PRESS RELEASE
Calculated Billings of $88.5 million, Growing 73% year-over-year Raised $264 million in Initial Public Offering
Anthony Luscri
Elastic Investor Relations
+1 650 695 1055
Deborah Wiltshire
Elastic Corporate Communications
Elastic N.V. (NYSE: ESTC) ("Elastic"), the company behind Elasticsearch and the Elastic Stack, today announced strong results for its fiscal second quarter ended October 31, 2018.
Second Quarter Fiscal 2019 Financial Highlights
- Total revenue was $63.6 million, growing 72% year-over-year.
- Calculated billings was $88.5 million, growing 73% year-over-year.
- Deferred revenue was $127.3 million, growing 78% year-over-year.
- GAAP operating loss was $27.1 million; GAAP operating margin was -42.6%.
- Non-GAAP operating loss was $14.8 million; Non-GAAP operating margin was -23.3%.
- GAAP net loss per share was $0.63; Non-GAAP net loss per share was $0.38.
- Operating cash flow was -$0.6 million with free cash flow of -$1.4 million.
- Cash and cash equivalents were $318.6 million as of October 31, 2018.
“We are very pleased with our Q2 results; our team delivered strong revenue growth of 72% year-over-year,” said Shay Banon, founder and chief executive officer at Elastic. “Search is an incredible foundation to enable our users and customers to address a variety of use cases. We’re proud of the pace of innovation across our self-managed and SaaS offerings and the rapid adoption of the Elastic Stack and our solutions by our users and customers.”
Second Quarter Fiscal 2019 Key Metrics and Recent Business Highlights
- Total subscription customer count was over 6,300.
- Total customer count with ACV greater than $100,000 was over 340.
- Subscription revenue represented 92% of total revenue.
- Net Expansion Rate remained over 130% for the eighth consecutive quarter.
- Released versions 6.4 and 6.5 of the Elastic Stack with many new features including support for Kerberos and FIPS (Federal Information Processing Standard) 140-2, Kibana spaces for better multitenancy, Canvas for pixel-perfect visualizations, cross-cluster replication to support disaster recovery and data locality, curated UIs for log and infrastructure data, and APM support for new programming languages like Java and Go.
- Released new SaaS features on Elasticsearch Service, the official hosted and managed Elasticsearch offering on Elastic Cloud, including custom topologies for hot-warm architectures, deployment templates for use cases like logging or security, machine learning, and a revised, more flexible pricing model.
- Released version 2.0 of Elastic Cloud Enterprise (ECE) bringing all the new SaaS features to hybrid and on-premise environments.
- Held 11 successful Elastic{ON} Tour events to engage with our community of users, customers, and partners in Melbourne, Sydney, Boston, Chicago, Toronto, Minneapolis, Denver, Washington DC, Stockholm, Frankfurt, and Santa Clara, with waitlists driven by strong demand.
- Appointed Jonathan Chadwick Audit Committee Chair to the Elastic Board of Directors. Jonathan is a former Executive Vice President, CFO, and COO of VMware, CFO of Skype, Corporate Vice President of Microsoft and Executive Vice President and CFO of McAfee.
Financial Outlook
The Company is providing the following guidance:
For its third quarter of fiscal 2019 (ending January 31, 2019):
- Total revenue is expected to be between $64 million and $66 million.
- Non-GAAP operating margin is expected to be between -30% and -28%.
- Non-GAAP net loss per share is expected to be between $0.32 and $0.30, assuming approximately 71 million ordinary shares outstanding.
For its fiscal year 2019 (ending April 30, 2019):
- Total revenue is expected to be between $254 million and $258 million.
- Non-GAAP operating margin is expected to be between -26.0% and -25.0%.
- Non-GAAP net loss per share is expected to be between $1.35 and $1.30, assuming approximately 56 million 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 these 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 beginning 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.
Lock-Up Release Extension
Lock-up agreements executed in connection with the Company’s initial public offering provided for early release of 25% of the shares if certain price and other conditions are met on or after January 2, 2019. However, since the Company will be in its standard quarterly trading blackout period on that date, this early lock-up release date will be extended (even if the early release conditions are met) until at least the second business day following the end of its blackout period. The Company expects to announce its earnings results for its fiscal quarter ending January 31, 2019 in late February 2019 or early March 2019. The Company will announce the lock-up release date at least two business days in advance.
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 search, logging, security, and analytics use cases. Elastic is a distributed company with Elasticians working in countries around the world. 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
Reconciliations of non-GAAP financial measures to Elastic’s financial results as determined in accordance with 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 January 31, 2019 and the fiscal year ending April 30, 2019. 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 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 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; 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 prospectus filed with the SEC pursuant to Rule 424(b)(4) dated October 4, 2018. 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, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenue | ||||||||||||||||
| License - self-managed | $ | 10,204 | $ | 6,456 | $ | 17,444 | $ | 11,105 | ||||||||
| Subscription - self-managed and SaaS | 48,232 | 28,326 | 92,601 | 53,068 | ||||||||||||
| Total subscription revenue | 58,436 | 34,782 | 110,045 | 64,173 | ||||||||||||
| Professional services | 5,139 | 2,256 | 10,174 | 4,509 | ||||||||||||
| Total revenue | 63,575 | 37,038 | 120,219 | 68,682 | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Cost of license - self-managed | 97 | 97 | 194 | 194 | ||||||||||||
| Cost of subscription - self-managed and SaaS | 12,870 | 6,254 | 23,071 | 11,236 | ||||||||||||
| Total cost of revenue - subscription | 12,967 | 6,351 | 23,265 | 11,430 | ||||||||||||
| Cost of professional services | 5,620 | 2,609 | 10,879 | 4,944 | ||||||||||||
| Total cost of revenue | 18,587 | 8,960 | 34,144 | 16,374 | ||||||||||||
| Gross profit | 44,988 | 28,078 | 86,075 | 52,308 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 25,332 | 12,182 | 44,313 | 23,006 | ||||||||||||
| Sales and marketing | 34,634 | 16,905 | 65,056 | 33,952 | ||||||||||||
| General and administrative | 12,092 | 6,117 | 22,191 | 11,650 | ||||||||||||
| Total operating expenses | 72,058 | 35,204 | 131,560 | 68,608 | ||||||||||||
| Operating loss | (27,070 | ) | (7,126 | ) | (45,485 | ) | (16,300 | ) | ||||||||
| Other income (expense), net | 264 | 86 | 860 | (638 | ) | |||||||||||
| Loss before income taxes | (26,806 | ) | (7,040 | ) | (44,625 | ) | (16,938 | ) | ||||||||
| Provision for income taxes | 733 | 987 | 1,492 | 1,056 | ||||||||||||
| Net loss | $ | (27,539 | ) | $ | (8,027 | ) | $ | (46,117 | ) | $ | (17,994 | ) | ||||
Net loss per share attributable to ordinary | $ | (0.63 | ) | $ | (0.25 | ) | $ | (1.20 | ) | $ | (0.57 | ) | ||||
Weighted-average shares used to compute net loss | 43,978,770 | 31,684,020 | 38,471,641 | 31,561,588 | ||||||||||||
| Elastic N.V. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (amounts in thousands, except share and per share amounts) | ||||||||
| (Unaudited) | ||||||||
October 31, | April 30, | |||||||
| 2018 | 2018 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 318,564 | $ | 50,941 | ||||
| Restricted cash | 2,283 | 668 | ||||||
Accounts receivable, net of allowance for doubtful accounts of
$1,604
| 54,512 | 53,233 | ||||||
| Deferred contract acquisition costs | 15,721 | 12,125 | ||||||
| Prepaid expenses and other current assets | 18,524 | 15,261 | ||||||
| Total current assets | 409,604 | 132,228 | ||||||
| Property and equipment, net | 4,104 | 4,536 | ||||||
| Goodwill | 19,964 | 19,182 | ||||||
| Intangible assets, net | 8,176 | 8,297 | ||||||
| Deferred contract acquisition costs, non-current | 7,147 | 5,954 | ||||||
| Deferred offering costs | - | 242 | ||||||
| Deferred tax assets | 3,036 | 3,946 | ||||||
| Other assets | 7,500 | 8,628 | ||||||
| Total assets | $ | 459,531 | $ | 183,013 | ||||
Liabilities, Redeemable Convertible Preferred Shares and
Shareholders’
| ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 9,827 | $ | 2,176 | ||||
| Accrued expenses and other liabilities | 16,866 | 11,816 | ||||||
| Accrued compensation and benefits | 16,458 | 15,191 | ||||||
| Deferred revenue | 116,255 | 95,929 | ||||||
| Total current liabilities | 159,406 | 125,112 | ||||||
| Deferred revenue, non-current | 11,024 | 6,632 | ||||||
| Other liabilities, non-current | 5,215 | 3,877 | ||||||
| Total liabilities | 175,645 | 135,621 | ||||||
| Commitments and contingencies | ||||||||
Redeemable convertible preference shares, par value €0.001 per
share;
| - | 200,921 | ||||||
| Shareholders’ (deficit) equity: | ||||||||
Convertible preference shares, €0.01 par value; 165,000,000 shares
authorized, 0 shares
| - | - | ||||||
Ordinary shares, par value €0.01 per share: 165,000,000 shares
authorized;
| 722 | - | ||||||
Ordinary shares, par value of €0.001 per share; 72,000,000 shares
authorized;
| - | 33 | ||||||
Treasury stock; 35,937 shares (repurchased at an average price of $10.30 per share) | (369 | ) | (369 | ) | ||||
| Additional paid-in capital | 546,219 | 62,542 | ||||||
| Accumulated other comprehensive loss | (1,795 | ) | (961 | ) | ||||
| Accumulated deficit | (260,891 | ) | (214,774 | ) | ||||
| Total shareholders’ (deficit) equity | 283,886 | (153,529 | ) | |||||
Total liabilities, redeemable convertible preference shares and
shareholders’
| $ | 459,531 | $ | 183,013 | ||||
| Elastic N.V. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
| (amounts in thousands) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
| October 31, | October 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||||
| Net loss | $ | (27,539 | ) | $ | (8,027 | ) | $ | (46,117 | ) | $ | (17,994 | ) | ||||
Adjustments to reconcile net loss to cash (used in) provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 1,466 | 1,072 | 3,008 | 2,095 | ||||||||||||
| Amortization of deferred contract acquisition costs | 4,829 | 2,996 | 8,848 | 5,598 | ||||||||||||
| Stock-based compensation expense | 11,239 | 2,769 | 16,904 | 5,024 | ||||||||||||
| Other | 15 | 2 | 15 | 2 | ||||||||||||
Changes in operating assets and liabilities, net of impact of business acquisition: | ||||||||||||||||
| Accounts receivable, net | (11,772 | ) | (6,700 | ) | (2,624 | ) | (2,092 | ) | ||||||||
| Deferred contract acquisition costs | (9,617 | ) | (4,552 | ) | (14,136 | ) | (7,253 | ) | ||||||||
| Prepaid expenses and other current assets | (5,900 | ) | (1,476 | ) | (4,857 | ) | (1,917 | ) | ||||||||
| Other assets | 110 | 44 | 1,643 | (1,827 | ) | |||||||||||
| Accounts payable | 1,685 | (957 | ) | 4,867 | 398 | |||||||||||
| Accrued expenses and other liabilities | 4,778 | 1,767 | 7,655 | 4,786 | ||||||||||||
| Accrued compensation and benefits | 4,820 | 2,935 | 1,666 | 2,381 | ||||||||||||
| Deferred revenue | 25,310 | 14,213 | 27,678 | 15,735 | ||||||||||||
Net cash (used in) provided by operating activities | (576 | ) | 4,086 | 4,550 | 4,936 | |||||||||||
| Cash flows from investing activities | ||||||||||||||||
| Purchases of property and equipment | (836 | ) | (502 | ) | (1,172 | ) | (896 | ) | ||||||||
| Maturities of short-term investments | - | 7,500 | - | 15,000 | ||||||||||||
| Business acquisitions, net of cash acquired | - | (651 | ) | (1,986 | ) | (3,702 | ) | |||||||||
| Net cash (used in) provided by investing activities | (836 | ) | 6,347 | (3,158 | ) | 10,402 | ||||||||||
| Cash flows from financing activities | ||||||||||||||||
Net proceeds from issuance of common stock in initial public offering | 269,514 | - | 269,514 | - | ||||||||||||
Proceeds from issuance of ordinary shares upon exercise of stock options | 2,133 | 771 | 2,782 | 1,328 | ||||||||||||
| Repurchase of ordinary shares | - | (344 | ) | - | (344 | ) | ||||||||||
| Repurchase of early exercised options | - | - | (500 | ) | - | |||||||||||
| Repayment of notes payable | - | (31 | ) | (20 | ) | (59 | ) | |||||||||
| Payments of deferred offering costs | (2,302 | ) | - | (2,302 | ) | - | ||||||||||
| Net cash provided by financing activities | 269,345 | 396 | 269,474 | 925 | ||||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (449 | ) | (1,565 | ) | (1,628 | ) | (584 | ) | ||||||||
Net increase in cash, cash equivalents, and restricted cash | 267,484 | 9,264 | 269,238 | 15,679 | ||||||||||||
Cash, cash equivalents, and restricted cash, beginning of period | 53,363 | 66,305 | 51,609 | 59,890 | ||||||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 320,847 | $ | 75,569 | $ | 320,847 | $ | 75,569 | ||||||||
| Elastic N.V. | |||||||||||||||||||||||||||||||||||
| REVENUE BY TYPE | |||||||||||||||||||||||||||||||||||
| (amounts in thousands, except percentages) | |||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||
Three Months Ended October 31, | Six Months Ended October 31, | ||||||||||||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||||
| % of | % of | % of | % of | ||||||||||||||||||||||||||||||||
| Total | Total | Total | Total | ||||||||||||||||||||||||||||||||
| Amount | Revenue | Amount | Revenue | Amount | Revenue | Amount | Revenue | ||||||||||||||||||||||||||||
| Self-managed subscription | $ | 48,406 | 76 | % | $ | 29,169 | 79 | % | $ | 89,718 | 75 | % | $ | 53,831 | 78 | % | |||||||||||||||||||
| License | 10,204 | 16 | % | 6,456 | 17 | % | 17,444 | 15 | % | 11,105 | 16 | % | |||||||||||||||||||||||
| Subscription | 38,202 | 60 | % | 22,713 | 62 | % | 72,274 | 60 | % | 42,726 | 62 | % | |||||||||||||||||||||||
| SaaS | 10,030 | 16 | % | 5,613 | 15 | % | 20,327 | 17 | % | 10,342 | 15 | % | |||||||||||||||||||||||
| Total subscription revenue | 58,436 | 92 | % | 34,782 | 94 | % | 110,045 | 92 | % | 64,173 | 93 | % | |||||||||||||||||||||||
| Professional services | 5,139 | 8 | % | 2,256 | 6 | % | 10,174 | 8 | % | 4,509 | 7 | % | |||||||||||||||||||||||
| Total revenue | $ | 63,575 | 100 | % | $ | 37,038 | 100 | % | $ | 120,219 | 100 | % | $ | 68,682 | 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, | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| Total revenue | $ | 63,575 | $ | 37,038 | $ | 120,219 | $ | 68,682 | |||||||||
| Add: Increase in total deferred revenue | 25,310 | 14,213 | 27,678 | 15,735 | |||||||||||||
Less: (Increase) decrease in unbilled | (361 | ) | 22 | (155 | ) | 508 | |||||||||||
| Calculated billings | $ | 88,524 | $ | 51,273 | $ | 147,742 | $ | 84,925 | |||||||||
| 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, | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| Net cash provided by (used in) operating activities | $ | (576 | ) | $ | 4,086 | $ | 4,550 | $ | 4,936 | ||||||||
| Less: Purchases of property and equipment | (836 | ) | (502 | ) | (1,172 | ) | (896 | ) | |||||||||
| Free cash flow | $ | (1,412 | ) | $ | 3,584 | $ | 3,378 | $ | 4,040 | ||||||||
| Net cash provided by (used in) investing activities | $ | (836 | ) | $ | 6,347 | $ | (3,158 | ) | $ | 10,402 | |||||||
| Net cash provided by financing activities | $ | 269,345 | $ | 396 | $ | 269,474 | $ | 925 | |||||||||
Net cash provided by (used in) operating activities | (1 | )% | 11 | % | 4 | % | 7 | % | |||||||||
Less: Purchases of property and equipment | (1 | )% | (1 | )% | (1 | )% | (1 | )% | |||||||||
| Free cash flow margin | (2 | )% | 10 | % | 3 | % | 6 | % | |||||||||
| 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 | Amortization | Acquisition | Tax | Non-GAAP (2) | |||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||
| Cost of license - self-managed | $ | 97 | - | (97 | ) | - | - | $ | - | |||||||||||||||
Cost of subscription - self-managed | $ | 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 | % | 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 | % | 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 | $ | (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, such as adjustments resulting from the 2017 Tax Act. 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. | |
| Elastic N.V. | ||||||||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP DATA | ||||||||||||||||||||||||
| For the three months ended October 31, 2017 | ||||||||||||||||||||||||
| (amounts in thousands, except percentages, share and per share amounts) | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| GAAP | Stock-Based | Amortization | Acquisition | Tax | Non-GAAP (2) | |||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||
| Cost of license - self-managed | $ | 97 | - | (97 | ) | - | - | $ | - | |||||||||||||||
Cost of subscription - self-managed | $ | 6,254 | (136 | ) | (216 | ) | - | - | $ | 5,902 | ||||||||||||||
| Total cost of revenue - subscription | $ | 6,351 | (136 | ) | (313 | ) | - | - | $ | 5,902 | ||||||||||||||
| Cost of professional services | $ | 2,609 | (70 | ) | - | - | - | $ | 2,539 | |||||||||||||||
| Total cost of revenue | $ | 8,960 | (206 | ) | (313 | ) | - | - | $ | 8,441 | ||||||||||||||
| Gross profit | $ | 28,078 | 206 | 313 | - | - | $ | 28,597 | ||||||||||||||||
| Gross margin (2) | 75.8 | % | 0.6 | % | 0.8 | % | 0.0 | % | 77.2 | % | ||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Research and development | $ | 12,182 | (1,092 | ) | - | (174 | ) | - | $ | 10,916 | ||||||||||||||
| Sales and marketing | $ | 16,905 | (756 | ) | (22 | ) | - | - | $ | 16,127 | ||||||||||||||
| General and administrative | $ | 6,117 | (716 | ) | - | (303 | ) | - | $ | 5,098 | ||||||||||||||
| Total operating expenses | $ | 35,204 | (2,564 | ) | (22 | ) | (477 | ) | - | $ | 32,141 | |||||||||||||
| Operating loss | $ | (7,126 | ) | 2,770 | 335 | 477 | - | $ | (3,544 | ) | ||||||||||||||
| Operating margin (2) | (19.2 | )% | 7.5 | % | 0.9 | % | 1.3 | % | (9.6 | )% | ||||||||||||||
| Other income, net | $ | 86 | - | - | - | - | $ | 86 | ||||||||||||||||
| Loss before income taxes | $ | (7,040 | ) | 2,770 | 335 | 477 | - | $ | (3,458 | ) | ||||||||||||||
| Provision for income taxes | $ | 987 | - | - | - | 820 | $ | 1,807 | ||||||||||||||||
| Tax rate (2) | (14.0 | )% | (52.3 | )% | ||||||||||||||||||||
| Net loss | $ | (8,027 | ) | 2,770 | 335 | 477 | (820 | ) | $ | (5,265 | ) | |||||||||||||
Net loss per share attributable to ordinary | $ | (0.25 | ) | $ | 0.09 | $ | 0.01 | $ | 0.02 | $ | (0.03 | ) | $ | (0.17 | ) | |||||||||
| (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, such as adjustments resulting from the 2017 Tax Act. 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 31,684,020 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 | Amortization | Acquisition | Tax | Non-GAAP (2) | |||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||
| Cost of license - self-managed | $ | 194 | - | (194 | ) | - | - | $ | - | |||||||||||||||
Cost of subscription - self-managed | $ | 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 | % | 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 | % | 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 | $ | (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, such as adjustments resulting from the 2017 Tax Act. 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. | |
| Elastic N.V. | ||||||||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP DATA | ||||||||||||||||||||||||
| For the six months ended October 31, 2017 | ||||||||||||||||||||||||
| (amounts in thousands, except percentages, share and per share amounts) | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| GAAP | Stock-Based | Amortization | Acquisition | Tax | Non-GAAP (2) | |||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||||
| Cost of license - self-managed | $ | 194 | - | (194 | ) | - | - | $ | - | |||||||||||||||
Cost of subscription - self-managed | $ | 11,236 | (255 | ) | (413 | ) | - | - | $ | 10,568 | ||||||||||||||
| Total cost of revenue - subscription | $ | 11,430 | (255 | ) | (607 | ) | - | - | $ | 10,568 | ||||||||||||||
| Cost of professional services | $ | 4,944 | (112 | ) | - | - | - | $ | 4,832 | |||||||||||||||
| Total cost of revenue | $ | 16,374 | (367 | ) | (607 | ) | - | - | $ | 15,400 | ||||||||||||||
| Gross profit | $ | 52,308 | 367 | 607 | - | - | $ | 53,282 | ||||||||||||||||
| Gross margin (2) | 76.2 | % | 0.5 | % | 0.9 | % | 0.0 | % | 77.6 | % | ||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Research and development | $ | 23,006 | (2,075 | ) | - | (314 | ) | - | $ | 20,617 | ||||||||||||||
| Sales and marketing | $ | 33,952 | (1,488 | ) | (44 | ) | - | - | $ | 32,420 | ||||||||||||||
| General and administrative | $ | 11,650 | (1,094 | ) | - | (608 | ) | - | $ | 9,948 | ||||||||||||||
| Total operating expenses | $ | 68,608 | (4,657 | ) | (44 | ) | (922 | ) | - | $ | 62,985 | |||||||||||||
| Operating loss | $ | (16,300 | ) | 5,024 | 651 | 922 | - | $ | (9,703 | ) | ||||||||||||||
| Operating margin (2) | (23.7 | )% | 7.3 | % | 0.9 | % | 1.3 | % | (14.1 | )% | ||||||||||||||
| Other income, net | $ | (638 | ) | - | - | - | - | $ | (638 | ) | ||||||||||||||
| Loss before income taxes | $ | (16,938 | ) | 5,024 | 651 | 922 | - | $ | (10,341 | ) | ||||||||||||||
| Provision for income taxes | $ | 1,056 | 1,720 | $ | 2,776 | |||||||||||||||||||
| Tax rate (2) | (6.2 | )% | (26.8 | )% | ||||||||||||||||||||
| Net loss | $ | (17,994 | ) | 5,024 | 651 | 922 | (1,720 | ) | $ | (13,117 | ) | |||||||||||||
Net loss per share attributable to ordinary | $ | (0.57 | ) | $ | 0.16 | $ | 0.02 | $ | 0.03 | $ | (0.05 | ) | $ | (0.42 | ) | |||||||||
| (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, such as adjustments resulting from the 2017 Tax Act. 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 31,561,588 weighted-average shares, basic and diluted. | |
About Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S. GAAP, we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information 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 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, 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.
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. 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.