Updating this: https://discussion.fool.com/estc-oct18-q-review-belated-34110734…
Company progress metrics
7/16 10/16 1/17 4/17 7/17 10/17 1/18 4/18 7/18 10/18 01/19 04/19
Calculated Billings (millions) 33.6 51.3 47.5 73.3 59.2 88.5 79.8 115.4
76.2% 72.5% 68.0% 57.4%
Revenue $16,572 21,305 23,128 27,172 31,644 37,038 41,681 49,572 56,644 63,575 70,835 80,599
(QoQ change%) 28.6% 8.6% 17.5% 16.5% 17.0% 12.5% 18.9% 14.3% 12.2% 11.4% 13.8%
(YoY change%) 90.9% 73.8% 80.2% 82.4% 79.0% 71.6% 69.9% 62.6%
Gross Profit 12,629 16,915 17,948 20,840 24,230 28,078 30,915 35,972 41,087 44,988 50,411 57,157
OpEx 20,924 23,673 39,591 31,316 33,404 35,204 43,374 55,207 59,502 72,058 74,197 89,242
(YoY change%) 104.7% 71.7% 61.6%
Operating Loss (8,295) (6,758) (21,643) (10,476) (9,174) (7,126) (12,459) (19,235) (18,415) (27,070) (23,786) (32,085)
Stock-Based Comp 1,098 1,195 15,087 1,506 2,254 2,770 3,554 4,164 5,665 11,239 11,111 11,927
Customer Count 5,500 6,300 7,200 8,100
Cust w ACV > 100k 300 340 380 440
Net Expansion Rate 130%+ 130%+ 130%+ 130%+ 130%+ 130%+ 130%+ 130%+ 130%+ 130%+
Valuation metrics
06/06/2019
Shares Outstanding (fully diluted, in mil) 87.5
Shares Outstanding (ordinary, in mil) 72.3
Share price as of this post 80.01
Cash (in mil) as of this post 298.0
TTM Revenue 271.6
TTM Billings 342.9
EV/S (fully diluted) as of this post 24.6
EV/S (ordinary) as of this post 20.2
EV/Billings (ordinary) as of this post 16.0
Takeaways
The dilution is being realized more slowly than I expected (I’m still not nearly an expert on that with recent IPOs), so it looks like I might have overstated the importance of looking at fully diluted shares. Still, we can see that ESTC is looking a lot less expensive by all metrics.
This was fiscal Q4, and revenue came in at 271.6m for the year. They’re guiding to 403m (at the high end) for the new fiscal year, so 48%. But expect to see some raises each quarter. I’m not worried that growth will slow below 50%. It has come down from 80% of course, but the raw numbers show that they’re steadily adding more revenue, customers, large customers, etc.
I love that OpEx growth has slowed from the triple digits we saw two quarters ago, but it obviously still jumped up this quarter. That’s common in the April quarter, but hopefully it means they still see plenty of avenues for growth.
The Operating Loss has risen, but they explain that they’re investing heavily and that it will come down a bit %-wise for the full year.
They acquired an endpoint security company called Endgame for $234m in stock. Seems like a bolt on, so I don’t think it’s a huge deal or anything that would change the thesis materially. Hopefully they can get some good contracts with the added functionality.
Conclusion
I said 2 quarters ago with a share price in the mid-70’s that this one probably wouldn’t appreciate much for a few quarters. That’s turned out to be right so far, but now I’m starting to see some upside. Sure, this does look relatively cheaper because everything else is more expensive now, but it is also absolutely cheaper based on fundamentals.
I added quite a bit to my position today.
Bear