Hi everyone,
Spent some time looking at ESTC, and thought I should do some kind of comparison to MDB, because their businesses are so similar.
Both offer open-source based datastores, with both services and subscription revenue streams. Their markets are very similar. Maybe elasticsearch has a bigger market (my personal belief), but its hard to make an argument either way.
And their approach to the businesses are very similar, pushing their own hosted version of the software (Atlas versus ElasticCloud).
hlygrail has a great writeup of the IPO docs in this thread, so suggest you read that first.
https://discussion.fool.com/elastic-estc-ipo-research-and-discus…
Anyway, on to the smackdown! All the numbers are based on the IPO documents of Mongo and Elastic respectively.
| | MDB | ESTC | |
|----------------------------------------------------|:----------|:-----------|:---------------|
| Subscription % of revenue | 91% | 91% | |
| Subscription % of revenue [change over 9 quarters] | 3% | 3% | |
| | | | |
| | MDB | ESTC | Winner |
|Subscription growth (TTM yoy) [higher better] | 54% | 82% | ESTC |
|Services growth (TTM yoy) [higher better] | 37% | 51% | ESTC |
|Revenue growth (TTM yoy) [higher better] | 53% | 79% | ESTC |
| | | | |
|Subsc. cost of revenue growth (TTM yoy) [low better]| 82% | 113% | MDB |
|Serv. cost of revenue growth (TTM yoy) [low better] | 51% | 104% | MDB |
| | | | |
| Gross margin (av ttm) [higher better] | 72% | 74% | Draw |
| Operating margin (av ttm) [higher better] | -70% | -30% | ESTC |
| Net margin (av ttm) [higher better] | -70% | -32%. | ESTC |
| | | | |
| Share based compensation [av ttm % of revenue]. | 15% | 9%. | ESTC |
I think Elastic wins the smackdown so far 
I’ve copied some of the SEC financial data to a google spreadsheet here, which you can download and play with:
https://docs.google.com/spreadsheets/d/10BCsiftLsuI0gCvnr0xX…
I may have got some of the calculations wrong (the italics bits) so let me know if anyone spots an error.
The main thing that suggests this may be a good IPO is the growth in ElasticCloud.
I’ll continue the smackdown and update this thread when I’ve got time, let me know any suggestions for a comparison.
cheers
Greg
Some other interesting quotes from the ESTC IPO doc:
“As of July 31, 2018, we had over 5,500 customers across over 80 countries and in a wide range of industries, compared to over 5,000 and 2,800 customers as of April 30, 2018 and 2017, respectively”
“In fiscal 2017, fiscal 2018, and for the three months ended July 31, 2018, Elastic Cloud contributed 11%, 16% and 18% of our total revenue, respectively”
“Total subscription revenue increased $22.2 million, or 76%, in the three months ended July 31, 2018 compared to the same period of the prior year. Over 40% of this increase was due to sales to new customers, and the remaining increase resulted from an increase in sales to existing customers.”
“We have recently experienced increased demand for consulting services. In fiscal 2018 we invested in our professional services organization, primarily in consulting resources that we believe will be needed as we continue to grow… [as opposed to training]”
“Our cost of revenue increased sequentially in each of the quarters presented, primarily driven by expanded adoption of Elastic Cloud by existing and new customers, which resulted in increased hosting and managing costs, as well as growth in personnel costs as we grew our support team.”