Elastic N.V.

Good afternoon and welcome to the Elastic NV fourth quarter fiscal 2025 earnings results conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Anthony Luskri, Vice President of Investor Relations. Please go ahead.

Thank you. Good afternoon, and thank you for joining us on today's conference call to discuss Elastic's fourth quarter fiscal 2025 financial results. On the call, we have Ash Kulkarni, Chief Executive Officer, and Nivam Walianda, 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 are supplemental to the call can also be found on the Elastic Investor Relations website at ir.elastic.co. Our discussion will include forward-looking statements which may include predictions, estimates, our expectations regarding the demand of 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 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 posted on the Investor Relations website, 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 non-GAAP measures, including reconciliations with the most comparable GAAP measures, can be found in the press release and slides. Unless specifically noted otherwise, all results and comparisons are on a fiscal year-over-year basis. The webcast replay of this call will be available on our company website under the Investor Relations link. Our first quarter fiscal 2026 quiet period begins at the close of business on July 17th. We will be participating in the Bank of America Technology Conference on June 5th. and the Rosenblatt Virtual AI Conference on June 11th. Also, Elastic will host a Financial Analyst Day in combination with our New York City Elasticon on October 9th, and we hope many of you will join us there in person. With that, I'll turn it over to Ash.

Thank you, Anthony. Good afternoon, everyone, and welcome to our Q4 earnings call. Elastic achieved a strong quarter, culminating in a solid finish to their fiscal year. Building on our momentum, we delivered strong growth, fueled by our sales execution and the persistent demand for our solutions, and our innovation velocity thrived. We exceeded guidance across all revenue and profitability metrics, demonstrating our platform strength and the extraordinary efforts of our team. In Q4, revenue grew 16%, Elastic Cloud revenue grew 23%, and we delivered a non-gap operating margin of 15%. we ended FY25 with more than 1,510 customers spending over $100,000. Q4 was a great quarter and a great close to a pivotal year in driving customer adoption of the Elasticsearch AI platform. In Q4, we continued to benefit from our sales strategy of landing and expanding enterprise and high potential mid-market customers. We ended the fiscal year with more than 210 customers, over a million dollars in committed annual contract value, representing more additions to this cohort than ever before. The sales segmentation changes we implemented at the start of the fiscal year have started to pay off. We saw progress in enterprise and commercial accounts and significant breakthroughs in our strategic segment, where we are helping our largest customers leverage our technology for consolidation and generative AI application development. For example, we closed an eight-figure expansion deal this quarter with a global financial institution for Elastic Observability, displacing a competitor. With our real-time alerting and monitoring features, we addressed critical feature gaps for the customer, giving them deeper insights into system performance. This deal also led to an expansion of Elasticsearch for Gen AI applications as part of an internal efficiency initiative. positioning Elastic as a strategic partner in their Gen AI journey. Gen AI and consolidation remain powerful drivers, accelerating our momentum and influencing customers and prospects to choose Elastic for their search, observability, and security needs. Now more than ever before, enterprises are scrutinizing their solution investments as they look to control costs and prioritize expenditures that drive productivity and ROI at scale. Leveraging AI to automate business processes and drive innovation and efficiency is a big priority for customers. We provide mission-critical technology able to flex to data complexities and accommodate diverse use cases for every industry. We continue to strengthen our position as the platform of choice for customers building GenAI applications as our pace of innovation drives superior performance, scalability, and ease of use. Enterprises remain committed to GenAI investments as a key business strategy. We continued our strong GenAI momentum in Q4. Now, over 2,000 Elastic Cloud customers are using Elastic for GenAI use cases, with over 310 of these customers spending $100,000 or more annually. Of our customers with over $1 million in committed ACVs, more than 25% are utilizing Elastic for Gen AI initiatives. Over the course of FY25, we saw customers progress from Gen AI application ideation to implementation. As Gen AI evolves, the importance of relevance and context increases. Criteria of Elasticsearch leads as the industry's most used vector database. This drove continued strength in our overall search business in Q4 and all of FY25. we recently announced the general availability of our better binary quantization or bbq technology our pioneering technology that compresses vectors for lightning fast retrieval since its debut we have improved its performance and accuracy now achieving even more relevance gains making it appealing for enterprise customers with large-scale production workflows elasticsearch is the first and only vector database with this quantization technique on the market this feature helped us upgrade an international defense agency from a free version of Elasticsearch in a seven-figure deal to leverage our vector database. They require a solution capable of ingesting diverse data types for their intelligence applications, one able to handle immense data volumes without sacrificing performance or accuracy. BBQ is the solution for their needs. In Q4, we continue to drive consolidation onto our Search AI platform as our core value proposition is built on our industry-leading innovation at a very attractive cost-to-value ratio. For instance, we secured a multi-year, seven-figure expansion deal with a leading international banking group in 50-plus global markets. Elastic was selected as one of the key platforms in their centralized observability strategy, spanning across all business units. This move supported a broader technology initiative aimed at consolidating multiple monitoring and observability tools into a streamlined ecosystem. As part of the expansion, the customer upgraded to an enterprise license to cost-effectively manage their environment with features such as the frozen tier, AI assistant, and synthetic source for LogsDB indices. They also recently deployed our AI assistant, which has already demonstrated value by identifying anomalies in retail banking data. Globally, our business performed well overall, though we saw some pressure in the U.S. public sector, where agencies face constraints. Our team executed effectively, and our compelling value-to-cost proposition was key to driving traction with these customers, with features like LogsDB and frozen tier storage motivating them to move more workloads to Elastic. We are utilizing this focus on efficiency as a catalyst as the U.S. administration seeks to transform processes and drive efficiency. areas where Elastic truly excels. Looking to FY26, we are projecting continued growth and strong margins as we continue to drive leverage across the business. Nawam will dig more into our assumptions here momentarily. While we acknowledge that there is potential uncertainty amidst evolving macro conditions, our pipeline remains healthy. Our business model also incentivizes customers to move more data to Elastic by offering competitive pricing and features to optimize infrastructure usage, thus enabling them to do more and realize the full potential of unlimited data on one unified platform. Finally, as we continue to innovate and develop highly differentiated solutions with features that effortlessly migrate customers to Elastic, we are generating significant forward sales opportunities from competitive displacements in security and observability. Meeting customers where they are differentiates Elastic in the marketplace. With the flexibility of our solutions, we unlock new opportunities across every industry and vertical, offering architecture able to accommodate both cloud and self-managed environments. Last quarter, our cloud business eclipsed 50% of our subscription revenue, and growth remains strong in Q4. In cloud, we are seeing significant adoption of AI, and it continues to be a favorite choice for customers looking to eliminate operational burden. We've also been seeing strong AI traction in our self-managed business. We announced an integration with the new NVIDIA AI Factory for Elasticsearch to be a recommended vector database for enterprises to build and deploy AI applications on their own infrastructure. We will also collaborate to build a plugin to accelerate vector indexing and search using NVIDIA QVS on top of NVIDIA GPUs and CPUs. This will allow NVIDIA and Elastic to bring all enterprise data to AI at blazing speeds for customers looking to build AI-native applications. We will continue to deliver innovative capabilities to both cloud and self-managed architectures for our customers in FY26. Security is a prime area where we see customers from every vertical industry and geo putting our AI features into use so that their security teams realize the benefits of advanced threat detection, investigation, and response. Attack discovery is now generally available to customers. Notably, we improved the technology's efficacy since launching in technical preview. We have better aligned attack discovery to our customers' use cases, reducing hallucinations and improving the overall customer experience. Customer interest for our AI assistant grows, with active users growing steadily over the course of FI25. We predicted that GenAI advancements would fundamentally change the security landscape, and our solutions are at the forefront of this transformation. In Q4, Siemens, a global technology company with over 1,300 cybersecurity experts protecting more than 120 factories worldwide, has enhanced its comprehensive defense-in-depth strategy by incorporating Elastic's SIM platform into their global Cyber Defense Center services. Siemens chose Elastic for its integration flexibility and AI-related capabilities for a multi-year collaboration. During FY25, we consistently delivered new capabilities and improved product features, further differentiating Elastic in search, observability, and security. During the fourth quarter, we continued to make progress with Elastic Cloud Serverless, now in general availability on AWS and Google Cloud. As a fully managed offering, Serverless allows customers to quickly launch and scale, giving them flexibility to manage workloads without managing the underlying infrastructure. In one expansion deal from the quarter, a leading cloud-based content and productivity platform selected Elastic to deliver mission-critical search capabilities and consolidate their security tools. To achieve operational efficiency, accelerate their go-to-market, and reduce costs with a scalable solution, the customer opted for Elastic Cloud Serverless, further enabling their modernization initiatives. Elastic emerged as the preferred choice against three competitors with serverless and our Gen AI features, specifically AI Assistant and ATT&CK Discovery, differentiating us from the other vendors. We believe that our serverless offering will benefit Elastic Cloud revenue over the long term, and early customer adoption is tracking to our expectations. In the area of security, we released a new SIM migration tool, Automatic Migration. Similar to Automatic Import, which streamlines user migration to AI-driven security analytics and expedites SecOps workflows, with Automatic Migration, customers can transfer detection rules from legacy providers onto Elastic. lowering the barrier to entry and helping us win new enterprise customers. Informed by our belief that bringing workflow automation features will strengthen all of our solution areas, we acquired Keap, an open source leader in AIOps, a platform that unifies alerts behind a single pane of glass and provides workflow automation capabilities for incident remediation. We are delighted to join forces with the Keap team to drive innovation across our Search AI platform. This quarter, we celebrated some significant wins and initiatives with our partners. For years, we have invested in partnerships, prioritizing hyperscalers through technical integrations, and they continue to drive new business at Elastic. Earlier this week, we announced a new five-year strategic collaboration agreement with AWS, which deepens our partnership through solution integrations, joint go-to-market, and marketing initiatives. ultimately simplifying Elastic adoption on the AWS marketplace. Working together, we believe our collaboration will accelerate AI innovation as the integrations will make it easier for customers to build Gen AI applications with Elastic on AWS. Our partnership with Google grows stronger too. At Google Cloud Next, we announced that Elasticsearch is the first third-party native grounding engine on Google Cloud's Vertex AI platform. and Google's Gemini models. Now our joint customers can seamlessly build Gen AI experiences grounded in their enterprise data, powered by Elastic Search AI capabilities. As proof of our continued partnership with Google, we won two Google Cloud Partner of the Year awards in the AI category at Google Cloud Next. I'm delighted to see our partnerships thriving, as they are key to helping us market and deliver our products globally. On the go-to-market front, We recently wrapped our annual sales kickoff meeting. I spent an incredibly productive week with the team. We believe our value proposition has never been clearer to customers and prospects. With the FY25 sales segmentation changes validated by recent financial performance, we are not bringing any major changes to our sales strategy this year. We enter FY26 with our team fully energized, ready to keep driving our momentum forward. We are motivated and ready to win. To close, I'm deeply proud of what our team has achieved this fiscal year and our exceptional performance this quarter. The continuous innovation in our Search AI platform, the accelerating adoption of generative AI, and the growing trend of customer consolidation all reinforce my confidence in Elastic's future and our ability to create a generational company. Thank you to our employees for their hard work and dedication, as well as to our customers, partners, and investors for their continued support and trust. I'll turn it over to Navam to review our financial results in more detail.