Q2 Revenue of $264.4 million, up 28%
year-over-year (34% in constant currency)
Q2 Elastic Cloud Revenue of $103.2 million, up
50% year-over-year (52% in constant currency)
Elastic (NYSE: ESTC) (“Elastic”), the company behind
Elasticsearch and the Elastic Stack, announced results for its
second quarter of fiscal 2023 (ended October 31, 2022).
Second Quarter Fiscal 2023 Financial Highlights
- Total revenue was $264.4 million, an increase of 28%
year-over-year, or 34% on a constant currency basis
- Elastic Cloud revenue was $103.2 million, an increase of 50%
year-over-year, or 52% on a constant currency basis
- GAAP operating loss was $49.0 million; GAAP operating margin
was -18%
- Non-GAAP operating income was $4.9 million; non-GAAP operating
margin was 2%
- GAAP net loss per share was $0.50; non-GAAP earnings per share
was $0.00
- Operating cash flow was $10.6 million with adjusted free cash
flow of $10.3 million
- Cash and cash equivalents were $856.2 million as of October 31,
2022
“In Q2, we exceeded both our revenue and profitability
targets, demonstrating the operating leverage inherent in our
business model,” said Ash Kulkarni, CEO, Elastic. “Revenue grew 34%
year-over-year in constant currency. Even in this difficult
business climate, we continue to see customers consolidate onto our
platform with additional use cases. We remain confident in our
long-term opportunity as we manage our cost structure with
discipline and significantly increase our focus on profitable
growth.”
The Company today also announced a selective reduction in its
workforce and facilities-related cost optimization actions to align
its investments more closely with its strategic priorities. “We are
rebalancing investments across all functions and will strategically
reinvest some savings in areas that best position us to drive
profitable growth. With these changes, we expect to accelerate our
non-GAAP operating income growth in the second half of fiscal 2023
and achieve a non-GAAP operating margin of 10% in fiscal 2024,”
said Kulkarni.
Second Quarter Fiscal 2023 Key Metrics and Recent Business
Highlights
Key Customer Metrics
- Total subscription customer count was approximately 19,700
compared to over 19,300 in Q1 FY23, and over 17,000 in Q2 FY22
- Total customer count with Annual Contract Value (ACV) greater
than $100,000 was over 1,050, compared to over 1,010 in Q1 FY23,
and over 830 in Q2 FY22
- Net Expansion Rate was approximately 125%
Cloud Momentum
- Elastic Cloud revenue represented 39% of total revenue this
quarter versus 34% one year ago
- Delivered a new streamlined sign-up experience for Elastic
Cloud on the AWS Marketplace, enabling customers to set up Elastic
in just a few clicks
- Added Elastic support for Azure Virtual Machines with Ampere
Altra Arm-based processors, letting customers maximize operational
efficiency across all solutions
- Announced an expanded partnership between Google Cloud and
Elastic to help organizations search, observe, and protect their
data and workloads more easily
Product Innovations and Updates
- Announced a roadmap for a new serverless architecture that will
form the foundation for the next-generation Elastic Search
Platform
- Announced new threat intelligence capabilities that will enable
security teams to identify indicators of compromise and take action
on threat intelligence from within Elastic Security
- Released the first Elastic Global Threat Report, compiled using
customer telemetry data, which details the evolving nature of
cybersecurity threats
- Launched the private beta of Universal Profiling™, an
innovative performance optimization and cost-saving capability that
overcomes the limitations of other profiling solutions by requiring
no changes to the application code
- Added new synthetics monitoring capabilities to provide
customers with frictionless visibility at all levels of
applications, services, and infrastructure
- Announced the general availability of vector search and updates
to improve search relevance with machine learning-based hybrid
scoring
Other Business Highlights
- Hosted more than 1,500 customers and prospects at ElasticON
events in Singapore, New York, and Amsterdam featuring customer
presentations by Affirm, Autozone, BMW, Booking.com, Comcast, and
SWIFT
- Sponsored AWS re:Invent, Google Next, KubeCon, and Microsoft
Ignite industry conferences
- Named winner of the 2022 CyberSecurity Breakthrough Award for
Threat Intelligence Platform of the Year
- Recognized as a Visionary in the 2022 Gartner Magic Quadrant,
Security Information and Event Management and as one of the
fastest-growing SIEMs in the IDC Worldwide Security Information and
Event Management Market Share, 2021
Financial Outlook
The Company expects the following results for the third quarter
of fiscal 2023 and is updating its prior full-year fiscal 2023
guidance as follows:
For the third quarter of fiscal 2023 (ending January 31,
2023):
- Total revenue is expected to be between $272 million and $274
million, representing 22% year-over-year growth at the midpoint
(26% year-over-year constant currency growth at the midpoint)
- Non-GAAP operating margin is expected to be between 4.3% and
4.7%
- Non-GAAP earnings per share is expected to be between $0.04 and
$0.07, assuming between 98.5 million and 99.5 million diluted
weighted average ordinary shares outstanding
For fiscal 2023 (ending April 30, 2023):
- Total revenue is expected to be between $1,067 million and
$1,073 million, representing 24% year-over-year growth at the
midpoint (28% year-over-year constant currency growth at the
midpoint)
- Non-GAAP operating margin is expected to be between 2.2% and
2.6%
- Non-GAAP earnings per share is expected to be between -$0.03
and $0.03, assuming between 95.0 million and 97.0 million basic
weighted average ordinary shares outstanding and 98.5 million and
100.5 million diluted weighted average ordinary shares
outstanding
The current guidance assumes, among others, the following
exchange rates: 1 Euro = 1.035 US Dollars; and 1 Great British
Pound = 1.208 US Dollars.
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 “Statement Regarding Use of 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 containing financial and
operating information will accompany the webcast and will be
available on the same website. 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.
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 January 31, 2023 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 the business climate and growth opportunities and our
ability to manage costs and address those opportunities, and the
expected benefits of our investments, our plan to reduce costs and
rebalance investments, and our expectations regarding our ability
to achieve cost savings, accelerate our non-GAAP operating income
growth and increase our non-GAAP operating margin upon
implementation of the plan. 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; any
disruption to our business resulting from our plan to reduce costs
and rebalance investments; the effects of currency movements on our
financial results; our ability to continue to deliver and improve
our offerings and develop new offerings; customer acceptance and
purchase of our new and existing offerings and the expansion and
adoption of our Elastic Cloud offerings; our inability to realize
value from investments in the business; our ability to maintain and
expand our user and customer base; the impact of the COVID-19
pandemic and variants on the macroeconomic environment, on our
business, operations, hiring and financial results, and on
businesses and spending priorities of our customers and partners;
the impact of our licensing model on the use and adoption of our
software; the impact of our pricing model strategies on our
business; the impact of foreign currency exchange rate fluctuations
and the uncertain inflation and interest rate environment on our
results; our international expansion strategy; our operating
results and cash flows; the sufficiency of our capital resources;
our ability to successfully execute our go-to-market strategy and
expand in new and existing 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,
uncertain macroeconomic environment 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, 2022 and other
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.
Statement Regarding Use of 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.
Reconciliations of historical GAAP financial measures to their
respective historical non-GAAP financial measures are included
below. 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.
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.
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.
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
(in thousands, except share and
per share data)
(unaudited)
Three Months Ended October
31,
Six Months Ended October
31,
2022
2021
2022
2021
Revenue
Subscription
$
241,211
$
190,257
$
473,025
$
367,442
Services
23,190
15,723
41,457
31,633
Total revenue
264,401
205,980
514,482
399,075
Cost of revenue
Subscription
55,101
42,242
108,652
79,762
Services
19,656
11,642
39,084
23,784
Total cost of revenue
74,757
53,884
147,736
103,546
Gross profit
189,644
152,096
366,746
295,529
Operating expenses
Research and development
75,568
63,763
154,217
123,145
Sales and marketing
128,179
94,953
253,185
182,986
General and administrative
34,925
30,555
69,013
57,607
Total operating expenses
238,672
189,271
476,415
363,738
Operating loss
(49,028
)
(37,175
)
(109,669
)
(68,209
)
Other income (expense), net
Interest expense
(6,209
)
(6,332
)
(12,610
)
(8,152
)
Other income (expense), net
14,975
(666
)
15,314
352
Loss before income taxes
(40,262
)
(44,173
)
(106,965
)
(76,009
)
Provision for income taxes
7,043
2,850
9,891
5,503
Net loss
$
(47,305
)
$
(47,023
)
$
(116,856
)
$
(81,512
)
Net loss per share attributable to
ordinary shareholders, basic and diluted
$
(0.50
)
$
(0.51
)
$
(1.23
)
$
(0.89
)
Weighted-average shares used to compute
net loss per share attributable to ordinary shareholders, basic and
diluted
95,307,146
92,206,199
94,964,423
91,703,786
Elastic N.V.
Condensed Consolidated Balance
Sheets
(in thousands, except share and
per share data)
(unaudited)
As of October 31,
2022
As of April 30,
2022
Assets
Current assets:
Cash and cash equivalents
$
856,237
$
860,949
Restricted cash
2,385
2,688
Accounts receivable, net of allowance for
credit losses of $1,801 and $2,700 as of October 31, 2022 and April
30, 2022, respectively
185,906
215,228
Deferred contract acquisition costs
45,418
43,628
Prepaid expenses and other current
assets
33,030
41,215
Total current assets
1,122,976
1,163,708
Property and equipment, net
5,696
7,207
Goodwill
303,742
303,906
Operating lease right-of-use assets
29,840
25,437
Intangible assets, net
37,384
45,800
Deferred contract acquisition costs,
non-current
77,544
74,419
Deferred tax assets
5,395
5,811
Other assets
11,655
16,643
Total assets
$
1,594,232
$
1,642,931
Liabilities and Shareholders’
Equity
Current liabilities:
Accounts payable
$
41,055
$
28,403
Accrued expenses and other liabilities
62,350
53,930
Accrued compensation and benefits
60,501
68,002
Operating lease liabilities
12,348
11,219
Deferred revenue
410,718
431,776
Total current liabilities
586,972
593,330
Deferred revenue, non-current
22,867
33,518
Long-term debt, net
567,026
566,520
Operating lease liabilities,
non-current
19,127
16,482
Other liabilities, non-current
6,675
17,648
Total liabilities
1,202,667
1,227,498
Commitments and contingencies
Shareholders’ equity:
Convertible preference shares, €0.01 par
value; 165,000,000 shares authorized, 0 shares issued and
outstanding as of October 31, 2022 and April 30, 2022
—
—
Ordinary shares, par value €0.01 per
share: 165,000,000 shares authorized; 95,575,775 shares issued and
outstanding as of October 31, 2022 and 94,174,914 shares issued and
outstanding as of April 30, 2022
1,005
990
Treasury stock
(369
)
(369
)
Additional paid-in capital
1,351,987
1,250,108
Accumulated other comprehensive loss
(27,036
)
(18,130
)
Accumulated deficit
(934,022
)
(817,166
)
Total shareholders’ equity
391,565
415,433
Total liabilities and shareholders’
equity
$
1,594,232
$
1,642,931
Elastic N.V.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended October
31,
Six Months Ended October
31,
2022
2021
2022
2021
Cash flows from operating
activities
Net loss
$
(47,305
)
$
(47,023
)
$
(116,856
)
$
(81,512
)
Adjustments to reconcile net loss to cash
provided by (used in) operating activities:
Depreciation and amortization
5,216
4,921
10,430
9,325
Amortization of deferred contract
acquisition costs
18,230
14,692
35,674
28,570
Amortization of debt issuance costs
254
230
506
307
Non-cash operating lease cost
2,644
1,988
5,649
3,842
Stock-based compensation expense, net of
amounts capitalized
47,287
29,400
94,170
59,578
Deferred income taxes
(747
)
(106
)
(80
)
(249
)
Foreign currency transaction loss
(gain)
(1,731
)
1,131
48
4
Other
45
—
67
98
Changes in operating assets and
liabilities:
Accounts receivable, net
(20,798
)
(47,805
)
25,193
519
Deferred contract acquisition costs
(23,893
)
(24,496
)
(43,569
)
(39,277
)
Prepaid expenses and other current
assets
3,180
6,815
7,909
2,218
Other assets
2,695
2,760
4,809
(3,337
)
Accounts payable
2,447
(175
)
12,320
10,485
Accrued expenses and other liabilities
15,096
16,889
(1,645
)
16,719
Accrued compensation and benefits
5,574
5,277
(5,947
)
3,823
Operating lease liabilities
(2,369
)
(2,038
)
(5,573
)
(3,983
)
Deferred revenue
4,817
27,157
(22,168
)
(3,462
)
Net cash provided by (used in) operating
activities
10,642
(10,383
)
937
3,668
Cash flows from investing
activities
Purchases of property and equipment
(343
)
(91
)
(822
)
(751
)
Capitalization of internal-use
software
—
(1,739
)
—
(2,713
)
Business acquisitions, net of cash
acquired
—
(108,104
)
—
(108,104
)
Net cash used in investing activities
(343
)
(109,934
)
(822
)
(111,568
)
Cash flows from financing
activities
Proceeds from the issuance of debt
—
—
—
575,000
Proceeds from issuance of ordinary shares
upon exercise of stock options
4,327
9,852
7,724
20,831
Payments of debt issuance costs
—
(2,046
)
—
(9,234
)
Net cash provided by financing
activities
4,327
7,806
7,724
586,597
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(7,152
)
(2,172
)
(12,854
)
(3,407
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
7,474
(114,683
)
(5,015
)
475,290
Cash, cash equivalents, and restricted
cash, beginning of period
851,148
993,681
863,637
403,708
Cash, cash equivalents, and restricted
cash, end of period
$
858,622
$
878,998
$
858,622
$
878,998
Elastic N.V.
Revenue by Type
(in thousands, except
percentages)
(unaudited)
Three Months Ended October
31,
Six Months Ended October
31,
2022
2021
2022
2021
Amount
% of
Total
Revenue
Amount
% of
Total
Revenue
Amount
% of
Total
Revenue
Amount
% of
Total
Revenue
Elastic Cloud
$
103,237
39
%
$
69,031
34
%
$
200,966
39
%
$
130,561
33
%
Other subscription
137,974
52
%
121,226
58
%
272,059
53
%
236,881
59
%
Total subscription
241,211
91
%
190,257
92
%
473,025
92
%
367,442
92
%
Services
23,190
9
%
15,723
8
%
41,457
8
%
31,633
8
%
Total revenue
$
264,401
100
%
$
205,980
100
%
$
514,482
100
%
$
399,075
100
%
Elastic N.V.
Reconciliation of GAAP to
Non-GAAP Data
Supplementary
Information
(in thousands, except
percentages)
(unaudited)
Three Months Ended
October 31, 2022
% Change Year Over
Year
% Change Year Over Year
Excluding Currency Changes
% Change Quarter Over
Quarter
% Change Quarter Over
Quarter Excluding Currency Changes
Revenue
Elastic Cloud
$
103,237
50
%
52
%
6
%
6
%
Other subscription
$
137,974
14
%
20
%
3
%
5
%
Total subscription
$
241,211
27
%
32
%
4
%
5
%
Total revenue
$
264,401
28
%
34
%
6
%
7
%
Total deferred revenue
$
433,585
11
%
18
%
—
%
1
%
Total remaining performance
obligations
$
901,200
8
%
16
%
(1
)%
—
%
Six Months Ended
October 31, 2022
% Change Year Over
Year
% Change Year Over Year
Excluding Currency Changes
Revenue
Elastic Cloud
$
200,966
54
%
57
%
Other subscription
$
272,059
15
%
21
%
Total subscription
$
473,025
29
%
34
%
Total revenue
$
514,482
29
%
34
%
Elastic N.V.
Reconciliation of GAAP to
Non-GAAP Data
Adjusted Free Cash
Flow
(in thousands, except
percentages)
(unaudited)
Three Months Ended October
31,
Six Months Ended October
31,
2022
2021
2022
2021
Net cash provided by (used in) operating
activities
$
10,642
$
(10,383
)
$
937
$
3,668
Less: Purchases of property and
equipment
(343
)
(91
)
(822
)
(751
)
Less: Capitalization of internal-use
software
—
(1,739
)
—
(2,713
)
Add: Interest paid on long-term debt
—
—
11,859
—
Adjusted free cash flow
$
10,299
$
(12,213
)
$
11,974
$
204
Net cash used in investing activities
$
(343
)
$
(109,934
)
$
(822
)
$
(111,568
)
Net cash provided by financing
activities
$
4,327
$
7,806
$
7,724
$
586,597
Net cash provided by (used in) operating
activities (as a percentage of total revenue)
4
%
(5
) %
—
%
1
%
Less: Purchases of property and equipment
(as a percentage of total revenue)
—
%
—
%
—
%
—
%
Less: Capitalization of internal-use
software (as a percentage of total revenue)
—
%
(1
) %
—
%
(1
) %
Add: Interest paid on long-term debt (as a
percentage of total revenue)
—
%
—
%
2
%
—
%
Adjusted free cash flow margin
4
%
(6
) %
2
%
—
%
Elastic N.V.
Reconciliation of GAAP to
Non-GAAP Data
(in thousands, except
percentages, share and per share data)
(unaudited)
Three Months Ended October
31,
Six Months Ended October
31,
2022
2021
2022
2021
Gross Profit Reconciliation:
GAAP gross profit
$
189,644
$
152,096
$
366,746
$
295,529
Stock-based compensation expense
4,342
3,356
8,727
7,065
Employer payroll taxes on employee stock
transactions
83
179
450
805
Amortization of acquired intangibles
2,961
2,498
5,925
4,510
Non-GAAP gross profit
$
197,030
$
158,129
$
381,848
$
307,909
Gross Margin Reconciliation(1):
GAAP gross margin
71.7
%
73.8
%
71.3
%
74.1
%
Stock-based compensation expense
1.6
%
1.6
%
1.7
%
1.8
%
Employer payroll taxes on employee stock
transactions
0.0
%
0.1
%
0.1
%
0.2
%
Amortization of acquired intangibles
1.1
%
1.2
%
1.2
%
1.1
%
Non-GAAP gross margin
74.5
%
76.8
%
74.2
%
77.2
%
Operating Loss Reconciliation:
GAAP operating loss
$
(49,028
)
$
(37,175
)
$
(109,669
)
$
(68,209
)
Stock-based compensation expense
47,287
29,982
94,170
60,160
Employer payroll taxes on employee stock
transactions
800
2,592
3,182
6,991
Amortization of acquired intangibles
4,193
3,926
8,388
7,367
Acquisition-related expenses
1,684
2,042
4,201
2,268
Non-GAAP operating income
$
4,936
$
1,367
$
272
$
8,577
Operating Margin
Reconciliation(1):
GAAP operating margin
(18.5
) %
(18.0
) %
(21.3
) %
(17.1
) %
Stock-based compensation expense
17.9
%
14.6
%
18.3
%
15.1
%
Employer payroll taxes on employee stock
transactions
0.3
%
1.3
%
0.6
%
1.8
%
Amortization of acquired intangibles
1.6
%
1.9
%
1.6
%
1.8
%
Acquisition-related expenses
0.6
%
1.0
%
0.8
%
0.6
%
Non-GAAP operating margin
1.9
%
0.7
%
0.1
%
2.1
%
Net Loss Reconciliation:
GAAP net loss
$
(47,305
)
$
(47,023
)
$
(116,856
)
$
(81,512
)
Stock-based compensation expense
47,287
29,982
94,170
60,160
Employer payroll taxes on employee stock
transactions
800
2,592
3,182
6,991
Amortization of acquired intangibles
4,193
3,926
8,388
7,367
Acquisition-related expenses
1,684
2,042
4,201
2,268
Litigation settlement
(10,150
)
—
(10,150
)
—
Income tax(2)
3,676
(262
)
3,528
(531
)
Non-GAAP net income (loss)
$
185
$
(8,743
)
$
(13,537
)
$
(5,257
)
Non-GAAP net earnings (loss) per share
attributable to ordinary
shareholders, basic(1)
$
—
$
(0.09
)
$
(0.14
)
$
(0.06
)
Non-GAAP net earnings (loss) per share
attributable to ordinary
shareholders, diluted(1)
$
—
$
(0.09
)
$
(0.14
)
$
(0.06
)
Weighted-average shares used to compute
net loss per share attributable to ordinary shareholders, basic
95,307,146
92,206,199
94,964,423
91,703,786
Weighted-average shares used to compute
net loss per share attributable to ordinary shareholders,
diluted
98,764,660
92,206,199
94,964,423
91,703,786
(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 other 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
(in thousands)
(unaudited)
Three Months Ended October
31,
Six Months Ended October
31,
2022
2021
2022
2021
Cost of revenue reconciliation:
GAAP subscription
$
55,101
$
41,847
$
108,652
$
79,021
Stock-based compensation expense
(2,029
)
(2,064
)
(4,189
)
(4,198
)
Employer payroll taxes on employee stock
transactions
(30
)
(65
)
(253
)
(327
)
Amortization of acquired intangibles
(2,961
)
(2,103
)
(5,925
)
(3,769
)
Non-GAAP subscription
$
50,081
$
37,615
$
98,285
$
70,727
GAAP services
$
19,656
$
11,642
$
39,084
$
23,784
Stock-based compensation expense
(2,313
)
(1,292
)
(4,538
)
(2,867
)
Employer payroll taxes on employee stock
transactions
(53
)
(114
)
(197
)
(478
)
Non-GAAP services
$
17,290
$
10,236
$
34,349
$
20,439
Operating expenses
reconciliation:
GAAP research and development expense
$
75,568
$
63,763
$
154,217
$
123,145
Stock-based compensation expense
(18,763
)
(13,658
)
(37,473
)
(25,755
)
Employer payroll taxes on employee stock
transactions
(323
)
(655
)
(1,285
)
(2,253
)
Acquisition-related expenses
(1,684
)
(982
)
(4,164
)
(982
)
Non-GAAP research and development
expense
$
54,798
$
48,468
$
111,295
$
94,155
GAAP sales and marketing expense
$
128,179
$
94,953
$
253,185
$
182,986
Stock-based compensation expense
(16,013
)
(8,403
)
(31,660
)
(18,253
)
Employer payroll taxes on employee stock
transactions
(266
)
(1,671
)
(1,041
)
(3,362
)
Amortization of acquired intangibles
(1,232
)
(1,428
)
(2,463
)
(2,857
)
Non-GAAP sales and marketing expenses
$
110,668
$
83,451
$
218,021
$
158,514
GAAP general and administrative
expense
$
34,925
$
30,555
$
69,013
$
57,607
Stock-based compensation expense
(8,169
)
(4,565
)
(16,310
)
(9,087
)
Employer payroll taxes on employee stock
transactions
(128
)
(87
)
(406
)
(571
)
Acquisition-related expenses
—
(1,060
)
(37
)
(1,286
)
Non-GAAP general and administrative
expense
$
26,628
$
24,843
$
52,260
$
46,663
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221130005431/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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