Elastic(US:ESTC)2025-02-27 23:39Revenue Performance - Subscription revenue accounted for 93% of total revenue for the nine months ended January 31, 2025 and 2024 [121] - Elastic Cloud contributed 46% of total revenue for the nine months ended January 31, 2025, up from 43% in the same period of 2024 [129] - Total revenue for the three months ended January 31, 2025, was $382.1 million, a 17% increase from $328.0 million in the same period of 2024 [155] - Subscription revenue increased by $50.6 million, or 16%, for the three months ended January 31, 2025, driven by a 26% growth in Elastic Cloud, which represented 47% of total revenue [155] - Services revenue rose by $3.6 million, or 18%, for the three months ended January 31, 2025, attributed to increased adoption of service offerings [156] - Subscription revenue increased by $157.2 million, or 18%, for the nine months ended January 31, 2025, driven by a 27% growth in Elastic Cloud, which accounted for 46% of total revenue [167] - Total revenue for the nine months ended January 31, 2025, was $932.3 million, a decrease of $162.5 million, or 17%, compared to the prior year [167] Customer Metrics - The number of customers with annual contract value over $100,000 increased to over 1,460 as of January 31, 2025, compared to over 1,270 as of January 31, 2024 [123] - The company had approximately 21,350 customers as of January 31, 2025, an increase from approximately 20,800 customers as of January 31, 2024 [122] - The Net Expansion Rate was approximately 112% as of January 31, 2025 [135] Financial Performance - Gross profit for the three months ended January 31, 2025, was $284.9 million, compared to $243.3 million in the same period of 2024, resulting in a gross margin of 75% [151] - Gross profit for the nine months ended January 31, 2025, was $812.8 million, an increase of $122.7 million, or 18%, compared to the prior year [169] - The operating loss for the three months ended January 31, 2025, was $4.6 million, an improvement from a loss of $26.4 million in the same period of 2024 [151] - Net loss for the three months ended January 31, 2025, was $17.1 million, compared to a net income of $176.1 million in the same period of 2024 [151] Expenses - Research and development expenses for the three months ended January 31, 2025, were $93.6 million, an increase from $87.2 million in the same period of 2024 [151] - Sales and marketing expenses increased to $153.7 million for the three months ended January 31, 2025, compared to $141.6 million in the same period of 2024 [151] - General and administrative expenses rose to $42.2 million for the three months ended January 31, 2025, from $40.9 million in the same period of 2024 [151] - Research and development expenses rose by $23.1 million, or 9%, for the nine months ended January 31, 2025, mainly due to a $19.4 million increase in personnel and related costs [171] - Sales and marketing expenses increased by $47.4 million, or 12%, for the nine months ended January 31, 2025, primarily driven by a $46.4 million rise in personnel and related costs [173] - General and administrative expenses increased by $11.5 million, or 10%, for the nine months ended January 31, 2025, largely due to an $8.9 million rise in personnel and related costs [174] Tax and Other Income - The effective tax rate was significantly impacted by recurring items and one-time tax benefits, with a provision for income taxes of $21.1 million for the three months ended January 31, 2025 [149] - The provision for income taxes was $21.1 million for the three months ended January 31, 2025, compared to a benefit from income taxes of $200.3 million for the same period of the prior year [164] - Other income, net increased by $6.6 million, or 77%, for the three months ended January 31, 2025, primarily due to $4.3 million in net foreign currency exchange activity [163] - Other income, net increased by $11.4 million, or 47%, to $35.5 million for the nine months ended January 31, 2025, primarily due to $6.9 million in interest and investment income and $4.4 million in foreign currency exchange activity [177] Cash Flow and Financial Position - Net cash provided by operating activities was $179.2 million for the nine months ended January 31, 2025, compared to $87.8 million in the prior year [185] - Net cash used in investing activities was $148.0 million for the nine months ended January 31, 2025, primarily due to purchases of marketable securities totaling $388.8 million [187] - As of January 31, 2025, cash, cash equivalents, and marketable securities totaled $1.284 billion, consisting of highly liquid investment-grade fixed-income securities [181] - The accumulated deficit was $1.083 billion as of January 31, 2025, indicating significant operating losses [182] - The company expects existing cash and future operations to fund operating and capital needs for at least the next 12 months [183] Strategic Initiatives - The company plans to continue investing in developing new features for the Elastic Stack to drive growth [131] - The addition of the Affero General Public License (AGPL) is expected to enhance engagement and adoption of the company's software [133] - The company anticipates that the increase in Elastic Cloud's contribution to revenue will have a modest adverse impact on gross margin due to third-party hosting costs [129] - The company continues to monitor macroeconomic conditions that may affect customer spending behavior and sales cycles [126] - The company increased its non-cancelable cloud hosting capacity commitments to $875.6 million over the next five years, effective February 2025 [190] Foreign Currency Impact - Foreign currency transaction losses were $1.5 million for the nine months ended January 31, 2025, compared to $2.8 million in the prior year [196]