Elastic Enters the Market With a Bang

Elastic N.V. (NYSE: ESTC), creator of Elastic Stack, entered the market with a bang on Friday. The company originally priced its shares at $36 apiece but actually entered the market 93% higher at $69.50.

The company expected to price its 7.0 million shares in the range of $33 to $35, with an overallotment option for an additional 1.05 million shares. At the $36 price, the entire offering was valued up to $289.8 million.

The underwriters for the offering are Goldman Sachs, JPMorgan, Barclays, RBC Capital Markets, Merrill Lynch, Citigroup, Jefferies and Canaccord Genuity.

The Elastic Stack (previously known as the ELK Stack) is a powerful set of software products that ingest and store data from any source, and in any format, and perform search, analysis and visualization in milliseconds or less.

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Developers build on top of the Elastic Stack to apply the power of search to their data and solve business problems. The firm also has built software solutions on the Elastic Stack that address a wide variety of use cases, including app search, site search, enterprise search, logging, metrics, application performance monitoring, business analytics and security analytics. The Elastic Stack and other solutions are designed to run on premises, in public or private clouds, or in hybrid environments.

In the filing, the company described its finances as follows:

Our revenue was $159.9 million and $88.2 million in fiscal 2018 and 2017, respectively, representing year-over-year growth of 81% for fiscal 2018. Our revenue was $56.6 million and $31.6 million in the three months ended July 31, 2018 and 2017, respectively, representing period-over-period growth of 79%. Subscriptions accounted for 93% and 90% of our total revenue in fiscal 2018 and 2017, respectively. Subscriptions accounted for 91% of our total revenue in the three months ended July 31, 2018. In fiscal 2018, revenue from outside the United States accounted for 39% of our total revenue.

In fiscal 2018 and 2017, we incurred net losses of $52.7 million and $52.0 million, respectively, and our operating cash flow was $(20.8) million and $(16.1) million, respectively. In the three months ended July 31, 2018 and 2017, we incurred net losses of $18.6 million and $10.0 million, respectively, and our operating cash flow was $5.1 million and $0.9 million, respectively.

Elastic intends to use the net proceeds from this offering primarily for working capital and general corporate purposes.

Shares of Elastic were last seen up 91% from the original pricing at $72.64. The stock had a range of $66.19 to $73.73 on the day thus far, with over 4 million shares moving as of 12:15 p.m. Eastern.

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