Elastic NV

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Management’s Discussion and Analysis of Financial Condition and Results of Operations and audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2024. As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such difference include, but are not limited to, those identified below and those discussed in our risk factors disclosed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended April 30, 2024 filed with the SEC on June 14, 2024.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Management’s Discussion and Analysis of Financial Condition and Results of Operations and audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2024. As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such difference include, but are not limited to, those identified below and those discussed in our risk factors disclosed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended April 30, 2024 filed with the SEC on June 14, 2024 (the “Company’s Annual Report on Form 10-K”).

Previous wording

We generate revenue primarily from sales of subscriptions to our platform. We offer various paid subscription tiers that provide different levels of rights to use proprietary features and access to support. We do not sell support separately. Our subscription agreements typically range from one to three years and are usually billed annually in advance. Our subscription agreements are both term-based and consumption-based, with the vast majority of Elastic Cloud subscriptions being consumption-based. We sell subscriptions in various currencies, with the majority of our subscriptions contracted in U.S. dollars, and a smaller portion contracted in Euro, British Pound Sterling, and other currencies. Elastic Cloud customers may also purchase subscriptions on a month-to-month basis without a commitment, with usage billed at the end of each month. Subscriptions accounted for 93% and 92% of total revenue for the three months ended July 31, 2024 and 2023, respectively. We also generate revenue from consulting and training services.

Current wording

We generate revenue primarily from sales of subscriptions to our platform. We offer various paid subscription tiers that provide different levels of rights to use proprietary features and access to support. We do not sell support separately. Our subscription agreements typically range from one to three years and are usually billed annually in advance. Our subscription agreements are both term-based and consumption-based, with the vast majority of Elastic Cloud subscriptions being consumption-based. We sell subscriptions in various currencies, with the majority of our subscriptions contracted in U.S. dollars, and a smaller portion contracted in Euro, British Pound Sterling, and other currencies. Elastic Cloud customers may also purchase subscriptions on a month-to-month basis without a commitment, with usage billed at the end of each month. Subscriptions accounted for 93% and 92% of total revenue for the six months ended October 31, 2024 and 2023, respectively. We also generate revenue from consulting and training services.

Previous wording

We make it easy for users to begin using our products in order to drive rapid adoption. Users can either sign up for a free trial on Elastic Cloud or download our software directly from our website without any sales interaction, and immediately begin using the full set of features. Users can also sign up for Elastic Cloud through public cloud marketplaces. We conduct low-touch campaigns to keep users and customers engaged once they have begun using Elastic Cloud or have downloaded our software. As of July 31, 2024, we had approximately 21,200 customers compared to approximately 20,500 customers as of July 31, 2023. The majority of our new customers use Elastic Cloud. We define a customer as an entity that generated revenue in the quarter ending on the measurement date from an annual or month-to-month subscription. Affiliated entities are typically counted as a single customer.

Current wording

We make it easy for users to begin using our products in order to drive rapid adoption. Users can either sign up for a free trial on Elastic Cloud or download our software directly from our website without any sales interaction, and immediately begin using the full set of features. Users can also sign up for Elastic Cloud through public cloud marketplaces. We conduct low-touch campaigns to keep users and customers engaged once they have begun using Elastic Cloud or have downloaded our software. As of October 31, 2024, we had approximately 21,300 customers compared to approximately 20,700 customers as of October 31, 2023. The majority of our new customers use Elastic Cloud. We define a customer as an entity that generated revenue in the quarter ending on the measurement date from an annual or month-to-month subscription. Affiliated entities are typically counted as a single customer.

Previous wording

Many of these customers start with limited initial spending on our products but can significantly increase their spending over time. We drive high-touch engagement with qualified prospects and customers to drive further awareness, adoption, and expansion of our products with paid subscriptions. Expansion includes increasing the number of developers and practitioners using our products, increasing the utilization of our products for a particular use case, and utilizing our products to address new use cases. The number of customers who represented greater than $100,000 in annual contract value (“ACV”) was over 1,370 and over 1,190 as of July 31, 2024 and 2023, respectively. The ACV of a customer’s commitments is calculated based on the terms of that customer’s subscriptions, and represents the total committed annual subscription amount as of the measurement date. Month-to-month subscriptions are not included in the calculation of ACV.

Current wording

Many of these customers start with limited initial spending on our products but can significantly increase their spending over time. We drive high-touch engagement with qualified prospects and customers to drive further awareness, adoption, and expansion of our products with paid subscriptions. Expansion includes increasing the number of developers and practitioners using our products, increasing the utilization of our products for a particular use case, and utilizing our products to address new use cases. The number of customers who represented greater than $100,000 in annual contract value (“ACV”) was over 1,420 and over 1,220 as of October 31, 2024 and 2023, respectively. The ACV of a customer’s commitments is calculated based on the terms of that customer’s subscriptions, and represents the total committed annual subscription amount as of the measurement date. Month-to-month subscriptions are not included in the calculation of ACV.

Previous wording

Our sales teams are organized primarily by geography and secondarily by customer segments. They focus on both seeking to obtain new customers and on pursuing additional sales to existing customers. In addition to our direct sales efforts, we also maintain partnerships to further extend our reach and awareness of our products around the world.

Current wording

Our sales teams are organized primarily by geography and secondarily by customer segments. They focus on both seeking to obtain new customers and on pursuing additional sales to existing customers. In addition to our direct sales efforts, we maintain partnerships to further extend our reach and awareness of our products around the world.

Previous wording

We continue to make substantial investments in developing the Elastic Stack and expanding our global sales and marketing footprint. With a distributed team spanning over 35 countries, we are able to recruit, hire, and retain high-quality, experienced technical and sales personnel and operate at a rapid pace to drive product releases, fix bugs, and create and market new products. We had 3,299 employees as of July 31, 2024.

Current wording

We continue to make substantial investments in developing the Elastic Stack and expanding our global sales and marketing footprint. With a distributed team spanning over 35 countries, we are able to recruit, hire, and retain high-quality, experienced technical and sales personnel and operate at a rapid pace to drive product releases, fix bugs, and create and market new products. We had 3,372 employees as of October 31, 2024.

Previous wording

Macroeconomic events, including continued inflation, slower economic growth, and political unrest, continue to evolve and negatively impact worldwide economic activity. Governmental and corporate responses to these factors, including changing interest rates, unpredictable and decreased spending, and layoffs, have added to the highly volatile macroeconomic landscape. We have experienced and, if economic conditions do not reflect a sustained recovery, we may continue to experience longer and more unpredictable sales cycles, increased scrutiny of deals, slowing consumption and overall customer expenditures, and the impacts of changing foreign exchange rates with a strengthening or weakening U.S. dollar. We continue to closely monitor the macroeconomic environment and its effects on our business and on global economic activity, including customer spending behavior. For a discussion of these risks, see “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended April 30, 2024 filed with the SEC on June 14, 2024.

Current wording

Macroeconomic events, including a possible resurgence in inflation, fluctuations in economic growth, and political unrest, continue to evolve and impact worldwide economic activity. Governmental and corporate responses to these factors, including changing interest rates and unpredictable and decreased spending, will continue to affect the macroeconomic conditions. We have experienced and, if economic conditions deteriorate, may continue to experience longer and more unpredictable sales cycles, increased scrutiny of deals, slowing consumption and overall customer expenditures, and the impacts of changing foreign exchange rates with a strengthening or weakening U.S. dollar. We continue to closely monitor the macroeconomic environment and its effects on our business and on global economic activity, including customer spending behavior. For a discussion of these risks, see “Item 1A. Risk Factors” of the Company's Annual Report on Form 10-K.

Previous wording

Increasing adoption of Elastic Cloud. Elastic Cloud, our family of cloud-based offerings, is an important growth opportunity for our business. Organizations are increasingly looking for hosted deployment alternatives with reduced administrative burdens. In some cases, users of our source available software that have been self-managing deployments of the Elastic Stack subsequently become paying subscribers of Elastic Cloud. For the three months ended July 31, 2024 and 2023, Elastic Cloud contributed 45% and 41% of our total revenue, respectively. We believe that offering Elastic Cloud is important for achieving our long-term growth potential, and we expect Elastic Cloud’s contribution to our subscription revenue to continue to increase over time. However, we expect that an increase in the relative contribution of Elastic Cloud to our business will continue to have a modest adverse impact on our gross margin as a result of the associated third-party hosting costs.

Current wording

Increasing adoption of Elastic Cloud. Elastic Cloud, our family of cloud-based offerings, is an important growth opportunity for our business. Organizations are increasingly looking for hosted deployment alternatives with reduced administrative burdens. In some cases, users of our source available software that have been self-managing deployments of the Elastic Stack subsequently become paying subscribers of Elastic Cloud. For the six months ended October 31, 2024 and 2023, Elastic Cloud contributed 46% and 42% of our total revenue, respectively. We believe that offering Elastic Cloud is important for achieving our long-term growth potential, and we expect Elastic Cloud’s contribution to our subscription revenue to continue to increase over time. However, we expect that an increase in the relative contribution of Elastic Cloud to our business will continue to have a modest adverse impact on our gross margin as a result of the associated third-party hosting costs.

Previous wording

We recently announced that we will be adding the Affero General Public License (“AGPL”) as an option to license the free part of our Elasticsearch and Kibana source code that is available under the Elastic License 2.0 and Server Side Public License Version 1.0 (“SSPL”) today. AGPL is an Open Source Initiative approved open-source license. We anticipate that this will drive further engagement and adoption of our software in areas such as vector search within our large community, further increasing our popularity for driving AI and machine learning use cases from large amounts of data. Subject to compliance with the conditions of AGPL, anyone may also redistribute our software in modified or unmodified form or use it to provide a competitive product or service offering.

Current wording

We recently added the Affero General Public License (“AGPL”) as an option to license the free part of our Elasticsearch and Kibana source code that has been available under the Elastic License 2.0 and Server Side Public License Version 1.0 (“SSPL”). AGPL is an Open Source Initiative approved open-source license. We anticipate that the addition of this license will drive further engagement and adoption of our software in areas such as vector search within our large community, further increasing our appeal for driving AI and machine learning use cases from large amounts of data. Subject to compliance with the conditions of AGPL, anyone may also redistribute our software in modified or unmodified form or use it to provide a competitive product or service offering.

Previous wording

Provision for income taxes consists primarily of income taxes related to the Netherlands, U.S. federal and state, and foreign jurisdictions in which we conduct business. Our effective tax rate is affected by recurring items, such as tax rates in jurisdictions outside the Netherlands and the relative amounts of income we earn in those jurisdictions, including Base Erosion and Anti-abuse Tax (the “BEAT”) legislation in the U.S., non-deductible stock-based compensation, and one-time tax benefits or charges.

Current wording

Provision for income taxes consists primarily of income taxes related to the Netherlands, U.S. federal and state, and foreign jurisdictions in which we conduct business. Our effective tax rate is affected by recurring items, such as tax rates in jurisdictions outside the Netherlands and the relative amounts of income we earn in those jurisdictions, non-deductible stock-based compensation, and one-time tax benefits or charges as well as Base Erosion and Anti-abuse Tax (the “BEAT”) legislation in the U.S.

Previous wording

Subscription revenue increased by $53.5 million, or 20%, for the three months ended July 31, 2024 compared to the same period of the prior year. This increase was primarily driven by continued adoption of Elastic Cloud, which grew 30% over the prior year and increased to 45% of total revenue for the three months ended July 31, 2024 from 41% for the three months ended July 31, 2023.

Current wording

Subscription revenue increased by $53.1 million, or 18%, for the three months ended October 31, 2024 compared to the same period of the prior year. This increase was primarily driven by continued adoption of Elastic Cloud, which grew 25% over the same period and increased to 46% of total revenue for the three months ended October 31, 2024 from 43% for the three months ended October 31, 2023.

Previous wording

Cost of subscription revenue increased by $11.1 million, or 19%, for the three months ended July 31, 2024 compared to the same period of the prior year. This increase was primarily due to an increase of $10.6 million in cloud infrastructure costs. Subscription gross margin was flat at 79% for the three months ended July 31, 2024 compared to the prior year.

Current wording

Cost of subscription revenue increased by $9.9 million, or 17%, for the three months ended October 31, 2024 compared to the same period of the prior year. This increase was primarily due to an increase of $10.7 million in cloud infrastructure costs, partially offset by decreases in other third-party costs of $0.7 million and travel costs of $0.4 million. Total subscription margin remained flat at 79% for the three months ended October 31, 2024 compared to the same period of the prior year.

Previous wording

Cost of services revenue increased by $3.2 million, or 16%, for the three months ended July 31, 2024 compared to the same period of the prior year. This increase was primarily due to increases of $2.5 million in personnel and related costs and $0.7 million in subcontractor costs. The increase in personnel and related costs included increases of $1.3 million in salaries and related taxes and $0.7 million in stock-based compensation. The increased costs combined with services revenue remaining relatively flat led to gross margin for services revenue decreasing to 1% for the three months ended July 31, 2024 compared to 14% for the same period of the prior year. We continue to make investments in our services organization that we believe will be needed to support our continued growth. Our gross margin for services may fluctuate or decline in the near-term as we seek to expand our services business.

Current wording

Cost of services revenue increased by $3.1 million, or 16%, for the three months ended October 31, 2024 compared to the same period of the prior year. This increase was due to increases of $1.7 million in personnel and related costs and $1.5 million in subcontractor costs. Gross margin for services revenue was 5% for the three months ended October 31, 2024 compared to 12% for the same period of the prior year. The decrease in gross margin was primarily attributable to personnel and related costs and subcontractor costs growing at a higher rate than the growth in services revenue. We continue to make investments in our services organization that we believe will be needed as we continue to grow. Our gross margin for services may fluctuate or decline in the near-term as we seek to expand our services business.

Previous wording

Services revenue remained relatively flat for the three months ended July 31, 2024 compared to the same period of the prior year.

Current wording

Interest expense remained relatively flat for the three months ended October 31, 2024 compared to the same period of the prior year.

Previous wording

Other income, net increased by $3.9 million to $11.2 million for the three months ended July 31, 2024 from $7.3 million for the same period of the prior year. The increase was primarily due to an increase of $2.9 million in investment income from marketable securities as well as a decrease in net foreign currency transaction and other losses by $1.0 million.

Current wording

Other income, net increased by $0.9 million, or 11%, for the three months ended October 31, 2024 compared to the same period of the prior year. The increase was primarily due to an increase of $1.8 million in interest and other investment income, partially offset by an increase of $0.9 million in net foreign currency exchange losses.

Previous wording

The provision for income taxes increased by $6.8 million, or 51%, for the three months ended July 31, 2024 compared to the same period of the prior year. Our effective tax rate was (69)% and (38)% of our net loss before income taxes for the three months ended July 31, 2024 and 2023, respectively. Our effective tax rate is affected by recurring items, such as tax rates in jurisdictions outside the Netherlands and the relative amounts of income we earn in those jurisdictions and non-deductible stock-based compensation as well as one-time tax benefits or charges.

Current wording

The provision for income taxes increased by $18.5 million, or 360%, for the three months ended October 31, 2024 compared to the same period of the prior year. Our effective tax rate was (1,328)% and (26)% of our net loss before income taxes for the three months ended October 31, 2024 and 2023, respectively. Our effective tax rate is affected by recurring items, such as tax rates in jurisdictions outside the Netherlands and the relative amounts of income we earn in those jurisdictions and non-deductible stock-based compensation as well as one-time tax benefits or charges.

Previous wording

Research and development expense increased by $8.6 million, or 11%, for the three months ended July 31, 2024 compared to the same period of the prior year as we continued to invest in the development of new and existing offerings. This increase was primarily due to increases of $7.0 million in personnel and related costs, $1.2 million in cloud infrastructure costs related to our research and development activities, and $0.3 million in software and equipment expense. The increase in personnel and related costs included increases of $5.2 million in salaries and related taxes, $1.6 million in stock-based compensation, and $0.8 million in employee benefits expense, offset in part by a decrease in acquisition-related compensation of $0.8 million.

Current wording

Research and development expense increased by $16.7 million, or 10%, for the six months ended October 31, 2024 compared to the same period of the prior year as we continued to invest in the development of new and existing offerings. This increase was primarily due to increases of $14.5 million in personnel and related costs and $2.6 million in cloud infrastructure costs related to our research and development activities. These increases were partially offset by a decrease of $0.8 million in consulting fees. The increase in personnel and related costs included increases of $10.0 million in salaries and related taxes, $3.8 million in stock-based compensation, and $1.5 million in employee benefits expense, offset in part by a decrease in acquisition-related compensation of $1.2 million.

Previous wording

General and administrative expense increased by $4.7 million, or 12%, for the three months ended July 31, 2024 compared to the same period of the prior year. This increase was primarily due to increases of $3.8 million in personnel and related costs, $0.3 million in other miscellaneous non-income based taxes, and $0.3 million in software and equipment expense. The increase in personnel and related costs included increases of $1.8 million in stock-based compensation and $1.5 million in salaries and related taxes.

Current wording

General and administrative expense increased by $10.1 million, or 13%, for the six months ended October 31, 2024 compared to the same period of the prior year. This increase was primarily due to increases of $9.6 million in personnel and related costs, $0.5 million in other miscellaneous non-income based taxes, and $0.4 million in software and equipment expense. The increase in personnel and related costs included increases of $3.8 million in stock-based compensation, $3.7 million in salaries and related taxes, $1.2 million in employee benefits expense, and $0.6 million in severance.

Previous wording

Restructuring and other related charges decreased by $0.6 million for the three months ended July 31, 2024 compared to the same period of the prior year due to lower employee-related severance and termination benefit charges.

Current wording

Restructuring and other related charges decreased by $0.5 million for the six months ended October 31, 2024 compared to the same period of the prior year due to lower employee-related severance and termination benefit charges.

Previous wording

Interest expense primarily related to interest on our Senior Notes and remained relatively flat for the three months ended July 31, 2024 compared to the same period of the prior year.

Current wording

Interest expense remained relatively flat for the six months ended October 31, 2024 compared to the same period of the prior year.

Previous wording

The increase in tax expense during the three months ended July 31, 2024 was driven primarily by growth in business operations in jurisdictions where we generate taxable income and do not have limitations to tax credits or net operating losses to offset that income. During the three months ended July 31, 2024, the Company also recorded a one-time charge of $2.2 million associated with acquisition-related integration.

Current wording

The increase in tax expense during the six months ended October 31, 2024 was driven primarily by growth in business operations in jurisdictions where we generate taxable income and do not have limitations to tax credits or net operating losses to offset that income and a one-time charge of $2.2 million associated with acquisition-related integration.

Previous wording

As of July 31, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1.147 billion. Our cash, cash equivalents and marketable securities consist of highly liquid investment-grade fixed-income securities. We believe that the credit quality of the securities portfolio is strong and diversified among industries and individual issuers.

Current wording

As of October 31, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1.198 billion. Our cash, cash equivalents and marketable securities consist of highly liquid investment-grade fixed-income securities. We believe that the credit quality of the securities portfolio is strong and diversified among industries and individual issuers.

Previous wording

We have generated significant operating losses from our operations as reflected in our accumulated deficit of $1.041 billion as of July 31, 2024. We have historically incurred, and expect to continue to incur, operating losses and may generate negative cash flows from operations in the future due to the investments we intend to make. As a result, we may require additional capital resources to execute on our strategic initiatives to grow our business.

Current wording

We have generated significant operating losses from our operations as reflected in our accumulated deficit of $1.066 billion as of October 31, 2024. We have historically incurred, and expect to continue to incur, operating losses and may generate negative cash flows from operations in the future due to the investments we intend to make. As a result, we may require additional capital resources to execute on our strategic initiatives to grow our business.

Previous wording

Net cash provided by operating activities during the three months ended July 31, 2024 was $52.8 million, which resulted from adjustments for non-cash charges of $106.4 million, partially offset by net loss of $49.2 million and a net cash outflow of $4.4 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $63.5 million for stock-based compensation expense, $23.2 million for amortization of deferred contract acquisition costs, $14.7 million in deferred income taxes, $4.2 million of depreciation and intangible asset amortization expense, and $2.8 million innon-cash operating lease costs, the effects of which were partially offset by $2.2 million from amortization of premium and accretion of discount on marketable securities, net. The net cash outflow from changes in operating assets and liabilities resulted from a $69.3 million decrease in deferred revenue, a $43.2 million decrease in accounts payable, accrued expenses, and accrued compensation and benefits, a $13.9 million increase in deferred contract acquisition costs, a $3.4 million decrease in operating lease liabilities, and a $1.8 million increase in prepaid expenses and other assets. These outflows were partially offset by inflows from a $127.2 million decrease in accounts receivable, net.

Current wording

Net cash provided by operating activities during the six months ended October 31, 2024 was $91.1 million, which resulted from adjustments for non-cash charges of $225.0 million, partially offset by net loss of $74.7 million and a net cash outflow of $59.2 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $127.6 million for stock-based compensation expense, $47.2 million for amortization of deferred contract acquisition costs, $38.4 million in deferred income taxes, and $7.7 million of depreciation and intangible asset amortization expense. The net cash outflow from changes in operating assets and liabilities resulted from a $51.4 million decrease in deferred revenue, a $37.2 million increase in deferred contract acquisition costs, a $32.0 million decrease in accounts payable, accrued expenses, and accrued compensation and benefits, and a $6.4 million decrease in operating lease liabilities. These outflows were partially offset by inflows from a $68.1 million decrease in accounts receivable, net.

Previous wording

Net cash provided by operating activities during the three months ended July 31, 2023 was $37.8 million, which resulted from adjustments for non-cash charges of $81.8 million and net cash inflow of $4.6 million from changes in operating assets and liabilities, offset by a net loss of $48.5 million. Non-cash charges primarily consisted of $57.1 million for stock-based compensation expense, $17.6 million for amortization of deferred contract acquisition costs, $1.2 million of foreign currency exchange losses, $5.1 million of depreciation and intangible asset amortization expense, and $2.7 million in non-cash operating lease costs. The net cash inflow from changes in operating assets and liabilities was the result of a decrease of $75.9 million in accounts receivable and a decrease of $5.6 million in prepaid expenses and other assets. These outflows were partially offset by a $29.1 million decrease in deferred revenue, a net decrease of $23.5 million in accounts payable, accrued expenses and accrued compensation and benefits, an increase in deferred contract acquisition costs of $21.1 million as our sales commissions increased due to increased business volume, and a decrease of $3.1 million in operating lease liabilities.

Current wording

Net cash provided by operating activities during the six months ended October 31, 2023 was $35.4 million, which resulted from adjustments for non-cash charges of $162.3 million, offset by a net loss of $73.3 million and net cash outflow of $53.6 million from changes in operating assets and liabilities. Non-cash charges primarily consisted of $113.6 million for stock-based compensation expense, $36.0 million for amortization of deferred contract acquisition costs, and $9.8 million of depreciation and intangible asset amortization expense. The net cash outflow from changes in operating assets and liabilities was the result of an increase in deferred contract acquisition costs of $43.4 million as our sales commissions increased due to increased business volume, a $22.6 million decrease in deferred revenue, a net decrease of $12.0 million in accounts payable, accrued expenses and accrued compensation and benefits, anda decrease of$6.2 million in operating lease liabilities. These outflows were partially offset by inflows from a decrease of $27.0 million in accounts receivable and a decrease of $3.7 million in prepaid expenses and other assets.

Previous wording

Net cash used in investing activities of $3.5 million during the three months ended July 31, 2024 was primarily due to the purchase of marketable securities of $95.2 million andcapital expenditures of$0.7 million, offset by cash provided by sales, maturities, and redemptions of marketable securities of $92.4 million.

Current wording

Net cash provided by investing activities of $10.8 million during the six months ended October 31, 2024 was primarily due to sales, maturities, and redemptions of marketable securities of $178.5 million, offset by cash used for the purchase of marketable securities of $166.3 million andcapital expenditures of$1.5 million.

Previous wording

Net cash used in investing activities of $55.1 million during the three months ended July 31, 2023 was primarily due to the purchase of marketable securities of $83.6 million and capital expenditures of $0.6 million, offset by cash provided by maturities of marketable securities of $29.1 million.

Current wording

Net cash used in investing activities of $104.5 million during the six months ended October 31, 2023 was primarily due to the purchase of marketable securities of $178.3 million, offset by cash provided by maturities of marketable securities of $75.3 million andcapital expenditures of$1.5 million.

Previous wording

Net cash provided by financing activities of $4.7 million during the three months ended July 31, 2024 wasdue to the proceeds from stock option exercises.

Current wording

Net cash provided by financing activities of $17.0 million during the six months ended October 31, 2024 wasdue to the proceeds from stock option exercises and ESPP purchases.

Previous wording

Net cash provided by financing activities of $3.8 million during the three months ended July 31, 2023 was also due to the proceeds from stock option exercises.

Current wording

Net cash provided by financing activities of $19.8 million during the six months ended October 31, 2023 wasdue to the proceeds from stock option exercises and ESPP purchases.

Previous wording

Our principal commitments consist of obligations under our operating leases, which are primarily for office space, and purchase commitments to our cloud hosting providers. There have been no material changes to our contractual obligations and commitments discussed in our Annual Report on Form 10-K for the fiscal year ended April 30, 2024.

Current wording

Our principal commitments consist of obligations under our operating leases, which are primarily for office space, and purchase commitments to our cloud hosting providers. There have been no material changes to our contractual obligations and commitments discussed in the Company’s Annual Report on Form 10-K.