Summary of Elastic's Conference Call Company Overview - **Company**: Elastic - **Core Product**: Elasticsearch, a search platform designed for handling unstructured data and making it searchable, which has evolved into areas like observability and security [2][4] Key Points and Arguments AI Impact and Opportunities - **AI Integration**: The rise of AI, particularly large language models (LLMs), is seen as a significant opportunity for Elastic, especially in automating business processes that rely on unstructured data [3][11] - **Search Business Growth**: The search segment is the fastest-growing part of Elastic's business, driven by AI advancements [5][6] - **Security Enhancements**: New AI capabilities, such as Elastic Attack Discovery, automate cybersecurity tasks, enhancing the competitiveness of Elastic's security offerings [6][7] - **Observability Improvements**: AI is also expected to improve observability, making it easier for users to manage and analyze data [8] Financial Performance - **Q1 Performance**: Elastic reported a strong Q1, beating revenue expectations by $18 million, with balanced growth across all geographies [22][21] - **Commitments and Consumption**: Both commitments and consumption levels showed strong year-over-year growth, indicating a healthy business environment [22][23] - **Pricing Strategy**: Elastic has a history of adjusting prices in line with added functionalities, which is a common practice among software companies [25][29] Market Dynamics - **Federal Sector Stability**: The federal market has stabilized, with a focus on efficiency, which is favorable for Elastic's offerings [42][43] - **Competitive Landscape**: Elastic's strengths lie in handling messy data, particularly in security and observability, where competitors may struggle [55][58] - **Vector Databases**: The perception of vector databases is shifting towards being a feature rather than a standalone category, aligning with Elastic's focus on unstructured data [59][61] Strategic Initiatives - **Open Source Strategy**: The adoption of the AGPL open-source license is aimed at increasing developer engagement and top-of-funnel activity, particularly in the vector database space [68][69] - **Sales Strategy Changes**: Recent changes in the sales strategy have led to a focus on enterprise and mid-market accounts, resulting in higher quality and larger deals [76][77] Other Important Content - **Analyst Day**: An upcoming Analyst Day is expected to provide insights into growth and profitability targets, alongside product demonstrations [70][72] - **Long-term Vision**: Elastic aims to embed its platform within emerging AI applications, positioning itself as a core infrastructure provider [17][13] This summary encapsulates the key insights from Elastic's conference call, highlighting the company's strategic focus on AI, financial performance, market dynamics, and future initiatives.

Core Viewpoint - Elastic (ESTC) shares have increased by 6.2% recently, with a mean price target of $119.83 suggesting a potential upside of 40.8% from the current price of $85.09 [1] Price Targets and Analyst Estimates - The mean estimate consists of 24 short-term price targets with a standard deviation of $13.6, indicating variability among analysts [2] - The lowest estimate is $87.00, suggesting a 2.2% increase, while the highest estimate is $150.00, indicating a potential surge of 76.3% [2] - A low standard deviation signifies strong agreement among analysts regarding the stock's price movement [7] Earnings Estimates and Analyst Agreement - Analysts show strong agreement in revising EPS estimates higher, which correlates with potential stock price increases [9] - The Zacks Consensus Estimate for the current year has risen by 1.6% over the past month, with two estimates increasing and no negative revisions [10] - ESTC holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [11] Caution on Price Targets - While price targets are often sought after, they can mislead investors and should not be the sole basis for investment decisions [5][8] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [6]

Amid a sky-high stock market, the priority on all investors’ minds should be how to remain invested while minimizing downside risk. To me, the answer to that dilemma is to rotate our portfolios out ofWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. H ...

[Note Regarding Forward-Looking Statements](index=3&type=section&id=Note%20Regarding%20Forward-Looking%20Statements) This section highlights the inherent uncertainties and risks associated with forward-looking statements concerning future financial and operational performance - This section contains forward-looking statements regarding future events or financial/operating performance, identified by words like "expects," "plans," "anticipates," etc. These statements are subject to substantial risks and uncertainties, including macroeconomic conditions, AI investments, future financial performance, product development, customer acceptance, geopolitical conditions, and foreign currency fluctuations[10](index=10&type=chunk)[12](index=12&type=chunk)[14](index=14&type=chunk) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section provides Elastic N.V.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, shareholders' equity, and cash flows, along with explanatory notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This table presents a snapshot of the company's assets, liabilities, and shareholders' equity at specific reporting dates Condensed Consolidated Balance Sheets (in thousands of US dollars) | Item | July 31, 2025 | April 30, 2025 | Change ($) | Change (%) | | :----------------------------------- | :------------ | :------------- | :--------- | :--------- | | Cash and cash equivalents | $662,338 | $727,543 | $(65,205) | -8.96% | | Marketable securities | $832,000 | $669,717 | $162,283 | 24.23% | | Accounts receivable, net | $221,989 | $375,613 | $(153,624) | -40.90% | | Total current assets | $1,878,311 | $1,931,007 | $(52,696) | -2.73% | | Total assets | $2,524,002 | $2,592,853 | $(68,851) | -2.66% | | Total current liabilities | $900,813 | $1,008,256 | $(107,443) | -10.66% | | Total liabilities | $1,552,646 | $1,665,619 | $(112,973) | -6.78% | | Total shareholders' equity | $971,356 | $927,234 | $44,122 | 4.76% | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This table details the company's revenues, expenses, and net loss over specific three-month periods Condensed Consolidated Statements of Operations (in thousands of US dollars, except per share data) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Subscription Revenue | $388,583 | $323,774 | $64,809 | 20.02% | | Services Revenue | $26,705 | $23,646 | $3,059 | 12.94% | | Total Revenue | $415,288 | $347,420 | $67,868 | 19.54% | | Gross Profit | $318,542 | $255,663 | $62,879 | 24.59% | | Operating Loss | $(9,440) | $(33,838) | $24,398 | -72.09% | | Net Loss | $(24,603) | $(49,227) | $24,624 | -50.02% | | Net Loss Per Share (Basic and Diluted) | $(0.23) | $(0.48) | $0.25 | -52.08% | [Condensed Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This table presents the net loss and other comprehensive income or loss components, leading to total comprehensive loss Condensed Consolidated Statements of Comprehensive Loss (in thousands of US dollars) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net loss | $(24,603) | $(49,227) | $24,624 | -50.02% | | Unrealized (loss) gain on available-for-sale securities, net of taxes | $(1,213) | $2,451 | $(3,664) | -149.49% | | Foreign currency translation adjustments | $(323) | $(279) | $(44) | 15.77% | | Other comprehensive (loss) income | $(1,536) | $2,172 | $(3,708) | -170.72% | | Total comprehensive loss | $(26,139) | $(47,055) | $20,916 | -44.45% | [Condensed Consolidated Statements of Shareholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) This table outlines the changes in shareholders' equity, including net loss, stock-based compensation, and other comprehensive income Changes in Shareholders' Equity (in thousands of US dollars) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Balances as of April 30 | $927,234 | $738,185 | | Issuance of ordinary shares upon exercise of stock options | $326 | $4,745 | | Issuance of ordinary shares upon release of restricted stock units | $0 | $0 | | Stock-based compensation | $69,935 | $63,543 | | Net loss | $(24,603) | $(49,227) | | Other comprehensive (loss) income | $(1,536) | $2,172 | | Balances as of July 31 | $971,356 | $759,418 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This table summarizes the cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands of US dollars) | Cash Flow Activity | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $104,835 | $52,754 | $52,081 | 98.72% | | Net cash used in investing activities | $(170,375) | $(3,520) | $(166,855) | 4740.20% | | Net cash provided by financing activities | $326 | $4,745 | $(4,419) | -93.13% | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(65,224) | $55,218 | $(120,442) | -218.11% | | Cash, cash equivalents, and restricted cash, end of period | $665,990 | $598,307 | $67,683 | 11.31% | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Organization and Description of Business](index=12&type=section&id=1.%20Organization%20and%20Description%20of%20Business) This note describes Elastic N.V.'s incorporation, its core Search AI Platform, and its primary software solutions - Elastic N.V. was incorporated in the Netherlands in 2012 and developed Elastic's Search AI Platform, which ingests, stores, searches, analyzes, and visualizes data[33](index=33&type=chunk) - The platform offers three software solutions: Elasticsearch, Elastic Observability, and Elastic Security, designed for hybrid, public, or multi-cloud environments[33](index=33&type=chunk) [2. Summary of Significant Accounting Policies](index=12&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the accounting principles used in preparing the financial statements and details new accounting pronouncements - The interim condensed consolidated financial statements are unaudited and prepared in accordance with U.S. GAAP, consistent with annual statements[34](index=34&type=chunk)[35](index=35&type=chunk) - Management makes estimates and assumptions affecting reported amounts, which may differ from actual results[38](index=38&type=chunk)[39](index=39&type=chunk) - No material changes to significant accounting policies were adopted in the three months ended July 31, 2025[40](index=40&type=chunk) - **New Accounting Pronouncements Not Yet Adopted**: - **Income Taxes (ASU No. 2023-09)**: Effective for fiscal years beginning after April 30, 2025, requiring enhanced income tax disclosures, including disaggregation of tax rate reconciliation and income taxes paid by jurisdiction[42](index=42&type=chunk) The Company plans to adopt in Q4 fiscal 2026[42](index=42&type=chunk) - **Financial Instruments—Credit Losses (ASU No. 2025-05)**: Effective for fiscal years beginning after April 30, 2026, provides a practical expedient for estimating expected credit losses for current accounts receivable and contract assets[43](index=43&type=chunk) Early adoption is permitted[43](index=43&type=chunk) - **Comprehensive Income—Expense Disaggregation Disclosures (ASU No. 2024-03)**: Effective for fiscal years beginning after April 30, 2027, requiring more detailed disclosures about specified expense categories on the income statement[44](index=44&type=chunk) Early adoption is permitted[44](index=44&type=chunk) [3. Revenue](index=14&type=section&id=3.%20Revenue) This note provides a breakdown of revenue by category and details revenue recognition policies and remaining performance obligations Revenue by Category (in thousands of US dollars) | Category | Three Months Ended July 31, 2025 (Amount) | Three Months Ended July 31, 2025 (% of Total) | Three Months Ended July 31, 2024 (Amount) | Three Months Ended July 31, 2024 (% of Total) | | :------------------- | :-------------------------------------- | :-------------------------------------------- | :-------------------------------------- | :-------------------------------------------- | | Annual Elastic Cloud | $145,912 | 35% | $111,031 | 32% | | Monthly Elastic Cloud | $49,862 | 12% | $46,250 | 13% | | Total Elastic Cloud | $195,774 | 47% | $157,281 | 45% | | Other subscription | $192,809 | 47% | $166,493 | 48% | | Total subscription | $388,583 | 94% | $323,774 | 93% | | Services | $26,705 | 6% | $23,646 | 7% | | Total revenue | $415,288 | 100% | $347,420 | 100% | - **Revenue Recognition**: The Company recognized **$311.6 million** and **$261.4 million** in revenue for the three months ended July 31, 2025 and 2024, respectively, from deferred revenue balances at the beginning of each period[47](index=47&type=chunk) - **Remaining Performance Obligations (RPO)**: As of July 31, 2025, RPO was **$1.461 billion**[50](index=50&type=chunk) Approximately **65%** is expected to be recognized as revenue over the next twelve months, and **91%** over the next twenty-four months[50](index=50&type=chunk) - **Deferred Contract Acquisition Costs**: Amortization expense was **$26.2 million** for the three months ended July 31, 2025, up from **$23.2 million** in the prior year period[51](index=51&type=chunk) No impairment was recognized[51](index=51&type=chunk) [4. Fair Value Measurements](index=14&type=section&id=4.%20Fair%20Value%20Measurements) This note details the fair value of financial assets and liabilities, including marketable securities and senior notes Financial Assets Measured at Fair Value (in thousands of US dollars) - July 31, 2025 | Category | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :------ | :------ | :------ | :------ | | Money market funds | $326,372 | — | — | $326,372 | | U.S. treasury securities | $21,986 | — | — | $21,986 | | U.S. agency securities | — | $46,528 | — | $46,528 | | Commercial paper | — | $7,958 | — | $7,958 | | Total cash equivalents | $348,358 | $54,486 | — | $402,844 | | Marketable securities (U.S. treasury) | $158,836 | — | — | $158,836 | | Marketable securities (Corporate debt) | — | $453,028 | — | $453,028 | | Marketable securities (Certificates of deposit) | — | $103,384 | — | $103,384 | | Marketable securities (International treasuries) | — | $44,881 | — | $44,881 | | Marketable securities (Municipal securities) | — | $36,669 | — | $36,669 | | Marketable securities (Commercial paper) | — | $25,125 | — | $25,125 | | Marketable securities (U.S. agency) | — | $10,077 | — | $10,077 | | Total marketable securities | $158,836 | $673,164 | — | $832,000 | | Mutual fund investments | $3,434 | — | — | $3,434 | | Total financial assets | $510,628 | $727,650 | — | $1,238,278 | - **Interest Income**: Interest income from cash, cash equivalents, and marketable securities increased to **$15.1 million** for the three months ended July 31, 2025, from **$11.4 million** in the prior year period[56](index=56&type=chunk) - **Marketable Securities Maturity**: As of July 31, 2025, **$481.0 million** of marketable securities are due within 1 year, and **$350.992 million** are due between 1 and 3 years[57](index=57&type=chunk) - **Senior Notes Fair Value**: The fair value of the **$575.0 million** Senior Notes was approximately **$547.4 million** as of July 31, 2025, categorized as Level 2[58](index=58&type=chunk) [5. Acquisitions](index=17&type=section&id=5.%20Acquisitions) This note describes the acquisition of Paladin Data Inc. and the allocation of its purchase price to developed technology and goodwill - On May 21, 2025, Elastic acquired Paladin Data Inc. (Keep) for **$10.9 million**[59](index=59&type=chunk) - The acquisition was accounted for as a business combination, with **$4.0 million** allocated to developed technology (amortized over 5 years) and **$6.6 million** to goodwill, primarily for enhancing Elastic's Search AI-powered solutions and the acquired workforce[60](index=60&type=chunk) [6. Balance Sheet Components](index=17&type=section&id=6.%20Balance%20Sheet%20Components) This note provides detailed breakdowns of property and equipment, intangible assets, goodwill, accrued expenses, and credit loss allowances Property and Equipment, Net (in thousands of US dollars) | Item | July 31, 2025 | April 30, 2025 | | :-------------------------- | :------------ | :------------- | | Total property and equipment | $27,739 | $27,228 | | Less: accumulated depreciation | $(21,404) | $(20,639) | | Property and equipment, net | $6,335 | $6,589 | Intangible Assets, Net (in thousands of US dollars) | Item | July 31, 2025 (Net Book Value) | April 30, 2025 (Net Book Value) | | :-------------------------- | :----------------------------- | :------------------------------ | | Developed technology | $13,852 | $11,428 | | Foreign currency translation adjustment | $(24) | $(24) | | Total | $13,828 | $11,404 | | Weighted Average Remaining Useful Life (July 31, 2025) | 3.0 years | | | Amortization expense (3 months ended July 31, 2025) | $1,576 | | Goodwill (in thousands of US dollars) | Item | Amount | | :-------------------------- | :----- | | Balance as of April 30, 2025 | $319,417 | | Addition from acquisition | $6,637 | | Foreign currency translation adjustment | $27 | | Balance as of July 31, 2025 | $326,081 | Accrued Expenses and Other Liabilities (in thousands of US dollars) | Item | July 31, 2025 | April 30, 2025 | | :-------------------------- | :------------ | :------------- | | Accrued expenses | $37,579 | $36,585 | | Income taxes payable | $14,795 | $11,690 | | Value added taxes payable | $2,978 | $9,872 | | Accrued interest | $988 | $6,918 | | Other | $16,955 | $21,282 | | Total | $73,295 | $86,347 | Accrued Compensation and Benefits (in thousands of US dollars) | Item | July 31, 2025 | April 30, 2025 | | :-------------------------- | :------------ | :------------- | | Accrued vacation | $41,740 | $42,136 | | Accrued commissions | $15,903 | $28,051 | | Accrued payroll and withholding taxes | $5,667 | $10,007 | | Other | $19,516 | $13,520 | | Total | $82,826 | $93,714 | Allowance for Credit Losses (in thousands of US dollars) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | Beginning balance | $5,510 | $4,979 | | Bad debt expense | $845 | $786 | | Accounts written off | $(1,117) | $(1,395) | | Ending balance | $5,238 | $4,370 | [7. Senior Notes](index=19&type=section&id=7.%20Senior%20Notes) This note details the Company's 4.125% Senior Notes, including their terms, carrying amount, and related interest expense - In July 2021, the Company issued **$575.0 million** in 4.125% Senior Notes due July 15, 2029[69](index=69&type=chunk) - Interest is payable semi-annually[70](index=70&type=chunk) - The Company may redeem the notes under certain conditions or repurchase them upon a change of control triggering event[71](index=71&type=chunk) - Covenants limit the Company's ability to create liens or grant subsidiary guarantees[72](index=72&type=chunk) Senior Notes Net Carrying Amount (in thousands of US dollars) | Item | July 31, 2025 | April 30, 2025 | | :-------------------------- | :------------ | :------------- | | Principal | $575,000 | $575,000 | | Unamortized debt issuance costs | $(4,984) | $(5,271) | | Net carrying amount | $570,016 | $569,729 | Interest Expense Related to Senior Notes (in thousands of US dollars) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | Contractual interest expense | $5,930 | $5,930 | | Amortization of debt issuance costs | $287 | $275 | | Total interest expense | $6,217 | $6,205 | [8. Commitments and Contingencies](index=20&type=section&id=8.%20Commitments%20and%20Contingencies) This note outlines the company's contractual obligations, outstanding letters of credit, and ongoing legal matters - **Cloud Hosting Commitments**: No material changes to contractual obligations and commitments during the three months ended July 31, 2025[74](index=74&type=chunk) - **Letters of Credit**: **$2.9 million** in letters of credit outstanding for office space as of July 31, 2025[75](index=75&type=chunk) - **Legal Matters**: A shareholder complaint, "In re Elastic N.V. Securities Litigation," was filed on February 11, 2025, alleging materially false and misleading statements[77](index=77&type=chunk) An amended complaint was filed on August 1, 2025, extending the class period[77](index=77&type=chunk) The Company intends to vigorously defend the case and cannot predict the ultimate outcome or estimate possible losses at this early stage[77](index=77&type=chunk) - **Indemnification**: The Company enters into indemnification provisions in the ordinary course of business, but has not incurred significant costs to date and believes the fair value of these agreements is not material[79](index=79&type=chunk) [9. Leases](index=20&type=section&id=9.%20Leases) This note provides details on lease costs, weighted-average lease terms, and future minimum lease payments Lease Costs (in thousands of US dollars) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :------------------- | :------------------------------- | :------------------------------- | | Operating lease cost | $2,634 | $3,137 | | Short-term lease cost | $670 | $540 | | Variable lease cost | $475 | $402 | | Total lease cost | $3,779 | $4,079 | - **Lease Term and Discount Rate**: As of July 31, 2025, the weighted average remaining lease term is **5.2 years**, and the weighted average discount rate is **5.4%**[82](index=82&type=chunk) - **Future Minimum Lease Payments**: Total minimum lease payments under non-cancelable operating leases are **$28.642 million**, with a present value of **$24.155 million** as of July 31, 2025[82](index=82&type=chunk) [10. Ordinary Shares](index=21&type=section&id=10.%20Ordinary%20Shares) This note describes the authorized and reserved ordinary shares, voting rights, and dividend policy - Elastic N.V. has **165 million** authorized ordinary shares (€0.01 par value), with each holder having one vote per share[83](index=83&type=chunk) - No dividends have been declared since inception[84](index=84&type=chunk) - The board is authorized to issue up to **20%** of issued share capital until April 1, 2026[85](index=85&type=chunk) Ordinary Shares Reserved for Issuance | Item | As of July 31, 2025 | As of April 30, 2025 | | :----------------------------------- | :------------------ | :------------------- | | Stock options issued and outstanding | 1,752,632 | 1,775,723 | | Restricted stock units issued and outstanding | 6,699,912 | 6,523,077 | | Available for future grants | 27,681,290 | 23,291,765 | | Available for 2022 ESPP | 5,290,599 | 5,290,599 | | Total ordinary shares reserved | 41,424,433 | 36,881,164 | [11. Equity Incentive Plans](index=22&type=section&id=11.%20Equity%20Incentive%20Plans) This note details the company's employee stock purchase plan and stock option plan, including stock-based compensation expenses - **2022 Employee Stock Purchase Plan (ESPP)**: **6.0 million** ordinary shares reserved[89](index=89&type=chunk) Employees can purchase shares at an **85%** discount[90](index=90&type=chunk) Stock-based compensation expense was **$2.0 million** for the three months ended July 31, 2025[91](index=91&type=chunk) - **2012 Stock Option Plan**: Grants stock options and RSUs to eligible employees, directors, and consultants, generally vesting over four years[92](index=92&type=chunk) Shares authorized for grant increased by **5,276,744** during the period[93](index=93&type=chunk) - **Unrecognized Stock-Based Compensation**: As of July 31, 2025, **$2.6 million** related to unvested stock options (**0.68 years** weighted-average period) and **$573.3 million** related to RSUs (**2.49 years** weighted-average period) remain unrecognized[95](index=95&type=chunk)[96](index=96&type=chunk) Stock-Based Compensation Expense (in thousands of US dollars) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Cost of revenue – Subscription | $2,468 | $2,297 | | Cost of revenue – Services | $3,932 | $3,467 | | Research and development | $26,623 | $24,021 | | Sales and marketing | $23,067 | $21,079 | | General and administrative | $13,845 | $12,679 | | Total stock-based compensation expense | $69,935 | $63,543 | [12. Net Loss Per Share Attributable to Ordinary Shareholders](index=25&type=section&id=12.%20Net%20Loss%20Per%20Share%20Attributable%20to%20Ordinary%20Shareholders) This note presents the calculation of basic and diluted net loss per share and lists potentially dilutive shares Net Loss Per Share Attributable to Ordinary Shareholders (in thousands of US dollars, except per share data) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(24,603) | $(49,227) | | Weighted-average shares (basic and diluted) | 105,961,879 | 102,284,435 | | Net loss per share (basic and diluted) | $(0.23) | $(0.48) | Potentially Dilutive Ordinary Shares Excluded from Diluted EPS (in thousands) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Stock options | 1,752,632 | 2,322,860 | | RSUs | 6,699,912 | 6,775,874 | | 2022 ESPP | 146,803 | 113,055 | | Total | 8,599,347 | 9,211,789 | [13. Income Taxes](index=26&type=section&id=13.%20Income%20Taxes) This note discusses the provision for income taxes, effective tax rate, and the impact of recent tax legislation - **Provision for Income Taxes**: The Company recorded a provision of **$24.6 million** for the three months ended July 31, 2025, an increase from **$20.1 million** in the prior year period[99](index=99&type=chunk) - **Effective Tax Rate**: The effective tax rate for the three months ended July 31, 2025, is not meaningful due to the exclusion of pre-tax losses in jurisdictions with valuation allowances[101](index=101&type=chunk) The prior year's effective tax rate was **(69)%**[101](index=101&type=chunk) - **OBBBA Impact**: The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, introduced significant changes to U.S. federal tax law, with some provisions impacting the current period and others effective in future periods[102](index=102&type=chunk) The Company is assessing its full impact[102](index=102&type=chunk) - **Pillar Two Model Rules**: The OECD's Pillar Two global minimum tax rules are being monitored[102](index=102&type=chunk) The Company determined Pillar Two did not have a material impact on its tax provision for the three months ended July 31, 2025[102](index=102&type=chunk) [14. Employee Benefit Plans](index=26&type=section&id=14.%20Employee%20Benefit%20Plans) This note outlines the company's contributions to its 401(k) plan and other employee benefit plans - **401(k) Plan**: The Company contributed **$5.7 million** to its U.S. 401(k) Plan for the three months ended July 31, 2025, up from **$5.2 million** in the prior year period[103](index=103&type=chunk) - **Other Employee Benefit Plans**: Contributions to defined-contribution and other employee benefit plans in other countries totaled **$4.3 million** for the three months ended July 31, 2025, compared to **$3.9 million** in the prior year period[104](index=104&type=chunk) [15. Segment Information](index=26&type=section&id=15.%20Segment%20Information) This note clarifies that the company operates as a single segment and provides revenue and long-lived asset breakdowns by geographic area - The Company operates in one operating segment, with the CEO serving as the chief operating decision maker, reviewing consolidated financial information to manage operations and allocate resources[105](index=105&type=chunk)[106](index=106&type=chunk) Total Revenue by Geographic Area (in thousands of US dollars) | Geographic Area | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :---------------- | :------------------------------- | :------------------------------- | | United States | $230,263 | $198,289 | | Rest of world | $185,025 | $149,131 | | Total revenue | $415,288 | $347,420 | Long-Lived Assets by Geographic Region (in thousands of US dollars) | Geographic Region | As of July 31, 2025 | As of April 30, 2025 | | :------------------ | :------------------ | :------------------- | | United States | $15,377 | $16,514 | | The Netherlands | $2,725 | $2,824 | | United Kingdom | $2,707 | $2,817 | | Rest of world | $7,108 | $6,768 | | Total long-lived assets | $27,917 | $28,923 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of Elastic's business, key performance drivers, and a detailed analysis of financial results, liquidity, and capital resources for the reported periods - Elastic, the Search AI Company, leverages its Search AI Platform to transform data into answers, actions, and outcomes[113](index=113&type=chunk) - The platform, built on Elasticsearch, offers solutions like Elastic Observability and Elastic Security, available as cloud services or self-managed software, and integrates with large language models (LLMs)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - **Business Model**: Primarily based on paid subscription offerings (Elastic Cloud Hosted and Serverless) and free/paid self-managed software (Elastic Self-Managed)[117](index=117&type=chunk) Subscriptions are sold via resource-based pricing, with most Elastic Cloud subscriptions being consumption-based[118](index=118&type=chunk) - **Open Software Development**: The core of Elasticsearch and Kibana is open source under an AGPL license, fostering community engagement and product-driven growth[119](index=119&type=chunk) The addition of AGPL in November 2024 aims to drive further adoption, especially in vector search for AI/ML use cases[121](index=121&type=chunk) - **Customer Growth**: The number of customers with over **$100,000** in Annual Contract Value (ACV) increased from over **1,370** as of July 31, 2024, to over **1,550** as of July 31, 2025[124](index=124&type=chunk) - **Net Expansion Rate**: The Net Expansion Rate was approximately **112%** as of July 31, 2025, indicating strong customer expansion[131](index=131&type=chunk) - **Elastic Cloud Adoption**: Elastic Cloud contributed **47%** of total revenue for the three months ended July 31, 2025, up from **45%** in the prior year, reflecting increasing adoption of cloud-based offerings[133](index=133&type=chunk) This growth is expected to continue but may modestly impact gross margin due to third-party hosting costs[133](index=133&type=chunk) - **Macroeconomic Conditions**: The Company continues to monitor macroeconomic events, which have led to longer sales cycles, increased scrutiny of sales, and impacts from changing foreign exchange rates[135](index=135&type=chunk) Revenue Comparison (in thousands of US dollars) | Category | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Change ($) | Change (%) | | :------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Subscription | $388,583 | $323,774 | $64,809 | 20% | | Services | $26,705 | $23,646 | $3,059 | 13% | | Total Revenue | $415,288 | $347,420 | $67,868 | 20% | - **Subscription Revenue Growth**: Driven by **24%** growth in Elastic Cloud and **16%** growth in Other subscriptions, with Annual Elastic Cloud increasing by **31%**[155](index=155&type=chunk) - **Services Revenue Growth**: Attributable to increased adoption of service offerings[156](index=156&type=chunk) Cost of Revenue and Gross Margin Comparison (in thousands of US dollars) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Change ($) | Change (%) | | :------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Cost of subscription revenue | $69,418 | $68,347 | $1,071 | 2% | | Cost of services revenue | $27,328 | $23,410 | $3,918 | 17% | | Total cost of revenue | $96,746 | $91,757 | $4,989 | 5% | | Gross profit | $318,542 | $255,663 | $62,879 | 25% | | Subscription gross margin | 82% | 79% | 3% | | | Services gross margin | (2)% | 1% | -3% | | | Total gross margin | 77% | 74% | 3% | | - **Subscription Gross Margin Improvement**: Increased to **82%** due to lower cloud infrastructure costs, despite increases in cloud infrastructure, personnel, and third-party costs[157](index=157&type=chunk) - **Services Gross Margin Decline**: Decreased to **(2)%** as personnel, travel, and subcontractor costs grew faster than services revenue, reflecting continued investments in the services organization[158](index=158&type=chunk) Operating Expenses Comparison (in thousands of US dollars) | Operating Expense | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Research and development | $109,122 | $89,332 | $19,790 | 22% | | Sales and marketing | $174,054 | $157,357 | $16,697 | 11% | | General and administrative | $44,806 | $42,673 | $2,133 | 5% | | Restructuring and other related charges | $0 | $139 | $(139) | -100% | - **R&D Expense Increase**: Primarily due to higher personnel and related costs (**$12.3 million**, including **$8.3 million** in salaries and **$2.6 million** in stock-based compensation), travel expenses, and cloud infrastructure costs, reflecting continued investment in new and existing offerings[159](index=159&type=chunk) - **Sales & Marketing Expense Increase**: Driven by higher personnel and related costs (**$15.3 million**, including **$6.4 million** in salaries, **$4.0 million** in commissions, and **$2.0 million** in stock-based compensation) and travel expenses, partially offset by lower marketing expenses[161](index=161&type=chunk) - **G&A Expense Increase**: Mainly due to higher personnel and related costs (**$1.6 million**, including **$1.2 million** in stock-based compensation) and legal/professional fees, partially offset by lower non-income based taxes[162](index=162&type=chunk) - **Restructuring Charges**: Decreased to zero as there were no employee-related severance and termination benefit charges in the current period[163](index=163&type=chunk) Other Income, Net Comparison (in thousands of US dollars) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Change ($) | Change (%) | | :------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Interest expense | $(6,351) | $(6,526) | $175 | -3% | | Other income, net | $15,782 | $11,208 | $4,574 | 41% | - **Other Income, Net Increase**: Primarily due to a **$4.0 million** increase in interest and other investment income from marketable securities and a **$0.6 million** increase in net foreign currency exchange gains[165](index=165&type=chunk) Provision for Income Taxes (in thousands of US dollars) | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Provision for income taxes | $24,594 | $20,071 | $4,523 | 23% | - **Liquidity**: As of July 31, 2025, principal sources of liquidity were cash, cash equivalents, and marketable securities totaling **$1.494 billion**[169](index=169&type=chunk) The Company believes existing liquidity and future operations will fund needs for at least the next 12 months[170](index=170&type=chunk) - **Operating Losses**: The Company has an accumulated deficit of **$1.124 billion** as of July 31, 2025, and expects to continue incurring operating losses due to investments in growth[171](index=171&type=chunk) Cash Flows Summary (in thousands of US dollars) | Cash Flow Activity | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $104,835 | $52,754 | | Net cash used in investing activities | $(170,375) | $(3,520) | | Net cash provided by financing activities | $326 | $4,745 | - **Operating Cash Flow Increase**: Net cash provided by operating activities increased significantly due to non-cash charges and a net cash inflow from changes in operating assets and liabilities, primarily a decrease in accounts receivable[176](index=176&type=chunk)[177](index=177&type=chunk) - **Investing Cash Flow Increase**: Net cash used in investing activities increased substantially, mainly due to higher purchases of marketable securities and business acquisitions[178](index=178&type=chunk)[179](index=179&type=chunk) - **Financing Cash Flow Decrease**: Net cash provided by financing activities decreased due to lower proceeds from stock option exercises[180](index=180&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses Elastic N.V.'s exposure to interest rate risk on its investment portfolio and senior notes, as well as foreign currency risk on its operations and financial assets - **Interest Rate Risk**: The Company's cash, cash equivalents, restricted cash, and marketable securities totaled **$1.498 billion** as of July 31, 2025[184](index=184&type=chunk) A **10%** change in interest rates is not expected to materially affect the fair value of the investment portfolio, but declines would reduce future interest income[184](index=184&type=chunk) - **Senior Notes Interest Rate Risk**: The fair value of the **$575.0 million** fixed-interest rate Senior Notes is subject to market interest rate fluctuations, increasing as rates fall and decreasing as rates rise, though this does not impact the Company's financial position or cash flows due to the fixed nature of the debt[185](index=185&type=chunk) - **Foreign Currency Risk**: The Company's revenue and expenses are primarily in U.S. dollars, with some exposure to Euro and British Pound Sterling[186](index=186&type=chunk) Foreign currency transaction losses of **$0.7 million** were recognized for the three months ended July 31, 2025[187](index=187&type=chunk) A **10%** change in exchange rates could impact cash, cash equivalents, restricted cash, and marketable securities by approximately **$7.3 million**[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that Elastic N.V.'s disclosure controls and procedures were effective as of July 31, 2025, with no material changes in internal control over financial reporting during the quarter - As of July 31, 2025, Elastic's disclosure controls and procedures were effective in ensuring timely and accurate reporting of information required under the Exchange Act[190](index=190&type=chunk) No material changes in internal control over financial reporting occurred during the quarter[191](index=191&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, insider trading arrangements, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings that would materially adversely affect its business, financial condition, or cash flows - The Company is not currently involved in any legal proceedings that, if determined adversely, would have a material adverse effect on its business, results of operations, financial condition, or cash flows[194](index=194&type=chunk) Future litigation, however, could impact the company due to defense costs and diversion of management resources[195](index=195&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors have occurred, though additional unknown or immaterial risks could still adversely affect the business - No material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K have occurred[196](index=196&type=chunk) The Company also acknowledges the existence of additional unknown or currently immaterial risks that could adversely affect its business[196](index=196&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) This section discloses Rule 10b5-1 trading arrangements adopted by two executive officers for the sale of ordinary shares - **Carolyn Herzog (Chief Legal Officer)**: Adopted a Rule 10b5-1 trading arrangement on June 2, 2025, for the sale of up to **17,135** ordinary shares, terminating by July 31, 2026[197](index=197&type=chunk) - **Navam Welihinda (Chief Financial Officer)**: Adopted a Rule 10b5-1 trading arrangement on July 7, 2025, for the sale of up to **27,376** ordinary shares (underlying RSUs and PSUs), terminating by July 7, 2026[198](index=198&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists all documents incorporated by reference or filed as exhibits with this Quarterly Report on Form 10-Q - **Key Exhibits Filed**: Form of Restricted Stock Unit Agreement, Form of Performance Unit Agreement, Certifications of Principal Executive Officer and Principal Financial Officer (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and Inline XBRL documents[201](index=201&type=chunk) [Signatures](index=44&type=section&id=Signatures) This section confirms the official signing of the report by the Chief Executive Officer and Chief Financial Officer of Elastic N.V - The report was duly signed on August 29, 2025, by Ashutosh Kulkarni, Chief Executive Officer and Director, and Navam Welihinda, Chief Financial Officer, on behalf of Elastic N.V[204](index=204&type=chunk)[205](index=205&type=chunk)

Financial Data and Key Metrics Changes - The company reported total revenue of $415 million for Q1 2026, representing a 20% year-over-year growth and an 18% growth on a constant currency basis [27] - Sales-led subscription revenue, excluding monthly Elastic Cloud, was $339 million, growing 22% as reported and 20% on a constant currency basis [27] - The non-GAAP operating margin was 16%, with a gross margin of 79% [33][34] Business Line Data and Key Metrics Changes - The company saw strong performance across both cloud and self-managed environments, with significant customer commitments and key wins in all solution areas [28] - The security business achieved strong results, with one-third of new and expansion deals coming from competitive displacements [19][28] - The number of customers spending over $100,000 annually grew to more than 1,550, indicating strong enterprise adoption [8] Market Data and Key Metrics Changes - In the U.S. public sector, signs of stabilization were noted, with a strategic agreement with the U.S. General Services Administration boosting interest among federal agencies [10][29] - The current remaining performance obligations (CRPO) were approximately $956 million, growing 18% year-over-year [30] Company Strategy and Development Direction - The company is focusing on leveraging its Search AI platform to drive growth in generative AI applications and platform consolidation across industries [24][100] - The introduction of new capabilities, such as the Elastic AI SOC engine (EASE), aims to enhance threat detection and drive competitive advantage in the security market [22][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong execution and momentum heading into the remainder of fiscal 2026, raising revenue guidance due to better-than-expected macro conditions [35][36] - The company anticipates sustained adjusted free cash flow margins and expects total revenue for fiscal 2026 to be in the range of $1.679 billion to $1.689 billion, representing approximately 14% growth [37] Other Important Information - The company is participating in several upcoming conferences, including Citi's Global TMT Conference and the Goldman Sachs Communicopia and Technology Conference [6] - A Financial Analyst Day is scheduled for October 9, where the company will showcase its Elasticsearch AI platform [38] Q&A Session Summary Question: Customer spend uplift related to AI - Management noted that as customers utilize AI applications, workloads tend to be more compute-intensive, leading to increased consumption and spending [41][44] Question: Impact of price increase on guidance - The price increase is expected to lift the floor year-over-year, contributing to overall growth, but the majority of growth comes from performance rather than price increases [46][48] Question: Growth mix across business areas - Management highlighted strong performance across all solution areas, with search driven by generative AI being a significant tailwind, alongside security and platform consolidation [52][53] Question: Predictability of the model - The sales-led subscription side has shown strong execution and predictability, while consumption remains slightly unpredictable on a quarter-over-quarter basis [54] Question: Competitive displacements in security - The shift towards viewing security as a data problem is driving competitive displacements, with customers increasingly consolidating onto the company's platform [60][62] Question: Self-managed growth acceleration - The growth in self-managed solutions was broad-based, contributing significantly to overall subscription revenue growth [68] Question: Federal business stabilization - Management confirmed stabilization in the U.S. public sector, with no significant flush expected in Q2, and the sales team is well-positioned to execute [90][93]

Financial Data and Key Metrics Changes - The company reported total revenue of $415 million for Q1 2026, representing a 20% year-over-year growth and an 18% growth on a constant currency basis [27] - Sales-led subscription revenue, excluding monthly Elastic Cloud, was $339 million, growing 22% as reported and 20% on a constant currency basis [27] - Non-GAAP operating margin was 16%, with a gross margin of 79% [32] Business Line Data and Key Metrics Changes - Subscription revenue growth was driven by both cloud and self-managed offerings, with strong performance across all solution areas [28] - The company ended the quarter with over 1,550 customers spending more than $100,000 annually, indicating strong enterprise adoption [7] - The number of Elastic Cloud customers using Gen AI use cases exceeded 2,200, with over 330 customers spending $100,000 or more annually [12] Market Data and Key Metrics Changes - In the U.S. Public sector, signs of stabilization were noted, with a strategic agreement signed with the U.S. General Services Administration [9] - The company reported strong customer commitments and competitive success in the security segment, with one-third of new and expansion deals coming from competitive displacements [28][51] Company Strategy and Development Direction - The company is focused on leveraging its Search AI platform to drive growth in Gen AI and platform consolidation across various industries [23] - The strategic alignment of the sales team towards expanding enterprise accounts and high-potential mid-market customers is proving effective [10] - The introduction of new capabilities, such as the Elastic AI SOC engine (EASE), aims to enhance threat detection and drive further adoption [28][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong execution and market position, despite operating in a complex macro environment [34] - The company raised its fiscal 2026 revenue guidance, reflecting better-than-expected macro conditions and strong demand for its solutions [34] - Management highlighted the importance of search relevance and context in the AI era, positioning the company as a leader in data retrieval and context engineering [15][101] Other Important Information - The company achieved an adjusted free cash flow margin of 28% in Q1, with expectations to maintain and expand this margin over time [33] - The current remaining performance obligations (CRPO) grew 18% year-over-year, reaching approximately $956 million [30] Q&A Session Summary Question: Customer spend uplift related to AI usage - Management noted that as customers utilize AI applications, workloads tend to be more compute-intensive, leading to increased overall consumption [42] Question: Impact of price increases on guidance - The price increase implemented in May is expected to provide a year-over-year benefit, but the majority of growth is attributed to performance rather than price [46] Question: Growth mix across business segments - Management indicated strong performance across all solution areas, with Gen AI driving growth in search, security, and observability [50] Question: Predictability of the business model - Management expressed confidence in the predictability of sales-led subscription growth, noting strong execution and consistency in performance [52] Question: Competitive displacements in security - Management highlighted a growing trend of customers recognizing security as a data problem, leading to increased migrations to the company's platform [58] Question: Federal business stabilization - Management confirmed stabilization in the U.S. Public sector, with expectations for continued execution and alignment with customer needs [90][94]

Financial Performance - Total revenue grew by 20% year-over-year to $415 million[116, 118] - Sales-led subscription revenue increased by 22% year-over-year, reaching $339 million[116, 118] - Elastic Cloud revenue grew by 24% year-over-year, totaling $196 million[116, 118] - Sales-led subscription revenue accounted for 82% of total revenue[118] - Non-GAAP operating margin was 16%[116, 130] - Adjusted free cash flow was $116 million, representing 28% of total revenue[131, 141] Customer Base - The company has 1,550 customers with ACV (Annual Contract Value) greater than $100K[117] - The net expansion rate is 112%[128] Future Outlook - The company projects total revenue between $415 million and $417 million for Q2 FY26, representing 14% year-over-year growth[132] - The company projects total revenue between $1.679 billion and $1.689 billion for FY26, representing 14% year-over-year growth[132] Platform and Technology - 72% of organizations have adopted AI in one or more business functions[18] - Elastic's Search AI Lake provides response times in milliseconds[34] - Elastic ingests 400 terabytes of telemetry data per day with Elastic Observability[54]

Exhibit 99.1 Elastic Reports First Quarter Fiscal 2026 Financial Results First Quarter Fiscal 2026 Key Metrics and Recent Business Highlights Key Customer Metrics Product Innovations and Updates • Total revenue was $415 million, an increase of 20% year-over-year, or 18% on a constant currency basis • Total subscription revenue was $389 million, an increase of 20% year-over-year, or 19% on a constant currency basis • Sales-led subscription revenue (calculated as subscription revenue excluding monthly Elastic ...

Core Insights - The upcoming earnings report from Elastic (ESTC) is projected to show quarterly earnings of $0.42 per share, reflecting a 20% increase year-over-year, with revenues expected to reach $396.89 million, a 14.2% increase from the previous year [1] Group 1: Earnings Estimates - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating analysts' reassessment of their projections [1] - Prior to earnings announcements, revisions to earnings estimates are crucial as they significantly influence investor actions regarding the stock [2] Group 2: Revenue Projections - The consensus estimate for 'Revenue- Services' is $25.24 million, indicating a 6.7% increase from the year-ago quarter [4] - Analysts expect 'Revenue- Subscription' to reach $371.59 million, reflecting a 14.8% increase year-over-year [4] - The estimate for 'Revenue- Subscription- Elastic Cloud' is projected at $189.97 million, suggesting a 20.8% increase from the previous year [4] - 'Revenue- Subscription- Other subscription' is anticipated to be $181.93 million, indicating a 9.3% increase from the prior-year quarter [5] Group 3: Stock Performance - Over the past month, shares of Elastic have decreased by 10.9%, contrasting with the Zacks S&P 500 composite's increase of 2.7% [5] - Currently, ESTC holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [5]

Group 1: Core Insights - Wedbush Securities has added CrowdStrike, Roblox, GE Vernova, and Nebius to its IVES AI 30 list, which highlights companies expected to shape the AI industry in the coming years [1][2] - The IVES AI 30 list was initially launched in May, featuring major companies like Apple and Nvidia, along with Chinese firms such as Alibaba and Baidu [1] - The firm also launched the Dan Ives Wedbush AI Revolution ETF focused on artificial intelligence [1] Group 2: Newly Added Companies - **CrowdStrike (CRWD.US)**: The company is demonstrating strategic advantages in capitalizing on the AI revolution through modular expansion in its core cybersecurity business, particularly with its data protection module and Charlotte AI product [1] - **Roblox (RBLX.US)**: The platform has created an attractive incentive system for developers, and its AI-driven discovery mechanism is expected to drive user growth and enhance monetization capabilities in the coming quarters [2] - **GE Vernova (GEV.US)**: The company is strategically positioned in the grid management solutions sector, benefiting from the surge in electrification demand driven by large-scale data center construction [2] - **Nebius (NBIS.US)**: The demand for the company's AI infrastructure services remains strong, with plans to expand data center capacity in the coming years, as service demand exceeds current supply capabilities [2] Group 3: Removed Companies - **C3.ai (AI.US)**: The company is facing significant financial impacts due to a sales team restructuring and the resignation of CEO Thomas Siebel, leading to a belief that its development is encountering a slowdown, although long-term prospects remain optimistic [2] - **CyberArk (CYBR.US)**: The company was removed from the list following the announcement of a $25 billion acquisition by Palo Alto Networks, which is already part of the IVES AI 30, thereby strengthening its market position [2] - **Adobe (ADBE.US)**: The company is experiencing disruptive impacts from AI technology on its product lines, which may affect growth trajectories and free cash flow generation, with a slower-than-expected AI transformation [3] - **Elastic (ESTC.US)**: Despite increased government spending on software and AI, the company's public sector business shows signs of slowing down, leading to the identification of more promising alternatives for the IVES AI 30 list [3]