Core Insights - V2X, Inc. has announced a strategic collaboration with Elastic to enhance search and analytics capabilities for government, defense, and intelligence community customers [1][2] - The partnership aims to provide faster access to critical information and improve decision-making while adhering to stringent security and compliance standards [2][3] Group 1: Partnership Details - The collaboration will integrate Elastic's search and analytics capabilities into V2X's workflows, allowing for the quick surfacing of mission-critical insights [3] - V2X aims to leverage Elasticsearch and Elastic Agent Builder to enhance security and operational efficiency across government and defense operations [3][7] Group 2: Mission Function Advancements - The partnership will drive advancements in key mission functions, including cyber and operational resilience, optimized logistics, and multi-source data analysis [7] - V2X will utilize enhanced search visibility to improve supply chain tracking, predictive maintenance, and asset management [7]

Financial Data and Key Metrics Changes - Total revenue for Q3 was $450 million, representing an 18% growth year-over-year and 16% on a constant currency basis [24][25] - Sales-led subscription revenue grew to $376 million, an increase of 21% as reported and 19% on a constant currency basis [25] - Current remaining performance obligations (CRPO) reached approximately $1.06 billion, growing 19% as reported and 15% on a constant currency basis [25][26] - Non-GAAP operating margin was 18.6%, with subscription gross margins at 82% and total gross margins at 78% [28][29] Business Line Data and Key Metrics Changes - Sales-led subscription revenue accelerated, with a notable increase in commitments from both self-managed and cloud offerings [25][27] - The number of customers with an annual contract value (ACV) over $100,000 grew to over 1,660, marking a 14% increase [26] - 28% of customers in the greater than $100K cohort are utilizing Elastic for AI, indicating strong demand for AI capabilities [27] Market Data and Key Metrics Changes - The company experienced strong deal momentum across all geographies, with multi-year commitments indicating customer confidence in the Elastic platform [26] - The demand for AI solutions is driving customer expansion, with significant growth in AI-related use cases [27][86] Company Strategy and Development Direction - The company is focused on becoming a critical data platform in the age of AI, leveraging its capabilities to support both cloud and self-managed environments [24][27] - The introduction of new features like Agent Builder and Elastic Workflows aims to enhance the platform's capabilities for context-driven AI applications [19][22] - The strategy emphasizes bridging the gap between LLMs and proprietary data, positioning Elastic as a leader in context engineering for AI applications [13][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing market demand and the company's ability to drive profitable growth, with expectations for continued strong performance in the upcoming quarters [29][34] - The company anticipates total revenue for fiscal 2026 to be in the range of $1.734 billion to $1.736 billion, representing approximately 17% growth at the midpoint [32] - Management highlighted the importance of AI adoption among customers, suggesting that as more customers reach the $100K ACV mark, growth could accelerate [40][75] Other Important Information - The company has made significant progress on its $500 million share repurchase program, returning approximately $186 million to shareholders during Q3 [30] - The introduction of the Elasticsearch GPU plugin aims to enhance AI application deployment speed and efficiency [18] Q&A Session Summary Question: Insights on AI customer growth and potential acceleration - Management noted that trends for generative AI customers remain strong, with potential for accelerated growth as more customers reach the $100K mark [39][40] Question: Importance of context in AI applications - The CEO emphasized the need for a comprehensive data platform that can handle various data types and provide accurate context for AI applications [42][43] Question: Performance of self-managed versus cloud customers - Management highlighted the strength in self-managed business, particularly as customers prefer to keep sensitive data within their control [48][49] Question: Future competition from frontier models - The CEO stated that AI models will not displace Elastic but rather depend on it for providing the necessary context for effective AI applications [56][57] Question: Impact of recent CISA win on government contracts - Management confirmed that the CISA win is expected to lead to additional agency engagements, enhancing the company's position in the government sector [68] Question: Concerns about CRPO growth rates - Management reassured that CRPO growth is strong, with expectations for continued improvement as AI adoption increases among customers [73][75]

Financial Data and Key Metrics Changes - Total revenue for Q3 was $450 million, representing an 18% growth year-over-year and 16% growth on a constant currency basis [24][25] - Sales-led subscription revenue grew to $376 million, an increase of 21% as reported and 19% on a constant currency basis [25] - Current remaining performance obligations (CRPO) reached approximately $1.06 billion, growing 19% as reported and 15% on a constant currency basis [25][26] - Non-GAAP operating margin was 18.6%, with subscription gross margins at 82% and total gross margins at 78% [28] Business Line Data and Key Metrics Changes - Sales-led subscription revenue growth was driven by both Self-Managed and cloud offerings, with strong consumption trends [25][27] - The number of customers with an annual contract value (ACV) over $100,000 increased to over 1,660, growing 14% [26] - 28% of the greater than $100,000 ACV cohort now utilizes Elastic for AI, indicating strong demand for AI capabilities [27] Market Data and Key Metrics Changes - The company saw balanced deal momentum across all geographies, with multi-year commitments indicating strong customer confidence in the Elastic platform [26] - The demand for Elastic's solutions is being driven by the need for organizations to manage increasing data volumes and leverage AI for innovation and efficiency [10][27] Company Strategy and Development Direction - The company is focused on becoming the essential infrastructure for AI-powered businesses, emphasizing the importance of context in AI applications [6][23] - Elastic aims to bridge the gap between LLMs and proprietary data, enhancing AI adoption among its customer base [13][15] - The introduction of new features like Agent Builder and Elastic Workflows aims to enhance the platform's capabilities for building intelligent applications [19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for Elastic's platform, particularly in the context of AI and data management [24][29] - The company anticipates continued growth in sales-led subscription revenue and adjusted free cash flow, with a focus on maintaining strong customer commitments [34][35] - The outlook for Q4 includes expected total revenue in the range of $445 million to $447 million, representing 15% growth at the midpoint [31][32] Other Important Information - The company has made significant progress on its $500 million share repurchase program, returning approximately $186 million to shareholders in Q3 [30] - The partnership with NVIDIA aims to enhance AI application deployment without straining IT infrastructure [18] Q&A Session Summary Question: Potential for growth acceleration among AI-native customers - Management noted that as more customers reach the $100,000 mark, there is potential for accelerated growth beyond the current 5% average [38][40] Question: Importance of context in AI applications - Management emphasized the need for a comprehensive data platform that can handle various data types and provide accurate context for AI applications [42][43] Question: Performance of Self-Managed versus cloud customers - Management highlighted the strength in Self-Managed business, particularly as customers prefer to keep sensitive data within their control [48][49] Question: Impact of AI on internal operations - Management shared that AI has significantly improved efficiency and reduced headcount needs in support operations [60][62] Question: Traction from recent CISA win - Management confirmed that the CISA win has led to additional agencies coming on board, indicating strong future growth potential [68][69]

Financial Data and Key Metrics Changes - Total revenue for Q3 was $450 million, representing an 18% growth year-over-year and a 16% growth on a constant currency basis [23][24] - Sales-led subscription revenue reached $376 million, growing 21% as reported and 19% on a constant currency basis [24] - Current remaining performance obligations (CRPO) crossed the $1 billion mark for the first time, reaching approximately $1.06 billion, growing 19% as reported and 15% on a constant currency basis [24][25] - Non-GAAP operating margin was 18.6%, with subscription gross margins at 82% and total gross margins at 78% [27][28] Business Line Data and Key Metrics Changes - Sales-led subscription revenue growth was driven by both self-managed and cloud offerings, with strong consumption trends [24][26] - The number of customers with an annual contract value (ACV) of over $100,000 grew to over 1,660, marking a 14% increase [25] - 28% of customers in the greater than $100,000 ACV cohort are utilizing Elastic for AI, indicating significant adoption of AI capabilities [26] Market Data and Key Metrics Changes - The company experienced strong deal momentum across all geographies, with multi-year commitments indicating the platform's strategic value [25] - The demand for Elastic's solutions is being driven by the need for organizations to manage increasing data volumes and leverage AI for innovation and efficiency [9][21] Company Strategy and Development Direction - The company is focused on becoming the essential infrastructure for AI-powered businesses, emphasizing the importance of context in AI applications [5][21] - Elastic aims to bridge the gap between proprietary data and AI models, enhancing the adoption of AI across its customer base [12][13] - The introduction of new features like Agent Builder and Elastic Workflows aims to enhance the platform's capabilities for building intelligent applications [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for Elastic's solutions, particularly in the context of AI and data management [23][34] - The company anticipates continued growth in sales-led subscription revenue and adjusted free cash flow, supported by strong customer commitments [33][34] - The outlook for Q4 includes expected total revenue in the range of $445 million to $447 million, representing 15% growth at the midpoint [30][31] Other Important Information - The company has made significant progress on its $500 million share repurchase program, returning approximately $186 million to shareholders in Q3 [29] - The partnership with NVIDIA aims to enhance AI application deployment without straining IT infrastructure [17] Q&A Session Summary Question: Potential for growth acceleration as AI penetration increases - Management noted that as more customers reach the $100,000 ACV mark, there is potential for accelerated growth beyond the current 5% average [36][38] Question: Core components for securing status as a leading provider of context for AI applications - The company emphasized the need for a comprehensive data platform that can handle both structured and unstructured data, along with capabilities for hybrid search and context engineering [40][41] Question: Insights on cloud revenue growth and sequential performance - Management highlighted that the sales-led subscription revenue growth remains the key metric, with strong performance in both self-managed and cloud segments [78] Question: Broader AI use cases and their impact on customer spending - The company is witnessing a diversification of AI use cases beyond vector databases, including security and observability workflows, which is expected to drive increased usage and spending [82]

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 announced a new integration for Amazon Bedrock AgentCore, enhancing observability for AI agents and applications within the Elasticsearch platform [1] - This integration enables site reliability engineers (SREs) and developers to monitor, optimize, and troubleshoot agents operating on Amazon Bedrock AgentCore [1] - Elastic Observability facilitates monitoring by ingesting all logs and metric signals related to AI agents and applications [1]

Financial Performance - Total revenue grew by 16% year-over-year to $423 million[99] - Sales-led subscription revenue increased by 18% year-over-year to $349 million[99] - Elastic Cloud revenue grew by 22% year-over-year to $206 million[99] - Non-GAAP operating margin was 165%[97] - The company has 1,600 customers with ACV (Annual Contract Value) greater than $100K[98] - Net Expansion Rate is 112%[109] Market and Product Positioning - 90% of enterprise data is unstructured, highlighting the need for solutions like Elasticsearch[14] - Elasticsearch is positioned as a comprehensive platform for building search, AI, observability, and security solutions[20, 24] - The company emphasizes its ability to deliver relevant results in real-time across various data sources and deployment environments[25, 27] Community and Adoption - 17% of all professional developers use Elasticsearch[77] - 19% of all AI developers use Elasticsearch[77] - Total downloads of Elasticsearch have reached 55 billion[77] Future Outlook - The company projects total revenue of $1715 billion - $1721 billion for the full fiscal year 2026, representing 16% year-over-year growth[113]

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 - Not all cash-generating companies are successful; some fail to reinvest effectively, limiting growth potential [1] - StockStory aims to identify companies with genuine upside potential [1] Companies to Sell - **Elastic (ESTC)** - Trailing 12-Month Free Cash Flow Margin: 20.2% [2] - Current stock price is $88.32, with a forward price-to-sales ratio of 5.3x [4] - **Edgewell Personal Care (EPC)** - Trailing 12-Month Free Cash Flow Margin: 1.9% [5] - Current stock price is $18.53, with a forward P/E ratio of 6.4x [7] Company to Watch - **Laureate Education (LAUR)** - Trailing 12-Month Free Cash Flow Margin: 15.6% [8] - Estimated sales growth of 12.5% for the next 12 months, indicating a slowdown from previous trends [8] - Operating margin increased by 7.7 percentage points over the last year [8] - Free cash flow margin expected to decrease by 2.4 percentage points in the coming year [8] Performance Concerns - **Laureate Education (LAUR)** - Organic revenue has underperformed over the past two years, suggesting a need for acquisitions to stimulate growth [9] - Earnings per share declined by 2.6% annually over the last three years, with flat revenue indicating reduced profitability per sale [9] - Free cash flow margin decreased by 4.9 percentage points over the last year due to increased investments [9] Positive Aspects - **Laureate Education (LAUR)** - Strong operating margin of 23.5% over the past two years due to disciplined cost controls [11] - Free cash flow generation is superior to most peers, enabling exploration of new investment opportunities [11] - Increasing returns on capital as previous investments begin to yield results [11]

Core Insights - Elastic has launched Agent Builder, a comprehensive set of capabilities that enables developers to create custom AI agents using company data in a matter of minutes [1] - Agent Builder offers an out-of-the-box conversational experience for exploring, analyzing, and optimizing data stored in Elasticsearch [1] - The evolution of AI agents is aimed at handling more complex and data-driven enterprise tasks, emphasizing the importance of reliability and accuracy [1] Company Developments - The introduction of Agent Builder signifies Elastic's commitment to enhancing developer tools and capabilities in the AI space [1] - The new features are designed to streamline the process of building AI agents, potentially increasing adoption among enterprises [1] Industry Trends - The demand for AI agents that can perform complex tasks is growing, indicating a shift towards more sophisticated data-driven solutions in the enterprise sector [1] - The focus on reliability and accuracy in AI applications reflects broader industry trends towards ensuring trust and effectiveness in AI technologies [1]