falsedesktopESTC2020-10-31000170775320000032{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large accelerated filer\t☒\tAccelerated filer\t☐\nNon-accelerated filer\t☐\tSmaller reporting company\t☐\n\t\tEmerging growth company\t☐\n", "q10k_tbl_1": "\t\tPage\n\tNote Regarding Forward-Looking Statements\t3\nPART I.\tFINANCIAL INFORMATION\t5\nItem 1.\tFinancial Statements (Unaudited)\t5\n\tCondensed Consolidated Balance Sheets\t5\n\tCondensed Consolidated Statements of Operations\t6\n\tCondensed Consolidated Statements of Comprehensive Loss\t7\n\tCondensed Consolidated Statements of Shareholders' Equity\t8\n\tCondensed Consolidated Statements of Cash Flows\t10\n\tNotes to Condensed Consolidated Financial Statements (Unaudited)\t11\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t26\nItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t42\nItem 4.\tControls and Procedures\t43\nPART II.\tOTHER INFORMATION\t44\nItem 1.\tLegal Proceedings\t44\nItem 1A.\tRisk Factors\t44\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t71\nItem 3.\tDefaults Upon Senior Securities\t72\nItem 4.\tMine Safety Disclosures\t72\nItem 5.\tOther Information\t72\nItem 6.\tExhibits\t73\nSignatures\t\t74\n", "q10k_tbl_2": "\tAs of October 31 2020\tAs of April 30 2020\nAssets\t\t\nCurrent assets:\t\t\nCash and cash equivalents\t348986\t297081\nRestricted cash\t2325\t2308\nAccounts receivable net of allowance for credit losses of $1505 and $1247 as of October 31 2020 and April 30 2020 respectively\t132523\t128690\nDeferred contract acquisition costs\t28487\t19537\nPrepaid expenses and other current assets\t31805\t32623\nTotal current assets\t544126\t480239\nProperty and equipment net\t8004\t7760\nGoodwill\t198196\t197877\nOperating lease right-of-use assets\t30277\t32783\nIntangible assets net\t43362\t50455\nDeferred contract acquisition costs non-current\t35996\t24012\nDeferred tax assets\t3685\t3164\nOther assets\t3915\t7621\nTotal assets\t867561\t803911\nLiabilities and Shareholders' Equity\t\t\nCurrent liabilities:\t\t\nAccounts payable\t9213\t11485\nAccrued expenses and other liabilities\t21824\t22210\nAccrued compensation and benefits\t46975\t48409\nOperating lease liabilities\t7863\t7639\nDeferred revenue\t262257\t231681\nTotal current liabilities\t348132\t321424\nDeferred revenue non-current\t46959\t28021\nOperating lease liabilities non-current\t25032\t27827\nOther liabilities non-current\t4781\t12992\nTotal liabilities\t424904\t390264\nCommitments and contingencies (Note 7)\t\t\nShareholders' equity:\t\t\nConvertible preference shares €0.01 par value; 165000000 shares authorized 0 shares issued and outstanding as of October 31 2020 and April 30 2020\t0\t0\nOrdinary shares par value €0.01 per share: 165000000 shares authorized; 87204991 and 82856978 shares issued and outstanding as of October 31 2020 and April 30 2020 respectively\t908\t856\nTreasury stock\t(369)\t(369)\nAdditional paid-in capital\t986075\t898788\nAccumulated other comprehensive loss\t(11914)\t(1377)\nAccumulated deficit\t(532043)\t(484251)\nTotal shareholders' equity\t442657\t413647\nTotal liabilities and shareholders' equity\t867561\t803911\n", "q10k_tbl_3": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nRevenue\t\t\t\t\nLicense - self-managed\t15514\t12272\t30393\t22179\nSubscription - self-managed and SaaS\t118695\t79407\t225158\t151890\nTotal subscription revenue\t134209\t91679\t255551\t174069\nProfessional services\t10685\t9427\t18213\t16747\nTotal revenue\t144894\t101106\t273764\t190816\nCost of revenue\t\t\t\t\nCost of license - self-managed\t347\t158\t693\t255\nCost of subscription - self-managed and SaaS\t29148\t19741\t55038\t37636\nTotal cost of revenue - subscription\t29495\t19899\t55731\t37891\nCost of professional services\t8953\t8862\t17548\t17121\nTotal cost of revenue\t38448\t28761\t73279\t55012\nGross profit\t106446\t72345\t200485\t135804\nOperating expenses\t\t\t\t\nResearch and development\t46688\t38478\t92366\t73660\nSales and marketing\t64474\t54020\t120625\t106031\nGeneral and administrative\t23705\t31808\t45434\t50376\nTotal operating expenses\t134867\t124306\t258425\t230067\nOperating loss\t(28421)\t(51961)\t(57940)\t(94263)\nOther income (expense) net\t(84)\t1684\t10801\t2615\nLoss before income taxes\t(28505)\t(50277)\t(47139)\t(91648)\nProvision for (benefit from) income taxes\t653\t(304)\t1020\t94\nNet loss\t(29158)\t(49973)\t(48159)\t(91742)\nNet loss per share attributable to ordinary shareholders basic and diluted\t(0.34)\t(0.64)\t(0.56)\t(1.20)\nWeighted-average shares used to compute net loss per share attributable to ordinary shareholders basic and diluted\t86373166\t77772406\t85275474\t76202865\n", "q10k_tbl_4": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nNet loss\t(29158)\t(49973)\t(48159)\t(91742)\nOther comprehensive loss:\t\t\t\t\nForeign currency translation adjustments\t(479)\t(1433)\t(10537)\t(1051)\nOther comprehensive loss\t(479)\t(1433)\t(10537)\t(1051)\nTotal comprehensive loss\t(29637)\t(51406)\t(58696)\t(92793)\n", "q10k_tbl_5": "\t\t\t\tAdditional Paid-in Capital\tAccumulated Other Comprehensive Loss\t\tTotal Shareholders' Equity\n\tOrdinary Shares\t\tTreasury Shares\t\tAccumulated Deficit\n\tShares\tAmount\t\t\nBalances at July 31 2020\t85737645\t890\t(369)\t946178\t(11435)\t(502885)\t432379\nIssuance of ordinary shares upon exercise of stock options\t1379823\t16\t0\t15962\t0\t0\t15978\nIssuance of ordinary shares upon release of restricted stock units\t87523\t2\t0\t(2)\t0\t0\t0\nStock-based compensation\t0\t0\t0\t21235\t0\t0\t21235\nReclassification of liability-classified awards\t0\t0\t0\t2702\t0\t0\t2702\nNet loss\t0\t0\t0\t0\t0\t(29158)\t(29158)\nForeign currency translation\t0\t0\t0\t0\t(479)\t0\t(479)\nBalances at October 31 2020\t87204991\t908\t(369)\t986075\t(11914)\t(532043)\t442657\n\t\t\t\tAdditional Paid-in Capital\tAccumulated Other Comprehensive Loss\t\tTotal Shareholders' Equity\n\tOrdinary Shares\t\tTreasury Shares\t\tAccumulated Deficit\n\tShares\tAmount\t\t\nBalances at July 31 2019\t76259361\t782\t(369)\t614532\t(1049)\t(358846)\t255050\nIssuance of ordinary shares upon exercise of stock options\t1936335\t23\t0\t19433\t0\t0\t19456\nIssuance of ordinary shares upon release of restricted stock units\t3037\t1\t0\t0\t0\t0\t1\nOrdinary shares issued in connection with the acquisition of Endgame\t1983663\t21\t0\t167316\t0\t0\t167337\nOrdinary shares issued in connection with the acquisition of Endgame held in escrow\t235031\t2\t0\t19824\t0\t0\t19826\nAssumption of stock option plan as consideration for acquisition of Endgame\t0\t0\t0\t9309\t0\t0\t9309\nRepurchase of unvested RSAs\t(4585)\t0\t0\t0\t0\t0\t0\nStock-based compensation\t0\t0\t0\t13583\t0\t0\t13583\nNet loss\t0\t0\t0\t0\t0\t(49973)\t(49973)\nForeign currency translation\t0\t0\t0\t0\t(1433)\t0\t(1433)\nBalances at October 31 2019\t80412842\t829\t(369)\t843997\t(2482)\t(408819)\t433156\n", "q10k_tbl_6": "\t\t\t\tAdditional Paid-in Capital\tAccumulated Other Comprehensive Loss\t\tTotal Shareholders' Equity\n\tOrdinary Shares\t\tTreasury Shares\t\tAccumulated Deficit\n\tShares\tAmount\t\t\nBalances at April 30 2020\t82856978\t856\t(369)\t898788\t(1377)\t(484251)\t413647\nCumulative-effect adjustment from adoption of ASU 2016-13\t0\t0\t0\t0\t0\t367\t367\nIssuance of ordinary shares upon exercise of stock options\t4035115\t47\t0\t45183\t0\t0\t45230\nIssuance of ordinary shares upon release of restricted stock units\t312898\t5\t0\t(5)\t0\t0\t0\nStock-based compensation\t0\t0\t0\t39407\t0\t0\t39407\nReclassification of liability-classified awards\t0\t0\t0\t2702\t0\t0\t2702\nNet loss\t0\t0\t0\t0\t0\t(48159)\t(48159)\nForeign currency translation\t0\t0\t0\t0\t(10537)\t0\t(10537)\nBalances at October 31 2020\t87204991\t908\t(369)\t986075\t(11914)\t(532043)\t442657\n\t\t\t\tAdditional Paid-in Capital\tAccumulated Other Comprehensive Loss\t\tTotal Shareholders' Equity\n\tOrdinary Shares\t\tTreasury Shares\t\tAccumulated Deficit\n\tShares\tAmount\t\t\nBalances at April 30 2019\t73675083\t754\t(369)\t581135\t(1431)\t(317077)\t263012\nIssuance of ordinary shares upon exercise of stock options\t4470226\t51\t0\t39517\t0\t0\t39568\nIssuance of ordinary shares upon release of restricted stock units\t53424\t1\t0\t0\t0\t0\t1\nOrdinary shares issued in connection with the acquisition of Endgame\t1983663\t21\t0\t167316\t0\t0\t167337\nOrdinary shares issued in connection with the acquisition of Endgame held in escrow\t235031\t2\t0\t19824\t0\t0\t19826\nAssumption of stock option plan as consideration for acquisition of Endgame\t0\t0\t0\t9309\t0\t0\t9309\nRepurchase of unvested RSAs\t(4585)\t0\t0\t0\t0\t0\t0\nVesting of ordinary shares subject to repurchase\t0\t0\t0\t1612\t0\t0\t1612\nStock-based compensation\t0\t0\t0\t25284\t0\t0\t25284\nNet loss\t0\t0\t0\t0\t0\t(91742)\t(91742)\nForeign currency translation\t0\t0\t0\t0\t(1051)\t0\t(1051)\nBalances at October 31 2019\t80412842\t829\t(369)\t843997\t(2482)\t(408819)\t433156\n", "q10k_tbl_7": "\tSix Months Ended October 31\t\n\t2020\t2019\nCash flows from operating activities\t\t\nNet loss\t(48159)\t(91742)\nAdjustments to reconcile net loss to cash provided by (used in) operating activities:\t\t\nDepreciation and amortization\t8566\t3338\nAmortization of deferred contract acquisition costs\t18173\t13921\nNon-cash operating lease cost\t3434\t3014\nStock-based compensation expense\t40078\t27187\nNon-cash acquisition expense settled with shares\t0\t8834\nDeferred income taxes\t(286)\t(671)\nForeign currency transaction gain\t(10924)\t0\nOther\t(11)\t323\nChanges in operating assets and liabilities:\t\t\nAccounts receivable net\t63\t4850\nDeferred contract acquisition costs\t(37872)\t(17025)\nPrepaid expenses and other current assets\t1100\t(819)\nOther assets\t4040\t1906\nAccounts payable\t(2638)\t4204\nAccrued expenses and other liabilities\t(1061)\t3372\nAccrued compensation and benefits\t(691)\t16214\nOperating lease liabilities\t(3535)\t(2788)\nDeferred revenue\t34432\t24478\nNet cash provided by (used in) operating activities\t4709\t(1404)\nCash flows from investing activities\t\t\nPurchases of property and equipment\t(1656)\t(3230)\nBusiness acquisition net of cash acquired\t0\t(24373)\nOther\t1320\t0\nNet cash used in investing activities\t(336)\t(27603)\nCash flows from financing activities\t\t\nProceeds from issuance of ordinary shares upon exercise of stock options\t45230\t39568\nPayment of withholding taxes related to acquisition expense settled in shares\t0\t(2834)\nRepayment of notes payable\t0\t(60)\nNet cash provided by financing activities\t45230\t36674\nEffect of exchange rate changes on cash cash equivalents and restricted cash\t2319\t(399)\nNet increase in cash cash equivalents and restricted cash\t51922\t7268\nCash cash equivalents and restricted cash beginning of period\t299389\t300280\nCash cash equivalents and restricted cash end of period\t351311\t307548\nSupplemental disclosures of cash flow information\t\t\nCash paid (refund received) for income taxes\t(1708)\t1132\nCash paid for operating lease liabilities\t4363\t3083\nSupplemental disclosures of non-cash investing and financing information\t\t\nProperty and equipment included in accounts payable and accrued liabilities\t10\t444\nOperating lease right-of-use assets for new lease obligations\t575\t11296\nVesting of shares subject to repurchase\t0\t1612\nIssuance of ordinary shares for business combination\t0\t178329\nAssumption of stock option plan as consideration for business combination\t0\t9309\n", "q10k_tbl_8": "Note\t\tPage\n1.\tOrganization and Description of Business\t12\n2.\tSummary of Significant Accounting Policies\t12\n3.\tRevenue and Performance Obligations\t14\n4.\tFair Value Measurements\t14\n5.\tAcquisitions\t15\n6.\tBalance Sheet Components\t17\n7.\tCommitments and Contingencies\t20\n8.\tLeases\t21\n9.\tOrdinary Shares\t22\n10.\tEquity Incentive Plans\t22\n11.\tNet Loss Per Share Attributable to Ordinary Shareholders\t24\n12.\tIncome Taxes\t24\n13.\tEmployee Benefit Plans\t25\n14.\tSegment Information\t25\n", "q10k_tbl_9": "\tThree Months Ended October 31\t\t\t\tSix Months Ended October 31\t\t\t\n\t2020\t\t2019\t\t2020\t\t2019\t\n\tAmount\t% of Total Revenue\tAmount\t% of Total Revenue\tAmount\t% of Total Revenue\tAmount\t% of Total Revenue\nSelf-managed subscription\t96781\t67%\t71030\t71%\t185496\t67%\t135842\t71%\nLicense\t15514\t11%\t12272\t12%\t30393\t11%\t22179\t11%\nSubscription\t81267\t56%\t58758\t59%\t155103\t56%\t113663\t60%\nSaaS\t37428\t26%\t20649\t20%\t70055\t26%\t38227\t20%\nTotal subscription revenue\t134209\t93%\t91679\t91%\t255551\t93%\t174069\t91%\nProfessional services\t10685\t7%\t9427\t9%\t18213\t7%\t16747\t9%\nTotal revenue\t144894\t100%\t101106\t100%\t273764\t100%\t190816\t100%\n", "q10k_tbl_10": "October 31 2020\tLevel 1\tLevel 2\tLevel 3\tTotal\nFinancial Assets:\t\t\t\t\nCash and cash equivalents:\t\t\t\t\nMoney market funds\t175007\t0\t0\t175007\n", "q10k_tbl_11": "April 30 2020\tLevel 1\tLevel 2\tLevel 3\tTotal\nFinancial Assets:\t\t\t\t\nCash and cash equivalents:\t\t\t\t\nMoney market funds\t197314\t0\t0\t197314\n", "q10k_tbl_12": "Cash paid\t26633\nOrdinary shares\t178331\nAssumption of stock option plan\t9309\nTotal consideration\t214273\n", "q10k_tbl_13": "Cash and cash equivalents\t2220\nRestricted cash\t40\nAccounts receivable\t2661\nPrepaid and other current assets\t549\nOperating lease right-of-use assets\t4363\nProperty and equipment\t503\nIntangible assets\t53800\nOther assets\t58\nGoodwill\t178764\nAccounts payable\t(1112)\nAccrued expenses and other current liabilities\t(3035)\nAccrued compensation and benefits\t(5042)\nOperating lease liabilities current\t(981)\nDeferred revenue current\t(3532)\nDeferred revenue non-current\t(2661)\nOperating lease liabilities non-current\t(3551)\nOther liabilities non-current\t(8771)\nTotal purchase consideration\t214273\n", "q10k_tbl_14": "\tTotal\tEstimated life (in years)\nDeveloped technology\t32700\t5\nCustomer relationships\t19200\t4\nTrade name\t1900\t4\nTotal intangible assets\t53800\t\n", "q10k_tbl_15": "\tThree Months Ended October 31 2019\tSix Months Ended October 31 2019\nPro forma revenue (1)\t105450\t200854\t\t\t\t\t\t\nPro forma net loss (1)\t(46309)\t(94663)\t\t\t\t\t\t\n", "q10k_tbl_16": "\tAs of October 31 2020\tAs of April 30 2020\nPrepaid hosting costs\t9842\t12228\nDeposits\t2167\t1857\nPrepaid software subscription costs\t4312\t3104\nPrepaid taxes\t3786\t3612\nPrepaid value added taxes\t4181\t5167\nOther\t7517\t6655\nTotal prepaid expenses and other current assets\t31805\t32623\n", "q10k_tbl_17": "\tUseful Life (in years)\t\t\tAs of October 31 2020\tAs of April 30 2020\nLeasehold improvements\tLesser of estimated useful life or remaining lease term\t\t\t8070\t8405\nComputer hardware and software\t\t3\t\t5832\t5687\nFurniture and fixtures\t3\t0\t5\t5151\t5072\nAssets under construction\t\t\t\t1852\t1661\nTotal property and equipment\t\t\t\t20905\t20825\nLess: accumulated depreciation\t\t\t\t(12901)\t(13065)\nProperty and equipment net\t\t\t\t8004\t7760\n", "q10k_tbl_18": "October 31 2020\tGross Fair Value\tAccumulated Amortization\tNet Book Value\tWeighted Average Remaining Useful Life (in years)\nDeveloped technology\t44830\t16780\t28050\t3.7\nCustomer relationships\t19598\t5653\t13945\t2.9\nTrade names\t2872\t1505\t1367\t2.9\nTotal\t67300\t23938\t43362\t3.4\n", "q10k_tbl_19": "April 30 2020\tGross Fair Value\tAccumulated Amortization\tNet Book Value\tWeighted Average Remaining Useful Life (in years)\nDeveloped technology\t44830\t12412\t32418\t4.1\nCustomer relationships\t19598\t3210\t16388\t3.4\nTrade names\t2872\t1223\t1649\t3.4\nTotal\t67300\t16845\t50455\t3.9\n", "q10k_tbl_20": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nCost of revenue-cost of license-self-managed\t347\t158\t693\t255\nCost of revenue-cost of subscription-self-managed and SaaS\t1762\t861\t3525\t1397\nSales and marketing\t1433\t379\t2874\t408\nTotal amortization of acquired intangible assets\t3542\t1398\t7092\t2060\n", "q10k_tbl_21": "Remainder of 2021\t7076\n2022\t12947\n2023\t11890\n2024\t8715\n2025\t2734\nTotal\t43362\n", "q10k_tbl_22": "\tCarrying Amount\nBalance as of April 30 2020\t197877\nForeign currency translation adjustment\t319\nBalance as of October 31 2020\t198196\n", "q10k_tbl_23": "\tAs of October 31 2020\tAs of April 30 2020\nAccrued expenses\t11796\t10864\nValue added taxes payable\t5649\t7230\nOther\t4379\t4116\nTotal accrued expenses and other liabilities\t21824\t22210\n", "q10k_tbl_24": "\tAs of October 31 2020\tAs of April 30 2020\nAccrued vacation\t21553\t17971\nAccrued commissions\t14919\t16259\nAccrued payroll taxes and withholding taxes\t5658\t7588\nOther\t4845\t6591\nTotal accrued compensation and benefits\t46975\t48409\n", "q10k_tbl_25": "\tAs of October 31 2020\tAs of April 30 2020\nUnbilled accounts receivable included in accounts receivable net\t3046\t2622\nDeferred contract acquisition costs\t64483\t43549\nDeferred revenue\t309216\t259702\n", "q10k_tbl_26": "\tUnbilled Accounts Receivable\t\n\tSix Months Ended October 31\t\n\t2020\t2019\nBeginning balance\t2622\t1710\nAmounts transferred to accounts receivable from unbilled accounts receivable presented at the beginning of the period\t(2622)\t(1710)\nAdditions through acquisition\t0\t321\nRevenue recognized during the period in excess of invoices issued\t3046\t2309\nEnding balance\t3046\t2630\n", "q10k_tbl_27": "\tDeferred Revenue\t\n\tSix Months Ended October 31\t\n\t2020\t2019\nBeginning balance\t259702\t170666\nIncreases due to invoices issued excluding amounts recognized as revenue during the period\t201784\t135665\nAmounts transferred to deferred revenue from accrued expenses and other liabilities upon entering into contracts with customers net of revenue recognized during the period\t5424\t0\nIncrease from acquisition net of revenue recognized\t0\t6147\nRevenue recognized that was included in deferred revenue balance at beginning of period\t(157694)\t(111147)\nEnding balance\t309216\t201331\n", "q10k_tbl_28": "\tSix Months Ended October 31\t\n\t2020\t2019\nBeginning balance\t43549\t26150\nCapitalization of contract acquisition costs\t39107\t17005\nAmortization of deferred contract acquisition costs\t(18173)\t(13921)\nEnding balance\t64483\t29234\n", "q10k_tbl_29": "Balance at April 30 2020\t1247\nCumulative-effect adjustment from adoption of ASU 2016-13\t(367)\nProvision\t1233\nWrite-offs\t(608)\nBalance at October 31 2020\t1505\n", "q10k_tbl_30": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nOperating lease cost\t2172\t2184\t4284\t3963\nShort-term lease cost\t721\t859\t1352\t1531\nVariable lease cost\t(65)\t189\t289\t308\nTotal lease cost\t2828\t3232\t5925\t5802\n", "q10k_tbl_31": "Years Ending April 30\t\n2021 (remaining six months)\t4546\n2022\t8542\n2023\t8259\n2024\t7179\n2025\t5870\nThereafter\t2804\nTotal minimum lease payments\t37200\nLess imputed interest\t(4305)\nPresent value of future minimum lease payments\t32895\nLess current lease liabilities\t(7863)\nOperating lease liabilities non-current\t25032\n", "q10k_tbl_32": "\tAs of October 31 2020\tAs of April 30 2020\nStock options issued and outstanding\t10757903\t15260506\nRSUs issued and outstanding\t2617676\t2472092\nRemaining shares available for future issuance under the 2012 Plan\t16612806\t12461850\nTotal ordinary shares reserved\t29988385\t30194448\n", "q10k_tbl_33": "\tSix Months Ended October 31 2020\nAvailable at beginning of period\t12461850\nAwards authorized\t4142849\nStock options granted\t(40129)\nStock options cancelled\t506718\nRSUs granted\t(668605)\nRSUs cancelled\t210123\nAvailable at end of period\t16612806\n", "q10k_tbl_34": "\tStock options Outstanding\t\t\t\n\tNumber of Stock Options Outstanding\tWeighted- Average Exercise Price\tRemaining Contractual Term (in years)\tAggregate Intrinsic Value\nBalance as of April 30 2020\t15260506\t14.17\t7.27\t767795\nStock options granted\t40129\t99.78\t\t\nStock options exercised\t(4035115)\t11.25\t\t\nStock options cancelled\t(506718)\t19.19\t\t\nStock options assumed in acquisition cancelled\t(899)\t75.00\t\t\nBalance as of October 31 2020\t10757903\t15.33\t6.93\t925989\nExercisable as of October 31 2020\t5926542\t12.36\t6.56\t527662\n", "q10k_tbl_35": "\tNumber of Awards\tWeighted- Average Grant Date Fair Value\nOutstanding and unvested at April 30 2020\t2472092\t66.78\nRSUs granted\t668605\t88.20\nRSUs released\t(312898)\t76.33\nRSUs cancelled\t(210123)\t52.15\nOutstanding and unvested at October 31 2020\t2617676\t72.28\n", "q10k_tbl_36": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nCost of revenue-cost of subscription-self-managed and SaaS\t1860\t946\t3226\t1861\nCost of revenue-professional services\t976\t638\t1928\t1199\nResearch and development\t7663\t5870\t14793\t10831\nSales and marketing\t7955\t4658\t14147\t8966\nGeneral and administrative\t3033\t2304\t5984\t4330\nTotal stock-based compensation expense\t21487\t14416\t40078\t27187\n", "q10k_tbl_37": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nNumerator:\t\t\t\t\nNet loss\t(29158)\t(49973)\t(48159)\t(91742)\nDenominator:\t\t\t\t\nWeighted-average shares used in computing net loss per share attributable to ordinary shareholders basic and diluted\t86373166\t77772406\t85275474\t76202865\nNet loss per share attributable to ordinary shareholders basic and diluted\t(0.34)\t(0.64)\t(0.56)\t(1.20)\n", "q10k_tbl_38": "\tSix Months Ended October 31\t\n\t2020\t2019\nStock options\t10757903\t18369959\nEquity settled RSUs\t2617676\t969360\nShares subject to repurchase\t0\t67237\nContingently issuable shares\t235031\t235031\nTotal\t13610610\t19641587\n", "q10k_tbl_39": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nUnited States\t80241\t57501\t152035\t106463\nRest of world\t64653\t43605\t121729\t84353\nTotal revenue\t144894\t101106\t273764\t190816\n", "q10k_tbl_40": "\tAs of October 31 2020\tAs of April 30 2020\nUnited States\t27701\t30373\nUnited Kingdom\t6369\t5854\nThe Netherlands\t3147\t3529\nRest of world\t1064\t787\nTotal long-lived assets\t38281\t40543\n", "q10k_tbl_41": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\n\t(in thousands)\t\t\t\nRevenue\t\t\t\t\nLicense - self-managed\t15514\t12272\t30393\t22179\nSubscription - self-managed and SaaS\t118695\t79407\t225158\t151890\nTotal subscription revenue\t134209\t91679\t255551\t174069\nProfessional services\t10685\t9427\t18213\t16747\nTotal revenue\t144894\t101106\t273764\t190816\nCost of revenue (1)(2)(3)\t\t\t\t\nCost of license - self-managed\t347\t158\t693\t255\nCost of subscription - self-managed and SaaS\t29148\t19741\t55038\t37636\nTotal cost of revenue - subscription\t29495\t19899\t55731\t37891\nCost of professional services\t8953\t8862\t17548\t17121\nTotal cost of revenue\t38448\t28761\t73279\t55012\nGross profit\t106446\t72345\t200485\t135804\nOperating expenses(1)(2)(3)(4)\t\t\t\t\nResearch and development\t46688\t38478\t92366\t73660\nSales and marketing\t64474\t54020\t120625\t106031\nGeneral and administrative\t23705\t31808\t45434\t50376\nTotal operating expenses\t134867\t124306\t258425\t230067\nOperating loss (1)(2)(3)(4)\t(28421)\t(51961)\t(57940)\t(94263)\nOther income (expense) net\t(84)\t1684\t10801\t2615\nLoss before income taxes\t(28505)\t(50277)\t(47139)\t(91648)\nProvision for (benefit from) income taxes\t653\t(304)\t1020\t94\nNet loss\t(29158)\t(49973)\t(48159)\t(91742)\n", "q10k_tbl_42": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\n\t(in thousands)\t\t\t\nCost of Revenue\t\t\t\t\nCost of subscription - self managed and SaaS\t1860\t946\t3226\t1861\nCost of professional services\t976\t638\t1928\t1199\nResearch and development\t7663\t5870\t14793\t10831\nSales and marketing\t7955\t4658\t14147\t8966\nGeneral and administrative\t3033\t2304\t5984\t4330\nTotal stock-based compensation expense\t21487\t14416\t40078\t27187\n", "q10k_tbl_43": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\n\t(in thousands)\t\t\t\nCost of Revenue\t\t\t\t\nCost of subscription - self managed and SaaS\t77\t166\t220\t300\nCost of professional services\t25\t86\t102\t120\nResearch and development\t465\t888\t1459\t1648\nSales and marketing\t614\t1887\t1771\t2481\nGeneral and administrative\t462\t753\t1199\t1360\nTotal employer payroll taxes on employee stock-based transactions\t1643\t3780\t4751\t5909\n", "q10k_tbl_44": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\n\t(in thousands)\t\t\t\nCost of Revenue\t\t\t\t\nCost of license - self-managed\t347\t158\t693\t255\nCost of subscription - self-managed and SaaS\t1762\t861\t3525\t1397\nSales and marketing\t1433\t379\t2874\t408\nTotal amortization of acquired intangibles\t3542\t1398\t7092\t2060\n", "q10k_tbl_45": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\n\t(in thousands)\t\t\t\nResearch and development\t0\t0\t0\t34\nSales and marketing\t0\t113\t0\t113\nGeneral and administrative\t0\t13849\t0\t16287\nTotal acquisition-related expenses\t0\t13962\t0\t16434\n", "q10k_tbl_46": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nRevenue\t\t\t\t\nLicense - self-managed\t11%\t12%\t11%\t11%\nSubscription - self-managed and SaaS\t82%\t79%\t82%\t80%\nTotal subscription revenue\t93%\t91%\t93%\t91%\nProfessional services\t7%\t9%\t7%\t9%\nTotal revenue\t100%\t100%\t100%\t100%\nCost of revenue (1)(2)(3)\t\t\t\t\nCost of license - self-managed\t0%\t0%\t0%\t0%\nCost of subscription - self-managed and SaaS\t20%\t20%\t20%\t20%\nTotal cost of revenue - subscription\t20%\t20%\t20%\t20%\nCost of professional services\t7%\t8%\t7%\t9%\nTotal cost of revenue\t27%\t28%\t27%\t29%\nGross profit\t73%\t72%\t73%\t71%\nOperating expenses(1)(2)(3)(4)\t\t\t\t\nResearch and development\t32%\t38%\t34%\t39%\nSales and marketing\t45%\t53%\t43%\t55%\nGeneral and administrative\t16%\t31%\t17%\t26%\nTotal operating expenses\t93%\t122%\t94%\t120%\nOperating loss (1)(2)(3)(4)\t(20)%\t(50)%\t(21)%\t(49)%\nOther income (expense) net\t0%\t0%\t4%\t1%\nLoss before income taxes\t(20)%\t(50)%\t(17)%\t(48)%\nProvision for (benefit from) income taxes\t0%\t(1)%\t1%\t0%\nNet loss\t(20)%\t(49)%\t(18)%\t(48)%\n", "q10k_tbl_47": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nCost of Revenue\t\t\t\t\nCost of subscription - self managed and SaaS\t1%\t1%\t1%\t1%\nCost of professional services\t1%\t0%\t1%\t1%\nResearch and development\t5%\t6%\t6%\t6%\nSales and marketing\t6%\t5%\t5%\t5%\nGeneral and administrative\t2%\t2%\t2%\t2%\nTotal stock-based compensation expense\t15%\t14%\t15%\t15%\n", "q10k_tbl_48": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nCost of Revenue\t\t\t\t\nCost of subscription - self managed and SaaS\t0%\t0%\t0%\t0%\nCost of professional services\t0%\t0%\t0%\t0%\nResearch and development\t0%\t1%\t1%\t1%\nSales and marketing\t1%\t2%\t1%\t1%\nGeneral and administrative\t0%\t1%\t0%\t1%\nTotal employer payroll taxes on employee stock-based transactions\t1%\t4%\t2%\t3%\n", "q10k_tbl_49": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nCost of Revenue\t\t\t\t\nCost of license - self-managed\t0%\t0%\t0%\t0%\nCost of subscription - self-managed and SaaS\t1%\t1%\t2%\t1%\nSales and marketing\t1%\t0%\t1%\t0%\nTotal amortization of acquired intangibles\t2%\t1%\t3%\t1%\n", "q10k_tbl_50": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\nResearch and development\t0%\t0%\t0%\t0%\nSales and marketing\t0%\t0%\t0%\t0%\nGeneral and administrative\t0%\t14%\t0%\t9%\nTotal acquisition-related expenses\t0%\t14%\t0%\t9%\n", "q10k_tbl_51": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\n\t(dollars in thousands)\t\t\t\nGross profit\t106446\t72345\t200485\t135804\nStock-based compensation expense\t2836\t1584\t5154\t3060\nEmployer payroll taxes on employee stock transactions\t102\t252\t322\t420\nAmortization of acquired intangibles\t2109\t1019\t4218\t1652\nNon-GAAP gross profit\t111493\t75200\t210179\t140936\nGross margin\t73%\t72%\t73%\t71%\nNon-GAAP gross margin (non-GAAP gross profit as a percentage of revenue)\t77%\t74%\t77%\t74%\n", "q10k_tbl_52": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\n\t(dollars in thousands)\t\t\t\nOperating loss\t(28421)\t(51961)\t(57940)\t(94263)\nStock-based compensation expense\t21487\t14416\t40078\t27187\nEmployer payroll taxes on employee stock transactions\t1643\t3780\t4751\t5909\nAmortization of acquired intangibles\t3542\t1398\t7092\t2060\nAcquisition-related expenses\t0\t13962\t0\t16434\nNon-GAAP loss from operations\t(1749)\t(18405)\t(6019)\t(42673)\nOperating margin\t(20)%\t(51)%\t(21)%\t(49)%\nNon-GAAP operating margin (non-GAAP loss from operations as a percentage of revenue)\t(1)%\t(18)%\t(2)%\t(22)%\n", "q10k_tbl_53": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\n\t(dollars in thousands)\t\t\t\nNet cash provided by (used in) operating activities\t(17289)\t290\t4709\t(1404)\nPurchases of property and equipment\t(1277)\t(1645)\t(1656)\t(3230)\nFree cash flow\t(18566)\t(1355)\t3053\t(4634)\nNet cash provided by (used in) investing activities\t43\t(26018)\t(336)\t(27603)\nNet cash provided by financing activities\t15978\t16591\t45230\t36674\nNet cash provided by (used in) operating activities (as a percentage of total revenue)\t(12)%\t-%\t2%\t-%\nLess: Purchases of property and equipment (as a percentage of total revenue)\t(1)%\t(1)%\t(1)%\t(2)%\nFree cash flow margin\t(13)%\t(1)%\t1%\t(2)%\n", "q10k_tbl_54": "\tThree Months Ended October 31\t\tSix Months Ended October 31\t\n\t2020\t2019\t2020\t2019\n\t(in thousands)\t\t\t\nTotal revenue\t144894\t101106\t273764\t190816\nAdd: Increase in total deferred revenue\t32701\t24511\t34432\t24478\nLess: (Increase) decrease in unbilled accounts receivable\t151\t(362)\t(424)\t(599)\nCalculated billings\t177746\t125255\t307772\t214695\n", "q10k_tbl_55": "\tThree Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nRevenue\t\t\t\t\nLicense - self-managed\t15514\t12272\t3242\t26%\nSubscription - self-managed and SaaS\t118695\t79407\t39288\t49%\nTotal subscription revenue\t134209\t91679\t42530\t46%\nProfessional services\t10685\t9427\t1258\t13%\nTotal revenue\t144894\t101106\t43788\t43%\n", "q10k_tbl_56": "\tThree Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nCost of revenue\t\t\t\t\nCost of license - self-managed\t347\t158\t189\t120%\nCost of subscription - self-managed and SaaS\t29148\t19741\t9407\t48%\nTotal cost of revenue - subscription\t29495\t19899\t9596\t48%\nCost of professional services\t8953\t8862\t91\t1%\nTotal cost of revenue\t38448\t28761\t9687\t34%\nGross profit\t106446\t72345\t34101\t47%\nGross margin:\t\t\t\t\nLicense - self-managed\t98%\t99%\t\t\nSubscriptions - self-managed and SaaS\t75%\t75%\t\t\nTotal subscription margin\t78%\t78%\t\t\nProfessional services\t16%\t6%\t\t\nTotal gross margin\t73%\t72%\t\t\n", "q10k_tbl_57": "\tThree Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nResearch and development\t46688\t38478\t8210\t21%\n", "q10k_tbl_58": "\tThree Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nSales and marketing\t64474\t54020\t10454\t19%\n", "q10k_tbl_59": "\tThree Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nGeneral and administrative\t23705\t31808\t(8103)\t(25)%\n", "q10k_tbl_60": "\tThree Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nOther income (expense) net\t(84)\t1684\t(1768)\t(105)%\n", "q10k_tbl_61": "\tThree Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nProvision for (benefit from) income taxes\t653\t(304)\t957\t(315)%\n", "q10k_tbl_62": "\tSix Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nRevenue\t\t\t\t\nLicense - self-managed\t30393\t22179\t8214\t37%\nSubscription - self-managed and SaaS\t225158\t151890\t73268\t48%\nTotal subscription revenue\t255551\t174069\t81482\t47%\nProfessional services\t18213\t16747\t1466\t9%\nTotal revenue\t273764\t190816\t82948\t43%\n", "q10k_tbl_63": "\tSix Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nCost of revenue\t\t\t\t\nCost of license - self-managed\t693\t255\t438\t172%\nCost of subscription - self-managed and SaaS\t55038\t37636\t17402\t46%\nTotal cost of revenue - subscription\t55731\t37891\t17840\t47%\nCost of professional services\t17548\t17121\t427\t2%\nTotal cost of revenue\t73279\t55012\t18267\t33%\nGross profit\t200485\t135804\t64681\t48%\nGross margin:\t\t\t\t\nLicense - self-managed\t98%\t99%\t\t\nSubscriptions - self-managed and SaaS\t76%\t75%\t\t\nTotal subscription margin\t78%\t78%\t\t\nProfessional services\t4%\t(2)%\t\t\nTotal gross margin\t73%\t71%\t\t\n", "q10k_tbl_64": "\tSix Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nResearch and development\t92366\t73660\t18706\t25%\n", "q10k_tbl_65": "\tSix Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nSales and marketing\t120625\t106031\t14594\t14%\n", "q10k_tbl_66": "\tSix Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nGeneral and administrative\t45434\t50376\t(4942)\t(10)%\n", "q10k_tbl_67": "\tSix Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nOther income net\t10801\t2615\t8186\t313%\n", "q10k_tbl_68": "\tSix Months Ended October 31\t\tChange\t\n\t2020\t2019\t$\t%\n\t(dollars in thousands)\t\t\t\nProvision for income taxes\t1020\t94\t926\t985%\n", "q10k_tbl_69": "\tSix Months Ended October 31\t\n\t2020\t2019\n\t(in thousands)\t\nNet cash provided by (used in) operating activities\t4709\t(1404)\nNet cash used in investing activities\t(336)\t(27603)\nNet cash provided by financing activities\t45230\t36674\n", "q10k_tbl_70": "Exhibit No.\t\t\t\tIncorporated by Reference\t\t\t\t\t\t\tFiled Herewith\n\tDescription\t\tForm\t\tFile No.\t\tExhibit\t\tFiling Date\t\n3.1\t\tArticles of Association of Elastic N.V. (English translation).\t\t10-Q\t\t001-38675\t\t3.1\t\t12/12/2018\t\n3.2\t\tDeed of Amendment of the Articles of Association of Elastic N.V. (English translation).\t\t10-Q\t\t001-38675\t\t3.2\t\t12/12/2018\t\n3.3\t\tDeed of Conversion and Amendment of the Articles of Association of Elastic N.V. Articles of Association (English translation).\t\t10-Q\t\t001-38675\t\t3.3\t\t12/12/2018\t\n31.1\t\tCertification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\t\t\t\t\t\t\t\t\tX\n31.2\t\tCertification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\t\t\t\t\t\t\t\t\tX\n32.1*\t\tCertification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.\t\t\t\t\t\t\t\t\tX\n32.2*\t\tCertification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.\t\t\t\t\t\t\t\t\tX\n101.INS\t\tInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\t\t\t\t\t\t\t\t\t\n101.SCH\t\tInline XBRL Taxonomy Extension Schema Document.\t\t\t\t\t\t\t\t\t\n101.CAL\t\tInline XBRL Taxonomy Extension Calculation Linkbase Document.\t\t\t\t\t\t\t\t\t\n101.DEF\t\tInline XBRL Taxonomy Extension Definition Linkbase Document.\t\t\t\t\t\t\t\t\t\n101.LAB\t\tInline XBRL Taxonomy Extension Label Linkbase Document.\t\t\t\t\t\t\t\t\t\n101.PRE\t\tInline XBRL Taxonomy Extension Presentation Linkbase Document.\t\t\t\t\t\t\t\t\t\n104\t\tCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).\t\t\t\t\t\t\t\t\t\n"}{"bs": "q10k_tbl_2", "is": "q10k_tbl_3", "cf": "q10k_tbl_7"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2020
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-38675
Elastic N.V.
The Netherlands
(State or other jurisdiction of
incorporation or organization)
Not Applicable
(I.R.S. Employer
Identification No.)
800 West El Camino Real, Suite 350
Mountain View, California94040
(Address of principal executive offices)
(650) 458-2620
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Ordinary shares, Par Value €0.01 Per Share
ESTC
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 30, 2020, the registrant had 87,403,657 ordinary shares, €0.01 par value per share, outstanding.
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risk and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
•the impact of the 2019 novel coronavirus disease (“COVID-19”) on our business, operations, hiring and financial results, and on the businesses of our customers and partners, including their spending priorities, the effect of governmental lockdowns, restrictions and new regulations;
•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 successfully develop new offerings, including security-related product offerings and SaaS offerings;
•our assessments of the strength of our solutions and products;
•customer acceptance and purchase of our existing offerings and new offerings, including the expansion and adoption of our SaaS offerings;
•our service performance and security, including the resources and costs required to prevent, detect and remediate potential security breaches, including by bad actors;
•our ability to maintain and expand our user and customer base;
•the market for our products continuing to develop;
•competition from other products and companies with more resources, recognition and presence in our industry;
•the impact of foreign currency exchange rate and interest rate fluctuations on our results;
•the pace of change and innovation in the markets in which we participate and the competitive nature of those markets;
•our business strategy and our plan to build our business;
•our ability to effectively manage our growth, including any changes to our pace of hiring;
•our international expansion strategy;
•our operating results and cash flows;
•our strategy of acquiring complementary businesses and our ability to successfully integrate acquired businesses and technologies, including the successful integration of Endgame, Inc. and its subsidiaries (“Endgame”);
•the potential impact on our operating margin from the acquisition of Endgame;
•the impact of acquisitions on our future product offerings;
•our beliefs and objectives for future operations;
•our relationships with and reliance on third parties, including partners;
•our ability to protect our intellectual property rights;
•our ability to develop our brands;
•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 execute our go-to-market strategy, including the positioning of our solutions and products, and 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;
•our ability to attract and retain qualified employees and key personnel;
•our ability to onboard, provide training to and integrate new employees;
•the effect of the loss of key personnel;
•our expectations about the impact of natural disasters and public health epidemics and pandemics, on our business, results of operations and financial condition;
•expectations about seasonality;
•the future trading prices of our ordinary shares;
•and general market, political, economic and business conditions (including developments and volatility arising from the ongoing COVID-19 pandemic).
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. Any additional or unforeseen effect from the ongoing COVID-19 pandemic may exacerbate these risks. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q or to conform such statements to actual results or revised expectations, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.
Accounts receivable, net of allowance for credit losses of $1,505 and $1,247 as of October 31, 2020 and April 30, 2020, respectively
132,523
128,690
Deferred contract acquisition costs
28,487
19,537
Prepaid expenses and other current assets
31,805
32,623
Total current assets
544,126
480,239
Property and equipment, net
8,004
7,760
Goodwill
198,196
197,877
Operating lease right-of-use assets
30,277
32,783
Intangible assets, net
43,362
50,455
Deferred contract acquisition costs, non-current
35,996
24,012
Deferred tax assets
3,685
3,164
Other assets
3,915
7,621
Total assets
$
867,561
$
803,911
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable
$
9,213
$
11,485
Accrued expenses and other liabilities
21,824
22,210
Accrued compensation and benefits
46,975
48,409
Operating lease liabilities
7,863
7,639
Deferred revenue
262,257
231,681
Total current liabilities
348,132
321,424
Deferred revenue, non-current
46,959
28,021
Operating lease liabilities, non-current
25,032
27,827
Other liabilities, non-current
4,781
12,992
Total liabilities
424,904
390,264
Commitments and contingencies (Note 7)
Shareholders’ equity:
Convertible preference shares, €0.01 par value; 165,000,000 shares authorized, 0 shares issued and outstanding as of October 31, 2020 and April 30, 2020
—
—
Ordinary shares, par value €0.01 per share: 165,000,000 shares authorized; 87,204,991 and 82,856,978 shares issued and outstanding as of October 31, 2020 and April 30, 2020, respectively
908
856
Treasury stock
(369)
(369)
Additional paid-in capital
986,075
898,788
Accumulated other comprehensive loss
(11,914)
(1,377)
Accumulated deficit
(532,043)
(484,251)
Total shareholders’ equity
442,657
413,647
Total liabilities and shareholders’ equity
$
867,561
$
803,911
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Elastic N.V. (“Elastic” or the “Company”) was incorporated under the laws of the Netherlands in 2012. Elastic is a search company. It created the Elastic Stack, a powerful set of software products that ingest and store data from any source and in any format, and perform search, analysis, and visualization in milliseconds or less. Developers build on top of the Elastic Stack to apply the power of search to their data and solve business problems. The Company also offers software solutions built on the Elastic Stack: Enterprise Search, Observability, and Security. The Elastic Stack and the Company’s solutions are designed to run in public or private clouds, in hybrid environments, or in traditional on-premises environments.
2.Summary of Significant Accounting Policies
Basis of Presentation
The accompanying interim condensed consolidated balance sheet as of October 31, 2020, the interim condensed consolidated statements of operations and of comprehensive loss, interim condensed statements of shareholders’ equity for the three and six months ended October 31, 2020 and 2019 and the interim condensed consolidated statements of cash flows for the six months ended October 31, 2020 and 2019, are unaudited. These interim condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, include all adjustments necessary to fairly state the Company’s financial position as of October 31, 2020, and the results of the Company’s operations, its statements of shareholders’ equity for the three and six months ended October 31, 2020 and 2019, and its statements of cash flows for the six months ended October 31, 2020 and 2019. The financial data and other financial information disclosed in the notes to these interim condensed consolidated financial statements related to the three and six month periods are also unaudited. The results for the six months ended October 31, 2020 are not necessarily indicative of the operating results expected for the fiscal year ending April 30, 2021, or any future period.
The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the financial statements of the Company and its wholly-owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation.
Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Therefore, these unaudited interim condensed consolidated financial statements and accompanying footnotes should be read in conjunction with the Company’s annual consolidated financial statements and related footnotes included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2020 filed with the SEC on June 26, 2020 (“the Company's Annual Report on Form 10-K”).
Fiscal Year
The Company’s fiscal year ends on April 30. References to fiscal 2021, for example, refer to the fiscal year ending April 30, 2021.
Use of Estimates and Judgments
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Such estimates include, but are not limited to, allocation of revenue between recognized and deferred amounts, deferred contract acquisition costs, allowance for credit losses, valuation of stock-based compensation, fair value of ordinary shares in periods prior to the Company’s initial public offering, fair value of acquired intangible assets and goodwill, useful lives of acquired intangible assets and property and equipment, whether an arrangement is or contains a lease, the discount rate used for operating leases and valuation allowance for deferred income taxes. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events.
In March 2020, the World Health Organization declared the 2019 novel Coronavirus Disease (“COVID-19”) a pandemic. The pandemic has resulted in a global slowdown of economic activity that is likely to decrease demand for a broad variety of goods and services, including from certain of the Company’s customers, while also disrupting sales channels and marketing activities for an unknown period of time. The full extent to which COVID-19 may impact the Company’s financial condition or results of operations is uncertain.
Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any
specific event or circumstance that would require the Company to update its estimates, judgments or revise the carrying value of the Company’s assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s financial statements.
Significant Accounting Policies
Other than as described below, there have been no changes to the Company’s significant accounting policies described in the Company's Annual Report on Form 10-K that have had a material impact on its consolidated financial statements and related notes.
Accounts Receivable and Allowance for Credit Losses
The Company records a receivable when an unconditional right to consideration exists, such that only the passage of time is required before payment of consideration is due. Timing of revenue recognition may differ from the timing of invoicing to customers. If revenue recognized on a contract exceeds the billings, then the Company records an unbilled receivable for that excess amount, which is included as part of accounts receivable, net in the Company’s condensed consolidated balance sheets.
The Company is exposed to credit losses primarily through the sales of subscriptions and services, which are recorded as accounts receivable, inclusive of unbilled receivables. The Company performs initial and ongoing evaluations of its customers' financial position and generally extends credit without collateral. Accounts receivable are recorded at amortized cost, net of an allowance for credit losses, and do not bear interest.
The allowance for credit losses represents the best estimate of lifetime expected credit losses against the existing accounts receivable, inclusive of unbilled receivables, based on certain factors including past collection experience, credit quality of the customer, current aging of the receivable balance, current economic conditions, reasonable and supportable forecasts, as well as specific circumstances arising with individual customers. Judgment is required in assessing these factors. Due to the short-term nature of the Company’s accounts receivable, forecasts have limited relevance to the Company’s expected credit loss estimates. Accounts receivable are written off against the allowance when management determines a balance is uncollectible and the Company no longer actively pursues collection of the receivable. The Company’s estimates of the allowance for credit losses may not be indicative of the Company’s actual credit losses requiring additional charges to be incurred to reflect the actual amount collected.
Recently Adopted Accounting Pronouncements
Goodwill Impairment: InJanuary 2017, the FASB issued ASU No. 2017-4, Intangibles— Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new standard will simplify the measurement of goodwill impairment by eliminating step two of the two-step impairment test. Step two measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The new guidance requires an entity to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The Company adopted ASU No. 2017-4 on May 1, 2020. The Company's adoption of this ASU did not have a material impact on the Company's condensed consolidated financial statements.
Fair Value Measurements: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which modifies, removes and adds certain disclosure requirements on fair value measurements based on the FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date.The Company adopted ASU No. 2018-13 on May 1, 2020. The Company's adoption of this ASU did not have a material impact on the Company's condensed consolidated financial statements.
Intangible Assets: In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this ASU.The Company adopted ASU No. 2018-15 on May 1, 2020 and applied it prospectively to implementation costs incurred after the
date of adoption. The Company’s adoption of this ASU had no material impact on the Company's condensed consolidated financial statements.
Credit Losses: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and has since issued various amendments including ASU No. 2018-19, ASU No. 2019-4, and ASU No. 2019-5. The standard and related amendments modify the accounting for credit losses for most financial assets and requires an entity to utilize a new impairment model known as current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized costs basis of the financial asset, presents the amount expected to be collected on the financial asset. Additionally, ASU No. 2016-13 amends the current available-for-sale security impairment model for debt securities held for investment. The new model requires an estimate of expected credit losses when the fair value is below the amortized cost of the asset. The credit-related impairment (and subsequent recoveries) are recognized as an allowance on the balance sheet with a corresponding adjustment to the income statement. Non-credit related losses will continue to be recognized through OCI. This guidance also requires new disclosures for financial assets measured at amortized cost, loans and available-for-sale debt securities. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company adopted ASU No. 2016-13 on May 1, 2020. The Company's adoption of this ASU resulted in a $0.4 million reduction to accumulated deficit.
New Accounting Pronouncements Not Yet Adopted
Income Taxes: In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, eliminating certain exceptions to the general principles in ASC 740 related to intra-period tax allocation, deferred tax liability and general methodology for calculating income taxes. Additionally, the ASU makes other changes for matters such as franchise taxes that are partially based on income, transactions with a government that result in a step up in the tax basis of goodwill, separate financial statements of legal entities that are not subject to tax, and enacted changes in tax laws in interim periods.The new guidance becomes effective for the Company for the fiscal year ending April 30, 2022. Early adoption is permitted.The Company does not expect the adoption of the new accounting standard to have a material impact on its consolidated financial statements.
3.Revenue and Remaining Performance Obligations
Disaggregation of Revenue
The following table presents revenue by category (in thousands):
Three Months Ended October 31,
Six Months Ended October 31,
2020
2019
2020
2019
Amount
% of Total Revenue
Amount
% of Total Revenue
Amount
% of Total Revenue
Amount
% of Total Revenue
Self-managed subscription
$
96,781
67
%
$
71,030
71
%
$
185,496
67
%
$
135,842
71
%
License
15,514
11
%
12,272
12
%
30,393
11
%
22,179
11
%
Subscription
81,267
56
%
58,758
59
%
155,103
56
%
113,663
60
%
SaaS
37,428
26
%
20,649
20
%
70,055
26
%
38,227
20
%
Total subscription revenue
134,209
93
%
91,679
91
%
255,551
93
%
174,069
91
%
Professional services
10,685
7
%
9,427
9
%
18,213
7
%
16,747
9
%
Total revenue
$
144,894
100
%
$
101,106
100
%
$
273,764
100
%
$
190,816
100
%
Remaining Performance Obligations
As of October 31, 2020, the Company had $643.5 million of remaining performance obligations, which is composed of product and services revenue not yet delivered. As of October 31, 2020, the Company expects to recognize approximately 85% of its remaining performance obligations as revenue over the next 24 months and the remainder thereafter.
4.Fair Value Measurements
The Company measures financial assets and liabilities that are measured at fair value on a recurring basis at each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The following table summarizes assets that are measured at fair value on a recurring basis as of October 31, 2020 and April 30, 2020 (in thousands):
October 31, 2020
Level 1
Level 2
Level 3
Total
Financial Assets:
Cash and cash equivalents:
Money market funds
$
175,007
—
—
$
175,007
April 30, 2020
Level 1
Level 2
Level 3
Total
Financial Assets:
Cash and cash equivalents:
Money market funds
$
197,314
—
—
$
197,314
The Company considers all highly liquid investments, including money market funds with an original maturity of three months or less at the date of purchase, to be cash equivalents. The Company uses quoted prices in active markets for identical assets to determine the fair value of its Level 1 investments in money market funds.
5.Acquisitions
Fiscal Year Ended April 30, 2020
Endgame, Inc.
On October 8, 2019, the Company acquired all outstanding shares of Endgame, a security company offering endpoint protection technology, for a total acquisition price of $234.0 million. Elastic paid the purchase price through (i) the issuance of 2,218,694 ordinary shares in respect of Endgame’s outstanding capital stock, warrants, convertible notes, and certain retention awards, (ii) the cash repayment of Endgame’s outstanding indebtedness of $20.4 million, (iii) the assumption of Endgame’s outstanding stock options, (iv) a $0.4 million cash deposit to an expense fund for the fees and expenses of the representative and agent of Endgame securityholders, (v) the cash payment of Endgame’s transaction expenses of $5.9 million, and (vi) the cash payment of withholding taxes related to acquisition expense settled in shares of $2.8 million. Approximately 11% of the ordinary shares issued, or 235,031 shares, is being held in an indemnity escrow fund for 18 months after the acquisition close date. For purposes of determining the total acquisition price of $234.0 million, the Company used the ordinary share price of $89.3836 which was determined on the basis of the volume weighted average price per share rounded to four decimal places for the twenty (20) consecutive trading days ending with the complete trading day ending five (5) trading days prior to the date upon which the acquisition was consummated.
The fair value of the shares transferred as consideration was $84.12 per share and was determined on the basis of the closing stock price of the Company’s ordinary shares on the date of acquisition. The fair value of the assumed stock options was determined by using a Black-Scholes option pricing model with the applicable assumptions as of the acquisition date.
The stock options assumed on the acquisition date will continue to vest as the Endgame employees provide services in the post-acquisition period. The fair value of these awards will be recorded as share-based compensation expense over the respective vesting period of each stock option.
The acquisition was accounted for as a business combination and the total purchase price was allocated to the net tangible and intangible assets and liabilities based on their respective fair values on the acquisition date and the excess was recorded as goodwill.
The following table summarizes the components of the U.S. GAAP purchase price and the preliminary allocation of the purchase price at fair value (in thousands):