Elastic NV at Goldman Sachs Communacopia + Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : I think you've already gotten the question what attracted you to Elastic. I'm not going to ask that question. That's a very old question already, although you do look extremely young. But I do -- I'm compelled to ask you, so what is it that you uncovered in your first few quarters as CEO, congratulations. You're now a $1 billion run rate company. It's no mean feat to accomplish in Silicon Valley. There's a high level of attrition from $100 million to $500 million, $500 million to $1 billion. So what have you uncovered? What are your key findings as you've done your work? And I also, as an adjunct to that, where would you like Elastic to be in the next 4 to 5 years? Let's say you came back to the Goldman Sachs conference in 2027, how would you -- how do you think Elastic -- nobody knows there's no crystal ball here, but what are your aspirations rather 5 years out?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. Excellent. So search is the mother lode of the company, you were known for search, Elasticsearch, right? Now getting into security and absorbability, there's more than Elastic. There are other companies that are equally enticed by the market opportunity and the TAM seems to be REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2022 / 6:30PM, ESTC.N - Elastic NV at Goldman Sachs Communacopia + Technology Conference growing ever since the first company go public, which is about 10 years back. People got a narrow TAM, but then keeps expanding. But in that view of the expanding TAM that there is more competition than before. How should we think about your critical differentiators? Is it the platform, the capabilities of the platform or the open source heritage or some combination, but how should we think about your competitive?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : They log for a reason.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. Ash, I was just curious, this past discussion, how has been your journey from CPO to CEO? All of a sudden, you're not just doing one thing, but doing like million different things. What has been that process like for you?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : you told me about your expense at McAfee that you deployed...

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : What was it like when you got that call you that you've made CEO?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : You're doing great.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Exactly, exactly. So you've set a target about $2 billion in fiscal '25. And I'm sure that life exists beyond fiscal '25 because fiscal '25, it's almost -- you can almost look at fiscal '25. So as you look to grow the company beyond the time frame, what should we be thinking about as the key drivers that will help you accomplish that goal? And also drivers are one thing, but then how do you see making changes to the go-to-market? Every company's REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2022 / 6:30PM, ESTC.N - Elastic NV at Goldman Sachs Communacopia + Technology Conference strategy changes that $100 million in revenue is not the same as $500 million, $1 billion to $5 billion, things change, right? As you look ahead, the drivers that will get you to that revenue goal near term, longer term? And how do you plan to do things differently with GTM, scaling, partnerships, what does that road map look like?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : You might run it to Thomas from TCP.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : He starts talking at 1:15, minus 15 minutes before that, I think there's a pretty good chance to get spot them. Judson was here yesterday from Microsoft Chief Commercial Officer. We've talked a little bit about their partnerships, et cetera. And the commentary is they're very bullish on cloud Infrastructure as a Service, Platform as a Service. I want to come back to cloud transitions can be tough. It starts with the product functionalities, the cloud functionality on par with the on-prem. There's -- when your customers love you for your on-prem technology, it scales really well, searches really fast, and that's the one thing, lightning fast searches on Elastic, right? How do you convince the customer that that's like a thing of the past and so cloud is where we're going? Is it that all the functionality and the improvement and the innovation research and development engine is working overdrive on the cloud side so it becomes so obvious that you got to do this? Or is there something else? And how do you get these on-prem customers to -- I hate to use the word migration, but how do you migrate to the cloud? A lot of things there. Sorry for that question.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Birds do it so easily but the cloud thing... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2022 / 6:30PM, ESTC.N - Elastic NV at Goldman Sachs Communacopia + Technology Conference

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Yes. Yes...

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : You know what Goldman Sachs would call that? Polycloud.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : George Lee, Chief Information Officer, who we met. He presented earlier this morning, and we talked about Polycloud business.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : I think it's just the Federation of services across third-party hyperscalers and being able to have a service that runs through and pick the best of each of these hyperscalers with regards to functionality and deliver a service that can run across all 3. I think -- we shared the explanation by the way. That's not the way George had explained it, but... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2022 / 6:30PM, ESTC.N - Elastic NV at Goldman Sachs Communacopia + Technology Conference

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : We've got about 7 or 8 minutes and before I turn it over to our clients, the macro, any thoughts on the macro environment, demand picture, et cetera?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : You don't want to see.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Inflation thing just crushed us. Any questions Sorry, there was a dark note. But I'm still hopeful that Jan's call for a soft landing.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : And if it does, please go ahead. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2022 / 6:30PM, ESTC.N - Elastic NV at Goldman Sachs Communacopia + Technology Conference Unidentified Analyst Can you talk about reinvesting in the business versus operating leverage?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Okay. That wraps it up. I think we're at the end of the session. Thank you, Ash.