Q4 Revenue of $239.4 million, Up 35% year-over-year (37% in constant currency) Q4 Elastic Cloud Revenue of $87.7 million, Up 71% year-over-year (72% in constant currency) FY22 Revenue of $862.4 million, Up 42% year-over-year (41% in constant currency)

Elastic (NYSE: ESTC) (“Elastic”), the company behind Elasticsearch and the Elastic Stack, announced strong results for its fourth quarter and full fiscal year (ended April 30, 2022).

Fourth Quarter Fiscal 2022 Financial Highlights

  • Total revenue was $239.4 million, an increase of 35% year-over-year, or 37% on a constant currency basis
  • Elastic Cloud revenue was $87.7 million, an increase of 71% year-over-year, or 72% on a constant currency basis
  • GAAP operating loss was $59.6 million; GAAP operating margin was -25%
  • Non-GAAP operating loss was $7.9 million; non-GAAP operating margin was -3%
  • GAAP net loss per share was $0.70; non-GAAP net loss per share was $0.16
  • Operating cash flow was -$3.1 million with adjusted free cash flow of -$5.3 million
  • Cash and cash equivalents were $860.9 million as of April 30, 2022

Full Fiscal 2022 Financial Highlights

  • Total revenue was $862.4 million, an increase of 42% year-over-year, or 41% on a constant currency basis
  • Elastic Cloud revenue was $298.6 million, an increase of 80% year-over-year, or 79% on a constant currency basis
  • GAAP operating loss was $173.7 million; GAAP operating margin was -20%
  • Non-GAAP operating profit was $0.9 million; non-GAAP operating margin was 0%
  • GAAP net loss per share was $2.20; non-GAAP net loss per share was $0.33
  • Operating cash flow was $5.7 million with adjusted free cash flow of $10.7 million

“We had a strong fourth quarter and closed out an excellent year, driven by robust growth in Elastic Cloud, which grew 80% year-over-year in fiscal year 2022, and increased to 37% of total revenue in Q4,” said Ash Kulkarni, CEO, Elastic. “The strong momentum in Elastic Cloud puts us on the path to deliver over 50% of total revenue from Elastic Cloud exiting Q4 of fiscal year 2024, which is ahead of our prior outlook. The enormous market opportunity, the strategic relevance of our solutions to our customers and partners, and the momentum in Elastic Cloud make us confident that we can achieve $2 billion in total revenue in fiscal year 2025.”

Fourth Quarter Fiscal 2022 Key Metrics and Recent Business Highlights

Key Customer Metrics

  • Total subscription customer count was over 18,600, compared to over 17,900 in Q3 FY22, and over 15,000 in Q4 FY21
  • Total customer count with Annual Contract Value (ACV) greater than $100,000 was over 960, compared to over 890 in Q3 FY22, and over 730 in Q4 FY21
  • Net Expansion Rate was just under 130%, and was flat compared to Q3 FY22

Cloud Partner Momentum

  • Announced expanded collaboration with AWS to accelerate momentum and build, market, and deliver seamless access for shared customers
  • Announced expanded strategic partnership with Microsoft to simplify cloud operations, launch co-selling activities, and make it easy to bring data from Azure services into Elastic, and added four new Azure regions in the Americas, Asia, and Africa
  • Joined the Data Cloud Alliance, led by Google Cloud, as a founding member to accelerate the path to value creation and solve the modern data challenges of today’s enterprises

Product Innovations and Updates

  • Announced Elastic 8.1 with new capabilities to help customers defend against cyberattacks and accelerate app development with expanded data integrations, faster indexing speeds, and more efficient storage utilization
  • Announced Elastic 8.2 with new capabilities that enable customers to build seamless search experiences, accelerate troubleshooting of cloud-native services, and streamline security analyst workflows
  • Enhanced machine learning and natural language processing capabilities across both releases to deliver more relevant results
  • Achieved Payment Card Industry Data Security Standard (PCI-DSS) compliance across all Elastic Cloud regions

Other Business Highlights

  • Named a Strong Performer by Forrester Research in The Forrester Wave™: Endpoint Detection and Response (EDR) Providers, Q2 2022
  • Appointed Carolyn Herzog as chief legal officer
  • Appointed Janesh Moorjani as chief operating officer in addition to his role as chief financial officer

Financial Outlook

The Company is providing the following guidance:

For the first quarter of fiscal 2023 (ending July 31, 2022):

  • Total revenue is expected to be between $244 million and $246 million, representing 27% year-over-year growth at the midpoint (32% year-over-year constant currency growth at the midpoint)
  • Non-GAAP operating margin is expected to be between -3.8% and -2.8%
  • Non-GAAP net loss per share is expected to be between $0.20 and $0.16, assuming between 94.0 million and 95.0 million weighted average ordinary shares outstanding

For fiscal 2023 (ending April 30, 2023):

  • Total revenue is expected to be between $1,080 million and $1,086 million, representing 26% year-over-year growth at the midpoint (29% year-over-year constant currency growth at the midpoint)
  • Non-GAAP operating margin is expected to be between 0.0% and 0.5%
  • Non-GAAP net loss per share is expected to be between $0.36 and $0.28, assuming between 95.0 million and 97.0 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. We present forward-looking non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled “About Non-GAAP Financial Measures” for an explanation of these non-GAAP measures. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for operating margin and net loss per share 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 (NYSE: ESTC) is a leading platform for search-powered solutions. We help organizations, their employees, and their customers accelerate the results that matter. With solutions in Enterprise Search, Observability, and Security, we enhance customer and employee search experiences, keep mission-critical applications running smoothly, and protect against cyber threats. Delivered wherever data lives, in one cloud, across multiple clouds, or on-premise, Elastic enables its customers to achieve new levels of success at scale and on a single platform. 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

In relation to constant currency non-GAAP financial measures, the only reconciling item between GAAP financial measures and non-GAAP financial measures is the effect of foreign currency rate fluctuations. Further details on how we calculate such effects can be found in the definition of “Constant Currency” below. Reconciliations of other GAAP financial measures to their respective non-GAAP financial measures are included at the end of this press release following the accompanying financial data. For a description of 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 ending July 31, 2022 and the fiscal year ending April 30, 2023, 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; the effects of currency movements on our financial results, 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; our pricing model strategies and their anticipated impacts on our business and results of operations; 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 (including impacts arising from the ongoing military conflict between Russia and Ukraine).

Any additional or unforeseen effect from the COVID-19 pandemic or ongoing conflict between Russia and Ukraine 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 Nikolay Beliov 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 April 30,

 

Year Ended April 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue

 

 

 

 

 

 

 

License - self-managed

$

22,507

 

 

$

22,321

 

 

$

76,964

 

 

$

67,994

 

Subscription - self-managed and SaaS

 

199,207

 

 

 

142,218

 

 

 

721,806

 

 

 

499,345

 

Total subscription revenue

 

221,714

 

 

 

164,539

 

 

 

798,770

 

 

 

567,339

 

Professional services

 

17,641

 

 

 

13,071

 

 

 

63,604

 

 

 

41,150

 

Total revenue

 

239,355

 

 

 

177,610

 

 

 

862,374

 

 

 

608,489

 

Cost of revenue

 

 

 

 

 

 

 

Cost of license - self-managed

 

306

 

 

 

347

 

 

 

1,548

 

 

 

1,386

 

Cost of subscription - self-managed and SaaS

 

50,559

 

 

 

34,663

 

 

 

176,656

 

 

 

121,127

 

Total cost of revenue - subscription

 

50,865

 

 

 

35,010

 

 

 

178,204

 

 

 

122,513

 

Cost of professional services

 

16,499

 

 

 

10,797

 

 

 

53,990

 

 

 

38,541

 

Total cost of revenue

 

67,364

 

 

 

45,807

 

 

 

232,194

 

 

 

161,054

 

Gross profit

 

171,991

 

 

 

131,803

 

 

 

630,180

 

 

 

447,435

 

Operating expenses

 

 

 

 

 

 

 

Research and development

 

78,867

 

 

 

55,437

 

 

 

273,761

 

 

 

199,203

 

Sales and marketing

 

118,603

 

 

 

82,165

 

 

 

406,658

 

 

 

273,877

 

General and administrative

 

34,143

 

 

 

31,278

 

 

 

123,441

 

 

 

103,833

 

Total operating expenses

 

231,613

 

 

 

168,880

 

 

 

803,860

 

 

 

576,913

 

Operating loss

 

(59,622

)

 

 

(37,077

)

 

 

(173,680

)

 

 

(129,478

)

Other income (expense), net

 

 

 

 

 

 

 

Interest expense

 

(6,389

)

 

 

(107

)

 

 

(20,716

)

 

 

(185

)

Other income (expense), net

 

(2,884

)

 

 

(553

)

 

 

(3,393

)

 

 

7,949

 

Loss before income taxes

 

(68,895

)

 

 

(37,737

)

 

 

(197,789

)

 

 

(121,714

)

Provision for (benefit from) income taxes

 

(3,285

)

 

 

5,564

 

 

 

6,059

 

 

 

7,720

 

Net loss

$

(65,610

)

 

$

(43,301

)

 

$

(203,848

)

 

$

(129,434

)

Net loss per share attributable to ordinary shareholders, basic and diluted

$

(0.70

)

 

$

(0.48

)

 

$

(2.20

)

 

$

(1.48

)

Weighted-average shares used to compute net loss per share attributable to ordinary shareholders, basic and diluted

 

93,806,902

 

 

 

90,028,822

 

 

 

92,547,145

 

 

 

87,207,094

 

 

Elastic N.V.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share and per share amounts)

(Unaudited)

 

 

As of April 30, 2022

 

As of April 30, 2021

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

860,949

 

 

$

400,814

 

Restricted cash

 

2,688

 

 

 

2,894

 

Accounts receivable, net of allowance for credit losses of $2,700 and $2,344 as of April 30, 2022 and April 30, 2021, respectively

 

215,228

 

 

 

160,415

 

Deferred contract acquisition costs

 

43,628

 

 

 

36,089

 

Prepaid expenses and other current assets

 

41,215

 

 

 

37,002

 

Total current assets

 

1,163,708

 

 

 

637,214

 

Property and equipment, net

 

7,207

 

 

 

8,881

 

Goodwill

 

303,906

 

 

 

198,851

 

Operating lease right-of-use assets

 

25,437

 

 

 

25,464

 

Intangible assets, net

 

45,800

 

 

 

36,286

 

Deferred contract acquisition costs, non-current

 

74,419

 

 

 

50,263

 

Deferred tax assets

 

5,811

 

 

 

3,697

 

Other assets

 

16,643

 

 

 

12,516

 

Total assets

$

1,642,931

 

 

$

973,172

 

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

28,403

 

 

$

7,248

 

Accrued expenses and other liabilities

 

53,930

 

 

 

28,909

 

Accrued compensation and benefits

 

68,002

 

 

 

52,525

 

Operating lease liabilities

 

11,219

 

 

 

8,528

 

Deferred revenue

 

431,776

 

 

 

352,805

 

Total current liabilities

 

593,330

 

 

 

450,015

 

Deferred revenue, non-current

 

33,518

 

 

 

44,895

 

Long-term debt, net

 

566,520

 

 

 

 

Operating lease liabilities, non-current

 

16,482

 

 

 

19,649

 

Other liabilities, non-current

 

17,648

 

 

 

7,782

 

Total liabilities

 

1,227,498

 

 

 

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 April 30, 2022 and April 30, 2021

 

 

 

 

 

Ordinary shares, par value €0.01 per share: 165,000,000 shares authorized; 94,174,914 and 90,533,985 shares issued and outstanding as of April 30, 2022 and April 30, 2021, respectively

 

990

 

 

 

948

 

Treasury stock

 

(369

)

 

 

(369

)

Additional paid-in capital

 

1,250,108

 

 

 

1,071,675

 

Accumulated other comprehensive loss

 

(18,130

)

 

 

(8,105

)

Accumulated deficit

 

(817,166

)

 

 

(613,318

)

Total shareholders’ equity

 

415,433

 

 

 

450,831

 

Total liabilities and shareholders’ equity

$

1,642,931

 

 

$

973,172

 

 

Elastic N.V.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(Unaudited)

 

 

Three Months Ended April 30,

 

Year Ended April 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Cash flows from operating activities

 

 

 

 

 

 

 

Net loss

$

(65,610

)

 

$

(43,301

)

 

$

(203,848

)

 

$

(129,434

)

Adjustments to reconcile net loss to cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

5,170

 

 

 

4,381

 

 

 

19,728

 

 

 

17,237

 

Amortization of deferred contract acquisition costs

 

17,365

 

 

 

12,536

 

 

 

60,738

 

 

 

40,991

 

Amortization of debt issuance costs

 

249

 

 

 

 

 

 

803

 

 

 

 

Non-cash operating lease cost

 

2,377

 

 

 

2,671

 

 

 

8,636

 

 

 

7,927

 

Stock-based compensation expense, net of amounts capitalized

 

43,641

 

 

 

28,375

 

 

 

140,612

 

 

 

93,680

 

Deferred income taxes

 

(2,211

)

 

 

321

 

 

 

(2,430

)

 

 

33

 

Foreign currency transaction (gain) loss

 

277

 

 

 

(44

)

 

 

1,984

 

 

 

(9,507

)

Other

 

 

 

 

(153

)

 

 

98

 

 

 

(142

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable, net

 

(71,988

)

 

 

(39,283

)

 

 

(62,187

)

 

 

(24,037

)

Deferred contract acquisition costs

 

(35,521

)

 

 

(26,525

)

 

 

(96,755

)

 

 

(81,137

)

Prepaid expenses and other current assets

 

(777

)

 

 

(9,009

)

 

 

(3,427

)

 

 

(4,192

)

Other assets

 

1,628

 

 

 

(9,344

)

 

 

825

 

 

 

(4,107

)

Accounts payable

 

6,584

 

 

 

1,546

 

 

 

21,036

 

 

 

(4,775

)

Accrued expenses and other liabilities

 

9,653

 

 

 

6,422

 

 

 

27,192

 

 

 

8,118

 

Accrued compensation and benefits

 

13,089

 

 

 

9,726

 

 

 

17,775

 

 

 

3,867

 

Operating lease liabilities

 

(2,450

)

 

 

(2,512

)

 

 

(8,888

)

 

 

(7,914

)

Deferred revenue

 

75,474

 

 

 

62,628

 

 

 

83,780

 

 

 

115,937

 

Net cash provided by (used in) operating activities

 

(3,050

)

 

 

(1,565

)

 

 

5,672

 

 

 

22,545

 

Cash flows from investing activities

 

 

 

 

 

 

 

Purchases of property and equipment

 

(1,498

)

 

 

(1,180

)

 

 

(2,485

)

 

 

(3,912

)

Capitalization of internal-use software costs

 

(705

)

 

 

(317

)

 

 

(4,932

)

 

 

(317

)

Business acquisitions, net of cash acquired

 

 

 

 

 

 

 

(119,854

)

 

 

 

Other

 

 

 

 

1,391

 

 

 

 

 

 

2,711

 

Net cash used in investing activities

 

(2,203

)

 

 

(106

)

 

 

(127,271

)

 

 

(1,518

)

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

 

8,870

 

 

 

9,704

 

 

 

36,410

 

 

 

77,258

 

Payments of debt issuance costs

 

 

 

 

 

 

 

(9,283

)

 

 

 

Net cash provided by financing activities

 

8,870

 

 

 

9,704

 

 

 

602,127

 

 

 

77,258

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(8,271

)

 

 

186

 

 

 

(20,599

)

 

 

6,034

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

(4,654

)

 

 

8,219

 

 

 

459,929

 

 

 

104,319

 

Cash, cash equivalents, and restricted cash, beginning of period

 

868,291

 

 

 

395,489

 

 

 

403,708

 

 

 

299,389

 

Cash, cash equivalents, and restricted cash, end of period

$

863,637

 

 

$

403,708

 

 

$

863,637

 

 

$

403,708

 

 

Elastic N.V.

REVENUE BY TYPE

(amounts in thousands, except percentages)

(Unaudited)

 

 

Three Months Ended April 30,

 

Year Ended April 30,

 

2022

 

2021

 

2022

 

2021

 

Amount

 

% of

Total

Revenue

 

Amount

 

% of

Total

Revenue

 

Amount

 

% of

Total

Revenue

 

Amount

 

% of

Total

Revenue

Elastic Cloud

$

87,652

 

37

%

 

$

51,335

 

29

%

 

$

298,615

 

35

%

 

$

166,319

 

27

%

Other subscription

 

134,062

 

56

%

 

 

113,204

 

64

%

 

 

500,155

 

58

%

 

 

401,020

 

66

%

Total subscription revenue

 

221,714

 

93

%

 

 

164,539

 

93

%

 

 

798,770

 

93

%

 

 

567,339

 

93

%

Professional services

 

17,641

 

7

%

 

 

13,071

 

7

%

 

 

63,604

 

7

%

 

 

41,150

 

7

%

Total revenue

$

239,355

 

100

%

 

$

177,610

 

100

%

 

$

862,374

 

100

%

 

$

608,489

 

100

%

 

Elastic N.V.

RECONCILIATION OF GAAP TO NON-GAAP DATA

CALCULATED BILLINGS

(amounts in thousands)

(Unaudited)

 

 

Three Months Ended April 30,

 

Year Ended April 30,

 

 

2022

 

 

 

2021

 

 

2022

 

 

 

2021

 

Total revenue

$

239,355

 

 

$

177,610

 

$

862,374

 

 

$

608,489

 

Add: Increase in deferred revenue

 

75,474

 

 

 

62,628

 

 

83,780

 

 

 

115,937

 

Less: Decrease (increase) in unbilled accounts receivable

 

(1,939

)

 

 

632

 

 

(4,041

)

 

 

(2,582

)

Calculated billings

$

312,890

 

 

$

240,870

 

$

942,113

 

 

$

721,844

 

 

Elastic N.V.

RECONCILIATION OF GAAP TO NON-GAAP DATA

ADJUSTED FREE CASH FLOW

(amounts in thousands, except percentages)

(Unaudited)

 

 

Three Months Ended April 30,

 

Year Ended April 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

Net cash provided by (used in) operating activities

$

(3,050

)

 

$

(1,565

)

 

$

5,672

 

 

$

22,545

 

Less: Purchases of property and equipment

 

(1,498

)

 

 

(1,180

)

 

 

(2,485

)

 

 

(3,912

)

Less: Capitalization of internal-use software

 

(705

)

 

 

(317

)

 

 

(4,932

)

 

 

(317

)

Add: Interest paid on long-term debt

 

 

 

 

 

 

 

12,452

 

 

 

Adjusted free cash flow

$

(5,253

)

 

$

(3,062

)

 

$

10,707

 

 

$

18,316

 

Net cash used in investing activities

$

(2,203

)

 

$

(106

)

 

$

(127,271

)

 

$

(1,518

)

Net cash provided by financing activities

$

8,870

 

 

$

9,704

 

 

$

602,127

 

 

$

77,258

 

Net cash provided by (used in) operating activities (as a percentage of total revenue)

 

(1

)%

 

 

(1

)%

 

 

1

%

 

 

4

%

Less: Purchases of property and equipment (as a percentage of total revenue)

 

(1

)%

 

 

(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)

 

%

 

 

%

 

 

1

%

 

 

%

Adjusted free cash flow margin

 

(2

)%

 

 

(2

)%

 

 

1

%

 

 

3

%

 

Elastic N.V.

RECONCILIATION OF GAAP TO NON-GAAP DATA

(amounts in thousands, except percentages, share and per share amounts)

(Unaudited)

 

 

Three Months Ended April 30,

 

Year Ended April 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Gross Profit Reconciliation:

 

 

 

 

 

 

 

GAAP gross profit

$

171,991

 

 

$

131,803

 

 

$

630,180

 

 

$

447,435

 

Stock-based compensation expense

 

3,976

 

 

 

3,577

 

 

 

14,831

 

 

 

11,929

 

Employer payroll taxes on employee stock transactions

 

328

 

 

 

424

 

 

 

1,393

 

 

 

1,335

 

Amortization of acquired intangibles

 

2,947

 

 

 

2,109

 

 

 

10,503

 

 

 

8,437

 

Non-GAAP gross profit

$

179,242

 

 

$

137,913

 

 

$

656,907

 

 

$

469,136

 

Gross Margin Reconciliation(1):

 

 

 

 

 

 

 

GAAP gross margin

 

71.9

%

 

 

74.2

%

 

 

73.1

%

 

 

73.5

%

Stock-based compensation expense

 

1.7

%

 

 

2.0

%

 

 

1.7

%

 

 

2.0

%

Employer payroll taxes on employee stock transactions

 

0.1

%

 

 

0.2

%

 

 

0.2

%

 

 

0.2

%

Amortization of acquired intangibles

 

1.2

%

 

 

1.2

%

 

 

1.2

%

 

 

1.4

%

Non-GAAP gross margin

 

74.9

%

 

 

77.6

%

 

 

76.2

%

 

 

77.1

%

Operating Loss Reconciliation:

 

 

 

 

 

 

 

GAAP operating loss

$

(59,622

)

 

$

(37,077

)

 

$

(173,680

)

 

$

(129,478

)

Stock-based compensation expense

 

43,641

 

 

 

28,375

 

 

 

141,194

 

 

 

93,680

 

Employer payroll taxes on employee stock transactions

 

1,327

 

 

 

3,940

 

 

 

9,961

 

 

 

14,376

 

Amortization of acquired intangibles

 

4,139

 

 

 

3,537

 

 

 

15,783

 

 

 

14,167

 

Acquisition-related expenses

 

2,633

 

 

 

 

 

 

7,632

 

 

 

 

Non-GAAP operating income (loss)

$

(7,882

)

 

$

(1,225

)

 

$

890

 

 

$

(7,255

)

Operating Margin Reconciliation(1):

 

 

 

 

 

 

 

GAAP operating margin

 

(24.9

)%

 

 

(20.9

)%

 

 

(20.1

)%

 

 

(21.3

)%

Stock-based compensation expense

 

18.2

%

 

 

16.0

%

 

 

16.4

%

 

 

15.4

%

Employer payroll taxes on employee stock transactions

 

0.6

%

 

 

2.2

%

 

 

1.2

%

 

 

2.4

%

Amortization of acquired intangibles

 

1.7

%

 

 

2.0

%

 

 

1.8

%

 

 

2.3

%

Acquisition-related expenses

 

1.1

%

 

 

0.0

%

 

 

0.9

%

 

 

0.0

%

Non-GAAP operating margin

 

(3.3

)%

 

 

(0.7

)%

 

 

0.1

%

 

 

(1.2

)%

Net Loss Reconciliation:

 

 

 

 

 

 

 

GAAP net loss

$

(65,610

)

 

$

(43,301

)

 

$

(203,848

)

 

$

(129,434

)

Stock-based compensation expense

 

43,641

 

 

 

28,375

 

 

 

141,194

 

 

 

93,680

 

Employer payroll taxes on employee stock transactions

 

1,327

 

 

 

3,940

 

 

 

9,961

 

 

 

14,376

 

Amortization of acquired intangibles

 

4,139

 

 

 

3,537

 

 

 

15,783

 

 

 

14,167

 

Acquisition-related expenses

 

2,633

 

 

 

 

 

 

7,632

 

 

 

 

Income tax(2)

 

(817

)

 

 

(200

)

 

 

(1,496

)

 

 

(777

)

Non-GAAP net loss

$

(14,687

)

 

$

(7,649

)

 

$

(30,774

)

 

$

(7,988

)

Non-GAAP net loss per share attributable to ordinary shareholders, basic and diluted

$

(0.16

)

 

$

(0.08

)

 

$

(0.33

)

 

$

(0.09

)

Weighted-average shares used to compute net loss per share attributable to ordinary shareholders, basic and diluted

 

93,806,902

 

 

 

90,028,822

 

 

 

92,547,145

 

 

 

87,207,094

 

(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 April 30,

 

Year Ended April 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Cost of revenue reconciliation:

 

 

 

 

 

 

 

GAAP cost of license - self-managed

$

306

 

 

$

347

 

 

$

1,548

 

 

$

1,386

 

Amortization of acquired intangibles

 

(306

)

 

 

(347

)

 

 

(1,548

)

 

 

(1,386

)

Non-GAAP cost of license - self -managed

$

 

 

$

 

 

$

 

 

$

 

GAAP cost of subscription - self-managed and SaaS

$

50,559

 

 

$

34,663

 

 

$

176,656

 

 

$

121,127

 

Stock-based compensation expense

 

(2,106

)

 

 

(2,040

)

 

 

(8,368

)

 

 

(7,105

)

Employer payroll taxes on employee stock transactions

 

(207

)

 

 

(187

)

 

 

(681

)

 

 

(674

)

Amortization of acquired intangibles

 

(2,641

)

 

 

(1,762

)

 

 

(8,955

)

 

 

(7,051

)

Non-GAAP cost of subscription - self-managed and SaaS

$

45,605

 

 

$

30,674

 

 

$

158,652

 

 

$

106,297

 

GAAP cost of professional services

$

16,499

 

 

$

10,797

 

 

$

53,990

 

 

$

38,541

 

Stock-based compensation expense

 

(1,870

)

 

 

(1,537

)

 

 

(6,463

)

 

 

(4,824

)

Employer payroll taxes on employee stock transactions

 

(121

)

 

 

(237

)

 

 

(712

)

 

 

(661

)

Non-GAAP cost of professional services

$

14,508

 

 

$

9,023

 

 

$

46,815

 

 

$

33,056

 

Operating expenses reconciliation:

 

 

 

 

 

 

 

GAAP research and development expense

$

78,867

 

 

$

55,437

 

 

$

273,761

 

 

$

199,203

 

Stock-based compensation expense

 

(18,127

)

 

 

(10,958

)

 

 

(59,911

)

 

 

(35,267

)

Employer payroll taxes on employee stock transactions

 

(400

)

 

 

(968

)

 

 

(3,316

)

 

 

(3,670

)

Acquisition-related expenses

 

(2,409

)

 

 

 

 

 

(6,104

)

 

 

 

Non-GAAP research and development expense

$

57,931

 

 

$

43,511

 

 

$

204,430

 

 

$

160,266

 

GAAP sales and marketing expense

$

118,603

 

 

$

82,165

 

 

$

406,658

 

 

$

273,877

 

Stock-based compensation expense

 

(15,000

)

 

 

(9,062

)

 

 

(45,798

)

 

 

(31,581

)

Employer payroll taxes on employee stock transactions

 

(413

)

 

 

(1,905

)

 

 

(4,287

)

 

 

(5,399

)

Amortization of acquired intangibles

 

(1,192

)

 

 

(1,428

)

 

 

(5,280

)

 

 

(5,730

)

Non-GAAP sales and marketing expenses

$

101,998

 

 

$

69,770

 

 

$

351,293

 

 

$

231,167

 

GAAP general and administrative expense

$

34,143

 

 

$

31,278

 

 

$

123,441

 

 

$

103,833

 

Stock-based compensation expense

 

(6,538

)

 

 

(4,778

)

 

 

(20,654

)

 

 

(14,903

)

Employer payroll taxes on employee stock transactions

 

(186

)

 

 

(643

)

 

 

(965

)

 

 

(3,972

)

Acquisition-related expenses

 

(224

)

 

 

 

 

 

(1,528

)

 

 

 

Non-GAAP general and administrative expense

$

27,195

 

 

$

25,857

 

 

$

100,294

 

 

$

84,958

 

 

 

 

 

 

 

 

 

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 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. 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 the differences between GAAP financial measures and the corresponding non-GAAP financial measures, 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 Loss Per Share

We define non-GAAP net 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 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.

Nikolay Beliov Elastic Investor Relations ir@elastic.co

Lisa Boughner Elastic Corporate Communications lisa.boughner@elastic.co

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