Q2 Revenue of $101.1 million; Up 59%
year-over-year (63% in constant currency)
SaaS Revenue of $20.6 million, Up 106%
year-over-year (114% in constant currency)
Calculated Billings of $125.3 million, Up 41%
year-over-year (45% in constant currency)
Elastic N.V. (NYSE: ESTC) (“Elastic”), the company behind
Elasticsearch and the Elastic Stack, announced strong results for
its second quarter of fiscal 2020 (ended October 31, 2019).
Second Quarter Fiscal 2020 Financial Highlights
- Total revenue was $101.1 million, an increase of 59%
year-over-year, or 63% on a constant currency basis.
- SaaS revenue was $20.6 million, an increase of 106%
year-over-year, or 114% on a constant currency basis.
- Calculated billings was $125.3 million, an increase of 41%
year-over-year, or 45% on a constant currency basis.
- Deferred revenue was $201.3 million, an increase of 58%
year-over-year.
- GAAP operating loss was $52.0 million; GAAP operating margin
was -51%.
- Non-GAAP operating loss was $18.4 million; non-GAAP operating
margin was -18%.
- GAAP net loss per share was $0.64; non-GAAP net loss per share
was $0.22.
- Operating cash flow was $0.3 million with free cash flow of
-$1.4 million.
- Cash and cash equivalents were $305.2 million as of October 31,
2019.
“We’re pleased with our constant currency revenue growth of 63%
year-over-year in Q2,” said Shay Banon, Elastic’s founder and chief
executive officer. “Closing the acquisition of Endgame is an
exciting step toward realizing our vision for applying search to
multiple use cases, as we are now able to offer users a powerful
threat hunting solution with superior endpoint protection.”
Second Quarter Fiscal 2020 Key Metrics and Recent Business
Highlights
Key Customer Metrics:
- Total subscription customer count was over 9,700, compared to
over 8,800 in Q1.
- Total customer count with ACV greater than $100,000 was over
525, compared to over 475 in Q1.
- Subscription revenue represented 91% of total revenue.
- Net Expansion Rate continued to be greater than 130%.
Product releases and other business highlights:
- Completed the acquisition of Endgame, Inc., a leader in
endpoint security and threat prevention, detection, and
response.
- Introduced Elastic Endpoint Security, a leading endpoint
protection solution that integrates with Elastic SIEM in the
Elastic Stack, and eliminates endpoint pricing, enabling
organizations to automatically and flexibly respond to threats in
real time, whether in the cloud, on-premises, or in hybrid
environments.
- Released versions 7.4 and 7.5 of the Elastic Stack introducing:
- Observability improvements that allow for monitoring more data
and services and several key integrations between APM, logging, and
security data.
- Elastic Maps and Elastic SIEM integration that allows real-time
live data to be searched and explored in maps.
- Kibana Lens (preview) for a fast and intuitive way to craft
visualizations with a drag-and-drop experience.
- Elastic Enterprise Search (preview) with new connectors for
Microsoft SharePoint Online, Office 365, OneDrive, and
ServiceNow.
- Machine learning enhancements, including a new UI in Kibana to
manage outlier detection jobs and more pre-built machine learning
jobs in Elastic SIEM.
- Released version 2.4 of Elastic Cloud Enterprise (ECE)
introducing:
- Elastic App Search (preview), making it possible to add App
Search as part of a deployment with a simple slider
experience.
- New ECE proxy that brings improved stability, fault tolerance,
and simpler deployment management with new API endpoints.
- Released Elastic Cloud on Kubernetes 1.0 (preview) introducing:
- StatefulSets, allowing for even faster upgrades and
configuration changes, as well as better usability when leveraging
Elasticsearch architectures, such as hot-warm-cold, driving
significant value for observability and security analytics use
cases.
- Announced the general availability of the Elasticsearch Service
on Google Cloud Platform (GCP) Marketplace, simplifying procurement
for GCP customers with consolidated billing; expanded availability
in London, Sydney, and N. Virginia.
- Launched the availability of the Elasticsearch Service on
Microsoft Azure (preview) in Virginia and the Netherlands; expanded
availability in Washington and Singapore.
- Held 12 successful Elastic{ON} Tour events to engage with
Elastic’s community of users, customers, and partners in Toronto,
Chicago, Boston, Minneapolis, Washington D.C., Munich, San Jose,
London, Amsterdam, Dallas, New York, and Barcelona, with waitlists
driven by strong demand.
- Nominated Alison Gleeson to join Elastic’s Board of Directors.
Gleeson is a globally recognized executive who was previously Cisco
Systems, Inc.'s Senior Vice President, Americas.
Financial Outlook
The Company is providing the following guidance:
For its third quarter of fiscal 2020 (ending January 31,
2020):
- Total revenue is expected to be between $106 million and $108
million.
- Non-GAAP operating margin is expected to be between -26.0% and
-24.0%.
- Non-GAAP net loss per share is expected to be between $0.36 and
$0.34, assuming between 80.5 million and 81.5 million weighted
average ordinary shares outstanding.
For its fiscal year 2020 (ending April 30, 2020):
- Total revenue is expected to be between $415 million and $417
million.
- Non-GAAP operating margin is expected to be between -23.0% and
-22.0%, including approximately -2% related to the acquisition of
Endgame.
- Non-GAAP net loss per share is expected to be between $1.24 and
$1.17, assuming between 78 million and 80 million weighted average
ordinary shares outstanding.
See the section titled “Forward-Looking Statements” below for
information on the factors that could cause our actual results to
differ materially. A reconciliation of non-GAAP guidance measures
to corresponding GAAP measures is not available on a
forward-looking basis without unreasonable effort due to the
uncertainty regarding, and the potential variability of, many of
the costs and expenses that may be incurred in the future.
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/ 11:00 p.m. CET to discuss the
Company’s financial results and business outlook. A live audio
webcast of the conference call will be available through Elastic’s
Investor Relations website at ir.elastic.co. Slides will accompany
the webcast. The replay of the webcast and slides will be available
for two months.
About Elastic
Elastic is a search company. As the creators of the Elastic
Stack (Elasticsearch, Kibana, Beats, and Logstash), Elastic builds
self-managed and SaaS offerings that make data usable in real time
and at scale for use cases like application search, site search,
enterprise search, logging, APM, metrics, security, business
analytics, and many more.
Elastic and associated marks are trademarks or registered
trademarks of Elastic N.V. and its subsidiaries. All other company
and product names may be trademarks of their respective owners.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to Elastic’s
financial results as determined in accordance with U.S. GAAP are
included at the end of this press release following the
accompanying financial data. For a description of these non-GAAP
financial measures, including the reasons management uses each
measure, please see the section of this press release titled “About
Non-GAAP Financial Measures.”
Forward-Looking Statements
This press release contains forward-looking statements which
include, but are not limited to, expected financial results for the
fiscal quarter ending October 31, 2019 and the fiscal year ending
April 30, 2020. These forward-looking statements are subject to the
safe harbor provisions under the Private Securities Litigation
Reform Act of 1995. Our expectations and beliefs regarding these
matters may not materialize. Actual outcomes and results may differ
materially from those contemplated by these forward-looking
statements as a result of uncertainties, risks, and changes in
circumstances, including but not limited to risks and uncertainties
related to: our future financial performance, including our
expectations regarding our revenue; cost of revenue; gross profit
or gross margin; and operating expenses (including changes in sales
and marketing, research and development and general and
administrative expenses); our ability to achieve, and maintain,
future profitability; our ability to continue to deliver and
improve our offerings and successfully develop new offerings;
customer acceptance and purchase of our existing offerings and new
offerings; our ability to maintain and expand our user and customer
base; the market for our products not continuing to develop;
competition from other products; the impact of foreign currency
exchange rate and interest rate fluctuations on our results; our
business strategy and our plan to build our business; our ability
to effectively manage our growth; the pace of change and innovation
in the markets in which we participate and the competitive nature
of those markets; our international expansion strategy; our service
performance and security, including the resources and costs
required to prevent, detect and remediate potential security
breaches; our operating results and cash flows; our strategy of
acquiring complementary businesses and our ability to successfully
integrate acquired businesses and technologies; our relationships
with third parties, including partners; our ability to protect our
intellectual property rights; our ability to develop our brands;
our ability to attract and retain qualified employees and key
personnel; the impact of expensing stock options and other equity
awards; the sufficiency of our capital resources; the impact of our
acquisition of Endgame, Inc. on our operating margin; the impact of
our acquisition of Endgame, Inc. on Elastic’s future product
offerings; and general market, political, economic and business
conditions. Additional risks and uncertainties that could cause
actual outcomes and results to differ materially from those
contemplated by the forward-looking statements are included under
the caption “Risk Factors” and elsewhere in our most recent filings
with the Securities and Exchange Commission (the “SEC”), including
our Annual Report on Form 10-K for the fiscal year ended April 30,
2019 and any subsequent reports on Form 10-K, Form 10-Q or Form 8-K
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 after the date of this release, except as required by
law.
Elastic N.V.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(amounts in thousands, except
share and per share amounts)
(Unaudited)
Three Months Ended October
31,
Six Months Ended October
31,
2019
2018
2019
2018
Revenue
License - self-managed
$
12,272
$
10,204
$
22,179
$
17,444
Subscription - self-managed and SaaS
79,407
48,232
151,890
92,601
Total subscription revenue
91,679
58,436
174,069
110,045
Professional services
9,427
5,139
16,747
10,174
Total revenue
101,106
63,575
190,816
120,219
Cost of revenue
Cost of license - self-managed
158
97
255
194
Cost of subscription - self-managed and
SaaS
19,741
12,870
37,636
23,071
Total cost of revenue - subscription
19,899
12,967
37,891
23,265
Cost of professional services
8,862
5,620
17,121
10,879
Total cost of revenue
28,761
18,587
55,012
34,144
Gross profit
72,345
44,988
135,804
86,075
Operating expenses
Research and development
38,478
25,332
73,660
44,313
Sales and marketing
54,020
34,634
106,031
65,056
General and administrative
31,808
12,092
50,376
22,191
Total operating expenses
124,306
72,058
230,067
131,560
Operating loss
(51,961
)
(27,070
)
(94,263
)
(45,485
)
Other income, net
1,684
264
2,615
860
Loss before income taxes
(50,277
)
(26,806
)
(91,648
)
(44,625
)
Provision for (benefit from) income
taxes
(304
)
733
94
1,492
Net loss
$
(49,973
)
$
(27,539
)
$
(91,742
)
$
(46,117
)
Net loss per share attributable to
ordinary shareholders, basic and diluted
$
(0.64
)
$
(0.63
)
$
(1.20
)
$
(1.20
)
Weighted-average shares used to compute
net loss per share attributable to ordinary shareholders, basic and
diluted
77,772,406
43,978,770
76,202,865
38,471,641
Elastic N.V.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(amounts in thousands, except
share and per share amounts)
(Unaudited)
October 31,
2019
April 30,
2019
Assets
Current assets:
Cash and cash equivalents
$
305,246
$
298,000
Restricted cash
2,302
2,280
Accounts receivable, net of allowance for
doubtful accounts of $1,495 and $1,411 as of October 31, 2019 and
April 30, 2019, respectively
78,920
81,274
Deferred contract acquisition costs
14,778
17,215
Prepaid expenses and other current
assets
31,859
30,872
Total current assets
433,105
429,641
Property and equipment, net
8,002
5,448
Goodwill
198,797
19,846
Operating lease right-of-use assets
40,177
-
Intangible assets, net
58,463
6,723
Deferred contract acquisition costs,
non-current
14,456
8,935
Deferred tax assets
2,255
1,748
Other assets
11,534
13,397
Total assets
$
766,789
$
485,738
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable
$
10,064
$
4,450
Accrued expenses and other liabilities
21,818
18,740
Accrued compensation and benefits
44,978
22,147
Operating lease liabilities
7,733
-
Deferred revenue
180,156
158,243
Total current liabilities
264,749
203,580
Deferred revenue, non-current
21,175
12,423
Operating lease liabilities,
non-current
34,137
-
Other liabilities, non-current
13,572
6,723
Total liabilities
333,633
222,726
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, 2019 and April 30, 2019
-
-
Ordinary shares, par value €0.01 per
share: 165,000,000 shares authorized; 80,412,842 and 73,675,083
shares issued and outstanding as of October 31, 2019 and April 30,
2019, respectively
829
754
Treasury stock
(369
)
(369
)
Additional paid-in capital
843,997
581,135
Accumulated other comprehensive loss
(2,482
)
(1,431
)
Accumulated deficit
(408,819
)
(317,077
)
Total shareholders’ equity
433,156
263,012
Total liabilities and shareholders’
equity
$
766,789
$
485,738
Elastic N.V.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(amounts in thousands)
(Unaudited)
Three Months Ended
October 31,
Six Months Ended
October 31,
2019
2018
2019
2018
Cash flows from operating
activities
Net loss
$
(49,973
)
$
(27,539
)
$
(91,742
)
$
(46,117
)
Adjustments to reconcile net loss to cash
provided by (used in) operating activities:
Depreciation and amortization
2,050
1,466
3,338
3,008
Amortization of deferred contract
acquisition costs
7,198
4,829
13,921
8,848
Non-cash operating lease cost
1,667
-
3,014
-
Stock-based compensation expense
14,416
11,239
27,187
16,904
Non-cash acquisition expense settled with
shares
8,834
-
8,834
-
Deferred income taxes
(690
)
42
(671
)
910
Other
323
15
323
15
Changes in operating assets and
liabilities, net of impact of business acquisitions:
Accounts receivable, net
(18,678
)
(11,772
)
4,850
(2,624
)
Deferred contract acquisition costs
(11,510
)
(9,617
)
(17,025
)
(14,136
)
Prepaid expenses and other current
assets
(3,389
)
(5,900
)
(819
)
(4,857
)
Other assets
851
68
1,906
733
Accounts payable
1,916
1,685
4,204
4,867
Accrued expenses and other liabilities
6,238
4,778
3,372
7,655
Accrued compensation and benefits
18,031
4,820
16,214
1,666
Operating lease liabilities
(1,505
)
-
(2,788
)
-
Deferred revenue
24,511
25,310
24,478
27,678
Net cash provided by (used in) operating
activities
290
(576
)
(1,404
)
4,550
Cash flows from investing
activities
Purchases of property and equipment
(1,645
)
(836
)
(3,230
)
(1,172
)
Business acquisitions, net of cash
acquired
(24,373
)
-
(24,373
)
(1,986
)
Net cash used in investing activities
(26,018
)
(836
)
(27,603
)
(3,158
)
Cash flows from financing
activities
Net proceeds from issuance of ordinary
shares in initial public offering
-
269,514
-
269,514
Proceeds from issuance of ordinary shares
upon exercise of stock options
19,455
2,133
39,568
2,782
Payment of withholding taxes related to
acquisition expense settled in shares
(2,834
)
-
(2,834
)
-
Repurchase of early exercised options
-
-
-
(500
)
Repayment of notes payable
(30
)
-
(60
)
(20
)
Payment of deferred offering costs
-
(2,302
)
-
(2,302
)
Net cash provided by financing
activities
16,591
269,345
36,674
269,474
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(728
)
(449
)
(399
)
(1,628
)
Net increase in cash, cash equivalents,
and restricted cash
(9,865
)
267,484
7,268
269,238
Cash, cash equivalents, and restricted
cash, beginning of period
317,413
53,363
300,280
51,609
Cash, cash equivalents, and restricted
cash, end of period
$
307,548
$
320,847
$
307,548
$
320,847
Elastic N.V.
REVENUE BY TYPE
(amounts in thousands, except
percentages)
(Unaudited)
Three Months Ended October
31,
Six Months Ended October
31,
2019
2018
2019
2018
% of
% of
% of
% of
Total
Total
Total
Total
Amount
Revenue
Amount
Revenue
Amount
Revenue
Amount
Revenue
Self-managed subscription
$
71,030
71
%
$
48,406
76
%
$
135,842
71
%
$
89,718
75
%
License
12,272
12
%
10,204
16
%
22,179
11
%
17,444
15
%
Subscription
58,758
59
%
38,202
60
%
113,663
60
%
72,274
60
%
SaaS
20,649
20
%
10,030
16
%
38,227
20
%
20,327
17
%
Total subscription revenue
91,679
91
%
58,436
92
%
174,069
91
%
110,045
92
%
Professional services
9,427
9
%
5,139
8
%
16,747
9
%
10,174
8
%
Total revenue
$
101,106
100
%
$
63,575
100
%
$
190,816
100
%
$
120,219
100
%
Elastic N.V.
RECONCILIATION OF GAAP TO
NON-GAAP DATA
CALCULATED BILLINGS
(amounts in thousands)
(Unaudited)
Three Months Ended October
31,
Six Months Ended October
31,
2019
2018
2019
2018
Total revenue
$
101,106
$
63,575
$
190,816
$
120,219
Add: Increase in total deferred
revenue
24,511
25,310
24,478
27,678
Less: Increase in unbilled accounts
receivable
(362
)
(361
)
(599
)
(155
)
Calculated billings
$
125,255
$
88,524
$
214,695
$
147,742
Elastic N.V.
RECONCILIATION OF GAAP TO
NON-GAAP DATA
FREE CASH FLOW
(amounts in thousands, except
percentages)
(Unaudited)
Three Months Ended October
31,
Six Months Ended October
31,
2019
2018
2019
2018
Net cash provided by (used in) operating
activities
$
290
$
(576
)
$
(1,404
)
$
4,550
Less: Purchases of property and
equipment
(1,645
)
(836
)
(3,230
)
(1,172
)
Free cash flow
$
(1,355
)
$
(1,412
)
$
(4,634
)
$
3,378
Net cash used in investing activities
$
(26,018
)
$
(836
)
$
(27,603
)
$
(3,158
)
Net cash provided by financing
activities
$
16,591
$
269,345
$
36,674
$
269,474
Net cash provided by (used in) operating
activities (as a percentage of total revenue)
0
%
(1
)%
(0
)%
4
%
Less: Purchases of property and equipment
(as a percentage of total revenue)
(1
)%
(1
)%
(2
)%
(1
)%
Free cash flow margin
(1
)%
(2
)%
(2
)%
3
%
Elastic N.V.
RECONCILIATION OF GAAP TO
NON-GAAP DATA
For the three months ended
October 31, 2019
(amounts in thousands, except
percentages, share and per share amounts)
(Unaudited)
GAAP
Stock-Based
Compensation
Expense
Employer Payroll Taxes on
Employee Stock Transactions
Amortization
of Acquired
Intangibles
Acquisition
Related
Expenses
Tax
Adjustment (1)
Non-GAAP (2)
Cost of revenue
Cost of license - self-managed
$
158
-
-
(158
)
-
-
$
-
Cost of subscription - self-managed and
SaaS
$
19,741
(946
)
(166
)
(861
)
-
-
$
17,768
Total cost of revenue - subscription
$
19,899
(946
)
(166
)
(1,019
)
-
-
$
17,768
Cost of professional services
$
8,862
(638
)
(86
)
-
-
-
$
8,138
Total cost of revenue
$
28,761
(1,584
)
(252
)
(1,019
)
-
-
$
25,906
Gross profit
$
72,345
1,584
252
1,019
-
-
$
75,200
Gross margin (2)
71.6
%
1.6
%
0.2
%
1.0
%
0.0
%
74.4
%
Operating expenses
Research and development
$
38,478
(5,870
)
(888
)
-
-
-
$
31,720
Sales and marketing
$
54,020
(4,658
)
(1,887
)
(379
)
(113
)
-
$
46,983
General and administrative
$
31,808
(2,304
)
(753
)
-
(13,849
)
-
$
14,902
Total operating expenses
$
124,306
(12,832
)
(3,528
)
(379
)
(13,962
)
-
$
93,605
Operating loss
$
(51,961
)
14,416
3,780
1,398
13,962
-
$
(18,405
)
Operating margin (2)
(51.4
)%
14.3
%
3.7
%
1.4
%
13.8
%
(18.2
)%
Other income, net
$
1,684
-
-
-
-
-
$
1,684
Loss before income taxes
$
(50,277
)
14,416
3,780
1,398
13,962
-
$
(16,721
)
Provision for (benefit from) income
taxes
$
(304
)
-
-
-
-
757
$
453
Tax rate (2)
0.6
%
(2.7
)%
Net loss
$
(49,973
)
14,416
3,780
1,398
13,962
(757
)
$
(17,174
)
Net loss per share attributable to
ordinary shareholders, basic and
diluted (2)(3)
$
(0.64
)
$
0.19
$
0.05
$
0.02
$
0.18
$
(0.01
)
$
(0.22
)
(1)
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.
(2)
Totals may not sum, due to rounding. Gross
margin, operating margin, tax rate and earnings per share are
calculated based upon the respective underlying, non-rounded
data.
(3)
Calculated based upon 77,772,406
weighted-average shares, basic and diluted.
Elastic N.V.
RECONCILIATION OF GAAP TO
NON-GAAP DATA
For the three months ended
October 31, 2018
(amounts in thousands, except
percentages, share and per share amounts)
(Unaudited)
GAAP
Stock-Based
Compensation
Expense
Employer Payroll Taxes on
Employee Stock Transactions (4)
Amortization
of Acquired
Intangibles
Acquisition
Related
Expenses
Tax
Adjustment (1)
Non-GAAP (2)
Cost of revenue
Cost of license - self-managed
$
97
-
-
(97
)
-
-
$
-
Cost of subscription - self-managed and
SaaS
$
12,870
(680
)
-
(637
)
-
-
$
11,553
Total cost of revenue - subscription
$
12,967
(680
)
-
(734
)
-
-
$
11,553
Cost of professional services
$
5,620
(227
)
-
-
-
-
$
5,393
Total cost of revenue
$
18,587
(907
)
-
(734
)
-
-
$
16,946
Gross profit
$
44,988
907
-
734
-
-
$
46,629
Gross margin (2)
70.8
%
1.4
%
0.0
%
1.2
%
0.0
%
73.3
%
Operating expenses
Research and development
$
25,332
(4,685
)
-
-
(174
)
-
$
20,473
Sales and marketing
$
34,634
(2,762
)
-
(40
)
-
-
$
31,832
General and administrative
$
12,092
(2,885
)
-
-
(53
)
-
$
9,154
Total operating expenses
$
72,058
(10,332
)
-
(40
)
(227
)
-
$
61,459
Operating loss
$
(27,070
)
11,239
-
774
227
-
$
(14,830
)
Operating margin (2)
(42.6
)%
17.7
%
0.0
%
1.2
%
0.4
%
(23.3
)%
Other income, net
$
264
-
-
-
-
-
$
264
Loss before income taxes
$
(26,806
)
11,239
-
774
227
-
$
(14,566
)
Provision for income taxes
$
733
-
-
-
-
1,611
$
2,344
Tax rate (2)
(2.7
)%
(16.1
)%
Net loss
$
(27,539
)
11,239
-
774
227
(1,611
)
$
(16,910
)
Net loss per share attributable to
ordinary shareholders, basic and
diluted (2)(3)
$
(0.63
)
$
0.26
$
-
$
0.02
$
0.01
$
(0.04
)
$
(0.38
)
(1)
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.
(2)
Totals may not sum, due to
rounding. Gross margin, operating margin, tax rate and earnings per
share are calculated based upon the respective underlying,
non-rounded data.
(3)
Calculated based upon 43,978,770
weighted-average shares, basic and diluted.
(4)
Information not meaningful for
period presented.
Elastic N.V.
RECONCILIATION OF GAAP TO
NON-GAAP DATA
For the six months ended
October 31, 2019
(amounts in thousands, except
percentages, share and per share amounts)
(Unaudited)
GAAP
Stock-Based
Compensation
Expense
Employer Payroll Taxes on
Employee Stock Transactions
Amortization
of Acquired
Intangibles
Acquisition
Related
Expenses
Tax
Adjustment (1)
Non-GAAP (2)
Cost of revenue
Cost of license - self-managed
$
255
-
-
(255
)
-
-
$
-
Cost of subscription - self-managed and
SaaS
$
37,636
(1,861
)
(300
)
(1,397
)
-
-
$
34,078
Total cost of revenue - subscription
$
37,891
(1,861
)
(300
)
(1,652
)
-
-
$
34,078
Cost of professional services
$
17,121
(1,199
)
(120
)
-
-
-
$
15,802
Total cost of revenue
$
55,012
(3,060
)
(420
)
(1,652
)
-
-
$
49,880
Gross profit
$
135,804
3,060
420
1,652
-
-
$
140,936
Gross margin (2)
71.2
%
1.6
%
0.2
%
0.9
%
0.0
%
73.9
%
Operating expenses
Research and development
$
73,660
(10,831
)
(1,648
)
-
(34
)
-
$
61,147
Sales and marketing
$
106,031
(8,966
)
(2,481
)
(408
)
(113
)
-
$
94,063
General and administrative
$
50,376
(4,330
)
(1,360
)
-
(16,287
)
-
$
28,399
Total operating expenses
$
230,067
(24,127
)
(5,489
)
(408
)
(16,434
)
-
$
183,609
Operating loss
$
(94,263
)
27,187
5,909
2,060
16,434
-
$
(42,673
)
Operating margin (2)
(49.4
)%
14.2
%
3.1
%
1.1
%
8.6
%
(22.4
)%
Other income, net
$
2,615
-
-
-
-
-
$
2,615
Loss before income taxes
$
(91,648
)
27,187
5,909
2,060
16,434
-
$
(40,058
)
Provision for income taxes
$
94
-
-
-
-
1,114
$
1,208
Tax rate (2)
(0.1
)%
(3.0
)%
Net loss
$
(91,742
)
27,187
5,909
2,060
16,434
(1,114
)
$
(41,266
)
Net loss per share attributable to
ordinary shareholders, basic and
diluted (2)(3)
$
(1.20
)
$
0.36
$
0.08
$
0.03
$
0.22
$
(0.01
)
$
(0.54
)
(1)
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.
(2)
Totals may not sum, due to
rounding. Gross margin, operating margin, tax rate and earnings per
share are calculated based upon the respective underlying,
non-rounded data.
(3)
Calculated based upon 76,202,865
weighted-average shares, basic and diluted.
Elastic N.V.
RECONCILIATION OF GAAP TO
NON-GAAP DATA
For the six months ended
October 31, 2018
(amounts in thousands, except
percentages, share and per share amounts)
(Unaudited)
GAAP
Stock-Based
Compensation
Expense
Employer Payroll Taxes on
Employee Stock Transactions (4)
Amortization
of Acquired
Intangibles
Acquisition
Related
Expenses
Tax
Adjustment (1)
Non-GAAP (2)
Cost of revenue
Cost of license - self-managed
$
194
-
-
(194
)
-
-
$
-
Cost of subscription - self-managed and
SaaS
$
23,071
(1,093
)
-
(1,213
)
-
-
$
20,765
Total cost of revenue -
subscription
$
23,265
(1,093
)
-
(1,407
)
-
-
$
20,765
Cost of professional services
$
10,879
(404
)
-
-
-
-
$
10,475
Total cost of revenue
$
34,144
(1,497
)
-
(1,407
)
-
-
$
31,240
Gross profit
$
86,075
1,497
-
1,407
-
-
$
88,979
Gross margin (2)
71.6
%
1.2
%
0.0
%
1.2
%
0.0
%
74.0
%
Operating expenses
Research and development
$
44,313
(6,782
)
-
-
(348
)
-
$
37,183
Sales and marketing
$
65,056
(4,614
)
-
(77
)
-
-
$
60,365
General and administrative
$
22,191
(4,011
)
-
-
(259
)
-
$
17,921
Total operating expenses
$
131,560
(15,407
)
-
(77
)
(607
)
-
$
115,469
Operating loss
$
(45,485
)
16,904
-
1,484
607
-
$
(26,490
)
Operating margin (2)
(37.8
)%
14.1
%
0.0
%
1.2
%
0.5
%
(22.0
)%
Other income, net
$
860
-
-
-
-
-
$
860
Loss before income taxes
$
(44,625
)
16,904
-
1,484
607
-
$
(25,630
)
Provision for income taxes
$
1,492
-
-
-
-
2,282
$
3,774
Tax rate (2)
(3.3
)%
(14.7
)%
Net loss
$
(46,117
)
16,904
-
1,484
607
(2,282
)
$
(29,404
)
Net loss per share attributable to
ordinary shareholders, basic and
diluted (2)(3)
$
(1.20
)
$
0.44
$
-
$
0.04
$
0.02
$
(0.06
)
$
(0.76
)
(1)
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.
(2)
Totals may not sum, due to rounding. Gross
margin, operating margin, tax rate and earnings per share are
calculated based upon the respective underlying, non-rounded
data.
(3)
Calculated based upon 38,471,641
weighted-average shares, basic and diluted.
(4)
Information not meaningful for period
presented.
About Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S.
GAAP, we believe the non-GAAP measures listed below are useful in
evaluating our operating performance. We use these non-GAAP
financial measures to evaluate our ongoing operations and for
internal planning and forecasting purposes. We believe that
non-GAAP financial information, when taken collectively, may be
helpful to investors because it provides consistency and
comparability with past financial performance. However, non-GAAP
financial information is presented for supplemental informational
purposes only, has limitations as an analytical tool and should not
be considered in isolation or as a substitute for financial
information presented in accordance with U.S. GAAP. In particular,
free cash flow is not a substitute for cash used in operating
activities. Additionally, the utility of free cash flow as a
measure of our liquidity is further limited as it does not
represent the total increase or decrease in our cash balance for a
given period. In addition, other companies, including companies in
our industry, may calculate similarly-titled non-GAAP measures
differently or may use other measures to evaluate their
performance, all of which could reduce the usefulness of our
non-GAAP financial measures as tools for comparison. A
reconciliation of our historical non-GAAP financial measures to
their most directly comparable financial measure stated in
accordance with U.S. GAAP has been provided in the financial
statement tables included in this press release. Investors are
cautioned that there are a number of limitations associated with
the use of non-GAAP financial measures and key metrics as
analytical tools. Investors are encouraged to review these
reconciliations, and not to rely on any single financial measure to
evaluate our business.
Non-GAAP Gross Profit and Non-GAAP Gross Margin
We define non-GAAP gross profit and non-GAAP gross margin as
GAAP gross profit and GAAP gross margin, respectively, excluding
stock-based compensation expense, employer payroll taxes on
employee stock transactions, and amortization of acquired
intangible assets. We believe non-GAAP gross profit and non-GAAP
gross margin provide our management and investors consistency and
comparability with our past financial performance and facilitate
period-to-period comparisons of operations, as these metrics
generally eliminate the effects of certain variables from period to
period for reasons unrelated to overall operating performance.
Non-GAAP Operating Loss and Non-GAAP Operating Margin
We define non-GAAP operating 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 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.
Free Cash Flow and Free Cash Flow Margin
Free cash flow is a non-GAAP financial measure that we define as
net cash (used in) provided by operating activities less purchases
of property and equipment. Free cash flow margin is calculated as
free cash flow divided by total revenue. We believe that free cash
flow and free cash flow margin are useful indicators of liquidity
that provide information to management and investors about the
amount of cash generated from our core operations that, after the
purchases of property and equipment, can be used for strategic
initiatives, including investing in our business and selectively
pursuing acquisitions and strategic investments.
Calculated Billings
We define calculated billings as total revenue plus the increase
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. 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/20191204005888/en/
Anthony Luscri Elastic Investor Relations ir@elastic.co
(650) 695-1055 Dan Reidy press@elastic.co
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