UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________________________________________________________________________________________________________________________________________

FORM 10-Q

____________________________________________________________________________________________________________________________________________________________________________________________

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

For the quarterly period ended October 31, 2023

OR

☐ 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

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

As of November 28, 2023, the registrant had 99,630,496 ordinary shares, par value €0.01 per share, outstanding.

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 Section 21E of 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 ir@elastic.co.

Table of Contents

		Page
	Note Regarding Forward-Looking Statements	3
PART I.	FINANCIAL INFORMATION	5
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Comprehensive Loss	7
	Condensed Consolidated Statements of Shareholders’ Equity	9
	Condensed Consolidated Statements of Cash Flows	10
	Notes to Condensed Consolidated Financial Statements (Unaudited)	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	40
PART II.	OTHER INFORMATION	41
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	75
Item 3.	Defaults Upon Senior Securities	75
Item 4.	Mine Safety Disclosures	75
Item 5.	Other Information	75
Item 6.	Exhibits	75
Signatures		76

2

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•our business strategy and our plan to build our business;

•the impact of macroeconomic conditions, including declining rates of economic growth, supply chain disruptions, inflationary pressures, increased interest rates, and other conditions discussed in this report, on information technology spending, sales cycles, and other factors affecting the demand for our offerings and our results of operations;

•our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit or gross margin, operating expenses (which include changes in sales and marketing, research and development and general and administrative expenses), and our ability to achieve and maintain future profitability;

•our ability to continue to deliver and improve our offerings and successfully develop new offerings;

•customer acceptance and purchase of our existing offerings and new offerings, including the expansion and adoption of our cloud-based offerings;

•the impact of actions that we are taking to reduce our costs and rebalance investments;

•the impact of the evolving conflict in Israel and Gaza and Russia’s invasion of Ukraine on our business and on the businesses of our customers and partners, including their spending priorities;

•the impact that increased adoption of consumption-based arrangements could have on our revenue or operating results;

•the impact of changes to our licensing of our products, particularly Elasticsearch and Kibana;

•our assessments of the strength of our solutions and products;

•our service performance and security, including the resources and costs required to prevent, detect and remediate potential security breaches or incidents, including by threat actors;

•our ability to maintain and expand our user and customer base;

•continued development of the market for our products;

•competition from other products and companies with more resources, recognition and presence in our industry;

•the impact of foreign currency exchange rate and interest rate fluctuations on our results;

•the pace of change and innovation in the markets in which we operate and the competitive nature of those markets;

•our ability to effectively manage our growth, including any changes to our pace of hiring;

•our international expansion strategy;

•our strategy of acquiring complementary businesses and our ability to successfully integrate acquired businesses and technologies;

•the impact of acquisitions on our future product offerings;

•our beliefs and objectives for future operations;

•our relationships with and reliance on third parties, including partners;

•our ability to protect our intellectual property rights;

•our ability to develop our brands;

•the impact of expensing stock options and other equity awards;

•the sufficiency of our capital resources;

•our ability to successfully defend litigation brought against us;

3

•our ability to successfully execute our go-to-market strategy, including the positioning of our solutions and products, and to expand in our existing markets and into new markets;

•sufficiency of cash to meet our cash needs for at least the next 12 months;

•our ability to comply with laws and regulations that currently apply or may become applicable to our business both in the United States and internationally;

•our ability to attract and retain qualified employees and key personnel;

•the effect of the loss of key personnel;

•our expectations about the impact of natural disasters and public health epidemics and pandemics on our business, results of operations and financial condition;

•the seasonality of our business;

•the future trading prices of our ordinary shares; and

•our ability to service our debt obligations.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe this information forms a reasonable basis for such statements, the information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Our forward-looking statements may not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

You should not rely upon forward-looking statements expressed or implied by us as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations regarding future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” in Part II, Item 1A and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. Actual results, events, or circumstances could differ materially from those described or implied in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events or circumstances as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date on which they are made or to conform such statements to actual results or revised expectations, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements.

4

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Elastic N.V.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)
(unaudited)

	As of October 31, 2023		As of April 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	589,685	$	644,167
Restricted cash	2,807		2,473
Marketable securities	376,674		271,041
Accounts receivable, net of allowance for credit losses of $3,569 and $3,409 as of October 31, 2023 and April 30, 2023, respectively	232,250		260,919
Deferred contract acquisition costs	62,733		55,813
Prepaid expenses and other current assets	37,620		39,867
Total current assets	1,301,769		1,274,280
Property and equipment, net	4,996		5,092
Goodwill	303,494		303,642
Operating lease right-of-use assets	18,236		19,997
Intangible assets, net	21,008		29,104
Deferred contract acquisition costs, non-current	95,627		95,879
Deferred tax assets	6,824		7,412
Other assets	5,892		8,076
Total assets	$	1,757,846	$	1,743,482
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	35,382	$	35,151
Accrued expenses and other liabilities	63,873		63,532
Accrued compensation and benefits	65,407		76,483
Operating lease liabilities	11,588		12,749
Deferred revenue	510,981		528,704
Total current liabilities	687,231		716,619
Deferred revenue, non-current	25,096		34,248
Long-term debt, net	568,072		567,543
Operating lease liabilities, non-current	12,160		13,942
Other liabilities, non-current	10,151		12,233
Total liabilities	1,302,710		1,344,585
Commitments and contingencies (Notes 7 and 8)
Shareholders’ equity:
Preference shares, €0.01 par value; 165,000,000 shares authorized, 0 shares issued and outstanding as of October 31, 2023 and April 30, 2023	—		—
Ordinary shares, par value €0.01 per share: 165,000,000 shares authorized; 99,599,262 shares issued and outstanding as of October 31, 2023 and 97,366,947 shares issued and outstanding as of April 30, 2023	1,048		1,024
Treasury stock	(369)		(369)
Additional paid-in capital	1,604,896		1,471,584
Accumulated other comprehensive loss	(23,808)		(20,015)
Accumulated deficit	(1,126,631)		(1,053,327)
Total shareholders’ equity	455,136		398,897
Total liabilities and shareholders’ equity	$	1,757,846	$	1,743,482

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

Elastic N.V.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)
(unaudited)

	Three Months Ended October 31,				Six Months Ended October 31,
	2023		2022		2023		2022
Revenue
Subscription	$	287,743	$	241,211	$	557,990	$	473,025
Services	22,869		23,190		46,375		41,457
Total revenue	310,612		264,401		604,365		514,482
Cost of revenue
Subscription	59,996		55,101		117,262		108,652
Services	20,093		19,656		40,304		39,084
Total cost of revenue	80,089		74,757		157,566		147,736
Gross profit	230,523		189,644		446,799		366,746
Operating expenses
Research and development	80,108		75,568		160,798		154,217
Sales and marketing	133,230		128,179		266,399		253,185
General and administrative	38,695		34,925		76,634		69,013
Restructuring and other related charges	29		—		754		—
Total operating expenses	252,062		238,672		504,585		476,415
Operating loss	(21,539)		(49,028)		(57,786)		(109,669)
Other income, net
Interest expense	(6,349)		(6,209)		(12,655)		(12,610)
Other income, net	8,239		14,975		15,539		15,314
Loss before income taxes	(19,649)		(40,262)		(54,902)		(106,965)
Provision for income taxes	5,147		7,043		18,402		9,891
Net loss	$	(24,796)	$	(47,305)	$	(73,304)	$	(116,856)
Net loss per share attributable to ordinary shareholders, basic and diluted	$	(0.25)	$	(0.50)	$	(0.74)	$	(1.23)
Weighted-average shares used to compute net loss per share attributable to ordinary shareholders, basic and diluted	99,073,401		95,307,146		98,507,725		94,964,423

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

Elastic N.V.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)
(unaudited)

	Three Months Ended October 31,				Six Months Ended October 31,
	2023		2022		2023		2022
Net loss	$	(24,796)	$	(47,305)	$	(73,304)	$	(116,856)
Other comprehensive loss:
Unrealized loss on available-for-sale securities	(196)		—		(1,607)		—
Foreign currency translation adjustments	(3,961)		(6,282)		(2,186)		(8,906)
Other comprehensive loss	(4,157)		(6,282)		(3,793)		(8,906)
Total comprehensive loss	$	(28,953)	$	(53,587)	$	(77,097)	$	(125,762)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

Elastic N.V.

Condensed Consolidated Statements of Shareholders’ Equity

(in thousands, except share data)
(unaudited)

	Ordinary Shares			Treasury Shares Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Shareholders' Equity
	Shares	Amount
Balances as of July 31, 2023	98,377,727	$	1,035	$	(369)	$	1,532,543	$	(19,651)	$	(1,101,835)	$	411,723
Issuance of ordinary shares upon exercise of stock options	451,558	4		—		6,796		—		—		6,800
Issuance of ordinary shares upon release of restricted stock units	575,872	7		—		(7)		—		—		—
Issuance of ordinary shares under employee stock purchase plan	194,105	2		—		9,109		—		—		9,111
Stock-based compensation	—	—		—		56,455		—		—		56,455
Net loss	—	—		—		—		—		(24,796)		(24,796)
Other comprehensive loss	—	—		—		—		(4,157)		—		(4,157)
Balances as of October 31, 2023	99,599,262	$	1,048	$	(369)	$	1,604,896	$	(23,808)	$	(1,126,631)	$	455,136
	Ordinary Shares			Treasury Shares Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Shareholders' Equity
	Shares	Amount
Balances as of July 31, 2022	94,970,627	$	999	$	(369)	$	1,300,379	$	(20,754)	$	(886,717)	$	393,538
Issuance of ordinary shares upon exercise of stock options	258,813	3		—		4,324		—		—		4,327
Issuance of ordinary shares upon release of restricted stock units	346,335	3		—		(3)		—		—		—
Stock-based compensation	—	—		—		47,287		—		—		47,287
Net loss	—	—		—		—		—		(47,305)		(47,305)
Other comprehensive loss	—	—		—		—		(6,282)		—		(6,282)
Balances as of October 31, 2022	95,575,775	$	1,005	$	(369)	$	1,351,987	$	(27,036)	$	(934,022)	$	391,565

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8

Elastic N.V.

Condensed Consolidated Statements of Shareholders’ Equity

(in thousands, except share data)
(unaudited)

	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, 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	715,386	7		—		10,636		—		—		10,643
Issuance of ordinary shares upon release of restricted stock units	1,322,824	15		—		(15)		—		—		—
Issuance of ordinary shares under employee stock purchase plan	194,105	2		—		9,109		—		—		9,111
Stock-based compensation	—	—		—		113,582		—		—		113,582
Net loss	—	—		—		—		—		(73,304)		(73,304)
Other comprehensive loss	—	—		—		—		(3,793)		—		(3,793)
Balances as of October 31, 2023	99,599,262	$	1,048	$	(369)	$	1,604,896	$	(23,808)	$	(1,126,631)	$	455,136
	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, 2022	94,174,914	$	990	$	(369)	$	1,250,108	$	(18,130)	$	(817,166)	$	415,433
Issuance of ordinary shares upon exercise of stock options	484,076	6		—		7,718		—		—		7,724
Issuance of ordinary shares upon release of restricted stock units	916,785	9		—		(9)		—		—		—
Stock-based compensation	—	—		—		94,170		—		—		94,170
Net loss	—	—		—		—		—		(116,856)		(116,856)
Other comprehensive loss	—	—		—		—		(8,906)		—		(8,906)
Balances as of October 31, 2022	95,575,775	$	1,005	$	(369)	$	1,351,987	$	(27,036)	$	(934,022)	$	391,565

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

9

Elastic N.V.

Condensed Consolidated Statements of Cash Flows

(in thousands)
(unaudited)

	Six Months Ended October 31,
	2023		2022
Cash flows from operating activities
Net loss	$	(73,304)	$	(116,856)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization	9,781		10,430
Amortization of premium and accretion of discount on marketable securities, net	(3,646)		—
Amortization of deferred contract acquisition costs	35,952		35,674
Amortization of debt issuance costs	529		506
Non-cash operating lease cost	5,270		5,649
Stock-based compensation expense	113,582		94,170
Deferred income taxes	427		(80)
Foreign currency transaction loss	422		48
Other	(18)		67
Changes in operating assets and liabilities:
Accounts receivable, net	26,972		25,193
Deferred contract acquisition costs	(43,421)		(43,569)
Prepaid expenses and other current assets	2,143		7,909
Other assets	1,556		4,809
Accounts payable	118		12,320
Accrued expenses and other liabilities	(1,393)		(1,645)
Accrued compensation and benefits	(10,773)		(5,947)
Operating lease liabilities	(6,194)		(5,573)
Deferred revenue	(22,578)		(22,168)
Net cash provided by operating activities	35,425		937
Cash flows from investing activities
Purchases of property and equipment	(1,528)		(822)
Purchases of marketable securities	(178,301)		—
Maturities of marketable securities	75,292		—
Net cash used in investing activities	(104,537)		(822)
Cash flows from financing activities
Proceeds from issuance of ordinary shares under employee stock purchase plan	9,111		—
Proceeds from issuance of ordinary shares upon exercise of stock options	10,643		7,724
Net cash provided by financing activities	19,754		7,724
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(4,790)		(12,854)
Net decrease in cash, cash equivalents, and restricted cash	(54,148)		(5,015)
Cash, cash equivalents, and restricted cash, beginning of period	646,640		863,637
Cash, cash equivalents, and restricted cash, end of period	$	592,492	$	858,622
Supplemental disclosures of cash flow information
Cash paid for interest	$	12,127	$	12,104
Cash paid for income taxes, net	$	14,990	$	3,861
Cash paid for operating lease liabilities	$	6,790	$	6,605
Supplemental disclosures of non-cash investing and financing information
Changes in property and equipment included in accounts payable	$	79	$	64
Operating lease right-of-use assets for new lease obligations	$	3,584	$	10,770

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

10

Elastic N.V.

Notes to Condensed Consolidated Financial Statements
(unaudited)

Note		Page
1.	Organization and Description of Business	12
2.	Summary of Significant Accounting Policies	12
3.	Revenue	13
4.	Fair Value Measurements	14
5.	Balance Sheet Components	16
6.	Senior Notes	18
7.	Commitments and Contingencies	19
8.	Leases	19
9.	Ordinary Shares	20
10.	Equity Incentive Plans	20
11.	Net Loss Per Share Attributable to Ordinary Shareholders	23
12.	Income Taxes	23
13.	Employee Benefit Plans	23
14.	Segment Information	24
15.	Restructuring and Other Related Charges	24
16.	Subsequent Events	24

11

1. Organization and Description of Business

Elastic N.V. (“Elastic” or the “Company”) was incorporated under the laws of the Netherlands in 2012. The Company created the Elastic Stack, a powerful set of software products that ingest and store data from any source and in any format, and perform search, analysis, and visualization on that data. Developers build on top of the Elastic Stack to apply the power of search to their data and solve business problems. The Company offers three software solutions built into the Elastic Stack: Search, Observability, and Security. The Elastic Stack and the Company’s solutions are designed to run across hybrid clouds, public or private clouds, and multi-cloud environments.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying interim condensed consolidated balance sheet as of October 31, 2023, interim condensed consolidated statements of operations, comprehensive loss, and shareholders’ equity for the three and six months ended October 31, 2023 and 2022, and interim condensed consolidated statements of cash flows for the six months ended October 31, 2023 and 2022 are unaudited. These interim condensed consolidated financial statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, include all normal recurring adjustments necessary to fairly state the Company’s financial position as of October 31, 2023; results of the Company’s operations for the three and six months ended October 31, 2023 and 2022; statements of shareholders’ equity for the three and six months ended October 31, 2023 and 2022; and statements of cash flows for the six months ended October 31, 2023 and 2022. The financial data and other financial information disclosed in the notes to these interim condensed consolidated financial statements related to the three and six month periods are also unaudited. The results for the three and six months ended October 31, 2023 are not necessarily indicative of the operating results expected for the fiscal year ending April 30, 2024, or any other future period.

The unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the financial statements of the Company and its wholly-owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation.

Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed balance sheet data as of April 30, 2023 was derived from the Company’s audited financial statements, but does not include all disclosures required by U.S. GAAP. Therefore, these unaudited interim condensed consolidated financial statements and accompanying footnotes should be read in conjunction with the Company’s annual consolidated financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2023 filed with the SEC on June 16, 2023 (the “Company’s Annual Report on Form 10-K”).

Fiscal Year

The Company’s fiscal year ends on April 30. References to fiscal 2024, for example, refer to the fiscal year ended April 30, 2024.

Use of Estimates and Judgments

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Such estimates include, but are not limited to, allocation of revenue between recognized and deferred amounts, deferred contract acquisition costs, allowance for credit losses, valuation of stock-based compensation, fair value of ordinary shares in periods prior to the Company’s initial public offering, fair value of acquired intangible assets and goodwill, useful lives of acquired intangible assets and property and equipment, whether an arrangement is or contains a lease, discount rate used for operating leases, and valuation allowance for deferred income taxes. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events.

12

Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, judgments or revise the carrying value of the Company’s assets or liabilities. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s financial statements.

Significant Accounting Policies

There have been no changes to the Company’s significant accounting policies described in the Company’s Annual Report on Form 10-K that have had a material impact on its condensed consolidated financial statements and related notes.

Recently Adopted Accounting Pronouncements

Acquisitions: In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, improving consistency in accounting for acquired revenue contracts with customers in a business combination by requiring that acquirers apply ASC 606 to recognize contract assets and contract liabilities as if they had originated the contracts. If the acquiree prepared its financial statements in accordance with U.S. GAAP, the resulting acquired contract assets and liabilities should generally be consistent with the acquiree’s financial statements. The Company adopted ASU No. 2021-08 on May 1, 2023. The Company’s adoption of this ASU did not have any impact on its condensed consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted

There have been no new accounting pronouncements or changes in accounting pronouncements during the six months ended October 31, 2023 that are significant or potentially significant to the Company.

3. Revenue

Disaggregation of Revenue

The following table presents revenue by category (in thousands):

	Three Months Ended October 31,								Six Months Ended October 31,
	2023				2022				2023				2022
	Amount		% of Total Revenue		Amount		% of Total Revenue		Amount		% of Total Revenue		Amount		% of Total Revenue
Elastic Cloud	$	134,989	43	%	$	103,237	39	%	$	256,161	42	%	$	200,966	39	%
Other subscription	152,754		50	%	137,974		52	%	301,829		50	%	272,059		53	%
Total subscription	287,743		93	%	241,211		91	%	557,990		92	%	473,025		92	%
Services	22,869		7	%	23,190		9	%	46,375		8	%	41,457		8	%
Total revenue	$	310,612	100	%	$	264,401	100	%	$	604,365	100	%	$	514,482	100	%

Concentration of Credit Risk

One customer, a channel partner, accounted for 11% and 12% of net accounts receivable as of October 31, 2023 and April 30, 2023, respectively. The same customer accounted for 10% of total revenue during the three and six months ended October 31, 2023. No customer accounted for more than 10% of the Company’s total revenue for the three and six months ended October 31, 2022.

Deferred Revenue

The Company recognized revenue of $371.2 million and $301.4 million during the six months ended October 31, 2023 and 2022, respectively, that was included in the deferred revenue balance at the beginning of each of the respective periods.

Unbilled Accounts Receivable

Unbilled accounts receivable is recorded as part of accounts receivable, net in the Company’s condensed consolidated balance sheets. As of October 31, 2023 and April 30, 2023, unbilled accounts receivable was $2.2 million.

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Remaining Performance Obligations

As of October 31, 2023, the Company had $1.117 billion of remaining performance obligations. As of October 31, 2023, the Company expects to recognize approximately 90% of its remaining performance obligations as revenue over the next 24 months and the remainder thereafter.

Deferred Contract Acquisition Costs

Amortization expense with respect to deferred contract acquisition costs was $36.0 million and $35.7 million for the six months ended October 31, 2023 and 2022, respectively. The Company did not recognize any impairment of deferred contract acquisition costs during the six months ended October 31, 2023 and 2022.

4. Fair Value Measurements

Financial Assets

The Company measures financial assets and liabilities that are measured at fair value on a recurring basis at each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company considers all highly liquid investments, including money market funds with an original maturity of three months or less at the date of purchase, to be cash equivalents. Its marketable securities are classified as available for sale and, as they are available to support current operations, are classified as short-term. The Company uses quoted prices in active markets for identical assets to determine the fair value of its Level 1 investments in money market funds.

The following table summarizes assets that are measured at fair value on a recurring basis as of October 31, 2023 (in thousands):

	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents:
Money market funds	$	299,934	$	—	$	—	$	299,934
Certificates of deposit	—		8,202		—		8,202
Total included in cash and cash equivalents	299,934		8,202		—		308,136
Marketable securities:
Certificates of deposit	—		53,092		—		53,092
Commercial paper	—		30,044		—		30,044
Municipal securities	—		2,495		—		2,495
U.S. treasury securities	68,919		—		—		68,919
Corporate debt securities	—		178,297		—		178,297
U.S. agency bonds	—		43,827		—		43,827
Total marketable securities	68,919		307,755		—		376,674
Total financial assets	$	368,853	$	315,957	$	—	$	684,810

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The following table summarizes assets that are measured at fair value on a recurring basis as of April 30, 2023 (in thousands):

	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents:
Money market funds	$	194,261	$	—	$	—	$	194,261
U.S. agency securities	—		27,406		—		27,406
Certificates of deposit	—		21,750		—		21,750
Commercial paper	—		60,750		—		60,750
Total included in cash and cash equivalents	194,261		109,906		—		304,167
Marketable securities:
Certificates of deposit	—		31,645		—		31,645
Commercial paper	—		33,735		—		33,735
U.S. treasury securities	47,627		—		—		47,627
Corporate debt securities	—		118,228		—		118,228
U.S. agency bonds	—		39,806		—		39,806
Total marketable securities	47,627		223,414		—		271,041
Total financial assets	$	241,888	$	333,320	$	—	$	575,208

Interest income from the Company’s cash, cash equivalents and marketable securities was $7.1 million and $13.2 million for the three and six months ended October 31, 2023, respectively, and $3.4 million and $4.8 million for the three and six months ended October 31, 2022, respectively, and is included in other income, net in the condensed consolidated statement of operations.

As of October 31, 2023 and April 30, 2023, net unrealized losses on the marketable securities were immaterial. The fluctuations in market interest rates impact the unrealized losses or gains on these securities.

As of October 31, 2023 and April 30, 2023, the contractual maturities of the Company’s available-for-sale debt securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheet, did not exceed 36 months. The fair values of available-for-sale securities, by remaining contractual maturity, are as follows (in thousands):

	As of October 31, 2023		As of April 30, 2023
Due within 1 year	$	257,868	$	168,264
Due between 1 year and 3 years	118,806		102,777
Total marketable securities	$	376,674	$	271,041

Financial Liabilities

In July 2021, the Company issued $575.0 million aggregate principal amount of 4.125% Senior Notes due July 15, 2029 (the “Senior Notes”) in a private placement. Based on the trading prices of the Senior Notes, the fair value of the Senior Notes as of October 31, 2023 was approximately $484.1 million. While the Senior Notes are recorded at cost, the fair value of the Senior Notes was determined based on quoted prices in markets that are not active; accordingly, the Senior Notes are categorized as Level 2 for purposes of the fair value measurement hierarchy.

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5. Balance Sheet Components

Property and Equipment, Net

The cost and accumulated depreciation of property and equipment were as follows (in thousands):

	Useful Life (in years)	As of October 31, 2023		As of April 30, 2023
Leasehold improvements	Lesser of estimated useful life or remaining lease term	$	11,423	$	10,081
Computer hardware and software	3	3,125		2,220
Furniture and fixtures	3-5	6,803		6,093
Assets under construction		243		1,734
Total property and equipment		21,594		20,128
Less: accumulated depreciation		(16,598)		(15,036)
Property and equipment, net		$	4,996	$	5,092

Depreciation expense related to property and equipment was $0.8 million and $1.7 million for the three and six months ended October 31, 2023, respectively, and $1.0 million and $2.0 million for the three and six months ended October 31, 2022, respectively.

Intangible Assets, Net

Intangible assets consisted of the following as of October 31, 2023 (in thousands):

	Gross Fair Value		Accumulated Amortization		Net Book Value		Weighted Average Remaining Useful Life (in years)
Developed technology	$	70,130	$	49,089	$	21,041	2.3
Customer relationships	19,598		19,598		—		0.0
Trade names	2,872		2,872		—		0.0
Total	$	92,600	$	71,559	$	21,041	2.3
Foreign currency translation adjustment					(33)
Total					$	21,008

Intangible assets consisted of the following as of April 30, 2023 (in thousands):

	Gross Fair Value		Accumulated Amortization		Net Book Value		Weighted Average Remaining Useful Life (in years)
Developed technology	$	70,130	$	43,136	$	26,994	2.7
Customer relationships	19,598		17,641		1,957		0.4
Trade names	2,872		2,686		186		0.4
Total	$	92,600	$	63,463	$	29,137	2.5
Foreign currency translation adjustment					(33)
Total					$	29,104

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Amortization expense for the intangible assets for the three and six months ended October 31, 2023 and 2022 was as follows (in thousands):

	Three Months Ended October 31,				Six Months Ended October 31,
	2023		2022		2023		2022
Cost of revenue – subscription	$	2,977	$	2,961	$	5,953	$	5,925
Sales and marketing	911		1,232		2,143		2,463
Total amortization of acquired intangible assets	$	3,888	$	4,193	$	8,096	$	8,388

The expected future amortization expense related to the intangible assets as of October 31, 2023 was as follows (in thousands, by fiscal year):

Remainder of 2024	$	5,887
2025	8,018
2026	5,057
2027	2,046
2028	—
Thereafter	—
Total	$	21,008

Goodwill

The following table represents the changes to goodwill (in thousands):

	Carrying Amount
Balance as of April 30, 2023	$	303,642
Foreign currency translation adjustment	(148)
Balance as of October 31, 2023	$	303,494

There was no impairment of goodwill during the six months ended October 31, 2023 and 2022.

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

	As of October 31, 2023		As of April 30, 2023
Accrued expenses	$	29,934	$	24,163
Income taxes payable	12,685		9,738
Value added taxes payable	6,670		9,403
Accrued interest	6,918		6,918
Other	7,666		13,310
Total accrued expenses and other liabilities	$	63,873	$	63,532

Accrued Compensation and Benefits

Accrued compensation and benefits consisted of the following (in thousands):

	As of October 31, 2023		As of April 30, 2023
Accrued vacation	$	30,637	$	30,026
Accrued commissions	15,328		26,175
Accrued payroll and withholding taxes	8,390		6,586
Other	11,052		13,696
Total accrued compensation and benefits	$	65,407	$	76,483

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Allowance for Credit Losses

The following is a summary of the changes in the Company’s allowance for credit losses (in thousands):

	Six Months Ended October 31,
	2023		2022
Beginning balance	$	3,409	$	2,700
Bad debt expense	1,660		785
Accounts written off	(1,500)		(1,684)
Ending balance	$	3,569	$	1,801

6. Senior Notes

In July 2021, the Company issued $575.0 million aggregate principal amount of 4.125% Senior Notes due July 15, 2029 in a private placement.

Interest on the Senior Notes is payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2022. The Company received net proceeds from the offering of the Senior Notes of $565.7 million after deducting underwriting commissions of $7.2 million and incurred additional issuance costs of $2.1 million. Total debt issuance costs of $9.3 million are being amortized to interest expense using the effective interest method over the term of the Senior Notes. The Company may redeem the Senior Notes, in whole or in part, at any time prior to July 15, 2024 at a price equal to 100% of the principal amount thereof plus a “make-whole” premium and accrued and unpaid interest, if any. The Company may at its election redeem all or a part of the Senior Notes on or after July 15, 2024, on any one or more occasions, at the redemption prices set forth in the indenture governing the Senior Notes (the “Indenture”), plus, in each case, accrued and unpaid interest thereon, if any, to, but excluding, the applicable redemption date. In addition, at any time prior to July 15, 2024, the Company may on any one or more occasions redeem up to 40% of the aggregate principal amount of the Senior Notes outstanding under the Indenture with the net cash proceeds of one or more equity offerings at a redemption price equal to 104.125% of the principal amount of the Senior Notes then outstanding, plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable redemption date. The Company may also at its election redeem the Senior Notes in whole, but not in part, at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, if certain changes in tax law occur as set forth in the Indenture.

If the Company experiences a change of control triggering event (as defined in the Indenture), the Company must offer to repurchase the Senior Notes at a repurchase price equal to 101% of the principal amount of the Senior Notes to be repurchased, plus accrued and unpaid interest, if any, to the repurchase date.

The Indenture contains covenants limiting the Company’s ability and the ability of certain subsidiaries to create liens on certain assets to secure debt; grant a subsidiary guarantee of certain debt without also providing a guarantee of the Senior Notes; and consolidate or merge with or into, or sell or otherwise dispose of all or substantially all of its assets to, another person. These covenants are subject to a number of limitations and exceptions. Certain of these covenants will not apply during any period in which the Senior Notes are rated investment grade by Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services.

The net carrying amount of the Senior Notes was as follows (in thousands):

	As of October 31, 2023		As of April 30, 2023
Principal	$	575,000	$	575,000
Unamortized debt issuance costs	(6,928)		(7,457)
Net carrying amount	$	568,072	$	567,543

The following table sets forth the interest expense recognized related to the Senior Notes (in thousands):

	Three Months Ended October 31,				Six Months Ended October 31,
	2023		2022		2023		2022
Contractual interest expense	$	5,930	$	5,929	$	11,859	$	11,859
Amortization of debt issuance costs	266		254		529		506
Total interest expense related to the Senior Notes	$	6,196	$	6,183	$	12,388	$	12,365

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7. Commitments and Contingencies

Cloud Hosting Commitments

During the six months ended October 31, 2023, there were no material changes, outside the ordinary course of business, to the Company’s contractual obligations and commitments reported in the Company's Annual Report on Form 10-K.

Letters of Credit

The Company had a total of $2.3 million in letters of credit outstanding in favor of certain landlords for office space as of October 31, 2023.

Legal Matters

From time to time, the Company has become involved in claims and other legal matters arising in the ordinary course of business. The Company investigates these claims as they arise. Although claims are inherently unpredictable, the Company is currently not aware of any matters that, if determined adversely to the Company, would individually or taken together have a material adverse effect on its business, results of operations, financial position or cash flows.

The Company accrues estimates for resolution of legal and other contingencies when losses are probable and reasonably estimable.

Indemnification

The Company enters into indemnification provisions under its agreements with other companies in the ordinary course of business, including business partners, landlords, contractors and parties performing its research and development. Pursuant to these arrangements, the Company agrees to indemnify, hold harmless, and reimburse the indemnified party for certain losses suffered or incurred by the indemnified party as a result of the Company’s activities. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the fair value of these agreements is not material. The Company maintains commercial general liability insurance and product liability insurance to offset certain of the Company’s potential liabilities under these indemnification provisions.

In addition, the Company indemnifies its officers, directors and certain key employees against certain liabilities that may arise as a result of their affiliation with the Company. To date, there have been no claims under any indemnification provisions.

8. Leases

The Company’s leases provide for rental of corporate office space under non-cancelable operating lease agreements that expire at various dates through fiscal 2029. The Company does not have any finance leases.

Lease Costs

Components of lease costs included in the condensed consolidated statement of operations were as follows (in thousands):

	Three Months Ended October 31,				Six Months Ended October 31,
	2023		2022		2023		2022
Operating lease cost	$	2,985	$	3,318	$	5,840	$	6,451
Short-term lease cost	500		565		974		1,348
Variable lease cost	285		(3)		522		227
Total lease cost	$	3,770	$	3,880	$	7,336	$	8,026

Lease term and discount rate information are summarized as follows:

	As of October 31, 2023
Weighted average remaining lease term (in years)	2.42
Weighted average discount rate	4.78	%

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Future minimum lease payments under non-cancelable operating leases on an undiscounted cash flow basis as of October 31, 2023 were as follows (in thousands, by fiscal year):

Remainder of 2024	$	6,728
2025	9,728
2026	5,420
2027	1,491
2028	1,501
Thereafter	271
Total minimum lease payments	25,139
Less imputed interest	(1,391)
Present value of future minimum lease payments	23,748
Less current lease liabilities	(11,588)
Operating lease liabilities, non-current	$	12,160

9. Ordinary Shares

The Company’s authorized ordinary share capital pursuant to our articles of association amounts to 165 million ordinary shares at a par value per ordinary share of €0.01.

Each holder of ordinary shares has the right to one vote per ordinary share. The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available and when proposed by the Company’s board of directors and adopted by the general meeting of shareholders, subject to the prior rights of holders of all classes of shares outstanding having priority rights to dividends. No dividends have been declared from the Company’s inception through October 31, 2023.

The board of directors has been authorized by the general meeting, on the Company’s behalf, to issue the Company’s ordinary shares and grant rights to acquire the Company’s ordinary shares in an amount up to 20% of the issued share capital of the Company as of August 21, 2023. This authorization is valid for a period of 18 months from October 5, 2023.

Ordinary Shares Reserved for Issuance

The Company has reserved ordinary shares for issuance as follows:

	As of October 31, 2023	As of April 30, 2023
Stock options issued and outstanding	3,225,368	4,038,238
RSUs issued and outstanding	6,593,346	7,494,399
Available for future grants	22,106,970	17,564,133
Available for employee stock purchases	5,805,895	6,000,000
Total ordinary shares reserved	37,731,579	35,096,770

Preference Shares

The Company’s authorized preference share capital pursuant to our articles of association amounts to 165 million preference shares at a par value per preference share of €0.01. Each holder of preference shares has rights and preferences, including the right to one vote per preference share. As of October 31, 2023, there were no preference shares issued or outstanding.

Preference shares in the capital of the Company may currently only be issued pursuant to a resolution adopted by the general meeting of shareholders at the proposal of the board of directors.

10. Equity Incentive Plans

2022 Employee Stock Purchase Plan

In August 2022, the Company’s board of directors adopted and, in October 2022, the Company’s shareholders approved the 2022 Employee Stock Purchase Plan (“2022 ESPP”). The Company reserved 6.0 million of the Company’s ordinary shares for future purchase and issuance under the 2022 ESPP in January 2023. The 2022 ESPP allows eligible

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employees to acquire ordinary shares of the Company at a discount at periodic intervals through accumulated payroll deductions. Eligible employees purchase ordinary shares of the Company during a purchase period at 85% of the market value of the Company’s ordinary shares at either the beginning or end of an offering period, whichever is lower. Offering periods under the 2022 ESPP are approximately six months long and begin on each of March 16 or September 16 or the next trading day thereafter.

For the three and six months ended October 31, 2023, 194,105 ordinary shares were purchased under the 2022 ESPP. Stock-based compensation expense recognized related to the 2022 ESPP was $1.8 million and $3.6 million for the three and six months ended October 31, 2023, respectively.

2012 Stock Option Plan

In September 2012, the Company’s board of directors adopted and the Company’s shareholders approved the 2012 Stock Option Plan, which was amended and restated in September 2018 and further amended in December 2021 (as amended and restated, the “2012 Plan”). Under the 2012 Plan, the board of directors, the compensation committee, as administrator of the 2012 Plan, and any other duly authorized committee may grant stock options and other equity-based awards, such as Restricted Stock Awards (“RSAs”), Restricted Stock Units (“RSUs”), and performance-based RSUs (“PSUs”), to eligible employees, directors, and consultants to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors and consultants, and to promote the success of the Company’s business.

The Company’s board of directors, compensation committee or other duly authorized committee determines the vesting schedule for all equity-based awards. Stock options and RSUs granted to employees generally vest over four years, subject to the employees’ continued service to the Company. During the six months ended October 31, 2023, the Company granted PSUs that vest over three years with a one-year performance period. The Company’s compensation committee may explicitly deviate from the general vesting schedules in its approval of an equity-based award, as it may deem appropriate. Stock options expire ten years after the date of grant. Stock options, RSAs and RSUs (including PSUs) that are canceled under certain conditions become available for future grant or sale under the 2012 Plan unless the 2012 Plan is terminated.

The equity awards available for grant were as follows: 

	Six Months Ended October 31, 2023
Available at beginning of fiscal year	17,564,133
Awards authorized	4,868,347
Options canceled	96,261
RSUs granted (1)	(1,030,554)
RSUs canceled (2)	608,783
Available at end of period	22,106,970

(1) Includes 132,960 PSUs granted during the six months ended October 31, 2023.

(2) Includes 16,437 PSUs canceled during the six months ended October 31, 2023.

Stock Options

The following table summarizes stock option activity:

	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, 2023	4,038,238	$	32.74	5.35	$	134,778
Stock options exercised	(715,386)	$	14.88
Stock options canceled	(96,261)	$	95.90
Stock options assumed in acquisition canceled	(1,223)	$	75.42
Balance as of October 31, 2023	3,225,368	$	34.80	4.97	$	147,640
Exercisable as of October 31, 2023	2,881,360	$	27.94	4.63	$	146,658

Aggregate intrinsic value represents the difference between the exercise price of the stock options to purchase the Company’s ordinary shares and the fair value of the Company’s ordinary shares. The weighted-average grant-date fair value per share of stock options granted was $49.97 and $48.56 for the three and six months ended October 31, 2022, respectively.

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As of October 31, 2023, the Company had unrecognized stock-based compensation expense of $18.9 million related to unvested stock options that the Company expects to recognize over a weighted-average period of 2.01 years.

RSUs

The following table summarizes RSU activity under the 2012 Plan:

	Number of Awards	Weighted-Average Grant Date Fair Value
Outstanding and unvested at April 30, 2023	7,494,399	$	74.52
RSUs granted (1)	1,030,554	$	72.96
RSUs released	(1,322,824)	$	78.79
RSUs canceled (2)	(608,783)	$	73.75
Outstanding and unvested at October 31, 2023	6,593,346	$	73.49

(1) Includes 132,960 PSUs granted during the six months ended October 31, 2023.

(2) Includes 16,437 PSUs canceled during the six months ended October 31, 2023.

During the six months ended October 31, 2023, the Company granted 132,960 PSUs subject to performance and service conditions, with a grant-date fair value of $9.1 million, to certain executives. The PSUs become eligible to vest based on the level of the Company’s achievement against a revenue-based performance goal for fiscal 2024. The amount that may be earned ranges from 0% to 200% of the eligible PSUs. Subject to the executives’ continued service to the Company through the applicable vesting date, one-third of the eligible PSUs will vest following the end of fiscal 2024 and, thereafter, one-eighth of the remaining eligible PSUs will vest on a quarterly basis over two years. Compensation expense related to PSUs is measured at the fair value on the date of grant and recognized over the requisite service period. In the event that an executive’s continuous service to the Company ceases, any associated unvested PSUs will immediately terminate and be forfeited. The Company recognizes forfeitures as they occur.

As of October 31, 2023, the Company had unrecognized stock-based compensation expense of $441.9 million related to RSUs that the Company expects to recognize over a weighted-average period of 2.80 years.

Stock-Based Compensation Expense

Total stock-based compensation expense recognized in the Company’s condensed consolidated statements of operations was as follows (in thousands):

	Three Months Ended October 31,				Six Months Ended October 31,
	2023		2022		2023		2022
Cost of revenue
Subscription	$	2,117	$	2,029	$	4,300	$	4,189
Services	2,853		2,313		5,649		4,538
Research and development	21,964		18,763		44,400		37,473
Sales and marketing	18,175		16,013		37,014		31,660