Summary
Elastic reported third quarter fiscal 2022 total revenue of $223.9 million, up 42.5% from the prior-year quarter. Gross profit was $162.7 million, up 41.3%. Gross margin was 72.6%, down 0.7 percentage points from a year earlier. The company posted a GAAP operating loss of $45.8 million, and the loss widened from the prior-year quarter. Operating margin was -20.5%, up 1.5 percentage points. GAAP net loss was $56.7 million, and the loss widened. On a non-GAAP basis, operating profit was $0.2 million and non-GAAP net loss per share was $0.12.
For the first nine months of fiscal 2022, revenue was $623.0 million, up 44.6%. Gross profit was $458.2 million, up 45.2%. The nine-month operating loss was $114.1 million, and the loss widened. The nine-month net loss was $138.2 million, and the loss widened. Diluted GAAP net loss per share for the nine months was -$1.50. Nine-month gross margin was 73.5%, up 0.3 percentage points, and nine-month operating margin was -18.3%, up 3.1 percentage points.
Elastic Cloud revenue grew 79% year over year and accounted for 36% of total revenue. Total subscription customer count was over 17,900, compared with over 17,000 in the second quarter of fiscal 2022 and over 13,800 in the third quarter of fiscal 2021. Customers with annual contract value above $100,000 numbered over 890, compared with over 830 in the second quarter of fiscal 2022 and over 670 in the third quarter of fiscal 2021. The Net Expansion Rate was slightly above the second quarter of fiscal 2022 and just below 130%. Deferred revenue was $395.7 million, up 18.5% from the prior-year quarter. Remaining performance obligations were $860.6 million, up 21.9%. Calculated billings were $233.0 million.
Operating cash flow was $5.1 million in the quarter, down 73.9% from the prior-year quarter. For the nine months, operating cash flow was $8.7 million, down 63.8%. Capital expenditures were $0.2 million in the quarter, down 78.1%, and $1.0 million for the nine months, down 63.9%. Adjusted free cash flow was $15.8 million. Cash and cash equivalents were $864.4 million as of January 31, 2022. The company issued $575.0 million of 4.125% senior notes due July 15, 2029. Accumulated deficit stood at $751.6 million. Elastic completed acquisitions of Cmd, build.security and Optimyze for combined consideration of $134.9 million during the nine months.
For the fourth quarter of fiscal 2022, management guides non-GAAP operating margin to -5.5% to -4.5% and non-GAAP net loss per share to $0.24 to $0.20, assuming 93.1 million to 94.1 million weighted average ordinary shares outstanding. For the full fiscal year 2022, management guides non-GAAP operating margin to -0.4% to -0.2% and non-GAAP net loss per share to $0.42 to $0.38, assuming 92.0 million to 93.0 million weighted average ordinary shares outstanding. Management also provided revenue guidance for both periods. The company faces risks from the ongoing COVID-19 pandemic, which has caused longer sales cycles, delayed implementation of professional services, reduced renewals, and headwinds to calculated billings and the Net Expansion Rate. Elastic Cloud now represents a larger share of revenue, and the company expects that mix to pressure gross margin because of third-party hosting costs. Professional services gross margin may fluctuate, decline or turn negative as the company invests in that business. Elastic has a history of operating losses and an accumulated deficit of $751.6 million, and it may need additional capital. Foreign currency fluctuations and higher interest expense from the senior notes also pose risks.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $223.9M | $206.0M | +8.7% | $157.1M | +42.5% |
| Gross profit | $162.7M | $152.1M | +6.9% | $115.1M | +41.3% |
| Gross margin | 72.6% | 73.8% | -1.2 pp | 73.3% | -0.7 pp |
| Research & development | $71.7M | $63.8M | +12.5% | $51.4M | +39.6% |
| Sales & marketing | $105.1M | $95.0M | +10.7% | $71.1M | +47.8% |
| General & administrative | $31.7M | $30.6M | +3.7% | $27.1M | +16.9% |
| Total operating expenses | $208.5M | $189.3M | +10.2% | $149.6M | +39.4% |
| Operating income (loss) | -$45.8M | -$37.2M | -23.3% | -$34.5M | -33.0% |
| Operating margin | -20.5% | -18.1% | -2.4 pp | -21.9% | +1.5 pp |
| Net income (loss) | -$56.7M | -$47.0M | -20.6% | -$38.0M | -49.4% |
| Net margin | -25.3% | -22.8% | -2.5 pp | -24.2% | -1.2 pp |
| Customers | 17,900 | 17,000 | +5.3% | 13,800 | +29.7% |
Risks
Russia's invasion of Ukraine and the resulting international political crisis could have significant negative macroeconomic consequences, including on the businesses of our customers and partners, and negatively impact their spending on our offerings.
As a provider of security solutions, we have been and may continue to be specifically targeted by bad actors, and political uncertainty and military actions associated with Russia's invasion of Ukraine heighten the risk of cybersecurity attacks, phishing attacks, viruses, malware, ransomware, hacking or similar breaches from nation-state actors.
In February 2021 we changed Elasticsearch and Kibana from Apache 2.0 to dual Elastic License 2.0 and SSPL, neither of which is Open Source Initiative approved or court interpreted, which may harm adoption; Amazon has launched OpenSearch based on a forked Elastic Stack under Apache 2.0 and rebranded its Elasticsearch Service to OpenSearch Service, increasing competition.
In July 2021 we issued $575.0 million aggregate principal amount of 4.125% Senior Notes due July 15, 2029; interest expense increased $14.4 million in the nine months ended January 31, 2022 due to long-term debt, and the indenture contains restrictive covenants limiting liens, subsidiary guarantees, and mergers or asset sales.
Privacy, data protection and information security laws, including GDPR, CCPA, CPRA, and Schrems II transfer rules, impose significant compliance costs; Austrian and French data protection authorities issued decisions in January and February 2022 finding that use of Google Analytics and similar tracking tools violates GDPR, which could limit marketing effectiveness and subject us to liabilities.
Elastic Cloud contributed 34% and 27% of total revenue for the nine months ended January 31, 2022 and 2021, respectively; increasing its relative contribution is expected to have a modest adverse impact on our gross margin as a result of associated third-party hosting costs.
During the nine months ended January 31, 2022 we acquired Cmd, build.security and Optimyze for a combined total consideration of $134.9 million; integration may disrupt our business, divert management attention, require continued investment, and fail to realize anticipated synergies.
Dutch proposals would impose an Alternative Withholding Tax on dividends to related entities in designated low-tax jurisdictions effective January 1, 2024, and a DWT Exit Tax on a deemed distribution if we cease to be a Dutch tax resident for tax treaty purposes, with retroactive effect from December 8, 2021, potentially subjecting shareholders to withholding tax.
The ongoing COVID-19 pandemic has resulted in delays in purchasing decisions, longer sales cycles, reduced renewals, and changes in approaches to creating sales pipeline, resulting in headwinds for calculated billings and our Net Expansion Rate; we expect live events and travel costs to trend back higher in the near term.
SaaS KPIs
All quarters →Net Expansion Rate
Non-GAAP Operating Margin
Adjusted Free Cash Flow
Adjusted Free Cash Flow Margin
Total subscription customer count
Customers with ACV > $100,000
Calculated Billings
Summary, forecast, risks and KPIs are extracted from Elastic N.V.'s SEC filings for Q3 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.