Financial Data and Key Metrics Changes - The company reported total revenue of $423 million for Q2, representing a growth of 16% year-over-year and 15% on a constant currency basis [24] - Sales-led subscription revenue was $349 million, growing 18% as reported and 17% on a constant currency basis [24] - The current remaining performance obligation (CRPO) was approximately $971 million, growing 17% as reported and 15% in constant currency [25] - Subscription gross margins were 82%, total gross margins were 78%, and operating margin was 16.5% [28] - Adjusted free cash flow was approximately $26 million, representing a margin of 6% [29] Business Line Data and Key Metrics Changes - The company saw strong execution in sales-led subscription revenue, with a notable increase in large commitments, including over 30 commitments greater than $1 million in annual contract value [24][26] - The number of customers spending over $100,000 annually grew to more than 1,600, with 23% of this cohort utilizing Elastic for GenAI use cases, up from 17% a year ago [27][33] Market Data and Key Metrics Changes - The company experienced broad-based demand across all geographies, supported by healthy consumption trends [23] - Despite a government shutdown impacting some renewals, the company closed significant deals, including a $26 million commitment with CISA [26][29] Company Strategy and Development Direction - The company is focused on leveraging its AI capabilities across all business areas, with a strong emphasis on security and observability [6][10] - The introduction of new products like Agent Builder aims to enhance the company's offerings in AI and context engineering [15][19] - The company is committed to innovation and strategic acquisitions, such as the acquisition of Jina AI, to strengthen its position in the AI and search markets [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong consumption and commitment trends [23][38] - The company raised its full fiscal year 2026 revenue guidance, expecting total revenue in the range of $1.715 billion to $1.721 billion, representing approximately 16% growth at the midpoint [32] - Management highlighted the importance of both cloud and self-managed environments in driving sales-led subscription revenue [30][31] Other Important Information - The company plans to return approximately $500 million to shareholders through a share repurchase program, having already returned $114 million in Q2 [29] - The company will participate in upcoming conferences, including the Barclays Global Technology Conference and the Needham Growth Conference [5] Q&A Session Summary Question: Performance of non-AI-native customers - Management noted strong consumption trends across all customer segments, including traditional businesses, driven by increased commitments and consolidation onto the platform [36][38] Question: Billings lagging behind other metrics - Management explained that seasonality and a government shutdown impacted billings, but overall commitments and consumption remained strong [40][42] Question: Composition of sales-led subscription revenue guidance - Management clarified that the guidance reflects commitments from both cloud and self-managed environments, with expectations for flat growth in the self-serve segment [49][50] Question: Growth opportunities outside of RAG - Management emphasized that relevance and context engineering are core strengths, and new products like Agent Builder will help monetize these capabilities [66] Question: Competitive landscape in security - Management indicated that the company is successfully displacing incumbents in the security space, leveraging its data platform and AI capabilities [85][90]

Core Insights - Elastic (NYSE:ESTC) has launched AutoOps for self-managed enterprise users at no additional cost, marking a significant development in its service offerings [1][3] - AutoOps is designed to enhance cluster management by providing cloud-connected services while ensuring that customer data remains within their self-managed environments [2][3] - The service offers real-time issue detection and resolution, simplifying cluster management through insights and automatic detection of operational issues [3] Company Overview - Elastic is a search AI company that provides software platforms for hybrid, public, or private clouds, as well as multi-cloud environments both in the US and internationally [4]

Core Insights - Elastic has launched AutoOps for self-managed enterprise users at no additional cost, enhancing the management of Elasticsearch [1] - The integration with Elastic Cloud allows users to benefit from powerful diagnostics while reducing infrastructure overhead [1] - This development aims to improve resource efficiency and lower hardware costs for self-managed users [1]