PRESS RELEASE

Elastic N.V. Reports Strong Third Quarter Fiscal 2019 Financial Results

Total Revenue of $70.8 million, Growing 70% year-over-year
Calculated Billings of $79.8 million, Growing 68% year-over-year
27 February 2019

Contact Information

Anthony Luscri

Elastic Investor Relations

ir@elastic.co
(650) 695-1055

Deborah Wiltshire

Elastic Corporate Communications

press@elastic.co
MOUNTAIN VIEW, Calif. and AMSTERDAM - 27 February 2019 -

Elastic N.V. (NYSE: ESTC) ("Elastic"), the company behind Elasticsearch and the Elastic Stack, today announced strong results for its fiscal third quarter ended January 31, 2019.


Third Quarter Fiscal 2019 Financial Highlights

  • Total revenue was $70.8 million, growing 70% year-over-year.
  • Calculated billings was $79.8 million, growing 68% year-over-year.
  • Deferred revenue was $137.8 million, growing 73% year-over-year.
  • GAAP operating loss was $23.8 million; GAAP operating margin was -33.6%.
  • Non-GAAP operating loss was $11.7 million; Non-GAAP operating margin was -16.6%.
  • GAAP net loss per share was $0.30; Non-GAAP net loss per share was $0.16.
  • Operating cash flow was -$8.7 million with free cash flow of -$9.9 million.
  • Cash and cash equivalents were $305.8 million as of January 31, 2019.

"We're very pleased with our strong revenue growth of 70% year-over-year in Q3," said Shay Banon, founder and chief executive officer at Elastic. "Our users and customers continue to embrace our search products that address an expanding set of use cases. Given the incredible customer and user demand that we are seeing, we are further accelerating investments across all parts of the business."

Third Quarter Fiscal 2019 Key Metrics and Recent Business Highlights

  • Total subscription customer count was over 7,200.
  • Total customer count with ACV greater than $100,000 was over 380.
  • Subscription revenue represented 91% of total revenue.
  • Net Expansion Rate remained over 130% for the ninth consecutive quarter.
  • Released version 6.6 of the Elastic Stack with better storage efficiency and performance improvements. New features include frozen indices and index lifecycle management for more efficient data retention; Bkd-backed geoshapes for significantly faster geoshape data analysis; and new Elasticsearch SQL functionality to easily build time series charts in Canvas.
  • Made Elastic APM generally available in Elastic's Elasticsearch Service and on Elastic Cloud Enterprise. Distributed tracing is also available in Elastic APM.
  • Released version 2.1 of Elastic Cloud Enterprise (ECE) making it easier to centralize APM, logs, and metrics data and furthering our hybrid cloud capabilities with cross-cluster search.
  • Introduced the Auditbeat System Module to make it easier to detect unusual events in audit data, especially security-related anomalies.
  • Joined the Cloud Native Computing Foundation (CNCF), to support and promote the use of open technologies and standards, like Kubernetes, open tracing and metrics. Elastic APM is now compatible with OpenTracing standards.
  • The Elastic Stack was named in InfoWorld's 2019 Technology of the Year Awards.
  • Held seven successful Elastic{ON} Tour events to engage with our community of users, customers, and partners in Anaheim, Atlanta, Dallas, Madrid, New York City, Paris, and Seoul, with waitlists driven by strong demand.
  • Launched the inaugural Elastic Search Awards Program. An evolution from the Elastic Cause Awards, this new program recognizes and celebrates community members and organizations that are using Elastic technology to improve lives.
  • Commemorated the new, expanded Elastic Amsterdam office with community members, customers, and partners, along with Prince Constantijn van Oranje, who is Special Envoy of Startup Delta, a Dutch startup accelerator.

Financial Outlook

The Company is providing the following guidance:

For its fourth quarter of fiscal 2019 (ending April 30, 2019):

  • Total revenue is expected to be between $74 million and $76 million.
  • Non-GAAP operating margin is expected to be between -26% and -24%.
  • Non-GAAP net loss per share is expected to be between $0.30 and $0.28, assuming approximately 74 million weighted average ordinary shares outstanding.

For its fiscal year 2019 (ending April 30, 2019):

  • Total revenue is expected to be between $265 million and $267 million.
  • Non-GAAP operating margin is expected to be between -22% and -21%.
  • Non-GAAP net loss per share is expected to be between $1.13 and $1.11, assuming approximately 56 million weighted average ordinary shares outstanding.

See the section titled "Forward-Looking Statements" below for information on the factors that could cause our actual results to differ materially. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, many of 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/ 11 p.m. CET to discuss the Company's financial results and business outlook. A live audio webcast of the conference call will be available through Elastic's Investor Relations website at ir.elastic.co. Slides will accompany the webcast. The replay of the webcast and slides will be available for two months.

Lock-Up Release Date and Extension

Pursuant to the lock-up agreements executed in connection with the Company's initial public offering, provided the closing price of Elastic's ordinary shares on March 4, 2019 is at least 33% greater than the IPO price of Elastic's ordinary shares, 25% of the shares subject to the lock-up agreements will be released from lock-up, and such shares will become eligible for immediate sale in the public market, at the open of trading on March 6, 2019, subject to trading limitations on shares held by affiliates of Elastic and applicable securities laws, restrictions under Elastic's insider trading policy and continued vesting of any unvested equity awards as of such date.

The lock-up restrictions with respect to all remaining shares are scheduled to expire after the close of the market on April 2, 2019. However, since the Company will be in its standard quarterly trading blackout period on that date, insiders will be restricted from selling shares until the start of the third trading day following the end of this blackout period. The Company expects to announce its earnings results for its fiscal year ending April 30, 2019 in early June 2019.

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 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 and our Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 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 January 31,

Nine Months Ended January 31,


2019
2018

2019
2018
Revenue















License - self-managed
$ 9,406

$ 5,815

$ 26,850

$ 16,920
Subscription - self-managed and SaaS