Q2 2026 Elastic NV Earnings Call Transcript
Key Points
- Elastic NV (ESTC) reported a strong Q2 with revenue growth of 16% and a non-GAAP operating margin of 16.5%, exceeding the high end of their guidance.
- The company achieved sales-led subscription revenue growth of 18%, driven by strong performance in both Elastic Cloud and self-managed offerings.
- Elastic NV (ESTC) secured over 30 commitments valued at over $1 million in annual commitment value, with five deals exceeding $10 million, including two over $20 million.
- The company is experiencing robust demand for its platform, particularly in AI and generative AI use cases, with over 2,450 customers using Elastic Cloud for GenAI applications.
- Elastic NV (ESTC) introduced new AI capabilities and announced the acquisition of Jina AI, enhancing their platform's multilingual and multimodal embedding capabilities.
- Elastic NV (ESTC) experienced some renewal slippage due to the US government shutdown, impacting self-managed renewals from Q2 to Q3.
- The company's billings growth lagged behind other metrics, attributed to seasonality and an atypical revenue distribution from the previous year.
- Despite strong AI adoption, only 23% of customers spending over $100,000 are utilizing Elastic for GenAI use cases, indicating room for growth.
- There is ongoing complexity in building agentic applications, which Elastic NV (ESTC) is addressing with new products like Agent Builder.
- The company faces competitive pressure in the security and observability markets, with incumbents and new entrants vying for market share.
Good day, and welcome to the Elastic N.V. second quarter fiscal 2026 earnings results conference call. (Operator Instructions)
Please note, this event is being recorded. I would now like to turn the conference over to Eric Prengel, GVP of Finance. Please go ahead.
Thank you. Good afternoon, and thank you for joining us on today's conference call to discuss Elastic's second quarter fiscal 2026 financial results. On the call, we have Ash Kulkarni, Chief Executive Officer; and Navam Welihinda, Chief Financial Officer. Following their prepared remarks, we will take questions.
Our press release was issued today after the close of market and is posted on our website. Slides, which are supplemental for the call can also be found in the Elastic Investor Relations website at ir.elastic.co. Our discussion will include forward-looking statements, which may include predictions, estimates our expectations regarding demand for our products and solutions and our future revenue and other information.
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