Elastic NV Q1 2026 Earnings Call Transcript

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

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Great, thanks for taking my questions, guys. Congrats on the results, really good to see early in the fiscal year. I guess maybe the first one for you, Ash, it's really good to hear about AI relevancy with Elastic Cloud and even the progress on serverless thus far. I guess I'm wondering, is there a way to think about what customers' -- the uplift of customer spend is when they start to think about growing usage of Elastic to support AI? It really does feel like you guys are becoming a bit of a center of gravity for that. But any way to kind of think about what this is doing to customer spend or usage, and maybe it becomes even more evident with serverless. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2025 / 9:00PM, ESTC.N - Q1 2026 Elastic NV Earnings Call

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Really good to hear. And then maybe just a quick one for Navam. You mentioned the May price increase, which is now reflected in the guide. Is there any way that you could help us think about how that's benefiting the year, just any sort of quantification that would be helpful. Thanks, guys.

Question: Matthew Hedberg - RBC Capital Markets Inc - Analyst : Thanks a lot.

Question: George McGreehan - BofA Securities, Inc. - Analyst : Hey, this is George McGreehan for Koji. I really appreciate it. I had one. I wanted to ask on the growth mix, just understanding, obviously there's a lot of momentum with GenAI in search, but if you could maybe stack rank or give us a framework to think about how growth across the business is kind of playing out in observability and security as well.

Question: George McGreehan - BofA Securities, Inc. - Analyst : Appreciate it. And if I could ask another question here, Navam, since you joined, how would you describe maybe the predictability of the model today versus when you joined? Has it changed much, and if so, why?

Question: Rob Owens - Piper Jaffray Inc - Analyst : Great. Thanks for taking my question. Really want to drill down in the success that you're seeing on the security front. I think you said a third of it was coming from competitive displacements. And obviously, we're seeing a lot of success, I think, across the board from vendors that are competing for this next-generation SIEM opportunity. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2025 / 9:00PM, ESTC.N - Q1 2026 Elastic NV Earnings Call So I guess relative to the unlock that happened this quarter, was there anything in particular that drove that momentum? Was it more just how the pipeline set up? And as we look forward, maybe what are some of the different key ingredients to further unlock customers that have been with some of those legacy vendors for some time? Thanks.

Question: Rob Owens - Piper Jaffray Inc - Analyst : I'll hold to the one question. Thank you very much.

Question: Raimo Lenschow - Barclays Services Corp - Analyst : Perfect. For me as well, it's nice to see the cloud acceleration, but the bigger upside in my model was actually on self-service. Can you speak to the factors there that drove that reacceleration of growth and what drove that? Was that like -- you mentioned several times, I take broad-based but like it still was a very decent step up on that growth right there. Thank you.

Question: Raimo Lenschow - Barclays Services Corp - Analyst : Yeah, okay. And then Ash, one follow-up. It's like all the other vendors, a lot of the other vendors struggling around AI with kind of how to price it properly, etc., but you guys have been on consumption for a long time. How does that help you at the moment in customer conversations and driving that AI message from you guys forward? Thank you. Congrats again.

Question: Raimo Lenschow - Barclays Services Corp - Analyst : Okay, perfect. Thank you.

Question: Sanjit Singh - Morgan Stanley - Analyst : Thank you for taking the questions and congrats on the stronger start to the fiscal year. Ash, I wanted to get some help in terms of understanding the impact on some of your most exciting opportunities. And I want to sort of compare and contrast the sort of AI search opportunity which you guys have been very clear, right, like we've come from POC and evals, initial applications in the production, and then you have to sort of get in -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2025 / 9:00PM, ESTC.N - Q1 2026 Elastic NV Earnings Call increase the penetration rate in terms of the customers' application real estate to do that long multi-year journey. You guys have been very clear about that. When it comes to the SIEM opportunity though, is the right way to think about it because it's a more established category, because there's a lot of brownfield replacement opportunities, can that be a more immediate impact on growth and self-managed and cloud growth? I just would love to get your comments on doing the compare and contrast between those two specific opportunities.

Question: Sanjit Singh - Morgan Stanley - Analyst : That's great color. I had a question on just the federal business, and that was a source of weakness last quarter. It sounds like things are stabilizing. As Fed comes into its fiscal year end, what are some of the assumptions that you're baking in for fiscal Q2 and the government's fiscal year end coming up next year?

Question: Sanjit Singh - Morgan Stanley - Analyst : Appreciate the thoughts.

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : Hi, thank you very much. I'll add my congrats on the quarter. Looks like everything is coming back together for you guys, just the way you would like it. Pardon me, Ash, this feels like a redux from a few years ago, but I have to ask you this, that, listening to the call, there is an AI search aspect to it, there's a security aspect to it, there's an observability aspect to it. What is it that makes Elastic tick at the end of the day? What is the message to your customer base? And what is the unifying thread that makes this machine a predictable growth machine that is ready for the next four to five years?

Question: Kash Rangan - Goldman Sachs Group Inc - Analyst : Thank you to Ash from Kash. Thank you.

Question: Tyler Radke - Citibank Cameroon SA - Analyst : Yeah, thank you, thanks for taking the question. You saw pretty good current RPO bookings this quarter and you also talked about some pretty impressive million-dollar customer adds on AI. Can you just talk about the use cases you're seeing and sort of what drove that step up versus the last couple quarters?

Question: Tyler Radke - Citibank Cameroon SA - Analyst : And follow-up on the pricing side, I think based on the list price that we saw out there, it looked like the monthly cloud price went up by about 5%. Was that similar across the rest of the business? I think there's price increases on the annual as well as the self-managed side of the equation.

Question: Brian Essex - JPMorgan Chase & Co - Analyst : Yeah. Hi, thank you for taking the question and congratulations from me on the strong results. Maybe one for you, Ash. We're hearing particularly on the security side the focus on AI and leveraging enhanced visibility, real-time detection on streaming data, which I think you addressed. But what we're also hearing is a focus on more efficient data ingestion leveraging AI and more efficient storage of data. And I'm wondering are you seeing that at all competitively and how you might be positioned to address that need? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2025 / 9:00PM, ESTC.N - Q1 2026 Elastic NV Earnings Call

Question: Brian Essex - JPMorgan Chase & Co - Analyst : That's very helpful. Thank you very much.

Question: Jake Roberge - William Blair Capital Partners - Analyst : Yeah, thanks for taking the questions. I just wanted to follow up on the go-to-market front. You talked about execution improving and the changes starting to bear more fruit. Just in terms of the go-forward, where do you see the largest opportunities remaining, and what inning do you feel like we're in with that overall transition?

Question: Jake Roberge - William Blair Capital Partners - Analyst : Okay, that's helpful. And then I know it's still early, but can you talk about the early feedback you've gotten for the new serverless solutions and just how that migration process has been progressing this year?

Question: Brent Thill - Jefferies LLC - Analyst : Thanks, Navam. Just on the guide in the 20% growth in Q1 and in guiding the below mid-teens growth or mid-teens growth for the year, I guess that drop-off in the growth, I guess what are you factoring in? Are there other factors that you're unclear about that you're not putting in, or more conservatism? Just trying to bridge the great start to the tail-off in the growth throughout the year.

Question: Brent Thill - Jefferies LLC - Analyst : Okay, great, thanks for the color on that. And Ash, maybe I'm mistaking this, but you seem to be pretty excited about the security business -- you mentioned it many times. I guess was there something in the quarter that triggered in terms of breadth of transactions, some big deals? Was there something that maybe -- or maybe I'm misreading this and reading into the number of times you mentioned security too much, but just curious if you could pull that thread. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2025 / 9:00PM, ESTC.N - Q1 2026 Elastic NV Earnings Call

Question: Brent Thill - Jefferies LLC - Analyst : Okay, good to hear. Thanks.