Elastic N.V. Q3 FY2026 earnings call

• Elastic delivered 18% total revenue growth and 18.6% non-gap operating margin in Q3. • Sustained platform demand, strong sales execution, and focus on customers drove Q3 momentum. • Enterprises choose Elastic to power context for AI needs. • Closed multiple large deals, including with a Fortune 100 insurance institution, a global leader in data resiliency software, and a global financial group. • Launched general availability of Agent Builder, expanded elastic inference service to include Jina AI's multilingual re-ranking models, introduced Elastic Workflows in Technical Preview, and Cloud Connect for self-managed customers. • Achieved product milestones to simplify path from data to action for customers.

Total revenue grew 18%, with sales-led subscription revenue accelerating to 21%. Subscription gross margins were 82%, total gross margins 78%, and non-gap operating margin 18.6%. CRPO grew 19% and RPO grew 22%. There are over 1,660 customers with ACV of more than 100,000, growing 14%. 28% of the >100K cohort utilizes Elastic for AI.

• Q3 total revenue $450M, growth ~18% (reported) and 16% constant currency. Sales-led subscription revenue $376M, growth 21% (reported) and 19% constant currency. • Q4 total revenue expected $445M - $447M (15% growth midpoint, 13% constant currency midpoint). Sales-led subscription revenue expected $371M - $373M (18% growth midpoint, 15% constant currency midpoint). Non-gap operating margin ~14.5%. Non-gap diluted EPS $0.55 - $0.57. • Full year 2026 total revenue expected $1.734B - $1.736B (17% growth midpoint, 15% constant currency midpoint). Sales-led subscription revenue expected $1.434B - $1.436B (20% growth midpoint, 18% constant currency midpoint). Non-GAAP operating margin ~16.3%. Non-GAAP diluted EPS $2.50 - $2.54.

Q: Sanjit Singh with Morgan Stanley asked about AI native customers and growth acceleration.

A: Sanjit, trends from Investor Day remain, generative ai cohorts perform well, and there's potential for acceleration as customers mature in AI journey.

Q: Rob Owens with Piper Sandler had questions about sales led subscription, Q4 guide, and self-managed vs cloud.

A: Asher and Navam addressed points about self-managed growth, Q4 guide considering 3 fewer days and prudence, and positive business outlook.

Q: Matt Hedberg with RBC asked about AI frontier models as competition or partnership.

A: Ash said AI doesn't displace Elastic, our role is to provide context for frontier models. Also discussed internal use of AI and its benefits.

Q: Brian Essex with J.P. Morgan asked about platform adherence to different approaches and CISA win traction.

A: Ash said we're on leading front with hybrid search, and CISA win is a success with more agencies expected to come on board.

Q: Brent Thill with Jefferies asked about CRPO growth and AI tailwind.

A: Ash said CRPO growth is strong, AI tailwinds are seen, and we're on track for midterm goals.

Q: Howard Ma with Guggenheim asked about cloud revenue sequential growth.

A: Navam said sales-led subscription revenue is key metric, cloud revenue grew 27% YOY in Q3.

Q: Ryan McWilliams with Wells Fargo asked about broadening of AI use cases.

A: Ash said usage is broadening into security, observability, etc., with more variety of AI use cases.

Q: Miller Jump with Truist Securities asked about MongoDB competitive win and large deal handling in guidance.

A: Ash said it was a one-off customer win, and large deals are handled with risk-adjusted guidance.

Q: Koji Ikeda with Bank of America asked about AI adoption tone and inning.

A: Ash said tone is more about helping with sophisticated agentic applications, still early days of adoption.

Q: Mike Sikos with Needham asked about GINA re-ranking models and guidance mechanics.

A: Ash said we monetize with consumption model, and raised sales led subscription revenue guide due to positive momentum.

Q: Eric Heath with KeyBank Capital Markets had no further questions, concluding Q&A.