SEC Form 10-K filed by Elastic N.V.

6/14/24 4:10:20 PM ET

Computer Software: Prepackaged Software

Technology

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estc-20240430

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________________________________________________________________________________________________________________________________________

FORM 10-K

____________________________________________________________________________________________________________________________________________________________________________________________


(Mark One)
☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended April 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-38675

_____________________________________________________________________________________________________________________________________________________________________________________________

Elastic N.V.

(Exact name of registrant as specified in its charter)

____________________________________________________________________________________________________________________________________________________________________________________________


The Netherlands			98-1756035
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

Not Applicable1

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: Not Applicable1

____________________________________________________________________________________________________________________________________________________________________________________________

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

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, a 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

1 We are a distributed company. Accordingly, we do not have a principal executive office. For purposes of compliance with applicable requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, any shareholder communication required to be sent to our principal executive offices may be directed to the email address [email protected] or to Elastic N.V., 88 Kearny St., Floor 19, San Francisco, CA 94108.

The aggregate market value of the ordinary shares held by non-affiliates of the registrant, based on the closing price of the ordinary shares on the New York Stock Exchange on October 31, 2023 (the last business day of the registrant’s second fiscal quarter), was approximately $7.5 billion.

As of May 31, 2024, the registrant had 101,715,185 ordinary shares, par value €0.01 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement relating to the registrant’s 2024 annual general meeting of shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such definitive proxy statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended April 30, 2024.

Table of Contents


		Page
PART I
Item 1.	Business	5
Item 1A.	Risk Factors	17
Item 1B.	Unresolved Staff Comments	49
Item 1C.	Cybersecurity	49
Item 2.	Properties	50
Item 3.	Legal Proceedings	50
Item 4.	Mine Safety Disclosures	50

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	51
Item 6.	[Reserved]	51
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	65
Item 8.	Financial Statements and Supplementary Data	67
Item 9.	Changes in and Disagreements w ith Accountants on Accounting and Financial Disclosure	103
Item 9A.	Controls and Procedures	103
Item 9B.	Other Information	104
Item 9C.	Disclosure Regarding Foreign Jurisdictions t hat Prevent Inspections	104

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	105
Item 11.	Executive Compensation	105
Item 12.	Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters	105
Item 13.	Certain Relationships and Related Transactions, and Director Independence	105
Item 14.	Principal Accountant Fees and Services	105

PART IV
Item 15.	Exhibits and Financial Statement Schedules	106
Item 16.	Form 10-K Summary	108

Signatures		109


	Year Ended April 30,
		2024		2023		2022

		(in thousands)
Revenue
Subscription		$	1,176,606	$	984,762	$	798,770
Services		90,715		84,227		63,604
Total revenue		1,267,321		1,068,989		862,374
Cost of revenue (1)(2)
Subscription		246,285		219,306		178,204
Services		83,794		77,320		53,990
Total cost of revenue		330,079		296,626		232,194
Gross profit		937,242		772,363		630,180
Operating expenses (1)(2)(3)
Research and development		341,951		313,454		273,761
Sales and marketing		559,648		503,537		406,658
General and administrative		160,628		143,247		123,441
Restructuring and other related charges		4,917		31,297		—
Total operating expenses		1,067,144		991,535		803,860
Operating loss (1)(2)(3)		(129,902)		(219,172)		(173,680)
Other income (expense), net
Interest expense		(26,132)		(25,159)		(20,716)
Other income (expense), net		33,278		27,454		(3,393)
Loss before income taxes		(122,756)		(216,877)		(197,789)
(Benefit from) provision for income taxes		(184,476)		19,284		6,059
Net income (loss)		$	61,720	$	(236,161)	$	(203,848)


	Year Ended April 30,				Change
	2024		2023		$		%

	(in thousands)
Revenue
Subscription	$	1,176,606	$	984,762	$	191,844	19	%
Services	90,715		84,227		6,488		8	%
Total revenue	$	1,267,321	$	1,068,989	$	198,332	19	%











Gross margin:
Subscription	79	%	78	%
Services	8	%	8	%
Total gross margin	74	%	72	%


Report of Independent Registered Public Accounting Firm (PCAOB ID 238)		68
Financial Statements:
	Consolidated Balance Sheets	70
	Consolidated Statements of Operations	71
	Consolidated Statements of Comprehensive Income (Loss)	72
	Consolidated Statements of Shareholders’ Equity	73
	Consolidated Statements of Cash Flows	74
	Notes to Consolidated Financial Statements	75


	As of April 30,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	540,397	$	644,167
Restricted cash	2,692		2,473
Marketable securities	544,002		271,041
Accounts receivable, net of allowance for credit losses of $4,979 and $3,409 as of April 30, 2024 and April 30, 2023, respectively	323,011		260,919
Deferred contract acquisition costs	78,030		55,813
Prepaid expenses and other current assets	42,765		39,867
Total current assets	1,530,897		1,274,280
Property and equipment, net	5,453		5,092
Goodwill	319,380		303,642
Operating lease right-of-use assets	20,506		19,997
Intangible assets, net	20,620		29,104
Deferred contract acquisition costs, non-current	114,509		95,879
Deferred tax assets	225,544		7,412
Other assets	5,657		8,076
Total assets	$	2,242,566	$	1,743,482
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	26,075	$	35,151
Accrued expenses and other liabilities	75,292		63,532
Accrued compensation and benefits	93,691		76,483
Operating lease liabilities	12,187		12,749
Deferred revenue	663,846		528,704
Total current liabilities	871,091		716,619
Deferred revenue, non-current	30,293		34,248
Long-term debt, net	568,612		567,543
Operating lease liabilities, non-current	12,898		13,942
Other liabilities, non-current	21,487		12,233
Total liabilities	1,504,381		1,344,585
Commitments and contingencies (Notes 8 and 9)
Shareholders’ equity:
Preference shares, €0.01 par value; 165,000,000 shares authorized, 0 shares issued and outstanding as of April 30, 2024 and April 30, 2023	—		—
Ordinary shares, par value €0.01 per share: 165,000,000 shares authorized; 101,705,935 shares issued and outstanding as of April 30, 2024 and 97,366,947 shares issued and outstanding as of April 30, 2023	1,070		1,024
Treasury stock	(369)		(369)
Additional paid-in capital	1,750,729		1,471,584
Accumulated other comprehensive loss	(21,638)		(20,015)
Accumulated deficit	(991,607)		(1,053,327)
Total shareholders’ equity	738,185		398,897
Total liabilities and shareholders’ equity	$	2,242,566	$	1,743,482


	Ordinary Shares		Treasury Shares Amount			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Shareholders' Equity
		Shares			Amount
Balances as of April 30, 2021		90,533,985	$	948		$	(369)	$	1,071,675	$	(8,105)	$	(613,318)	$	450,831
Fair value of replacement equity awards attributable to pre-acquisition service		—	—			—		1,266		—		—		1,266
Issuance of ordinary shares upon exercise of stock options		2,563,287	29			—		36,381		—		—		36,410
Issuance of ordinary shares upon release of restricted stock units		1,077,642	13			—		(13)		—		—		—
Stock-based compensation		—	—			—		140,799		—		—		140,799
Net loss		—	—			—		—		—		(203,848)		(203,848)
Other comprehensive loss		—	—			—		—		(10,025)		—		(10,025)
Balances as of April 30, 2022		94,174,914	990			(369)		1,250,108		(18,130)		(817,166)		415,433
Issuance of ordinary shares upon exercise of stock options		1,127,036	12			—		17,459		—		—		17,471
Issuance of ordinary shares upon release of restricted stock units		2,064,997	22			—		(22)		—		—		—
Stock-based compensation		—	—			—		204,039		—		—		204,039
Net loss		—	—			—		—		—		(236,161)		(236,161)
Other comprehensive loss		—	—			—		—		(1,885)		—		(1,885)
Balances as of April 30, 2023		97,366,947	1,024			(369)		1,471,584		(20,015)		(1,053,327)		398,897
Issuance of ordinary shares upon exercise of stock options		1,292,375	14			—		20,905		—		—		20,919
Issuance of ordinary shares upon release of restricted stock units		2,701,448	28			—		(28)		—		—		—
Issuance of ordinary shares under employee stock purchase plan		345,165	4			—		19,131		—		—		19,135
Stock-based compensation		—	—			—		239,137		—		—		239,137
Net income		—	—			—		—		—		61,720		61,720
Other comprehensive loss		—	—			—		—		(1,623)		—		(1,623)
Balances as of April 30, 2024		101,705,935	$	1,070		$	(369)	$	1,750,729	$	(21,638)	$	(991,607)	$	738,185


Note		Page
1.	Organization and Description of Business	76
2.	Summary of Significant Accounting Policies	76
3.	Revenue	84
4.	Fair Value Measurements	85
5.	Acquisitions	86
6.	Balance Sheet Components	87
7.	Senior Notes	89
8.	Commitments and Contingencies	90
9.	Leases	91
10.	Ordinary Shares	92
11.	Equity Incentive Plans	93
12.	Net Earnings (Loss) Per Share Attributable to Ordinary Shareholders	96
13.	Income Taxes	97
14.	Employee Benefit Plans	101
15.	Segment Information	101
16.	Restructuring and Other Related Charges	101


			Useful life (in years)
Developed technology			4-5
Customer relationships			4
Trade names			4


	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents:
Money market funds	$	180,248	$	—	$	—	$	180,248
U.S. treasury securities	35,407		—		—		35,407
Corporate debt securities	—		699		—		699



Total included in cash and cash equivalents	215,655		699		—		216,354

Marketable securities:
Certificates of deposit	—		42,972		—		42,972
Commercial paper	—		43,051		—		43,051
Municipal securities	—		27,806		—		27,806
U.S. treasury securities	112,471		—		—		112,471
International treasuries	—		12,642		—		12,642
Corporate debt securities	—		269,168		—		269,168
U.S. agency bonds	—		35,892		—		35,892
Total marketable securities	112,471		431,531		—		544,002

Mutual fund investments (1)	461		—		—		461
Total financial assets	$	328,587	$	432,230	$	—	$	760,817


	As of April 30, 2024		As of April 30, 2023
Due within 1 year	$	298,876	$	168,264
Due between 1 year and 3 years	245,126		102,777

Total marketable securities	$	544,002	$	271,041


	Useful Life (in years)	As of April 30, 2024		As of April 30, 2023
Leasehold improvements	Lesser of estimated useful life or remaining lease term	$	12,683	$	10,081
Computer hardware and software	3	3,464		2,220
Furniture and fixtures	3-5	7,395		6,093
Assets under construction		428		1,734
Total property and equipment		23,970		20,128
Less: accumulated depreciation		(18,517)		(15,036)
Property and equipment, net		$	5,453	$	5,092


	Gross Fair Value		Accumulated Amortization		Net Book Value		Weighted Average Remaining Useful Life (in years)
Developed technology	$	76,130	$	55,489	$	20,641	2.7
Customer relationships	19,598		19,598		—		0.0
Trade names	2,872		2,872		—		0.0
Total	$	98,600	$	77,959	$	20,641	2.7
Foreign currency translation adjustment					(21)
Total					$	20,620


	Carrying Amount
Balance as of April 30, 2022	$	303,906

Foreign currency translation adjustment	(264)
Balance as of April 30, 2023	303,642
Addition from acquisition	15,854
Foreign currency translation adjustment	(116)
Balance as of April 30, 2024	$	319,380


	As of April 30, 2024		As of April 30, 2023
Accrued expenses	$	34,779	$	24,163
Income taxes payable	10,596		9,738
Value added taxes payable	8,849		9,403
Accrued interest	6,918		6,918
Other	14,150		13,310
Total accrued expenses and other liabilities	$	75,292	$	63,532


	As of April 30, 2024		As of April 30, 2023
Accrued vacation	$	35,005	$	30,026
Accrued commissions	34,339		26,175
Accrued payroll and withholding taxes	9,830		6,586
Other	14,517		13,696
Total accrued compensation and benefits	$	93,691	$	76,483


	As of April 30, 2024		As of April 30, 2023
Principal	$	575,000	$	575,000
Unamortized debt issuance costs	(6,388)		(7,457)
Net carrying amount	$	568,612	$	567,543


Years Ending April 30,	Purchase Obligations
2025	$	164,457
2026	157,159
2027	102,936


Total	$	424,552


	As of April 30, 2024
Weighted average remaining lease term (in years)	2.7
Weighted average discount rate	5.0	%


2025	$	13,017
2026	7,543
2027	2,684
2028	2,341
2029	1,022
Thereafter	66
Total minimum lease payments	26,673
Less imputed interest	(1,588)
Present value of future minimum lease payments	25,085
Less current lease liabilities	(12,187)
Operating lease liabilities, non-current	$	12,898


	Stock Options Outstanding
	Number of Stock Options Outstanding	Weighted- Average Exercise Price		Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Balance as of April 30, 2022	5,219,124	$	29.41	6.22	$	266,021
Stock options granted	94,105	$	82.24

Stock options exercised	(1,127,036)	$	15.55
Stock options canceled	(143,656)	$	78.69
Stock options assumed in acquisition canceled	(4,299)	$	47.63
Balance as of April 30, 2023	4,038,238	$	32.74	5.35	$	134,778

Stock options exercised	(1,292,375)	$	16.19
Stock options canceled	(104,137)	$	98.35
Stock options assumed in acquisition canceled	(1,303)	$	76.12
Balance as of April 30, 2024	2,640,423	$	38.23	4.67	$	178,081
Exercisable as of April 30, 2024	2,395,257	$	32.69	4.40	$	173,413

SEC Form 10-K filed by Elastic N.V.

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	Number of Awards	Weighted-Average Grant Date Fair Value
Outstanding and unvested at April 30, 2022	4,717,548	$	108.44
RSUs granted	6,105,614	$	60.08
RSUs released	(2,065,664)	$	94.01
RSUs canceled	(1,263,099)	$	99.51
Outstanding and unvested at April 30, 2023	7,494,399	$	74.52
RSUs granted (1)	3,399,494	$	102.23
RSUs released	(2,701,448)	$	80.51
RSUs canceled (2)	(1,115,609)	$	75.60
Outstanding and unvested at April 30, 2024	7,076,836	$	85.38


	Year Ended
		April 30, 2024
Beginning balance		$	—
Incurred during the period		4,217
Paid during the period		(589)
Foreign currency translation adjustment		(2)
Ending balance		$	3,626


	Elastic N.V.

Date: June 14, 2024	By:	/s/ Ashutosh Kulkarni
		Ashutosh Kulkarni
		Chief Executive Officer and Director (Principal Executive Officer)

Date	Price Target	Rating	Analyst
10/14/2024		Mkt Perform → Outperform	William Blair
10/7/2024	$90.00 → $95.00	Equal Weight → Overweight	Barclays
9/11/2024	$100.00	Buy	Guggenheim
8/30/2024	$140.00 → $94.00	Buy → Neutral	BofA Securities
8/30/2024	$135.00 → $95.00	Outperform → Neutral	Robert W. Baird
5/22/2024	$135.00	Buy	UBS
2/15/2024	$185.00	Sector Outperform	Scotiabank
1/12/2024	$100.00 → $110.00	Overweight → Equal Weight	Barclays