Elastic Eliminates Per-Endpoint Pricing for XDR Mar 23, 2026 12:09 PM Eastern Daylight Time Elastic Eliminates Per-Endpoint Pricing for XDR Share Elastic Security ends the "endpoint tax† "Organizations shouldn'4t have to decide which systems are worth protecting, and with AI drastically evolving the threat landscape, they can'€ afford to, †said Mike Nichols, general manager of Security at Elastic. "Per-endpoint pricing turns coverage into a budget decision. We don't believe in that at Elastic. We've built t ...

Core Insights - Elastic N.V. reported third-quarter results that surpassed analyst expectations, but shares fell over 15% intra-day due to concerns about the fourth-quarter outlook [1] Group 1: Financial Performance - The company posted adjusted earnings per share of $0.73, exceeding the consensus estimate of $0.65 by $0.08 [1] - Revenue increased by 18% year-over-year to $450 million, surpassing analyst expectations of $438.38 million [1] - Subscription revenue rose by 19% to $426 million, while sales-led subscription revenue advanced by 21% to $376 million [2] Group 2: Future Projections - For the fourth quarter of fiscal 2026, Elastic forecasts revenue between $445 million and $447 million, with a midpoint of $446 million indicating 15% year-over-year growth [2] - Adjusted earnings per share for the fourth quarter are projected to be between $0.55 and $0.57 [2] - For the full fiscal 2026, the company expects revenue between $1.734 billion and $1.736 billion, slightly above the $1.72 billion consensus estimate [3] Group 3: Customer Metrics - Elastic's customer base with annual contract value above $100,000 grew to over 1,660, up from over 1,460 in the prior-year quarter [3] - The net expansion rate was approximately 112% [3]

February 26, 2026 Corporate Overview and Q3FY26 Financial Results Forward Looking Statements; Use of Non-GAAP Measures Elastic, the Search AI Company, combines the precision of search with the intelligence of AI to help everyone find answers that matter from all data. In real time. At scale. This presentation and the accompanying oral presentation contain forward-looking statements that involve substantial risks and uncertainties, which include, but are not limited to, statements regarding our expected fina ...

Core Insights - Elastic has introduced two Jina Rerankers on its Elastic Inference Service (EIS), enhancing its capabilities in providing fast and high-quality inference for users [1] Group 1: Product Development - The new Jina Rerankers offer low-latency and high-precision multilingual reranking, which is a significant improvement for the Elastic ecosystem [1] - EIS is a GPU-accelerated inference-as-a-service that simplifies the process of running inference without the need for complex setup or hosting [1] Group 2: Market Context - As generative AI prototypes transition into production-ready search and retrieval-augmented generation (RAG) systems, users are increasingly facing challenges related to relevance and inference [1]

Core Insights - Elastic N.V. shares fell over 12% intra-day despite reporting fiscal Q2 2026 results that exceeded analyst expectations, as investors expressed concerns about the company's long-term growth trajectory [1] Financial Performance - The company reported adjusted earnings of $0.64 per share for the quarter ended October 31, surpassing the consensus estimate of $0.58 [2] - Revenue increased by 16% year over year to $423 million, or 15% in constant currency, exceeding expectations of $418.23 million [2] - Elastic Cloud revenue, a key growth component, rose 22% year over year to $206 million [2] Future Outlook - Management described the quarter as "outstanding" and raised the full-year revenue forecast by $18 million, now guiding to $1.715–$1.721 billion, compared to prior consensus expectations of $1.706 billion [3] - For Q3, Elastic projected revenue of $437–$439 million, above the $429.9 million consensus, and adjusted earnings of $0.63–$0.65 per share, ahead of analyst expectations of $0.60 [3]

Core Viewpoint - Elastic N.V. was downgraded to Neutral by Monness due to a perceived lack of excitement in its Q2 performance, despite showing positive financial results [1][5] Financial Performance - Elastic reported adjusted earnings of 64 cents per share, exceeding the analyst estimate of 58 cents [2][5] - The company's quarterly revenue reached $423 million, surpassing the expected $418 million, marking a 16% increase year-over-year, or 15% when adjusted for constant currency [2][5] - Subscription revenue grew to $398 million, reflecting a 17% year-over-year increase, or 16% on a constant currency basis [3][5] Stock Performance - The stock price declined to $82.08, a decrease of 7.02% with a change of $6.20, fluctuating between a low of $82.01 and a high of $91.09 on the earnings call day [3][4] - Elastic's market capitalization is approximately $8.72 billion, with a trading volume of 2,974,153 shares on the NYSE [4]

Core Insights - Elastic reported total revenue of $423 million for the second quarter of fiscal 2026, reflecting a year-over-year increase of 16% or 15% on a constant currency basis [1] - Subscription revenue reached $398 million, marking a 17% year-over-year increase or 16% on a constant currency basis [1] Financial Performance - Total revenue: $423 million, up 16% year-over-year [1] - Subscription revenue: $398 million, up 17% year-over-year [1] - Sales-led subscription revenue was also highlighted, indicating a strong performance in this segment [1]

Core Insights - Elastic has been recognized as a Leader in the IDC MarketScape for Worldwide General-Purpose Knowledge Discovery 2025, highlighting its strong position in the market for search and analytics solutions [1][3]. Company Overview - Elastic is identified as the Search AI company, integrating search technology with artificial intelligence to transform data into actionable insights [8]. - The company has a significant user base, with over 50% of Fortune 500 companies utilizing its solutions [8]. Product Strengths - Elasticsearch is noted for its capabilities as a widely deployed open-source document and vector database, providing a powerful search and analytics engine essential for generative AI applications [1][2]. - The platform supports fast semantic and hybrid search, GPU-accelerated inference-as-a-service, and offers integrated observability and access controls [2][3]. Key Differentiators - Elastic's hybrid, semantic, and reranking models ensure AI systems are grounded in relevant and accurate context, a concept the company pioneered [5]. - The introduction of Agent Builder allows developers to create custom AI agents quickly, enhancing the platform's flexibility and usability [4][5]. - The company has achieved over 5.5 billion downloads of Elasticsearch, indicating a robust open-source community and developer engagement [5]. Strategic Vision - Elastic aims to help organizations unlock the full potential of their data by connecting content, context, and creativity through search and generative AI [5]. - The company emphasizes a unified data platform that combines search, observability, and security, helping organizations reduce costs and achieve faster insights [5]. Market Position - The IDC MarketScape assessment utilizes a rigorous scoring methodology to evaluate technology suppliers, providing a comprehensive overview of their competitive fitness [7]. - Elastic's recognition as a Leader reflects its strong capabilities and strategies in the knowledge discovery market [1][3].

Core Insights - Elastic has announced new capabilities in the Elastic Distribution of OpenTelemetry (EDOT) SDK, aimed at simplifying the management, updating, and deployment of SDKs at scale [1] - The company introduced new features to support OpenTelemetry for the PHP programming language, addressing the needs of developers and observability teams [1] Group 1 - The new capabilities in EDOT SDK are designed to alleviate bottlenecks faced by developers managing thousands of OpenTelemetry SDKs across distributed systems [1] - The enhancements in OpenTelemetry support for PHP are part of Elastic's broader strategy to improve observability and streamline operations for developers [1]

Core Insights - Elastic has completed the acquisition of Jina AI, enhancing its capabilities in retrieval, embeddings, and context engineering for agentic AI [1][2] - The acquisition positions Elastic as a leading Search AI Platform, emphasizing its commitment to open and accessible Search AI solutions [2][3] Group 1: Acquisition Details - The acquisition deepens Elastic's capabilities in vector search, retrieval-augmented generation (RAG), and context engineering [2] - Jina AI's technology adds dense vector, multilingual, and multimodal embeddings models, enhancing Elastic's ELSER model [3] - Advanced rerankers from Jina AI improve retrieval quality for visual and long-context multilingual documents [3] Group 2: Strategic Goals - The integration of Jina AI's models aims to enhance relevance for unstructured data, enabling developers to deliver higher-quality context to generative AI systems [3] - Elastic plans to continue Jina AI's practice of releasing models on Hugging Face and publishing academic research [4] - The models will be available through the Elastic Inference Service (EIS) on Elastic Cloud, allowing enterprise customers to utilize embeddings and rerankers alongside Elastic's vector database [4] Group 3: Leadership and Vision - The former CEO of Jina AI, Han Xiao, has joined Elastic as VP of AI, indicating a strategic alignment in advancing search foundation models [4] - Elastic's CEO, Ash Kulkarni, highlighted the importance of search in generative AI and the expanded capabilities brought by Jina AI [3]