Elastic at Bank of America Conference: Strategic Growth Amid Challenges

On Wednesday, 04 June 2025, Elastic (NYSE:ESTC) presented at the Bank of America Global Technology Conference 2025, revealing a cautiously optimistic outlook. The company reported strong revenue growth and improved margins while acknowledging potential headwinds in the US public sector and small to medium-sized business segments.

Key Takeaways

• Elastic reported a 16% year-over-year revenue increase in Q4.
• Subscription revenue less monthly cloud grew by 19% year-over-year.
• Operating margins improved by 400 basis points, with free cash flow margins reaching 19%.
• The company anticipates conservative growth due to macroeconomic uncertainties.
• Generative AI is highlighted as a future growth area, though still in early adoption stages.

Financial Results

• Revenue increased by 16% year-over-year in Q4.
• Subscription revenue, excluding monthly cloud, rose by 19% year-over-year.
• Operating margin improved by 400 basis points compared to the previous year.
• Free cash flow margin achieved 19% for the year.
• SMB revenue remained roughly flat year-over-year.

Operational Updates

• Sales strategy is organized by geography and customer segment, including North America, EMEA, APJ, and US Public Sector.
• Sales teams are incentivized to boost bookings in both self-managed and cloud solutions.
• Elastic invests in sales, marketing, and R&D to seize market opportunities.
• The company’s solutions are primarily used for search, observability, and security.
• Over 50% of the Fortune 500 are Elastic customers, with tens of thousands of customers overall.

Future Outlook

• Elastic’s full-year guidance is conservative due to potential macroeconomic headwinds.
• SMB revenue is expected to remain flat, with potential slowdowns in EMEA and APJ regions.
• The company targets a 16% operating income, factoring in customer budget constraints and optimization efforts.

Q&A Highlights

• US public sector softness impacted Q4, especially civilian agencies, due to spending moratoriums and personnel changes.
• Q4 cloud net new revenue was $1.5 million, slightly below expectations.
• The quarter’s shorter duration was noted as a factor in revenue differences.

Elastic’s CFO, Navam Willi Hinda, emphasized the importance of evaluating the company’s performance holistically, highlighting product and R&D strengths, particularly in generative AI.

Readers are invited to refer to the full transcript for more detailed insights.

Full transcript - Bank of America Global Technology Conference 2025:

Koji Ikeda, Software Analyst, Bank of America: Get it started here. Welcome, everybody, to the afternoon session of the second day of the Bank of America Technology Conference. Thank you, everybody, for joining. I am super thrilled. Or my name is Koji Ikeda.

I am one of the software analysts here at Bank of America, and I’m thrilled to have Navam Willi Hinda. Did I get it right?

Navam Willi Hinda, CFO, Elastic: You got

Koji Ikeda, Software Analyst, Bank of America: it right. Amazing. From Elastic, CFO, new CFO. Thank you. And thanks for joining us.

And, yeah, let’s get it kicked off here. And so Great

Navam Willi Hinda, CFO, Elastic: to be here, Krasik.

Koji Ikeda, Software Analyst, Bank of America: Yeah. No. Of course. Thank you so much. I think many in the room are familiar with Elastic.

And so instead of going deep into what is Elastic and what do you guys do, we’ll get into that a little bit later. You guys reported results last week. And so let’s go over of the puts and takes of the results. What were the key highlights that you wanna talk about from the results last week?

Navam Willi Hinda, CFO, Elastic: Sure thing. Yeah. I’ll do maybe a twenty second for those of people who don’t know Elastic. So many of you may know this, but we’re a search AI platform. What we do is we help take our customers’ unstructured messy data and get value out of it.

And there are multiple use cases you can use Elastic for, but we focus our focuses on three specific solutions, which are search, observability, and security. So that’s what a lot of customers use us for. We have tens of thousands of customers, more than 50% of the Fortune 500 use us. We’ve been benefiting from fair amount of consolidation in the observability and security space. And, we’ve been seeing a lot of interest and tailwinds from from Gen AI.

And as you said, Koji, we just reported our fourth quarter last week. From my vantage point, it was a very strong quarter. So we delivered 16% year over year growth on the top line in revenue. We discussed a new metric that we disclosed called subscription revenue less monthly cloud. So when you think about our business, we incentivize our sales team to go sell our solutions, either a self managed or cloud.

That’s how we run our business. So we thought it to be important to disclose this new metric that measures how we’re how our sales team is doing. So subscription revenue less monthly cloud was a new metric disclosure that we did. That was a fantastic, yeah, quarter for us as well, 19% year over year growth. Then on the bottom line, we continue to deliver margin improvements.

Our year, we increased our operating margin by 400 basis points, and we’re at our scale now that we have we continue to deliver strong free cash flow margins, so 19% free cash flow margins capping the year. So overall, the message on the fourth quarter was we’re very pleased with the results of the fourth quarter as evidenced by strong top, bottom and free cash flow margin numbers that we provided. We also, I, being new, had the unenviable position of delivering a full year’s guidance straight off the bat. And what we’ve done at what we did at the time was talk about our guidance in the context of what we knew and what we didn’t know. What we knew was obviously how q four was performing and q one was performing.

Relatively speaking, we we had a very benign macro impact specific to US public sector civilian, and that’s the only sort of macro impact we saw in q four. And despite that, we had a strong quarter. When we issued our full year guidance, though, we we didn’t wanna just assume that was gonna be stable, and we laid out our assumptions in providing a much more conservative view for the full year, assuming macro gets worse than what we saw. So we didn’t see a bad macro, but we don’t know what we don’t know at this point. So our guidance reflects that that macro conservatism.

And, know, we we think absent macro, there’s plenty of ways for us to beat that guidance number that we provided. So all in all, strong quarter. Very pleased with Yatkin.

Koji Ikeda, Software Analyst, Bank of America: I do like the subscription x monthly new metric. Not a new metric to me. I’ve been looking at that one for

Navam Willi Hinda, CFO, Elastic: a while. You’re ahead of the curve.

Koji Ikeda, Software Analyst, Bank of America: Just a little Yeah. This one instance. Just a little bit. This one instance. And it did grow 19% in acceler reacceleration, which I thought was pretty good.

But let’s get back to the guidance methodology. Sure. So the public sector softness, I mean, it sounds like there’s three factors kind of the guide: public sector softness, SMB, and then consumption assumed consumption headwinds when you’re not seeing anything. And so let’s walk through those one by one. Sure.

On the public sector side, you know, why so much conversation around that as that is the factor that one of the main factors of, you know, kind of informing the guy going forward? Yeah.

Navam Willi Hinda, CFO, Elastic: I think back to what I said, which is what we saw versus what we don’t know. Right? What we saw in q four, and this is not just us. It’s almost every software company, not almost every software company that sells to US public sector in particular, was impacted by the efficiency drive and the activity by Doge, which was, you know, in the front end of the calendar year. So March, April timeframe, there was a lot of focus in the civilian agencies in particular.

There were spending moratoriums. There were personnel, you know, changes in in in various various civilian civilian agencies. Pubsec as a whole is a very wide segment. So, you know, you have the DOD intelligence community sled parts of the public sector as well. Those were relatively unimpacted, but civilian agencies in particular were an area of focus for for Doge.

And that’s where we saw the spending moratorium sort of drag out deal cycles. And as you can imagine, if you lose a month of of purchasing activity, everything gets dragged out. When personnel are in flux, there is a little bit of uncertainty related to what they want to do. So that was the impact we saw in particular in Q4. That continues to date.

Right? Sure. It’s not the same amount of of activity in terms of spending moratoriums as it was in q four, but the personnel changes, that that that’s still continuing on or that the impact is still continuing on. So that’s factor number one, which is we’ve factored in what we’ve seen. Yeah.

On the second place, which is the monthly cloud business, as an SMB business, it’s it’s self serve. It’s not what our sales team is doing. So individuals who are running experiments or very small customers take their credit card. They buy Elastic on our credit card. That business has has been roughly flat last year.

Yeah. And our expectation next year is that’s not changing much. It’s gonna be a roughly flat business for us next year as well. So we’re not making any incremental positive or negative assumptions just because that’s the way the SMB side of our business has been performing. So that’s that’s roughly the same next year as well.

Then on the third part, which is we the the part that we don’t know is how, you know, macro spreads from one part to another. And that’s this q two through q four assumption of, hey. What if what if there is more exposure than what we have seen, and this is the unpredictable part? I wanna lay out to you what I’ve assumed in q two through q four, which is what we saw in this small segment in civilian, macro kinda goes around to the Amer EMEA and APJ business, and that slows down. To be clear, we haven’t seen this.

It’s just if that assumption takes place, that moves the entire forecast range down. And then, additionally, if customers were to face budget headwinds because, well, their businesses are slowing down. They’re going to do more optimizations as well, and that informs the bottom end of the of of the guidance. Right? So that’s essentially the the three assumptions that you laid out.

But to to the point I was making earlier, that third part, which is the biggest impact of the guidance, we have seen no activity to date until earnings that that’s actually happening. This is more of a what if scenario in q two through q four. So there are multiple paths for us to exceed the guidance that we provided. Being this this late in the year, having an April year end, we wanted to be prudent in how we’re looking at the full year and making clear that there are things that we don’t know. And this is very unlike other software companies that had January or December year ends, and their guide, their annual guide did not factor any macro in.

Koji Ikeda, Software Analyst, Bank of America: Right. Right. I think on the call, you mentioned that March was not so good on the public. That was when you were beginning to see the effects in Yeah. Doge and civil Fed civilian, and things somewhat improved in April.

Yeah. Does the guide use March data or April date, combination of the two? Yeah.

Navam Willi Hinda, CFO, Elastic: I mean, I I would focus more on it. It reflects the conservatism of a lower lower number in US PubSet in general. Right? You are right in the fact that the the impact was most acutely felt in that and this is, again, not us. The the moratorium, I think, hit in that March time frame where where almost nothing happened from a from a purchasing activity, and that impacts the whole quarter.

Right? So while things move forward so to be clear, we still had activity in The US public sector Yeah. Just not the same level we would have anticipated absent Doge and and U S P USPS civilian sort of pressure. The good news for us is we don’t have an overreliance on any single customer or any single vertical. So being a balanced business, the other parts of the business, you know, you know, the North America business, the EMEA business, and the APJ business performed really well and covered for covered for USPS.

Koji Ikeda, Software Analyst, Bank of America: Is is PubSEC mostly self managed for you guys, or is it mix of both? I mean, walk me through what they buy.

Navam Willi Hinda, CFO, Elastic: Yeah. It’s a mix of both. Okay. But, you know, there’s a slight skew towards self managed. So you you get both flavors, but there is more self managed in PubSEC.

Koji Ikeda, Software Analyst, Bank of America: Got it. And then just kind of following up on SMB. You know, when we punched the numbers into our model, it looked like 12% of revenue coming from SMB.

Navam Willi Hinda, CFO, Elastic: Roughly. Yeah.

Koji Ikeda, Software Analyst, Bank of America: Roughly. You know, that’s a downtick from what it was. So SMB performing worse than before. What’s happening in SMB right now, and what’s the path to recover? I guess, what needs to happen with an SMB for that number to improve?

Navam Willi Hinda, CFO, Elastic: Yeah. It’s a good question. So I I think you your numbers probably have some estimations in the prior quarters because we did not disclose that sub revenue less monthly cloud number. Yep. Right?

So from now on, when we do continuous disclosure, you’d be able to get a clean SMB number. But absent those, you know, assumptions you’ve made, the SMB number was actually roughly flat. Okay. Yeah. It wasn’t it wasn’t a big decline.

It was, you know, roughly flat as a business. And I think the dynamics there largely reflect the strength of the SMB segment in general in this environment. So, you know, we saw great SMB activity when, you know, the interest rates were low and that business segment was booming. Like we said like I said earlier, we aren’t necessarily focusing our sales team there. So it’s not a area of dollar deployment and focus where we put our sales and marketing dollars to work the most.

It’s with our sales led motion, which is a, you know, direct sale to our strategic enterprise high propensity mid market customers. So that’s where the dollars are going, and the mid market is kind of moving the way the mid market moves through the self serve business. So unless there was a natural uptick because the SMB segment itself is is recovering and strengthening like it did several years ago during the low interest rate environment, our expectation is that it remains the same as it did. Got it. Got it.

Koji Ikeda, Software Analyst, Bank of America: Maybe shifting gears a little bit to CRPO. Yeah. You know, kind of a pretty nice number there. CRPO growth 17%. As we how do we think about that number based on balanced against the guide?

You know, the exit rate of the growth guide, call it 11%, but CRPO just grew 17.

Navam Willi Hinda, CFO, Elastic: Sure. Yeah. So first of all, on the number itself, it’s a new metric disclosure. And we issued two new metric disclosures this quarter, CRPO being one of them, sub revenue plus monthly cloud being the other. And, you know, it’s my first quarter here, and I think I talked to you as well first couple of weeks that I got in, and I heard a lot of investors expressed interest to get more understanding of what’s happening in the business performance side.

And these two metrics are an attempt to provide more visibility. Right? Sub revenue less monthly cloud because that’s what we have control over, and that’s what the business is doing. CRPO because it it tells you specific to that subscription revenue less monthly cloud number what the runoff is for the next year. So it’s an important number.

The reason we provided it is to look at it in conjunction with all the other metrics. Right? So revenue is the most important rev metric followed by sub revenue less monthly cloud, and CRPO is there as another thing for you to consider as you as you digest our performance. I’d caution against using the number mechanically to to sort of imply convergence or understand, like, what the next year’s revenue is gonna look like simply with that CRPO number because there are a lot of puts and takes to that number. Right?

The starting bases are different. It’s act even though it’s the c, it’s a current number, the it is impacted by duration. So if duration moves around, how much RPO that goes into CRPO will change around, and that’ll that’ll impact the number itself. So it’s not a great mechanical estimator to forward revenue number. So the way I personally look at it is it’s the coverage of how much I have given the guide.

So if I’m guiding to x, CRPO covers a x amount of it, and it gives you a a a relative risk, derisk view of where the guide sits and where the forward revenue sits. So I would think about forward revenue as informed by the revenue guide, and I’d consume CRPO in the context of that that revenue number. But net is, I think, it’s a very important number to look at, and we’ll continue to disclose it every quarter.

Koji Ikeda, Software Analyst, Bank of America: So we’ve talked a lot about subscription x monthly new metric for you guys. Understand the reason why to to make that change. And I wanna dig into a little bit about the selling motion there. Sure. Right?

You guys sell Elastic as Elastic. And so walk me through what that sale process looks like. I mean, your salespeople just coming in? How can Elastic help you? Or is there a push to cloud at all or a push to self manage?

Walk us through that just a little bit.

Navam Willi Hinda, CFO, Elastic: That’s a great question and and also important in why we disclose that metric. So when you look at our sales team, it’s it’s organized by geo segment. So first of all, it’s organized by geography, which is the North American geography, the EMEA geography, and the APJ geography, and US best is the fourth one. Right? So US public sector in particular and then the three major geographies.

And then you break it down into segments. There’s the strategic segment, which are the highest propensity to buy customers like the Bank of Americas, which have massive IT spend, lots of automation in the back end. That would be, you know, one of those, not not Bank of America in particular, but a customer like them who may be in the strategic segment. Then you have the enterprise segment, which are sort of your Fortune 500 type customers, the the larger enterprise spend customers. And then you have high high propensity mid market customers who are the larger g two k kind of customers as well.

Right? Those are covered by our enterprise sales team with various coverage ratios. So our strategic reps have the lowest lowest amount of customers they need to to cover, and it gets slightly bigger as you go into the enterprise and high propensity mid market segment. But it’s still a handful of customers that each rep has to manage. And that rep’s responsibility is to meet the customers where they are and sell our Elastic platform to the customers for the for the solution sets that I pro that I talked about earlier, either search or observability or security.

If the customer has a lot of and let’s take GenAI for example. Right? GenAI applications are generally built where the data is. So if the customer has a lot of data in their own environment, this could be their own AWS environment or their GCP environment, they would buy a self managed Elastic license to build their GenAI apps self managed. They’re not gonna move all their data to cloud and then buy a cloud license.

Right? So depending on how our custom where our customers are, they may go self managed or cloud. And in order to hit our revenue growth target, we expect both the self managed and the cloud number to grow. And that’s how we incentivize our sales team. They’re given a quota, and that quota is the aggregate quota for that territory that they cover, and they can make it up either way, cloud or self managed.

Now they have incentives to sell cloud. We think cloud’s a great product, so they’ll they’ll sell cloud if if the customer wants to go there, but we expect both of those revenue lines to grow, which is why it’s so important to then take those two numbers in aggregate and say, this is where that growth is coming from. It’s from both of these both of these revenue lines, self managed and cloud.

Koji Ikeda, Software Analyst, Bank of America: As much as you can say, how much is that incentive to push cloud? Is it a

Navam Willi Hinda, CFO, Elastic: big, little No. The the majority of the incentive is on on what we call NNE, new and expand bookings. Uh-huh. So when you think about where where the the rep makes the most amount of money is when they hit their quota number. Then there are what we call spiffs.

Right? Like, things that you get over the top. You sell a multiyear deal. You sell cloud. There’s some competition that the sales teams run.

These are typical things that the enterprise software company does. Mhmm. That would be over the top. You you you incentivize sales teams to do various things. And cloud is not just one, not the only thing we run.

We run other under competitions as well.

Koji Ikeda, Software Analyst, Bank of America: Got it. Got it. So a lot switching to generative AI. You guys give a lot of good data points, and you gave some new data points on the on the last quarter call too on generative AI. And and I I think that’s that’s wonderful.

Right? Good visibility into how your customer base is testing out AI, even moving into production. And so I I think there’s a you know, you could kind of run the numbers, you know, based off of, hey. These many customers are trying things out and these big customers are trying things out and trying to put two and two together of when do we see it in the numbers. Right?

Yeah. It’s great data points. When do we see it in the p and l? And I think the at the heart of that is when do you guys expect, or are you beginning to see an acceleration of testing and playing with generative AI becoming actual production experiences?

Navam Willi Hinda, CFO, Elastic: Yeah. It’s % becoming production So it’s not only in test. We’ve given multiple examples of this. I can talk about two, for example, one internal and one customer internal and one customer external example. DocuSign’s navigator, which I think is a product that DocuSign has talked about.

It’s a, you know, an AI driven product that you can query all the documents that you have in DocuSign and ask things like, hey. Tell me everything that has a termination for convenience clause, and we’ll help you do that. That has Elastic behind the scenes. That is a production GenAI app. Right?

And it’s out in the wild right now. Cisco, I believe, has has talked about a customer support service ad. So it’s a chat app that allows their customer engineers to query their their knowledge base on features, bugs, etcetera, in their existing environment to help them service their customers better using generative AI. That’s an internal application that they’ve built in production. So that’s just two.

There are many other examples of in production AI applications with our customer base and with us Elastic internally as well. But I wanna put that in context with the aggregate amount of apps that any enterprise has in its portfolio. Right? Like, Cisco probably has hundreds, if not thousands, of apps. Bank of America has thousands, if not more, apps.

How many of those are generative AI? I would argue handful, a dozen, maybe, and you may be in the in the cutting edge of that. But each of these customers are in the very, very early stages of expanding GenAI across their entire application portfolio. So if you think about where the Gen AI wave is right now, it’s in hardware, it’s in the LLMs, but the application layer, it’s still very, very early in the adoption cycle of the application layer. So while we are seeing all these applications in production, I’d say it’s still the tip of the iceberg on how far we need to go in GenAI with with the g two k and the Fortune five hundred and how much of their of their portfolio is GenAI.

Right? So this is a long way of saying there’s a long way to go. We are seeing acceleration in our search business, which is a which is an indicator of of Gen AI tailwinds affecting us.

Koji Ikeda, Software Analyst, Bank of America: You are the CFO, and you have the difficult task, I think, of balancing growth versus profitability. I mean, you guys have done a great job expanding profit margins. You have told the street, you know, expect a little bit less. Expect margin expansion, but less than what we’ve seen in the past. And and and I I think that’s fine given the opportunity that you guys are facing.

Not only with generative AI, but also with security and observability too. And so how do you balance that algorithm, you know, in your mind of what what sort of signals or triggers are you looking for that maybe, you know, it is the time to step on the gas a little bit more? And would there ever be a time period would you take down margins because the opportunity is so great?

Navam Willi Hinda, CFO, Elastic: Yeah. So first of all, there’s a tremendous opportunity ahead of us, and we’re early in that opportunity. If you look through our non GAAP income statement over the past three quarters, you’d notice that our sales and marketing costs have gone up, and r and d costs have gone up. And that’s by design. We’ve invested in the sales and marketing team, investing in in capacity.

We’ve invested in the r and d team to invest in product velocity. We do that because we see the opportunity ahead of us. And the business historically and so we are we are investing to win in in this year, not for the downside. And that’s the reason we have the 16% target op inc rate compared to the 15.3 we had this past year. So this past year, we delivered 400 basis points of operating margin improvement.

The expectation is that we invest to do the opportunity and maintaining it roughly around 16. We don’t expect to go back. But if the opportunity is ahead of us, we don’t expect to drop a ton into the bottom line the way we did last year as well last year. Mhmm. So that’s point number one.

Two is, you know, we we our costs are primarily either people or cloud costs. And if you take last q one as an example of, hey. We didn’t see the opportunity ahead of us, and we pulled back spend. Elastic is very good at doing that. So if macro plays out the way it does in our guide and we see that, you know, look, it’s it’s a little slower because of all the all the contagion that we’ve assumed, then, you know, we would expect to to pull down our investments and deliver more op inc.

So we see it as dynamic of we’re very good at moderating op inc. We’re very good at delivering free cash flow. We also wanna invest in the opportunity. We’ve set a target of 16. If we’re coming in, you know, towards the the lower end of the guidance or towards the guidance, we’re gonna deliver more.

If, on the other hand, we see a path to beating the guidance, we wanna maintain that 16.

Koji Ikeda, Software Analyst, Bank of America: Got it. Got it. I gotta ask you a question on on cloud net new revenue. Sure. You added 1,500,000.

I mean, are some puts and takes with the days and adjust all that kind of stuff. But I do think it was a little lower than some were expecting. Walk me through what’s happening with cloud net new kind of predictability, visibility there. How do we think about this particular line item going forward?

Navam Willi Hinda, CFO, Elastic: Yeah. So first and foremost, at both, look at the sub revenue less cloud, less monthly cloud line, because that’s what we’re driving. Right. And that’s where you wanna see progress. In cloud in particular, you know, it’s driven by consumption and the amount of days in the quarter tells you how much ECUs you’re gonna consume.

So the fourth quarter has eighty nine days this year, whereas every other quarter has ninety two. So it’s a, you know, roughly a 10% difference between the two quarters. And you have to what I do is I normally adjust everything to ninety two days and say, well, assume magically we had three more days in in this in this quarter, and then look at what performance is. And if you really wanna be, you know, very, specific, take out monthly cloud. Yeah.

And when you do that, you’d see that the quarter was no different than the last quarter. It was about a 24% year over year growth rate. On a net new basis, you know, it was a it was a reasonable incremental revenue addition, and it wasn’t as bad as the headline number looks like at the at one point one point five incremental quarter over quarter. So when you do those puts and takes adjustments, it it gives you a better picture. And then second, as the cloud revenue number gets bigger, you start to see a little bit of quarter over quarter seasonality trends emerge.

Now this is what it’s at right now. That may again change as the number gets bigger. But normally, what we see is in q one, you have a lower incremental adjusted for days incremental ad number as people just start their consumption journey of things they’ve added in q three and q four. Then q two, q ’3, things get a little higher in terms of the incremental dollars added. Tie ties towards the end of the year as well.

You know, there may be some retail tailwinds. There may be a few things that allow us to get to a to a higher incremental ad number, and q four ends up being variable compared to Yeah. Could be higher, could be lower, depending on how low the last two years has been, you know, roughly variable. So there’s some trends emerging here.

The quarter didn’t look too different given the trends we’ve seen once but the main point is you gotta adjust for those those extra days and then look at the picture. And the bigger point is, look. As a business, we’re pushing the sales team to drive bookings and results against both those lines. And while cloud is important, we’ll continue to to, you know, disclose that number. Really, what we’re driving as a business is to sell sub revenue less less monthly.

Koji Ikeda, Software Analyst, Bank of America: Yep. Yep. You guys are kinda coming up on one year from the, you know, the bookings miss one year ago. And and so how how do we think about sales productivity today versus a year ago? I know you guys are still hiring too.

And so how are you feeling? Yeah. I mean,

Navam Willi Hinda, CFO, Elastic: I I think fourth quarter, we saw some very good results in the in the customer accounts, the hundred k’s and the the the million dollar customer accounts, both were very strong, and that’s a testament to the sales team, you know, performing as as expected. Yeah. And a lot of the the changes we did in q one, yeah, it was a little painful to to see that take take you know, took a little time for it to take hold, but two, three, four were were very good from a performance perspective. So very pleased with where the way the sales team is going. This quarter, there’s, you know, not compared to that that quarter last year, it wasn’t any diff wasn’t that much change.

It wasn’t changing like that. The only changes we did was we added a few incremental security heads or security specialist sales folks and increased capacity. So that’s that’s not really disrupting the way things were in the in the first quarter. So overall, I think the sales team is doing really well, and that played out in the way

Koji Ikeda, Software Analyst, Bank of America: fourth quarter bookings played out. Got it. Last question for you. Not a numbers question. You’ve been here

Navam Willi Hinda, CFO, Elastic: six months now?

Koji Ikeda, Software Analyst, Bank of America: No. Not even three months.

Navam Willi Hinda, CFO, Elastic: Three months? Yeah. Three months.

Koji Ikeda, Software Analyst, Bank of America: Yeah. What’s what’s the biggest thing that surprised you, you know, kinda coming into it? You did a ton of work coming into Elastic, but now that we’re here, what’s what surprised you?

Navam Willi Hinda, CFO, Elastic: I I wouldn’t say it was a surprise, but it there’s a lot of parallels and similarities in terms of where I was before, HashiCorp being an open source company, very similar investors, very similar customers, but also, I’d say, better tailwinds as a business with Gen AI behind us. Then having a single code base as a platform is incredibly powerful. Right? Like, it even though we have three solutions, it’s one code base. Yeah.

So having that is is a very, very good advantage to have. So I was I was surprised at, you know, the r and d strength and the product strength we have embedded in the company, and I’m pretty excited about what those guys can do.

Koji Ikeda, Software Analyst, Bank of America: Got it. Navam, we’re out of time. Thank you so much.

Navam Willi Hinda, CFO, Elastic: This has

Koji Ikeda, Software Analyst, Bank of America: been great. Thank you. Thank you for coming. Yes.

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