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press release

June 1, 2022, 4:06 p.m. EDT

Elastic Reports Strong Fourth Quarter and Fiscal 2022 Financial Results

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)

MOUNTAIN VIEW, Calif., (BUSINESS WIRE) -- Elastic (“Elastic”), /zigman2/quotes/209635082/composite ESTC -4.05% 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 /zigman2/quotes/209635082/composite ESTC -4.05% 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.
 
  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.
 
  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.
 
  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.
 
  Three Months Ended April 30,   Year Ended April 30,
  2022   2021   2022   2021
  Amount   % of   Amount   % of   Amount   % of   Amount   % of
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.
 
  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.
 
  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.
 
  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.
 
  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/

SOURCE: Elastic N.V.

Nikolay Beliov
Elastic Investor Relations
ir@elastic.co Lisa Boughner
Elastic Corporate Communications
lisa.boughner@elastic.co

COMTEX_408064126/2456/2022-06-01T16:05:30

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/zigman2/quotes/209635082/composite
US : U.S.: NYSE
$ 80.60
-3.40 -4.05%
Volume: 646,285
Aug. 17, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$7.97 billion
Rev. per Employee
$289,582
loading...
/zigman2/quotes/209635082/composite
US : U.S.: NYSE
$ 80.60
-3.40 -4.05%
Volume: 646,285
Aug. 17, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$7.97 billion
Rev. per Employee
$289,582
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