Elastic NV at Goldman Sachs Technology and Internet Conference (Virtual) 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 : Thank you. Thank you so much. Thank you so much. Elastic, when we first met, it dawned on me that it's a technically very elegant company. It's got open source. There is this aura about it. There is search. There's this one platform. There's a lot of things. And I can tell you that a few years after you've been public, there is still a bit of mystique and aura about what Elastic is. And I remember when we first met Shay and said, I go to say, yes, we were trying to build an application to search for food recipes since [I came to decide], it became this thing. And then the next thing you know is that Yelp uses you guys. Uber uses you guys. Everybody uses you guys. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 12, 2021 / 11:10PM, ESTC.N - Elastic NV at Goldman Sachs Technology and Internet Conference (Virtual) So to the generalists that are in this audience, how would you describe Elastic, just to level set? I'm sure the definition of Elastic has changed in the last couple of years. You're doing more things today than you did 2 years back.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : I just muted myself, Janesh, just to make sure we don't have any ambient noise. As a result of the 3-pillar approach that you have, you got the Observability, you got the Security and Search. I really like that simplification was very evident first Investor Day meeting. There was consistency in the way you [presented] the business and talked about the business. But through this lens, rather, how would you describe the market opportunity and also the competitive landscape that is unique to each of these segments, if you will, right? Observability, that alone is its own little industry sector. You got the likes of Datadog and Dynatrace and whatnot. In Security, you've got the likes of Splunk and so on and so forth. So how do you look at the market opportunity? And how do you think of the competitive advantage that you have in each of these seemingly disparate markets with different competitors?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. So we've all worked through and continuing to work through COVID. What is -- what are the things that -- we almost learn something every day, every week as how to deal with this and how not to deal with it as well. What are your takeaways? If you could share this with your peers and investors, what is your wisdom from COVID?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Janesh, I mean, as the economy opens up, my colleague, Heath Terry, has been running a series of reports titled America Opens Up. And we've basically developed a scale system. And our chief economist, Jan Hatzius, talks about how the vaccine is going to have a reshaped recovery, accelerating economic growth of 6.4%. Once we're in that phase, as hard as it is to imagine that we're going to be in a normal phase, how does life look like? What are the things that are going to not come back? What are the things that do come back from your perspective as far as the business is concerned? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 12, 2021 / 11:10PM, ESTC.N - Elastic NV at Goldman Sachs Technology and Internet Conference (Virtual)

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : No lockdown from logs.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : We came up with that when we had Splunk earlier today. We just really midstream came up with that. So that's my contribution for the day. Plus I also realized that once we switch to the client mode where we have questions that are coming through the channel, I just quickly realized, I could be out of my job because my job is I need to ask questions today and if the clients are going to ask those questions, then I don't have anything to do. I just sit around and be nice to you.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : That's right, yes. A beautiful mind, right? You see the ocean of data and you see the pattern in the ocean of data. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 12, 2021 / 11:10PM, ESTC.N - Elastic NV at Goldman Sachs Technology and Internet Conference (Virtual)

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : When we -- if we do get back to a normal economy, we did talk about how much is -- what is going to come back, what's not going to come back. Is there a risk that digital transformation gets -- as much as it is being pulled forward, do we go backward with digital transformation? Not with you but customers. Customers who are....

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. So if we look at your 3 pillars, Janesh, Search, Observability and Security, where do these things stand in customers' pecking order or priority list of IT spending?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. And if you look at each of these pillars, if you will, any thoughts on competition, which I presume is different across these pillars? What are you seeing in terms of changes with competition in ferocity -- or maybe it's not ferocious.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Great. I'm going to steal a question from somebody. Somebody who used to be an analyst with me in Goldman Sachs is now a CEO of a tech company. We asked, so what is the -- what is the -- one important question to ask the management team. The question was -- but of course, you're the first one to get this question. Incredible. Incredible. What are you as the management team spending the most of your time on?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. Got it. So that was a good question.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : And that is a good answer. Yes. You hired quite a few senior executives. You have a head of sales. You just mentioned Chief Product Officer and Chief Marketing Officer. How are they coming along? And what are you looking to get out of them that you couldn't get with the predecessors?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. And on market opportunity, the Security pillar got a big boost through the Endgame acquisition. How is that coming along? It's been more than a year, I would assume, since Endgame closed.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : 15 months. Okay.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. Got it. Got it. How is Search looking? Do we still -- what kind of runway do we still have for your core product that made you Elastic?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. I have a question from the [corner] here. How do you define the -- do you see it as a unified buyer in an IT department? Or is it a buyer in DevOps and Search and Security and Observability?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. The unified pricing model, how much of an advantage is that for Elastic? Do you run into situations where the customer says, "This is -- everything else being equal, I'm going with you guys because I like the pricing"? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 12, 2021 / 11:10PM, ESTC.N - Elastic NV at Goldman Sachs Technology and Internet Conference (Virtual)

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : got it. We have time left for maybe one last question. I want to ask you the 2-letter word question. AWS, Elasticsearch, the open-source version of AWS that they created a fork with and try to compete with these guys, running it on their service. That's been a debate for quite some time. What's the latest thinking on that offering as potentially a competitor to you guys?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. I think we've -- it's perfect. It's 02:50. That's the number we're supposed to wrap up. Thank you very much. It was exactly a year back when we came by your office. And lo and behold, the world has changed. We were -- it's a virtual world, but truly appreciate our dialogue and truly appreciate your investment in the Goldman platform. And to our clients who took time to listen to this, especially people on the East Coast and some of you that are probably dialing in from Europe or getting on the Internet from Europe, thank you so much for your patience. It's been a terrific, terrific day. And we're going to wrap it up with one last presentation, which happens in about 8 minutes from now. That will be Marc Benioff. So with that, Janesh, thank you very much once again. Say hi to Shay from my end.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Absolutely. True pleasure. Have a lovely day. And all the best for 2021.