Elastic N.V.

Good day, and welcome to the Elastic Third Quarter Fiscal Year 2022 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. And I would now like to turn the conference over to Janice Oh. Please go ahead.

Thank you. Good afternoon, and thank you for joining us on today's conference call to discuss Elastic's third quarter fiscal 2022 financial results. On the call, we have Ashkel Carney, Chief Executive Officer, and Janesh Morjani, Chief Financial Officer. Following their prepared remarks, we will take questions. Our press release was issued today after the close of market and is posted on our website. Slides which accompany this webcast can be viewed in conjunction with live remarks and can also be downloaded at the conclusion of the webcast on the Elastic Investor Relations website, ir.elastic.co. Our discussion will include forward-looking statements which may include predictions, estimates, our expectations regarding the demand for our products and solutions, and our future revenue and other information. These forward-looking statements are based on factors currently known to us speak only as of the date of this call and are subject to risks and uncertainties that could cause actual results to differ materially. We disclaim any obligation to update or revise these forward-looking statements unless required by law. Please refer to the risks and uncertainties included in the press release that we issued earlier today, included in the slides accompanying this webcast, and those more fully described in our filings with the Securities and Exchange Commission. We will also discuss certain non-GAAP financial measures. Disclosures regarding these non-GAAP measures, including reconciliations with the most comparable GAAP measures, can be found in the press release and slides. The webcast replay of this call will be available for the next 60 days on our company website under the investor relations link. Our fourth quarter fiscal 2022 quiet period begins at the close of business Friday, April 15, 2022. With that, I will turn it over to Ash.

Thank you, Janice. Hello and welcome, everyone. I'm honored to join you on my first earnings call as Elastic's CEO. Since assuming the CEO role in January, I have spent time with many of our teams across the company, learning, understanding, and speaking with as many Elasticians as I possibly could. It has been tremendous to be welcomed so warmly by them. I'm continually impressed with the passion of our organization, the knowledge of the and most importantly, their commitment and dedication to serving our users and customers. I would also like to thank Shai Bannon for building an amazing foundation here at Elastic, a foundation that we will continue to grow and expand upon, especially as we accelerate our opportunity in the cloud, a growth area where I have strong conviction. I am very excited about the contributions that Shai is already making in his return to the role of Elastic's CTO, driving even greater innovation as we continue to increase our cloud focus. Q3 was a strong quarter. We delivered revenue of $223.9 million, up 43% year over year. I'm very pleased about our performance in cloud, where increasing consumption trends fueled cloud revenue of 80.4 million, up 79% year-over-year. We will spend a fair bit of time talking about our Q3 results and business momentum, and there are three key messages to take away from today's discussion. First, the markets we operate in are immense and growing, a $78 billion opportunity, and we are well positioned to succeed. Our focus on Elastic Cloud will be a major driver of growth for our business as more organizations embrace the cloud. Third, our team has both the drive for innovation and the operational expertise needed for success, and that will continue to show in our results. I joined Elastic a little over a year ago as its chief product officer. I had been a big fan of the Elastic platform even before then, having used it in the past for implementing various search powered solutions for observability and security. So the size of our market opportunity and the breadth of use cases was clear to me. Whether it's the complexity of modern cloud native applications, the sophistication of cyber threats, or the explosion of customer facing services that rely on data, organizations are constantly being challenged to extract value from data, with speed, at scale, and with relevance. This is where search comes in. It's the most intuitive and interactive way to approach data, and therein lies our biggest strength and differentiator, elastic search. It's the best foundation for addressing modern observability, security, and enterprise search needs. When our customers bring their log data, their trace data, their metrics data, their threat data, all of this data into Elasticsearch. They can use our advanced machine learning algorithms to correlate across logs, traces, and metrics to quickly identify performance issues for observability. They can use a rich set of behavior detection rules for identifying threats across their entire environment. they can seamlessly adopt Elastic for more and more of their observability, security, and enterprise search use cases. They can do this at scale, with great speed, and all in a single unified data store with a unified pricing model. This foundation of Elasticsearch enables our many innovations across our platform and solutions. As data continues to grow in volume and importance, We believe Elastic will be essential to our customers' success. Very recently, I met with several of our customers in Europe, including BMW, Deutsche Telekom, SAP, and several others. When I speak with customers, there are three universal themes and takeaways from our conversations. First, customers are unconditional in voicing their reliance on using Elastic for observability, security, and enterprise search every single day to extract value from their massive amounts of enterprise data. I especially heard significant interest in using Elastic for SIM in security and for log analytics and observability, where customers are looking to displace incumbent offerings with Elastic. Second, they value Elastic as a unified platform within and across observability and security, especially with our resource-based pricing model, which allows them to scale their costs in more manageable ways, even as their data volumes explode. This is something that our competitors often struggle with, where their costs tend to become prohibitive as data volumes grow. Our strategy is resonating with our customers, many of whom now use us for more than one solution. And third, our investments in Elastic Cloud are positioning us better than ever to address the large market opportunity across our three solution areas. And our opportunity in the cloud is significant. Growing Elastic Cloud is a top priority, and our performance in Q3 is a testament to that focus. 36% of our total revenue is cloud, compared to 29% a year ago. The majority of our customers are already in the cloud, and new and existing customers are universally driving more workloads rapidly to the cloud. Elastic Cloud is ready for them today and will get even better in the future. We continue to expect that over 50% of our revenue to be driven by Elastic Cloud in the next three years, and we will not stop there. With our deepening technical and go-to-market partnerships with cloud hyperscalers, frictionless onboarding experience with Elastic Agent, pre-built integrations, and so much more, we are incredibly optimistic about Elastic's future in cloud. There is no better indicator of our progress in the cloud than the success we are seeing with customers. In the third quarter, we expanded business with our customer, Barclays, who is using Elastic Observability on Elastic Cloud to power their global internal center of excellence that supports hundreds of use cases across their business. Barclays uses all three Elastic solutions, Their new deployment of Elastic Observability on Elastic Cloud creates a single pane of glass to monitor their data across the bank. Now they can spend time serving their internal stakeholders instead of on infrastructure maintenance. Similarly, one of the world's leading digital travel companies also expanded business with us in Q3. They use Elastic Security on Elastic Cloud for SIEM, threat hunting, and fraud detection and analytics throughout their organization. Elastic enables them to significantly increase the efficiency of their security team. And they are also seeing immense value from searchable snapshots, which allows them to store a year or more of security data for compliance requirements and future analysis in low-cost object storage in the cloud. We also signed on a new customer, Canva, the global visual communications platform and one of the world's fastest growing tech companies with over 75 million monthly active users. Canva is using Elastic Cloud to deepen their security capabilities and enable more effective threat hunting and detection at scale. A leading online retail delivery service in North America continue to expand their business with us in Q3 using Elastic Cloud for their enterprise search use case. The customer uses Elastic Cloud to power their search as you type experience, as well as their real-time text matching ads offering, making it easier than ever for their users to find what they're looking for. I'm also inspired by the outstanding work done by our teams across all functions and their passion for operational excellence and continued innovation. We recently launched Elastic 8.0, a game-changing release that featured capabilities like native vector search, enhanced machine learning, natural language processing capabilities, simplified data onboarding, and streamlined security. The native vector search capabilities empower users to search and receive highly relevant results using their own words and language. With the natural language processing feature, users can now perform named entity recognition, sentiment analysis, text classification, and more directly in Elasticsearch without requiring additional components or coding. We introduced new observability tooling for continuous integration and continuous delivery pipelines. We also delivered more than 30 out-of-the-box integrations, including new ServiceNow connectors as well as new integrations with AWS and a more simplified Elastic Cloud on AWS onboarding experience. Our continued focus on the cloud marketplaces, AWS, Google Cloud, and Microsoft Azure, remains a source of strength for us and will continue to help drive future growth. Also, we are grateful for our robust Elastic community and all the engagement we see from them every day. In fact, our second annual Elastic community conference in February had more than 2,000 global attendees who joined more than 60 sessions in six different languages. Looking ahead, we are focused on delivering a strong Q4 while actively planning for FY23. We remain confident that our prioritization of cloud, our dedicated innovation in observability, security, and enterprise search, and our large total addressable market will yield durable growth for many years to come. We have the mission and the demonstrated capabilities to capture the large market opportunity ahead of us and to become a generational company whose offerings are synonymous with the markets in which we operate I look forward to sharing more with you when we lay out our plan for next year. I will now pass it over to Janesh to talk more about our Q3 financials and our fourth quarter outlook. Over to you, Janesh.