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Elastic Reports Fourth Quarter and Fiscal 2023 Financial Results

Q4 Revenue of $280 million, up 17% year-over-year (19% in constant currency)

Q4 Elastic Cloud Revenue of $112 million, up 28% year-over-year (30% in constant currency)

FY23 Revenue of $1.069 billion, up 24% year-over-year (28% in constant currency)

Elastic (NYSE: ESTC) (“Elastic”), the company behind Elasticsearch and the Elastic Stack, announced financial results for its fourth quarter and full fiscal year ended April 30, 2023.

Fourth Quarter Fiscal 2023 Financial Highlights

  • Total revenue was $280 million, an increase of 17% year-over-year, or 19% on a constant currency basis
  • Elastic Cloud revenue was $112 million, an increase of 28% year-over-year, or 30% on a constant currency basis
  • GAAP operating loss was $40 million; GAAP operating margin was -14%
  • Non-GAAP operating income was $24 million; non-GAAP operating margin was 9%
  • GAAP net loss per share was $0.48; non-GAAP diluted earnings per share was $0.22
  • Operating cash flow was $28 million with adjusted free cash flow of $26 million
  • Cash, cash equivalents, and marketable securities were $915 million as of April 30, 2023

Full Fiscal 2023 Financial Highlights

  • Total revenue was $1.069 billion, an increase of 24% year-over-year, or 28% on a constant currency basis
  • Elastic Cloud revenue was $424 million, an increase of 42% year-over-year, or 44% on a constant currency basis
  • GAAP operating loss was $219 million; GAAP operating margin was -21%
  • Non-GAAP operating income was $46 million; non-GAAP operating margin was 4%
  • GAAP net loss per share was $2.47; non-GAAP diluted earnings per share was $0.25
  • Operating cash flow was $36 million with adjusted free cash flow of $57 million

“In Q4, total revenue grew 19% year-over-year in constant currency and we once again managed the business with discipline to deliver stronger than expected non-GAAP operating margin," said Ash Kulkarni, CEO, Elastic. "I am proud of how our team executed as we continued to focus on helping customers drive better business outcomes in the current business climate. We believe our platform capabilities play to our strengths as customers look to consolidate vendors without sacrificing innovation and we are confident about the opportunity ahead of us, especially in the area of generative AI.”

Fourth Quarter Fiscal 2023 Key Metrics and Recent Business Highlights

Key Customer Metrics

  • Total subscription customer count was approximately 20,200 compared to approximately 19,900 in Q3 FY23, and over 18,600 in Q4 FY22
  • Total customer count with Annual Contract Value (ACV) greater than $100,000 was over 1,160 compared to over 1,110 in Q3 FY23, and over 960 in Q4 FY22
  • Net Expansion Rate was approximately 117%

Product Innovations and Updates

  • Announced the Elasticsearch Relevance Engine, powered by built-in vector search and transformer models, designed specifically to bring the power of AI innovation to proprietary enterprise data
  • Expanded capabilities for Elastic Security including Cloud Security Posture Management (CSPM) for AWS, container workload security, and cloud vulnerability management to deliver a comprehensive security analytics solution that includes complete Cloud Native Application Protection for AWS
  • Contributed Elastic Common Schema (ECS) to OpenTelemetry, the second highest velocity project in the Cloud Native Computing Foundation, and committed to joint development of a common schema
  • Launched the beta of a new Service Level Objective, or SLO, monitoring capabilities in Elastic Observability, which lets customers measure and monitor service quality

Other Business Highlights

  • Expanded strategic collaboration with AWS to accelerate integrated go-to-market activities and streamline migration of on-premises workloads to Elastic Cloud on AWS, and achieved AWS Security Competency
  • Sponsored Microsoft Build as a Premium Plus sponsor, where we announced integrations with Azure OpenAI Services as part of our Elasticsearch Relevance Engine announcement
  • Recognized by Comparably as a Best Company in: Company Outlook, Global Culture, Sales Team, and Best Places to Work in the Bay Area

Financial Outlook

The Company is providing the following guidance:

For the first quarter of fiscal 2024 (ending July 31, 2023):

  • Total revenue is expected to be between $283 million and $286 million, representing 14% year-over-year growth at the midpoint (14% year-over-year constant currency growth at the midpoint)
  • Non-GAAP operating margin is expected to be between 5.6% and 6.0%
  • Non-GAAP earnings per share is expected to be between $0.10 and $0.12, assuming between 100.5 million and 101.5 million diluted weighted average ordinary shares outstanding

For fiscal 2024 (ending April 30, 2024):

  • Total revenue is expected to be between $1.238 billion and $1.250 billion, representing 16% year-over-year growth at the midpoint (16% year-over-year constant currency growth at the midpoint)
  • Non-GAAP operating margin is expected to be between 9.7% and 10.3%
  • Non-GAAP earnings per share is expected to be between $0.94 and $1.06, assuming between 102.0 million and 104.0 million diluted weighted average ordinary shares outstanding

The guidance assumes, among others, the following exchange rates: 1 Euro = 1.076 US Dollars; and 1 Great British Pound = 1.237 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 historical and 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 forward-looking non-GAAP measures to the 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. A presentation containing financial and operating information will be available at the same website. The replay of the webcast will also be available on the Investor Relations website.

About Elastic

Elastic (NYSE: ESTC) is a leading platform for search-powered solutions. Elastic understands it’s the answers, not just the data. The Elasticsearch platform enables anyone to find the answers they need in real-time using all their data, at scale. Elastic delivers complete, cloud-based, AI-powered solutions for enterprise security, observability and search built on the Elasticsearch platform, the development platform used by thousands of companies, including more than 50% of the Fortune 500. 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 risks and uncertainties, which include, but are not limited to, statements regarding our expected financial results for the fiscal quarter ending July 31, 2023 and the fiscal year ending April 30, 2024, our expectations regarding demand for our products and solutions, our assessments of the strength of our solutions and products, the expected performance or benefits of our offerings, assessments of customers' reasons for selecting our solutions and products, and expected market opportunities, especially in the area of generative AI. 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; our ability to continue to deliver and improve our offerings and develop new offerings (including innovations around artificial intelligence use cases); customer acceptance and purchase of our new and existing offerings and the expansion and adoption of our Elastic Cloud offerings; our ability to realize value from investments in the business; our ability to maintain and expand our user and customer base; the impact of the uncertain macroeconomic environment and ongoing conflict between Russia and Ukraine on our business, operations, hiring and financial results, and on businesses and spending priorities of our customers and partners; bank failures; the impact of uncertainties related to the current U.S. debt ceiling; 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 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 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 income (loss) and GAAP operating margin, respectively, excluding stock-based compensation expense, employer payroll taxes on employee stock transactions, amortization of acquired intangible assets, acquisition-related expenses, and restructuring and other related charges. 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 Earnings Per Share

We define non-GAAP earnings 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, restructuring and other related charges, one-time litigation settlements, and the tax effects related to the foregoing. We believe non-GAAP earnings 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

Madge Miller

Elastic Corporate Communications

PR-Team@elastic.co

Elastic N.V.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

 

Three Months Ended April 30,

 

Year Ended April 30,

 

2023

 

2022

 

2023

 

2022

Revenue

 

 

 

 

 

 

 

Subscription

$

256,124

 

 

$

221,714

 

 

$

984,762

 

 

$

798,770

 

Services

 

23,817

 

 

 

17,641

 

 

 

84,227

 

 

 

63,604

 

Total revenue

 

279,941

 

 

 

239,355

 

 

 

1,068,989

 

 

 

862,374

 

Cost of revenue

 

 

 

 

 

 

 

Subscription

 

54,508

 

 

 

50,865

 

 

 

219,306

 

 

 

178,204

 

Services

 

19,174

 

 

 

16,499

 

 

 

77,320

 

 

 

53,990

 

Total cost of revenue

 

73,682

 

 

 

67,364

 

 

 

296,626

 

 

 

232,194

 

Gross profit

 

206,259

 

 

 

171,991

 

 

 

772,363

 

 

 

630,180

 

Operating expenses

 

 

 

 

 

 

 

Research and development

 

81,765

 

 

 

78,867

 

 

 

313,454

 

 

 

273,761

 

Sales and marketing

 

123,635

 

 

 

118,603

 

 

 

503,537

 

 

 

406,658

 

General and administrative

 

39,523

 

 

 

34,143

 

 

 

143,247

 

 

 

123,441

 

Restructuring and other related charges

 

1,492

 

 

 

 

 

 

31,297

 

 

 

 

Total operating expenses

 

246,415

 

 

 

231,613

 

 

 

991,535

 

 

 

803,860

 

Operating loss

 

(40,156

)

 

 

(59,622

)

 

 

(219,172

)

 

 

(173,680

)

Other income (expense), net

 

 

 

 

 

 

 

Interest expense

 

(6,284

)

 

 

(6,389

)

 

 

(25,159

)

 

 

(20,716

)

Other income (expense), net

 

6,680

 

 

 

(2,884

)

 

 

27,454

 

 

 

(3,393

)

Loss before income taxes

 

(39,760

)

 

 

(68,895

)

 

 

(216,877

)

 

 

(197,789

)

Provision for (benefit from) income taxes

 

6,971

 

 

 

(3,285

)

 

 

19,284

 

 

 

6,059

 

Net loss

$

(46,731

)

 

$

(65,610

)

 

$

(236,161

)

 

$

(203,848

)

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

$

(0.48

)

 

$

(0.70

)

 

$

(2.47

)

 

$

(2.20

)

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

 

96,978,043

 

 

 

93,806,902

 

 

 

95,729,844

 

 

 

92,547,145

 

Elastic N.V.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

 

 

As of

April 30, 2023

 

As of

April 30, 2022

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

644,167

 

 

$

860,949

 

Restricted cash

 

2,473

 

 

 

2,688

 

Marketable securities

 

271,041

 

 

 

 

Accounts receivable, net of allowance for credit losses of $3,409 and $2,700 as of April 30, 2023 and April 30, 2022, respectively

 

260,919

 

 

 

215,228

 

Deferred contract acquisition costs

 

55,813

 

 

 

43,628

 

Prepaid expenses and other current assets

 

39,867

 

 

 

41,215

 

Total current assets

 

1,274,280

 

 

 

1,163,708

 

Property and equipment, net

 

5,092

 

 

 

7,207

 

Goodwill

 

303,642

 

 

 

303,906

 

Operating lease right-of-use assets

 

19,997

 

 

 

25,437

 

Intangible assets, net

 

29,104

 

 

 

45,800

 

Deferred contract acquisition costs, non-current

 

95,879

 

 

 

74,419

 

Deferred tax assets

 

7,412

 

 

 

5,811

 

Other assets

 

8,076

 

 

 

16,643

 

Total assets

$

1,743,482

 

 

$

1,642,931

 

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

35,151

 

 

$

28,403

 

Accrued expenses and other liabilities

 

63,532

 

 

 

53,930

 

Accrued compensation and benefits

 

76,483

 

 

 

68,002

 

Operating lease liabilities

 

12,749

 

 

 

11,219

 

Deferred revenue

 

528,704

 

 

 

431,776

 

Total current liabilities

 

716,619

 

 

 

593,330

 

Deferred revenue, non-current

 

34,248

 

 

 

33,518

 

Long-term debt, net

 

567,543

 

 

 

566,520

 

Operating lease liabilities, non-current

 

13,942

 

 

 

16,482

 

Other liabilities, non-current

 

12,233

 

 

 

17,648

 

Total liabilities

 

1,344,585

 

 

 

1,227,498

 

Shareholders’ equity:

 

 

 

Convertible preference shares, €0.01 par value; 165,000,000 shares authorized, 0 shares issued and outstanding as of April 30, 2023 and April 30, 2022

 

 

 

 

 

Ordinary shares, par value €0.01 per share: 165,000,000 shares authorized; 97,366,947 shares issued and outstanding as of April 30, 2023 and 94,174,914 shares issued and outstanding as of April 30, 2022

 

1,024

 

 

 

990

 

Treasury stock

 

(369

)

 

 

(369

)

Additional paid-in capital

 

1,471,584

 

 

 

1,250,108

 

Accumulated other comprehensive loss

 

(20,015

)

 

 

(18,130

)

Accumulated deficit

 

(1,053,327

)

 

 

(817,166

)

Total shareholders’ equity

 

398,897

 

 

 

415,433

 

Total liabilities and shareholders’ equity

$

1,743,482

 

 

$

1,642,931

 

Elastic N.V.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

Three Months Ended April 30,

 

Year Ended April 30,

 

2023

 

2022

 

2023

 

2022

Cash flows from operating activities

 

 

 

 

 

 

 

Net loss

$

(46,731

)

 

$

(65,610

)

 

$

(236,161

)

 

$

(203,848

)

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

 

 

 

 

 

 

 

Depreciation and amortization

 

4,758

 

 

 

5,170

 

 

 

20,233

 

 

 

19,728

 

Amortization of discounts or premiums on marketable securities

 

(772

)

 

 

 

 

 

(772

)

 

 

 

Amortization of deferred contract acquisition costs

 

17,405

 

 

 

17,365

 

 

 

68,900

 

 

 

60,738

 

Amortization of debt issuance costs

 

260

 

 

 

249

 

 

 

1,023

 

 

 

803

 

Non-cash operating lease cost

 

2,526

 

 

 

2,377

 

 

 

10,880

 

 

 

8,636

 

Asset impairment charges

 

 

 

 

 

 

 

6,242

 

 

 

 

Stock-based compensation expense, net of amounts capitalized

 

55,413

 

 

 

43,641

 

 

 

204,039

 

 

 

140,612

 

Deferred income taxes

 

(2,075

)

 

 

(2,211

)

 

 

(2,007

)

 

 

(2,430

)

Foreign currency transaction loss (gain)

 

(3,647

)

 

 

277

 

 

 

(1,386

)

 

 

1,984

 

Other

 

(23

)

 

 

 

 

 

44

 

 

 

98

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable, net

 

(60,403

)

 

 

(71,988

)

 

 

(46,353

)

 

 

(62,187

)

Deferred contract acquisition costs

 

(33,833

)

 

 

(35,521

)

 

 

(102,017

)

 

 

(96,755

)

Prepaid expenses and other current assets

 

(6,348

)

 

 

(777

)

 

 

1,323

 

 

 

(3,427

)

Other assets

 

1,419

 

 

 

1,628

 

 

 

8,525

 

 

 

825

 

Accounts payable

 

5,793

 

 

 

6,584

 

 

 

6,304

 

 

 

21,036

 

Accrued expenses and other liabilities

 

10,582

 

 

 

9,653

 

 

 

4,310

 

 

 

27,192

 

Accrued compensation and benefits

 

8,485

 

 

 

13,089

 

 

 

8,324

 

 

 

17,775

 

Operating lease liabilities

 

(3,001

)

 

 

(2,450

)

 

 

(11,405

)

 

 

(8,888

)

Deferred revenue

 

77,747

 

 

 

75,474

 

 

 

95,616

 

 

 

83,780

 

Net cash provided by (used in) operating activities

 

27,555

 

 

 

(3,050

)

 

 

35,662

 

 

 

5,672

 

Cash flows from investing activities

 

 

 

 

 

 

 

Purchases of property and equipment

 

(1,665

)

 

 

(1,498

)

 

 

(2,684

)

 

 

(2,485

)

Purchases of marketable securities

 

(270,268

)

 

 

 

 

 

(270,268

)

 

 

 

Capitalization of internal-use software

 

 

 

 

(705

)

 

 

 

 

 

(4,932

)

Business acquisitions, net of cash acquired

 

 

 

 

 

 

 

 

 

 

(119,854

)

Net cash used in investing activities

 

(271,933

)

 

 

(2,203

)

 

 

(272,952

)

 

 

(127,271

)

Cash flows from financing activities

 

 

 

 

 

 

 

Proceeds from the issuance of debt

 

 

 

 

 

 

 

 

 

 

575,000

 

Proceeds from issuance of ordinary shares upon exercise of stock options

 

5,237

 

 

 

8,870

 

 

 

17,471

 

 

 

36,410

 

Payments of debt issuance costs

 

 

 

 

 

 

 

 

 

 

(9,283

)

Net cash provided by financing activities

 

5,237

 

 

 

8,870

 

 

 

17,471

 

 

 

602,127

 

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

 

5,736

 

 

 

(8,271

)

 

 

2,822

 

 

 

(20,599

)

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

 

(233,405

)

 

 

(4,654

)

 

 

(216,997

)

 

 

459,929

 

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

 

880,045

 

 

 

868,291

 

 

 

863,637

 

 

 

403,708

 

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

$

646,640

 

 

$

863,637

 

 

$

646,640

 

 

$

863,637

 

Elastic N.V.

Revenue by Type

(in thousands, except percentages)

(unaudited)

 

 

Three Months Ended April 30,

 

Year Ended April 30,

 

2023

 

2022

 

2023

 

2022

 

Amount

 

% of

Total

Revenue

 

Amount

 

% of

Total

Revenue

 

Amount

 

% of

Total

Revenue

 

Amount

 

% of

Total

Revenue

Elastic Cloud

$

112,344

 

40

%

 

$

87,652

 

37

%

 

$

424,053

 

40

%

 

$

298,615

 

35

%

Other subscription

 

143,780

 

51

%

 

 

134,062

 

56

%

 

 

560,709

 

52

%

 

 

500,155

 

58

%

Total subscription

 

256,124

 

91

%

 

 

221,714

 

93

%

 

 

984,762

 

92

%

 

 

798,770

 

93

%

Services

 

23,817

 

9

%

 

 

17,641

 

7

%

 

 

84,227

 

8

%

 

 

63,604

 

7

%

Total revenue

$

279,941

 

100

%

 

$

239,355

 

100

%

 

$

1,068,989

 

100

%

 

$

862,374

 

100

%

Elastic N.V.

Reconciliation of GAAP to Non-GAAP Data

Supplementary Information

(in thousands, except percentages)

(unaudited)

 

 

Three Months

Ended


April 30, 2023

 

% 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

$

112,344

 

28

%

 

30

%

 

1

%

 

1

%

Other subscription

$

143,780

 

7

%

 

10

%

 

(1

)%

 

(2

)%

Total subscription

$

256,124

 

16

%

 

18

%

 

%

 

(1

)%

Total revenue

$

279,941

 

17

%

 

19

%

 

2

%

 

1

%

Total deferred revenue

$

562,952

 

21

%

 

21

%

 

16

%

 

16

%

Total remaining performance obligations

$

1,102,965

 

18

%

 

17

%

 

11

%

 

10

%

 

 

Years Ended

April 30, 2023

 

% Change

Year Over

Year

 

% Change

Year Over Year

Excluding

Currency Changes

 

Revenue

 

 

 

 

 

 

Elastic Cloud

$

424,053

 

42

%

 

44

%

 

Other subscription

$

560,709

 

12

%

 

17

%

 

Total subscription

$

984,762

 

23

%

 

27

%

 

Total revenue

$

1,068,989

 

24

%

 

28

%

 

Elastic N.V.

Reconciliation of GAAP to Non-GAAP Data

Adjusted Free Cash Flow

(in thousands, except percentages)

(unaudited)

 

 

Three Months Ended April 30,

 

Year Ended April 30,

 

2023

 

2022

 

2023

 

2022

Net cash provided by (used in) operating activities

$

27,555

 

 

$

(3,050

)

 

$

35,662

 

 

$

5,672

 

Less: Purchases of property and equipment

 

(1,665

)

 

 

(1,498

)

 

 

(2,684

)

 

 

(2,485

)

Less: Capitalization of internal-use software

 

 

 

 

(705

)

 

 

 

 

 

(4,932

)

Add: Interest paid on long-term debt

 

 

 

 

 

 

 

23,719

 

 

 

12,452

 

Adjusted free cash flow (1)

$

25,890

 

 

$

(5,253

)

 

$

56,697

 

 

$

10,707

 

Net cash used in investing activities

$

(271,933

)

 

$

(2,203

)

 

$

(272,952

)

 

$

(127,271

)

Net cash provided by financing activities

$

5,237

 

 

$

8,870

 

 

$

17,471

 

 

$

602,127

 

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

 

10

%

 

 

(1

)%

 

 

3

%

 

 

1

%

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

 

(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)

 

%

 

 

%

 

 

2

%

 

 

1

%

Adjusted free cash flow margin

 

9

%

 

 

(2

)%

 

 

5

%

 

 

1

%

 

(1) Adjusted free cash flow includes $4.8 million and $22.8 million of cash paid for restructuring and other charges during the three months and year ended April 30, 2023.

Elastic N.V.

Reconciliation of GAAP to Non-GAAP Data

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

(unaudited)

 

 

Three Months Ended April 30,

 

Year Ended April 30,

 

2023

 

2022

 

2023

 

2022

Gross Profit Reconciliation:

 

 

 

 

 

 

 

GAAP gross profit

$

206,259

 

 

$

171,991

 

 

$

772,363

 

 

$

630,180

 

Stock-based compensation expense

 

4,324

 

 

 

3,976

 

 

 

17,743

 

 

 

14,831

 

Employer payroll taxes on employee stock transactions

 

140

 

 

 

328

 

 

 

845

 

 

 

1,393

 

Amortization of acquired intangibles

 

2,879

 

 

 

2,947

 

 

 

11,781

 

 

 

10,503

 

Non-GAAP gross profit

$

213,602

 

 

$

179,242

 

 

$

802,732

 

 

$

656,907

 

Gross Margin Reconciliation(1):

 

 

 

 

 

 

 

GAAP gross margin

 

73.7

%

 

 

71.9

%

 

 

72.3

%

 

 

73.1

%

Stock-based compensation expense

 

1.5

%

 

 

1.7

%

 

 

1.7

%

 

 

1.7

%

Employer payroll taxes on employee stock transactions

 

0.1

%

 

 

0.1

%

 

 

0.1

%

 

 

0.2

%

Amortization of acquired intangibles

 

1.0

%

 

 

1.2

%

 

 

1.1

%

 

 

1.2

%

Non-GAAP gross margin

 

76.3

%

 

 

74.9

%

 

 

75.1

%

 

 

76.2

%

Operating Income Reconciliation:

 

 

 

 

 

 

 

GAAP operating loss

$

(40,156

)

 

$

(59,622

)

 

$

(219,172

)

 

$

(173,680

)

Stock-based compensation expense

 

55,413

 

 

 

43,641

 

 

 

204,039

 

 

 

141,194

 

Employer payroll taxes on employee stock transactions

 

2,252

 

 

 

1,327

 

 

 

7,133

 

 

 

9,961

 

Amortization of acquired intangibles

 

4,071

 

 

 

4,139

 

 

 

16,668

 

 

 

15,783

 

Acquisition-related expenses

 

878

 

 

 

2,633

 

 

 

5,978

 

 

 

7,632

 

Restructuring and other related charges

 

1,492

 

 

 

 

 

 

31,297

 

 

 

 

Non-GAAP operating income (loss)

$

23,950

 

 

$

(7,882

)

 

$

45,943

 

 

$

890

 

Operating Margin Reconciliation(1):

 

 

 

 

 

 

 

GAAP operating margin

 

(14.3

)%

 

 

(24.9

)%

 

 

(20.5

)%

 

 

(20.1

)%

Stock-based compensation expense

 

19.8

%

 

 

18.2

%

 

 

19.1

%

 

 

16.4

%

Employer payroll taxes on employee stock transactions

 

0.8

%

 

 

0.6

%

 

 

0.7

%

 

 

1.2

%

Amortization of acquired intangibles

 

1.5

%

 

 

1.7

%

 

 

1.6

%

 

 

1.8

%

Acquisition-related expenses

 

0.3

%

 

 

1.1

%

 

 

0.6

%

 

 

0.9

%

Restructuring and other related charges

 

0.5

%

 

 

%

 

 

2.9

%

 

 

%

Non-GAAP operating margin

 

8.6

%

 

 

(3.3

)%

 

 

4.3

%

 

 

0.1

%

Net Income (Loss) Reconciliation:

 

 

 

 

 

 

 

GAAP net loss

$

(46,731

)

 

$

(65,610

)

 

$

(236,161

)

 

$

(203,848

)

Stock-based compensation expense

 

55,413

 

 

 

43,641

 

 

 

204,039

 

 

 

141,194

 

Employer payroll taxes on employee stock transactions

 

2,252

 

 

 

1,327

 

 

 

7,133

 

 

 

9,961

 

Amortization of acquired intangibles

 

4,071

 

 

 

4,139

 

 

 

16,668

 

 

 

15,783

 

Acquisition-related expenses

 

878

 

 

 

2,633

 

 

 

5,978

 

 

 

7,632

 

Restructuring and other related charges

 

1,492

 

 

 

 

 

 

31,297

 

 

 

 

Litigation settlement

 

(250

)

 

 

 

 

 

(10,400

)

 

 

 

Income tax(2)

 

4,770

 

 

 

(817

)

 

 

6,699

 

 

 

(1,496

)

Non-GAAP net income (loss)

$

21,895

 

 

$

(14,687

)

 

$

25,253

 

 

$

(30,774

)

Non-GAAP earnings (loss) per share attributable to ordinary

shareholders, basic(1)

$

0.23

 

 

$

(0.16

)

 

$

0.26

 

 

$

(0.33

)

Non-GAAP earnings (loss) per share attributable to ordinary

shareholders, diluted(1)

$

0.22

 

 

$

(0.16

)

 

$

0.25

 

 

$

(0.33

)

Weighted-average shares used to compute earnings (loss) per share attributable to ordinary shareholders, basic

 

96,978,043

 

 

 

93,806,902

 

 

 

95,729,844

 

 

 

92,547,145

 

Weighted-average shares used to compute earnings (loss) per share attributable to ordinary shareholders, diluted

 

100,076,763

 

 

 

93,806,902

 

 

 

99,273,692

 

 

 

92,547,145

 

 

(1) Totals may not sum, due to rounding. Gross margin, operating margin, and earnings (loss) 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 April 30,

 

Year Ended April 30,

 

2023

 

2022

 

2023

 

2022

Cost of revenue reconciliation:

 

 

 

 

 

 

 

GAAP subscription

$

54,508

 

 

$

50,559

 

 

$

219,306

 

 

$

176,656

 

Stock-based compensation expense

 

(1,956

)

 

 

(2,106

)

 

 

(8,308

)

 

 

(8,368

)

Employer payroll taxes on employee stock transactions

 

(41

)

 

 

(207

)

 

 

(422

)

 

 

(681

)

Amortization of acquired intangibles

 

(2,879

)

 

 

(2,641

)

 

 

(11,781

)

 

 

(8,955

)

Non-GAAP subscription

$

49,632

 

 

$

45,605

 

 

$

198,795

 

 

$

158,652

 

GAAP services

$

19,174

 

 

$

16,499

 

 

$

77,320

 

 

$

53,990

 

Stock-based compensation expense

 

(2,368

)

 

 

(1,870

)

 

 

(9,435

)

 

 

(6,463

)

Employer payroll taxes on employee stock transactions

 

(99

)

 

 

(121

)

 

 

(423

)

 

 

(712

)

Non-GAAP services

$

16,707

 

 

$

14,508

 

 

$

67,462

 

 

$

46,815

 

Operating expenses reconciliation:

 

 

 

 

 

 

 

GAAP research and development expense

$

81,765

 

 

$

78,867

 

 

$

313,454

 

 

$

273,761

 

Stock-based compensation expense

 

(21,792

)

 

 

(18,127

)

 

 

(80,170

)

 

 

(59,911

)

Employer payroll taxes on employee stock transactions

 

(616

)

 

 

(400

)

 

 

(2,458

)

 

 

(3,316

)

Acquisition-related expenses

 

(841

)

 

 

(2,409

)

 

 

(5,875

)

 

 

(6,104

)

Non-GAAP research and development expense

$

58,516

 

 

$

57,931

 

 

$

224,951

 

 

$

204,430

 

GAAP sales and marketing expense

$

123,635

 

 

$

118,603

 

 

$

503,537

 

 

$

406,658

 

Stock-based compensation expense

 

(18,187

)

 

 

(15,000

)

 

 

(68,943

)

 

 

(45,798

)

Employer payroll taxes on employee stock transactions

 

(592

)

 

 

(413

)

 

 

(2,420

)

 

 

(4,287

)

Amortization of acquired intangibles

 

(1,192

)

 

 

(1,192

)

 

 

(4,887

)

 

 

(5,280

)

Non-GAAP sales and marketing expenses

$

103,664

 

 

$

101,998

 

 

$

427,287

 

 

$

351,293

 

GAAP general and administrative expense

$

39,523

 

 

$

34,143

 

 

$

143,247

 

 

$

123,441

 

Stock-based compensation expense

 

(11,110

)

 

 

(6,538

)

 

 

(37,183

)

 

 

(20,654

)

Employer payroll taxes on employee stock transactions

 

(904

)

 

 

(186

)

 

 

(1,410

)

 

 

(965

)

Acquisition-related expenses

 

(37

)

 

 

(224

)

 

 

(103

)

 

 

(1,528

)

Non-GAAP general and administrative expense

$

27,472

 

 

$

27,195

 

 

$

104,551

 

 

$

100,294

 

 

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