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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Elastic NV | NYSE:ESTC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.44 | -0.41% | 105.66 | 107.94 | 105.51 | 107.69 | 689,642 | 01:00:00 |
Q3 Revenue of $113.2 million, Up 60% year-over-year (61% in constant currency)
SaaS Revenue of $25.1 million, Up 114% year-over-year (118% in constant currency)
Calculated Billings of $122.9 million, Up 54% year-over-year (56% in constant currency)
Elastic N.V. (NYSE: ESTC) (“Elastic”), the company behind Elasticsearch and the Elastic Stack, announced strong results for its third quarter of fiscal 2020 (ended January 31, 2020).
Third Quarter Fiscal 2020 Financial Highlights
“We’re pleased with our revenue growth of 60% year-over-year in Q3,” said Shay Banon, Elastic’s founder and chief executive officer. “Our strategy of building enterprise search, observability, and security solutions on a single technology stack that can be deployed anywhere is clearly resonating with both users and customers.”
In a separate news release issued today, the Company announced that its Chief Revenue Officer, Aaron Katz, has, based on mutual agreement and effective immediately, transitioned into an advisory role until August 1, 2020, and that it has begun a search for his successor. Justin Hoffman, Senior Vice President of Sales, who is a core member of the Company’s executive leadership team and has already been leading Sales for all of the Americas and EMEA for almost seven years, will lead worldwide Sales in the near term.
Third Quarter Fiscal 2020 Key Metrics and Recent Business Highlights
Key Customer Metrics:
Product Releases and Other Business Highlights:
Financial Outlook
The Company is providing the following guidance:
For its fourth quarter of fiscal 2020 (ending April 30, 2020):
For its fiscal year 2020 (ending April 30, 2020):
See the section titled “Forward-Looking Statements” below for information on the factors that could cause our actual results to differ materially. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, many of the costs and expenses that may be incurred in the future.
Conference Call and Webcast
Elastic’s executive management team will host a conference call today at 2:00 p.m. PT/ 5:00 p.m. ET/ 11:00 p.m. CET to discuss the Company’s financial results and business outlook. A live audio webcast of the conference call will be available through Elastic’s Investor Relations website at ir.elastic.co. Slides will accompany the webcast. The replay of the webcast and slides will be available for two months.
About Elastic
Elastic is a search company that powers enterprise search, observability, and security solutions built on one technology stack that can be deployed anywhere. From finding documents to monitoring infrastructure to hunting for threats, Elastic makes data usable in real time and at scale. Founded in 2012, Elastic is a distributed company with Elasticians around the globe. 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 U.S. GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of this press release titled “About Non-GAAP Financial Measures.”
Forward-Looking Statements
This press release contains forward-looking statements which include, but are not limited to, expected financial results for the fiscal quarter and the fiscal year ending April 30, 2020. These forward-looking statements are subject to the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Our expectations and beliefs regarding these matters may not materialize. Actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of uncertainties, risks, and changes in circumstances, including but not limited to risks and uncertainties related to: our future financial performance, including our expectations regarding our revenue; cost of revenue; gross profit or gross margin; and operating expenses (including changes in sales and marketing, research and development and general and administrative expenses); our ability to achieve, and maintain, future profitability; our ability to continue to deliver and improve our offerings and successfully develop new offerings; customer acceptance and purchase of our existing offerings and new offerings; our ability to maintain and expand our user and customer base; the market for our products not continuing to develop; competition from other products; the impact of foreign currency exchange rate and interest rate fluctuations on our results; our business strategy and our plan to build our business; our ability to effectively manage our growth; the pace of change and innovation in the markets in which we participate and the competitive nature of those markets; our international expansion strategy; our service performance and security, including the resources and costs required to prevent, detect and remediate potential security breaches; our operating results and cash flows; our strategy of acquiring complementary businesses and our ability to successfully integrate acquired businesses and technologies; our relationships with third parties, including partners; our ability to protect our intellectual property rights; our ability to develop our brands; our ability to attract and retain qualified employees and key personnel; the impact of expensing stock options and other equity awards; the sufficiency of our capital resources; our ability to successfully defend litigation brought against us; our ability to successfully expand in our existing markets and into new markets; sufficiency of cash to meet cash needs for at least the next 12 months; our ability to comply with laws and regulations that currently apply or become applicable to our business both in the United States and internationally; the future trading prices of our ordinary shares; the impact of our acquisition of Endgame, Inc. on our operating margin; the impact of our acquisition of Endgame, Inc. on Elastic’s future product offerings; and general market, political, economic and business conditions. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption “Risk Factors” and elsewhere in our most recent filings with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for the fiscal year ended April 30, 2019 and any subsequent reports on Form 10-K, Form 10-Q or Form 8-K filed with the SEC. SEC filings are available on the Investor Relations section of Elastic’s website at ir.elastic.co and the SEC’s website at www.sec.gov. Elastic assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release, except as required by law.
Contact Information
Anthony Luscri Elastic Investor Relations ir@elastic.co (650) 695-1055
Lisa Boughner Elastic Corporate Communications lisa.boughner@elastic.co
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,
2020
2019
2020
2019
Revenue
License - self-managed
$
14,495
$
9,406
$
36,674
$
26,850
Subscription - self-managed and SaaS
89,703
55,180
241,593
147,781
Total subscription revenue
104,198
64,586
278,267
174,631
Professional services
8,983
6,249
25,730
16,423
Total revenue
113,181
70,835
303,997
191,054
Cost of revenue
Cost of license - self-managed
347
96
602
290
Cost of subscription - self-managed and SaaS
23,196
13,941
60,832
37,012
Total cost of revenue - subscription
23,543
14,037
61,434
37,302
Cost of professional services
9,862
6,387
26,983
17,266
Total cost of revenue
33,405
20,424
88,417
54,568
Gross profit
79,776
50,411
215,580
136,486
Operating expenses
Research and development
46,119
25,850
119,779
70,163
Sales and marketing
54,829
37,196
160,860
102,252
General and administrative
21,096
11,151
71,472
33,342
Total operating expenses
122,044
74,197
352,111
205,757
Operating loss
(42,268
)
(23,786
)
(136,531
)
(69,271
)
Other income (expense), net
(1,339
)
1,877
1,276
2,737
Loss before income taxes
(43,607
)
(21,909
)
(135,255
)
(66,534
)
Provision for (benefit from) income taxes
674
(558
)
768
934
Net loss
$
(44,281
)
$
(21,351
)
$
(136,023
)
$
(67,468
)
Net loss per share attributable to ordinary shareholders, basic and diluted
$
(0.55
)
$
(0.30
)
$
(1.75
)
$
(1.37
)
Weighted-average shares used to compute net loss per share attributable to ordinary shareholders, basic and diluted
80,737,237
70,725,336
77,713,604
49,261,240
Elastic N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share and per share amounts)
(Unaudited)
January 31, 2020
April 30, 2019
Assets
Current assets:
Cash and cash equivalents
$
294,076
$
298,000
Restricted cash
2,291
2,280
Accounts receivable, net of allowance for doubtful accounts of $1,583 and $1,411 as of January 31, 2020 and April 30, 2019, respectively
72,557
81,274
Deferred contract acquisition costs
14,885
17,215
Prepaid expenses and other current assets
34,697
30,872
Total current assets
418,506
429,641
Property and equipment, net
7,958
5,448
Goodwill
198,774
19,846
Operating lease right-of-use assets
33,814
-
Intangible assets, net
54,005
6,723
Deferred contract acquisition costs, non-current
17,015
8,935
Deferred tax assets
2,205
1,748
Other assets
9,572
13,397
Total assets
$
741,849
$
485,738
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable
$
13,098
$
4,450
Accrued expenses and other liabilities
19,351
18,740
Accrued compensation and benefits
31,607
22,147
Operating lease liabilities
7,292
-
Deferred revenue
189,208
158,243
Total current liabilities
260,556
203,580
Deferred revenue, non-current
20,586
12,423
Operating lease liabilities, non-current
29,034
-
Other liabilities, non-current
13,231
6,723
Total liabilities
323,407
222,726
Commitments and contingencies
Shareholders’ equity:
Convertible preference shares, €0.01 par value; 165,000,000 shares authorized, 0 shares issued and outstanding as of January 31, 2020 and April 30, 2019
-
-
Ordinary shares, par value €0.01 per share: 165,000,000 shares authorized; 81,574,811 and 73,675,083 shares issued and outstanding as of January 31, 2020 and April 30, 2019, respectively
842
754
Treasury stock
(369
)
(369
)
Additional paid-in capital
871,675
581,135
Accumulated other comprehensive loss
(606
)
(1,431
)
Accumulated deficit
(453,100
)
(317,077
)
Total shareholders’ equity
418,442
263,012
Total liabilities and shareholders’ equity
$
741,849
$
485,738
Elastic N.V.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(Unaudited)
Three Months Ended January 31,
Nine Months Ended January 31,
2020
2019
2020
2019
Cash flows from operating activities
Net loss
$
(44,281
)
$
(21,351
)
$
(136,023
)
$
(67,468
)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization
5,235
1,378
8,573
4,386
Amortization of deferred contract acquisition costs
6,660
5,870
20,581
14,718
Non-cash operating lease cost
2,156
-
5,170
-
Stock-based compensation expense
15,588
11,111
42,775
28,015
Non-cash acquisition expense settled with shares
-
-
8,834
-
Deferred income taxes
50
(22
)
(621
)
888
Other
809
51
1,132
66
Changes in operating assets and liabilities, net of impact of business acquisitions:
Accounts receivable, net
6,023
396
10,873
(2,228
)
Deferred contract acquisition costs
(9,416
)
(6,278
)
(26,441
)
(20,414
)
Prepaid expenses and other current assets
(3,526
)
(4,741
)
(4,345
)
(9,598
)
Other assets
1,874
1,010
3,780
1,743
Accounts payable
2,900
(5,233
)
7,104
(366
)
Accrued expenses and other liabilities
(1,852
)
(925
)
1,520
6,730
Accrued compensation and benefits
(12,837
)
404
3,377
2,070
Operating lease liabilities
(1,798
)
-
(4,586
)
-
Deferred revenue
9,188
9,633
33,666
37,311
Net cash used in operating activities
(23,227
)
(8,697
)
(24,631
)
(4,147
)
Cash flows from investing activities
Purchases of property and equipment
(1,007
)
(1,187
)
(4,237
)
(2,359
)
Business acquisitions, net of cash acquired
-
-
(24,373
)
(1,986
)
Net cash used in investing activities
(1,007
)
(1,187
)
(28,610
)
(4,345
)
Cash flows from financing activities
Net proceeds from issuance of ordinary shares in initial public offering
-
-
-
269,514
Proceeds from issuance of ordinary shares upon exercise of stock options
11,054
755
50,622
3,537
Payment of withholding taxes related to acquisition expense settled in shares
-
-
(2,834
)
-
Repurchase of early exercised options
-
-
-
(500
)
Repayment of notes payable
(30
)
(53
)
(90
)
(73
)
Payment of deferred offering costs
-
(3,371
)
-
(5,673
)
Net cash provided by (used in) financing activities
11,024
(2,669
)
47,698
266,805
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
2,029
196
1,630
(1,432
)
Net increase (decrease) in cash, cash equivalents, and restricted cash
(11,181
)
(12,357
)
(3,913
)
256,881
Cash, cash equivalents, and restricted cash, beginning of period
307,548
320,847
300,280
51,609
Cash, cash equivalents, and restricted cash, end of period
$
296,367
$
308,490
$
296,367
$
308,490
Elastic N.V.
REVENUE BY TYPE
(amounts in thousands, except percentages)
(Unaudited)
Three Months Ended January 31,
Nine Months Ended January 31,
2020
2019
2020
2019
% of
% of
% of
% of
Total
Total
Total
Total
Amount
Revenue
Amount
Revenue
Amount
Revenue
Amount
Revenue
Self-managed subscription
$
79,105
70
%
$
52,846
74
%
$
214,947
71
%
$
142,564
74
%
License
14,495
13
%
9,406
13
%
36,674
12
%
26,850
14
%
Subscription
64,610
57
%
43,440
61
%
178,273
59
%
115,714
60
%
SaaS
25,093
22
%
11,740
17
%
63,320
21
%
32,067
17
%
Total subscription revenue
104,198
92
%
64,586
91
%
278,267
92
%
174,631
91
%
Professional services
8,983
8
%
6,249
9
%
25,730
8
%
16,423
9
%
Total revenue
$
113,181
100
%
$
70,835
100
%
$
303,997
100
%
$
191,054
100
%
Elastic N.V.
RECONCILIATION OF GAAP TO NON-GAAP DATA
CALCULATED BILLINGS
(amounts in thousands)
(Unaudited)
Three Months Ended January 31,
Nine Months Ended January 31,
2020
2019
2020
2019
Total revenue
$
113,181
$
70,835
$
303,997
$
191,054
Add: Increase in total deferred revenue
9,188
9,633
33,666
37,311
Less: (Increase) decrease in unbilled accounts receivable
535
(639
)
(64
)
(794
)
Calculated billings
$
122,904
$
79,829
$
337,599
$
227,571
Elastic N.V.
RECONCILIATION OF GAAP TO NON-GAAP DATA
FREE CASH FLOW
(amounts in thousands, except percentages)
(Unaudited)
Three Months Ended January 31,
Nine Months Ended January 31,
2020
2019
2020
2019
Net cash used in operating activities
$
(23,227
)
$
(8,697
)
$
(24,631
)
$
(4,147
)
Less: Purchases of property and equipment
(1,007
)
(1,187
)
(4,237
)
(2,359
)
Free cash flow
$
(24,234
)
$
(9,884
)
$
(28,868
)
$
(6,506
)
Net cash used in investing activities
$
(1,007
)
$
(1,187
)
$
(28,610
)
$
(4,345
)
Net cash provided by (used in) financing activities
$
11,024
$
(2,669
)
$
47,698
$
266,805
Net cash used in operating activities (as a percentage of total revenue)
(21
)%
(12
)%
(8
)%
(2
)%
Less: Purchases of property and equipment (as a percentage of total revenue)
(1
)%
(2
)%
(1
)%
(1
)%
Free cash flow margin
(21
)%
(14
)%
(9
)%
(3
)%
Elastic N.V.
RECONCILIATION OF GAAP TO NON-GAAP DATA
(amounts in thousands, except percentages, share and per share amounts)
(Unaudited)
Three months ended January 31,
Nine months ended January 31,
2020
2019
2020
2019
Gross Profit Reconciliation:
GAAP gross profit
$
79,776
$
50,411
$
215,580
$
136,486
Stock-based compensation expense
1,887
1,459
4,947
2,956
Employer payroll taxes on employee stock transactions
37
-
457
-
Amortization of acquired intangibles
3,007
734
4,659
2,141
Non-GAAP gross profit
$
84,707
$
52,604
$
225,643
$
141,583
Gross Margin Reconciliation(1):
GAAP gross margin
70.5
%
71.2
%
70.9
%
71.4
%
Stock-based compensation expense
1.7
%
2.1
%
1.6
%
1.5
%
Employer payroll taxes on employee stock transactions
0.0
%
0.0
%
0.2
%
0.0
%
Amortization of acquired intangibles
2.7
%
1.0
%
1.5
%
1.1
%
Non-GAAP gross margin
74.8
%
74.3
%
74.2
%
74.1
%
Operating Loss Reconciliation:
GAAP operating loss
$
(42,268
)
$
(23,786
)
$
(136,531
)
$
(69,271
)
Stock-based compensation expense
15,588
11,111
42,775
28,015
Employer payroll taxes on employee stock transactions
739
-
6,648
-
Amortization of acquired intangibles
4,458
772
6,518
2,256
Acquisition-related expenses
1,328
173
17,762
780
Non-GAAP operating loss
$
(20,155
)
$
(11,730
)
$
(62,828
)
$
(38,220
)
Operating Margin Reconciliation(1):
GAAP operating margin
(37.3
)%
(33.6
)%
(44.9
)%
(36.3
)%
Stock-based compensation expense
13.8
%
15.7
%
14.1
%
14.7
%
Employer payroll taxes on employee stock transactions
0.7
%
0.0
%
2.2
%
0.0
%
Amortization of acquired intangibles
3.9
%
1.1
%
2.1
%
1.2
%
Acquisition-related expenses
1.2
%
0.2
%
5.8
%
0.4
%
Non-GAAP operating margin
(17.8
)%
(16.6
)%
(20.7
)%
(20.0
)%
Net Loss Reconciliation:
GAAP net loss
$
(44,281
)
$
(21,351
)
$
(136,023
)
$
(67,468
)
Stock-based compensation expense
15,588
11,111
42,775
28,015
Employer payroll taxes on employee stock transactions
739
-
6,648
-
Amortization of acquired intangibles
4,458
772
6,518
2,256
Acquisition-related expenses
1,328
173
17,762
780
Income tax(2)
(51
)
(1,856
)
(1,165
)
(4,138
)
Non-GAAP net loss
$
(22,219
)
$
(11,151
)
$
(63,485
)
$
(40,555
)
Non-GAAP net loss per share attributable to ordinary shareholders, basic and diluted(1)
$
(0.28
)
$
(0.16
)
$
(0.82
)
$
(0.82
)
Weighted-average shares used to compute net loss per share attributable to ordinary shareholders, basic and diluted
80,737,237
70,725,336
77,713,604
49,261,240
(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.
RECONCILIATION OF GAAP TO NON-GAAP DATA
(amounts in thousands)
(Unaudited)
Three months ended January 31,
Nine months ended January 31,
2020
2019
2020
2019
Cost of revenue reconciliation:
GAAP cost of license - self-managed
$
347
$
96
$
602
$
290
Amortization of acquired intangibles
(347
)
(96
)
(602
)
(290
)
Non-GAAP cost of license - self -managed
$
-
$
-
$
-
$
-
GAAP cost of subscription - self-managed and SaaS
$
23,196
$
13,941
$
60,832
$
37,012
Stock-based compensation expense
(1,008
)
(1,095
)
(2,869
)
(2,188
)
Employer payroll taxes on employee stock transactions(1)
(21
)
-
(321
)
-
Amortization of acquired intangibles
(2,660
)
(638
)
(4,057
)
(1,851
)
Non-GAAP cost of subscription - self-managed and SaaS
$
19,507
$
12,208
$
53,585
$
32,973
GAAP cost of professional services
$
9,862
$
6,387
$
26,983
$
17,266
Stock-based compensation expense
(879
)
(364
)
(2,078
)
(768
)
Employer payroll taxes on employee stock transactions(1)
(16
)
-
(136
)
-
Non-GAAP cost of professional services
$
8,967
$
6,023
$
24,769
$
16,498
Operating expenses reconciliation:
GAAP research and development expense
$
46,119
$
25,850
$
119,779
$
70,163
Stock-based compensation expense
(6,256
)
(4,604
)
(17,087
)
(11,386
)
Employer payroll taxes on employee stock transactions(1)
(238
)
-
(1,886
)
-
Acquisition-related expenses
-
(173
)
(34
)
(521
)
Non-GAAP research and development expense
$
39,625
$
21,073
$
100,772
$
58,256
GAAP sales and marketing expense
$
54,829
$
37,196
$
160,860
$
102,252
Stock-based compensation expense
(4,540
)
(3,471
)
(13,506
)
(8,085
)
Employer payroll taxes on employee stock transactions(1)
(335
)
-
(2,816
)
-
Amortization of acquired intangibles
(1,451
)
(38
)
(1,859
)
(115
)
Acquisition-related expenses
(395
)
-
(508
)
-
Non-GAAP sales and marketing expenses
$
48,108
$
33,687
$
142,171
$
94,052
GAAP general and administrative expense
$
21,096
$
11,151
$
71,472
$
33,342
Stock-based compensation expense
(2,905
)
(1,577
)
(7,235
)
(5,588
)
Employer payroll taxes on employee stock transactions(1)
(129
)
-
(1,489
)
-
Acquisition-related expenses
(933
)
-
(17,220
)
(259
)
Non-GAAP general and administrative expense
$
17,129
$
9,574
$
45,528
$
27,495
(1) Information not meaningful for three and nine months ended January 31, 2019.
About Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S. GAAP, we believe the non-GAAP measures listed below are useful in evaluating our operating performance. We use these non-GAAP financial measures to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. In particular, free cash flow is not a substitute for cash used in operating activities. Additionally, the utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for a given period. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation of our historical non-GAAP financial measures to their most directly comparable financial measure stated in accordance with U.S. GAAP has been provided in the financial statement tables included in this press release. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures and key metrics as analytical tools. Investors are encouraged to review these reconciliations, and not to rely on any single financial measure to evaluate our business.
Non-GAAP Gross Profit and Non-GAAP Gross Margin
We define non-GAAP gross profit and non-GAAP gross margin as GAAP gross profit and GAAP gross margin, respectively, excluding stock-based compensation expense, employer payroll taxes on employee stock transactions, and amortization of acquired intangible assets. We believe non-GAAP gross profit and non-GAAP gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these metrics generally eliminate the effects of certain variables from period to period for reasons unrelated to overall operating performance.
Non-GAAP Operating Loss and Non-GAAP Operating Margin
We define non-GAAP operating loss and non-GAAP operating margin as GAAP operating loss and GAAP operating margin, respectively, excluding stock-based compensation expense, employer payroll taxes on employee stock transactions, amortization of acquired intangible assets, and acquisition-related expenses. We believe non-GAAP operating loss and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations, as these metrics generally eliminate the effects of certain variables from period to period for reasons unrelated to overall operating performance.
Non-GAAP Net Loss Per Share
We define non-GAAP net loss per share as GAAP net loss per share, excluding stock-based compensation expense, employer payroll taxes on employee stock transactions, amortization of acquired intangible assets, acquisition-related expenses and the tax effects related to the foregoing. We believe non-GAAP net loss per share provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as this metric generally eliminates the effects of certain variables from period to period for reasons unrelated to overall operating performance.
Free Cash Flow and Free Cash Flow Margin
Free cash flow is a non-GAAP financial measure that we define as net cash (used in) provided by operating activities less purchases of property and equipment. Free cash flow margin is calculated as free cash flow divided by total revenue. We believe that free cash flow and free cash flow margin are useful indicators of liquidity that provide information to management and investors about the amount of cash generated from our core operations that, after the purchases of property and equipment, can be used for strategic initiatives, including investing in our business and selectively pursuing acquisitions and strategic investments.
Calculated Billings
We define calculated billings as total revenue plus the increase in total deferred revenue as presented on or derived from our consolidated statements of cash flows less the (increase) decrease in total unbilled accounts receivable in a given period. Calculated billings exclude deferred revenue and unbilled accounts receivable acquired through acquisitions. We typically invoice our customers annually in advance, and to a lesser extent multi-year in advance, quarterly in advance, monthly in advance, monthly in arrears or upon delivery. Our management uses calculated billings to understand and evaluate our near term cash flows and operating results.
Constant Currency
We compare the percent change in certain results from one period to another period using constant currency information to provide a framework for assessing how our business performed excluding the effect of foreign currency rate fluctuations. In presenting this information, current and comparative prior period results are converted into United States dollars at the exchange rates in effect on the last day of our prior fiscal year, rather than the actual exchange rates in effect during the respective periods.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200226005887/en/
Anthony Luscri Elastic Investor Relations ir@elastic.co (650) 695-1055
Lisa Boughner Elastic Corporate Communications lisa.boughner@elastic.co
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