, Elastic. “I look
forward to us executing against the large and growing market
opportunity ahead of us, particularly in cloud. I am confident that
our demonstrated success, combined with the relevance of our
solutions, enables us to capture this sizeable opportunity.”
Third Quarter Fiscal 2022 Key Metrics and Recent Business
Highlights
Key Customer Metrics
- Total subscription customer count was over 17,900, compared to
over 17,000 in Q2 FY22, and over 13,800 in Q3 FY21
- Total customer count with Annual Contract Value (ACV) greater
than $100,000 was over 890, compared to over 830 in Q2 FY22, and
over 670 in Q3 FY21
- Net Expansion Rate was slightly above Q2 FY22 and just below
130%
Business Highlights
Cloud Momentum
- Delivered a more simplified Elastic Cloud on AWS onboarding
and trial experience and expanded cloud-native AWS integrations
which include AWS FireLens, Amazon S3 Storage Lens, the Elastic
Serverless Forwarder in the AWS Serverless Application Repository,
Elastic and AWS Web Application Firewall, and the Elastic and AWS
Network Firewall
Product Innovations
- Announced Elastic 8.0 with major enhancements to
Elasticsearch’s vector search capabilities, new native support for
modern natural language processing models, increasingly simplified
data onboarding, and a streamlined security experience
- Announced Elastic 7.16 with new features enabling
simplified data ingestion into the Elastic Search Platform,
including dozens of prebuilt Elastic Agent data integrations, and
observability tooling for continuous integration and continuous
delivery (CI/CD) pipelines
Community Momentum
- Hosted the second annual Elastic Community Conference
with 2,000+ global attendees participating in more than 60
sessions
Financial Outlook
The Company is providing the following guidance:
For the fourth quarter of fiscal 2022 (ending April 30,
2022):
- Total revenue is expected to be between $230 million and $232
million
- Non-GAAP operating margin is expected to be between -5.5% and
-4.5%
- Non-GAAP net loss per share is expected to be between $0.24 and
$0.20, assuming between 93.1 million and 94.1 million weighted
average ordinary shares outstanding
For fiscal 2022 (ending April 30, 2022):
- Total revenue is expected to be between $853 million and $855
million
- Non-GAAP operating margin is expected to be between -0.4% and
-0.2%
- Non-GAAP net loss per share is expected to be between $0.42 and
$0.38, assuming between 92.0 million and 93.0 million weighted
average ordinary shares outstanding
See the section titled “Forward-Looking Statements” below for
information on the factors that could cause our actual results to
differ materially. A reconciliation of non-GAAP guidance measures
to corresponding GAAP measures is not available on a
forward-looking basis without unreasonable effort due to the
uncertainty regarding, and the potential variability of, many of
the costs and expenses that may be incurred in the future. These
items necessary to reconcile such non-GAAP measures could be
material and have a significant impact on the Company’s results
computed in accordance with GAAP.
Conference Call and Webcast
Elastic’s executive management team will host a conference call
today at 2:00 p.m. PT/5:00 p.m. ET to discuss the Company’s
financial results and business outlook. A live audio webcast of the
conference call will be available through Elastic’s Investor
Relations website at ir.elastic.co. Slides will accompany the
webcast. The replay of the webcast and slides will be available for
two months.
About Elastic
Elastic is a search company built on a free and open heritage.
Anyone can use Elastic products and solutions to get started
quickly and frictionlessly. Elastic offers three solutions for
enterprise search, observability, and security, built on one
technology stack that can be deployed anywhere. From finding
documents to monitoring infrastructure to hunting for threats,
Elastic makes data usable in real time and at scale. Founded in
2012, Elastic is a distributed company with Elasticians around the
globe. Learn more at elastic.co.
Elastic and associated marks are trademarks or registered
trademarks of Elastic N.V. and its subsidiaries. All other company
and product names may be trademarks of their respective owners.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to Elastic’s
financial results as determined in accordance with U.S. GAAP are
included at the end of this press release following the
accompanying financial data. For a description of these non-GAAP
financial measures, including the reasons management uses each
measure, please see the section of this press release titled “About
Non-GAAP Financial Measures.”
Forward-Looking Statements
This press release contains forward-looking statements that
involve substantial risk and uncertainties, which include, but are
not limited to, statements regarding our expected financial results
for the fiscal quarter and the fiscal year ending April 30, 2022,
our expectations regarding demand for our products and solutions
and our future revenue, our assessments of the strength of our
solutions and products, the expected performance or benefits of our
offerings, our expectations regarding market and growth
opportunities and our ability to address those opportunities, our
expectations regarding the growth and adoption of our Elastic Cloud
offering, and the expected benefits of our investments. These
forward-looking statements are subject to the safe harbor
provisions under the Private Securities Litigation Reform Act of
1995. Our expectations and beliefs in light of currently available
information regarding these matters may not materialize. Actual
outcomes and results may differ materially from those contemplated
by these forward-looking statements due to uncertainties, risks,
and changes in circumstances, including but not limited to those
related to: our future financial performance, including our
expectations regarding our revenue, cost of revenue, gross profit
or gross margin, operating expenses (which include changes in sales
and marketing, research and development and general and
administrative expenses), and our ability to achieve and maintain
future profitability; our ability to continue to deliver and
improve our offerings and develop new offerings, including
security-related product and Elastic Cloud offerings; customer
acceptance and purchase of our existing offerings and new
offerings, including the expansion and adoption of our Elastic
Cloud offerings; our inability to realize value from investments in
the business, including R&D investments and strategic
transactions; our ability to maintain and expand our user and
customer base; the impact of the COVID-19 pandemic, including any
variants, on the macroeconomic environment, on our business,
operations, hiring and financial results, and on businesses of our
customers and partners, including their spending priorities, the
effect of lockdowns, restrictions and new regulations; the impact
of our licensing model on the use and adoption of our software; the
impact of foreign currency exchange rate and interest rate
fluctuations on our results; our international expansion strategy;
our operating results and cash flows; our beliefs and objectives
for future operations; the sufficiency of our capital resources;
our ability to successfully execute our go-to-market strategy,
including by expanding our relationships with our partners, and
expand in our existing markets and into new markets, and our
ability to forecast customer retention and expansion; and general
market, political, economic and business conditions.
Any additional or unforeseen effect from the COVID-19 pandemic
may exacerbate these risks. Additional risks and uncertainties that
could cause actual outcomes and results to differ materially are
included in our filings with the Securities and Exchange Commission
(the “SEC”), including our Annual Report on Form 10-K for the
fiscal year ended April 30, 2021 and any subsequent reports filed
with the SEC. SEC filings are available on the Investor Relations
section of Elastic’s website at ir.elastic.co and the SEC’s website
at www.sec.gov. Elastic assumes no obligation to, and does not
currently intend to, update any such forward-looking statements,
except as required by law.
Contact Information
Janice Oh Elastic Investor Relations ir@elastic.co
Lisa Boughner Elastic Corporate Communications
lisa.boughner@elastic.co
Elastic N.V.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(amounts in thousands, except
share and per share amounts)
(Unaudited)
Three Months Ended January
31,
Nine Months Ended January
31,
2022
2021
2022
2021
Revenue
License - self-managed
$
20,119
$
15,280
$
54,457
$
45,673
Subscription - self-managed and SaaS
189,495
131,969
522,599
357,127
Total subscription revenue
209,614
147,249
577,056
402,800
Professional services
14,330
9,866
45,963
28,079
Total revenue
223,944
157,115
623,019
430,879
Cost of revenue
Cost of license - self-managed
501
346
1,242
1,039
Cost of subscription - self-managed and
SaaS
47,076
31,426
126,097
86,464
Total cost of revenue - subscription
47,577
31,772
127,339
87,503
Cost of professional services
13,707
10,196
37,491
27,744
Total cost of revenue
61,284
41,968
164,830
115,247
Gross profit
162,660
115,147
458,189
315,632
Operating expenses
Research and development
71,749
51,400
194,894
143,766
Sales and marketing
105,069
71,087
288,055
191,712
General and administrative
31,691
27,121
89,298
72,555
Total operating expenses
208,509
149,608
572,247
408,033
Operating loss
(45,849
)
(34,461
)
(114,058
)
(92,401
)
Other income (expense), net
Interest expense
(6,175
)
(65
)
(14,327
)
(78
)
Other income (expense), net
(861
)
(2,312
)
(509
)
8,502
Loss before income taxes
(52,885
)
(36,838
)
(128,894
)
(83,977
)
Provision for income taxes
3,841
1,136
9,344
2,156
Net loss
$
(56,726
)
$
(37,974
)
$
(138,238
)
$
(86,133
)
Net loss per share attributable to
ordinary shareholders, basic and diluted
$
(0.61
)
$
(0.43
)
$
(1.50
)
$
(1.00
)
Weighted-average shares used to compute
net loss per share attributable to ordinary shareholders, basic and
diluted
93,015,185
88,341,038
92,140,919
86,296,028
Elastic N.V.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(amounts in thousands, except
share and per share amounts)
(Unaudited)
As of January 31,
2022
As of April 30,
2021
Assets
Current assets:
Cash and cash equivalents
$
864,363
$
400,814
Restricted cash
3,928
2,894
Accounts receivable, net of allowance for
credit losses of $2,729 and $2,344 as of January 31, 2022 and April
30, 2021, respectively
146,218
160,415
Deferred contract acquisition costs
38,938
36,089
Prepaid expenses and other current
assets
39,405
37,002
Total current assets
1,092,852
637,214
Property and equipment, net
6,739
8,881
Goodwill
304,155
198,851
Operating lease right-of-use assets
21,454
25,464
Intangible assets, net
49,948
36,286
Deferred contract acquisition costs,
non-current
62,980
50,263
Deferred tax assets
3,765
3,697
Other assets
17,403
12,516
Total assets
$
1,559,296
$
973,172
Liabilities and Shareholders’
Equity
Current liabilities:
Accounts payable
$
21,792
$
7,248
Accrued expenses and other liabilities
42,110
28,909
Accrued compensation and benefits
56,181
52,525
Operating lease liabilities
8,983
8,528
Deferred revenue
362,287
352,805
Total current liabilities
491,353
450,015
Deferred revenue, non-current
33,395
44,895
Long-term debt, net
566,271
—
Operating lease liabilities,
non-current
14,879
19,649
Other liabilities, non-current
21,089
7,782
Total liabilities
1,126,987
522,341
Commitments and contingencies
Shareholders’ equity:
Convertible preference shares, €0.01 par
value; 165,000,000 shares authorized, 0 shares issued and
outstanding as of January 31, 2022 and April 30, 2021
—
—
Ordinary shares, par value €0.01 per
share: 165,000,000 shares authorized; 93,420,927 and 90,533,985
shares issued and outstanding as of January 31, 2022 and April 30,
2021, respectively
982
948
Treasury stock
(369
)
(369
)
Additional paid-in capital
1,197,570
1,071,675
Accumulated other comprehensive loss
(14,318
)
(8,105
)
Accumulated deficit
(751,556
)
(613,318
)
Total shareholders’ equity
432,309
450,831
Total liabilities and shareholders’
equity
$
1,559,296
$
973,172
Elastic N.V.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(amounts in thousands)
(Unaudited)
Three Months Ended January
31,
Nine Months Ended January
31,
2022
2021
2022
2021
Cash flows from operating
activities
Net loss
$
(56,726
)
$
(37,974
)
$
(138,238
)
$
(86,133
)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation and amortization
5,233
4,290
14,558
12,856
Amortization of deferred contract
acquisition costs
14,803
10,282
43,373
28,455
Amortization of debt issuance costs
247
—
554
—
Non-cash operating lease cost
2,417
1,822
6,259
5,256
Stock-based compensation expense, net of
amounts capitalized
37,393
25,227
96,971
65,305
Deferred income taxes
30
(2
)
(219
)
(288
)
Foreign currency transaction (gain)
loss
1,703
1,461
1,707
(9,463
)
Other
—
22
98
11
Changes in operating assets and
liabilities:
Accounts receivable, net
9,282
15,183
9,801
15,246
Deferred contract acquisition costs
(21,957
)
(16,740
)
(61,234
)
(54,612
)
Prepaid expenses and other current
assets
(4,868
)
3,717
(2,650
)
4,817
Other assets
2,534
1,197
(803
)
5,237
Accounts payable
3,967
(3,683
)
14,452
(6,321
)
Accrued expenses and other liabilities
820
2,757
17,539
1,696
Accrued compensation and benefits
863
(5,168
)
4,686
(5,859
)
Operating lease liabilities
(2,455
)
(1,867
)
(6,438
)
(5,402
)
Deferred revenue
11,768
18,877
8,306
53,309
Net cash provided by operating
activities
5,054
19,401
8,722
24,110
Cash flows from investing
activities
Purchases of property and equipment
(236
)
(1,076
)
(987
)
(2,732
)
Capitalization of internal-use software
costs
(1,514
)
—
(4,227
)
—
Business acquisitions, net of cash
acquired
(11,750
)
—
(119,854
)
—
Other
—
—
—
1,320
Net cash used in investing activities
(13,500
)
(1,076
)
(125,068
)
(1,412
)
Cash flows from financing
activities
Proceeds from the issuance of senior
notes
—
—
575,000
—
Proceeds from issuance of ordinary shares
upon exercise of stock options
6,709
22,324
27,540
67,554
Payments of debt issuance costs
(49
)
—
(9,283
)
—
Net cash provided by financing
activities
6,660
22,324
593,257
67,554
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(8,921
)
3,529
(12,328
)
5,848
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(10,707
)
44,178
464,583
96,100
Cash, cash equivalents, and restricted
cash, beginning of period
878,998
351,311
403,708
299,389
Cash, cash equivalents, and restricted
cash, end of period
$
868,291
$
395,489
$
868,291
$
395,489
Elastic N.V.
REVENUE BY TYPE
(amounts in thousands, except
percentages)
(Unaudited)
Three Months Ended January
31,
Nine Months Ended January
31,
2022
2021
2022
2021
Amount
% of
Total
Revenue
Amount
% of
Total
Revenue
Amount
% of
Total
Revenue
Amount
% of
Total
Revenue
Elastic Cloud
$ 80,402
36 %
$ 44,929
29 %
$ 210,963
34 %
$ 114,984
27 %
Other subscription
129,212
58 %
102,320
65 %
366,093
59 %
287,816
66 %
Total subscription revenue
209,614
94 %
147,249
94 %
577,056
93 %
402,800
93 %
Professional services
14,330
6 %
9,866
6 %
45,963
7 %
28,079
7 %
Total revenue
$ 223,944
100 %
$ 157,115
100 %
$ 623,019
100 %
$ 430,879
100 %
Elastic N.V.
RECONCILIATION OF GAAP TO
NON-GAAP DATA
CALCULATED BILLINGS
(amounts in thousands)
(Unaudited)
Three Months Ended January
31,
Nine Months Ended January
31,
2022
2021
2022
2021
Total revenue
$
223,944
$
157,115
$
623,019
$
430,879
Add: Increase in deferred revenue
11,768
18,877
8,306
53,309
Less: Increase in unbilled accounts
receivable
(2,711
)
(2,790
)
(2,102
)
(3,214
)
Calculated billings
$
233,001
$
173,202
$
629,223
$
480,974
Elastic N.V.
RECONCILIATION OF GAAP TO
NON-GAAP DATA
ADJUSTED FREE CASH
FLOW
(amounts in thousands, except
percentages)
(Unaudited)
Three Months Ended January
31,
Nine Months Ended January
31,
2022
2021
2022
2021
Net cash provided by operating
activities
$
5,054
$
19,401
$
8,722
$
24,110
Less: Purchases of property and
equipment
(236
)
(1,076
)
(987
)
(2,732
)
Less: Capitalization of internal-use
software
(1,514
)
—
(4,227
)
—
Add: Interest paid on long-term debt
12,452
—
12,452
$
—
Adjusted free cash flow
$
15,756
$
18,325
$
15,960
$
21,378
Net cash used in investing activities
$
(13,500
)
$
(1,076
)
$
(125,068
)
$
(1,412
)
Net cash provided by financing
activities
$
6,660
$
22,234
$
593,257
$
67,554
Net cash provided by operating activities
(as a percentage of total revenue)
2
%
13
%
1
%
6
%
Less: Purchases of property and equipment
(as a percentage of total revenue)
—
%
(1
)%
—
%
(1
)%
Less: Capitalization of internal-use
software (as a percentage of total revenue)
(1
)%
—
%
—
%
—
%
Add: Interest paid on long-term debt (as a
percentage of total revenue)
6
%
—
%
2
%
—
%
Adjusted free cash flow margin
7
%
12
%
3
%
5
%
Elastic N.V.
RECONCILIATION OF GAAP TO
NON-GAAP DATA
(amounts in thousands, except
percentages, share and per share amounts)
(Unaudited)
Three Months Ended January
31,
Nine Months Ended January
31,
2022
2021
2022
2021
Gross Profit Reconciliation:
GAAP gross profit
$
162,660
$
115,147
$
458,189
$
315,632
Stock-based compensation expense
3,790
3,198
10,855
8,352
Employer payroll taxes on employee stock
transactions
260
589
1,065
911
Amortization of acquired intangibles
3,046
2,110
7,556
6,328
Non-GAAP gross profit
$
169,756
$
121,044
$
477,665
$
331,223
Gross Margin Reconciliation(1):
GAAP gross margin
72.6
%
73.3
%
73.5
%
73.3
%
Stock-based compensation expense
1.7
%
2.0
%
1.7
%
1.9
%
Employer payroll taxes on employee stock
transactions
0.1
%
0.4
%
0.2
%
0.2
%
Amortization of acquired intangibles
1.4
%
1.3
%
1.2
%
1.5
%
Non-GAAP gross margin
75.8
%
77.0
%
76.7
%
76.9
%
Operating Loss Reconciliation:
GAAP operating loss
$
(45,849
)
$
(34,461
)
$
(114,058
)
$
(92,401
)
Stock-based compensation expense
37,393
25,227
97,553
65,305
Employer payroll taxes on employee stock
transactions
1,643
5,685
8,634
10,436
Amortization of acquired intangibles
4,277
3,538
11,644
10,630
Acquisition-related expenses
2,731
—
4,999
—
Non-GAAP operating income (loss)
$
195
$
(11
)
$
8,772
$
(6,030
)
Operating Margin
Reconciliation(1):
GAAP operating margin
(20.5
)%
(21.9
)%
(18.3
)%
(21.4
)%
Stock-based compensation expense
16.7
%
16.1
%
15.7
%
15.2
%
Employer payroll taxes on employee stock
transactions
0.7
%
3.6
%
1.4
%
2.4
%
Amortization of acquired intangibles
1.9
%
2.3
%
1.9
%
2.5
%
Acquisition-related expenses
1.2
%
0.0
%
0.8
%
0.0
%
Non-GAAP operating margin
0.1
%
0.0
%
1.4
%
(1.4
)%
Net Loss Reconciliation:
GAAP net loss
$
(56,726
)
$
(37,974
)
$
(138,238
)
$
(86,133
)
Stock-based compensation expense
37,393
25,227
97,553
65,305
Employer payroll taxes on employee stock
transactions
1,643
5,685
8,634
10,436
Amortization of acquired intangibles
4,277
3,538
11,644
10,630
Acquisition-related expenses
2,731
—
4,999
—
Income tax(2)
(148
)
(427
)
(679
)
(577
)
Non-GAAP net loss
$
(10,830
)
$
(3,951
)
$
(16,087
)
$
(339
)
Non-GAAP net loss per share
attributable to ordinary shareholders, basic and diluted
$
(0.12
)
$
(0.04
)
$
(0.17
)
$
—
Weighted-average shares used to compute
net loss per share attributable to ordinary shareholders, basic and
diluted
93,015,185
88,341,038
92,140,919
86,296,028
(1) Totals may not sum, due to rounding. Gross margin, operating
margin, and earnings per share are calculated based upon the
respective underlying, non-rounded data.
(2) Non-GAAP financial information for the quarter is adjusted
for a tax rate equal to our annual estimated tax rate on non-GAAP
income. This rate is based on our estimated annual GAAP income tax
rate forecast, adjusted to account for items excluded from GAAP
income in calculating the non-GAAP financial measures presented
above as well as significant tax adjustments. Our estimated tax
rate on non-GAAP income is determined annually and may be adjusted
during the year to take into account events or trends that we
believe materially impact the estimated annual rate including, but
not limited to, significant changes resulting from tax legislation,
material changes in the geographic mix of revenue and expenses and
other significant events. Due to the differences in the tax
treatment of items excluded from non-GAAP earnings, as well as the
methodology applied to our estimated annual tax rates as described
above, our estimated tax rate on non-GAAP income may differ from
our GAAP tax rate and from our actual tax liabilities.
Elastic N.V.
RECONCILIATION OF GAAP TO
NON-GAAP DATA
(amounts in thousands)
(Unaudited)
Three Months Ended January
31,
Nine Months Ended January
31,
2022
2021
2022
2021
Cost of revenue reconciliation:
GAAP cost of license - self-managed
$
501
$
346
$
1,242
$
1,039
Amortization of acquired intangibles
(501
)
(346
)
(1,242
)
(1,039
)
Non-GAAP cost of license - self
-managed
$
—
$
—
$
—
$
—
GAAP cost of subscription - self-managed
and SaaS
$
47,076
$
31,426
$
126,097
$
86,464
Stock-based compensation expense
(2,064
)
(1,839
)
(6,262
)
(5,065
)
Employer payroll taxes on employee stock
transactions
(147
)
(267
)
(474
)
(487
)
Amortization of acquired intangibles
(2,545
)
(1,764
)
(6,314
)
(5,289
)
Non-GAAP cost of subscription -
self-managed and SaaS
$
42,320
$
27,556
$
113,047
$
75,623
GAAP cost of professional services
$
13,707
$
10,196
$
37,491
$
27,744
Stock-based compensation expense
(1,726
)
(1,359
)
(4,593
)
(3,287
)
Employer payroll taxes on employee stock
transactions
(113
)
(322
)
(591
)
(424
)
Non-GAAP cost of professional services
$
11,868
$
8,515
$
32,307
$
24,033
Operating expenses
reconciliation:
GAAP research and development expense
$
71,749
$
51,400
$
194,894
$
143,766
Stock-based compensation expense
(16,029
)
(9,516
)
(41,784
)
(24,309
)
Employer payroll taxes on employee stock
transactions
(663
)
(1,243
)
(2,916
)
(2,702
)
Acquisition-related expenses
(2,713
)
—
(3,695
)
—
Non-GAAP research and development
expense
$
52,344
$
40,641
$
146,499
$
116,755
GAAP sales and marketing expense
$
105,069
$
71,087
$
288,055
$
191,712
Stock-based compensation expense
(12,545
)
(8,372
)
(30,798
)
(22,519
)
Employer payroll taxes on employee stock
transactions
(512
)
(1,723
)
(3,874
)
(3,494
)
Amortization of acquired intangibles
(1,231
)
(1,428
)
(4,088
)
(4,302
)
Non-GAAP sales and marketing expenses
$
90,781
$
59,564
$
249,295
$
161,397
GAAP general and administrative
expense
$
31,691
$
27,121
$
89,298
$
72,555
Stock-based compensation expense
(5,029
)
(4,141
)
(14,116
)
(10,125
)
Employer payroll taxes on employee stock
transactions
(208
)
(2,130
)
(779
)
(3,329
)
Acquisition-related expenses
(18
)
—
(1,304
)
—
Non-GAAP general and administrative
expense
$
26,436
$
20,850
$
73,099
$
59,101
About Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S.
GAAP, we believe the non-GAAP measures listed below are useful in
evaluating our operating performance. We use these non-GAAP
financial measures to evaluate our ongoing operations and for
internal planning and forecasting purposes. We believe that
non-GAAP financial information, when taken collectively, may be
helpful to investors because it provides consistency and
comparability with past financial performance. However, non-GAAP
financial information is presented for supplemental informational
purposes only, has limitations as an analytical tool and should not
be considered in isolation or as a substitute for financial
information presented in accordance with U.S. GAAP. In particular,
free cash flow is not a substitute for cash used in operating
activities. Additionally, the utility of free cash flow as a
measure of our liquidity is further limited as it does not
represent the total increase or decrease in our cash balance for a
given period. In addition, other companies, including companies in
our industry, may calculate similarly-titled non-GAAP measures
differently or may use other measures to evaluate their
performance, all of which could reduce the usefulness of our
non-GAAP financial measures as tools for comparison. A
reconciliation of our historical non-GAAP financial measures to
their most directly comparable financial measure stated in
accordance with U.S. GAAP has been provided in the financial
statement tables included in this press release. Investors are
cautioned that there are a number of limitations associated with
the use of non-GAAP financial measures and key metrics as
analytical tools. Investors are encouraged to review these
reconciliations, and not to rely on any single financial measure to
evaluate our business.
Non-GAAP Gross Profit and Non-GAAP Gross Margin
We define non-GAAP gross profit and non-GAAP gross margin as
GAAP gross profit and GAAP gross margin, respectively, excluding
stock-based compensation expense, employer payroll taxes on
employee stock transactions, and amortization of acquired
intangible assets. We believe non-GAAP gross profit and non-GAAP
gross margin provide our management and investors consistency and
comparability with our past financial performance and facilitate
period-to-period comparisons of operations, as these metrics
generally eliminate the effects of certain variables from period to
period for reasons unrelated to overall operating performance.
Non-GAAP Operating Income (Loss) and Non-GAAP Operating
Margin
We define non-GAAP operating income (loss) and non-GAAP
operating margin as GAAP operating loss and GAAP operating margin,
respectively, excluding stock-based compensation expense, employer
payroll taxes on employee stock transactions, amortization of
acquired intangible assets, and acquisition-related expenses. We
believe non-GAAP operating income (loss) and non-GAAP operating
margin provide our management and investors consistency and
comparability with our past financial performance and facilitate
period-to-period comparisons of operations, as these metrics
generally eliminate the effects of certain variables from period to
period for reasons unrelated to overall operating performance.
Non-GAAP Net Earnings (Loss) Per Share
We define non-GAAP net earnings (loss) per share as GAAP net
loss per share, excluding stock-based compensation expense,
employer payroll taxes on employee stock transactions, amortization
of acquired intangible assets, acquisition-related expenses and the
tax effects related to the foregoing. We believe non-GAAP net
earnings (loss) per share provides our management and investors
consistency and comparability with our past financial performance
and facilitates period-to-period comparisons of operations, as this
metric generally eliminates the effects of certain variables from
period to period for reasons unrelated to overall operating
performance.
Adjusted Free Cash Flow and Adjusted Free Cash Flow
Margin
Adjusted free cash flow is a non-GAAP financial measure that we
define as net cash provided by (used in) operating activities
adjusted for cash paid for interest less cash used for investing
activities for purchases of property and equipment, and capitalized
internal-use software costs. Adjusted free cash flow margin is
calculated as adjusted free cash flow divided by total revenue.
Adjusted free cash flow does not represent residual cash flow
available for discretionary expenditures since, among other things,
we have mandatory debt service requirements.
Calculated Billings
We define calculated billings as total revenue plus the increase
(decrease) in total deferred revenue as presented on or derived
from our consolidated statements of cash flows less the (increase)
decrease in total unbilled accounts receivable in a given period.
Calculated billings exclude deferred revenue and unbilled accounts
receivable acquired through acquisitions in the period of
acquisition. We typically invoice our customers annually in
advance, and to a lesser extent multi-year in advance, quarterly in
advance, monthly in advance, monthly in arrears or upon delivery.
Our management uses calculated billings to understand and evaluate
our near-term cash flows and operating results.
Constant Currency
We compare the percent change in certain results from one period
to another period using constant currency information to provide a
framework for assessing how our business performed excluding the
effect of foreign currency rate fluctuations. In presenting this
information, current and comparative prior period results are
converted into United States dollars at the exchange rates in
effect on the last day of our prior fiscal year, rather than the
actual exchange rates in effect during the respective periods.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220303005804/en/
Janice Oh Elastic Investor Relations ir@elastic.co
Lisa Boughner Elastic Corporate Communications
lisa.boughner@elastic.co
Elastic NV (NYSE:ESTC)
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