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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220601005973/en/
Nikolay Beliov Elastic Investor Relations
ir@elastic.co
Lisa Boughner Elastic Corporate Communications
lisa.boughner@elastic.co
Elastic NV (NYSE:ESTC)
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