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Corporate Overview and Q3FY25 Financial Results February 27, 2025
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Forward Looking Statements; Use of Non-GAAP Measures This presentation and the accompanying oral presentation contain forward-looking statements that involve substantial risks and uncertainties, which include, but are not limited to, statements regarding our expected financial results for the fiscal quarter and the fiscal year ending April 30, 2025, our strategic areas of focus, expectations and plans regarding our future growth, our go-to-market and growth strategies and the effectiveness of such strategies, estimates of the impact of AI, assessments of our strategic partnerships, the expected performance or benefits of our offerings, our assessments of our competitive advantages, the strength of and demand for our solutions and products, and growth opportunities as well as our ability to address those opportunities. Actual outcomes and results may differ materially from those contemplated by these forward-looking statements due to uncertainties, risks, and changes in circumstances, including but not limited to those related to: our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit or gross margin, operating expenses (which include changes in sales and marketing, research and development and general and administrative expenses), and our ability to achieve and maintain future profitability; our ability to continue to deliver and improve our offerings and develop new offerings (including innovations around AI use cases); customer acceptance and purchase of our new and existing offerings; the expansion and adoption of our Elastic Cloud offerings; our ability to realize value from investments in the business; our ability to maintain and expand our user and customer base; the impact of the evolving macroeconomic and geopolitical environments on our business, operations, hiring and financial results, and on businesses and spending priorities of our customers and partners; the impact of our pricing model strategies on our business; the impact of foreign currency exchange rate fluctuations and the uncertain inflation and interest rate environment on our results; our international expansion strategy; our operating results and cash flows; the sufficiency of our capital resources; our ability to successfully execute our go-to-market strategy, our forecasts regarding our business; and general market, political, economic and business conditions. Any additional or unforeseen effect from the evolving macroeconomic and geopolitical environments may exacerbate these risks. Additional risks and uncertainties that could cause actual outcomes and results to differ materially are included in our filings with the Securities and Exchange Commission (the “SECˮ), including our Annual Report on Form 10K for the fiscal year ended April 30, 2024 and subsequent reports filed with the SEC. SEC filings are available on the Investor Relations section of Elasticʼs website at ir.elastic.co and the SECʼs website at www.sec.gov. Elastic assumes no obligation to, and does not currently intend to, update any such forward-looking statements, except as required by law. In addition to GAAP financial information, this presentation and the accompanying oral presentation include certain non-GAAP financial measures. See the Appendix for a reconciliation of all historical non-GAAP financial measures to their nearest GAAP equivalent.
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Elastic, the Search AI Company, combines the precision of search with the intelligence of AI to help everyone find answers that matter from all data. In real time. At scale. 3
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Improving Operational Resilience Mitigating Security Risk Elevating Customer Experiences Todayʼs Business Priorities all Connect to Data 4
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Data produced daily by 2025 480EB 1 EB 1000 PB 1,000,000 TB *Source: IDC Global DataSphere and StorageSphere Forecasts But the mountain of data is enormous People canʼt find what theyʼre looking for 5
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GAI 2022 Mainframes 1950s Databases 1960s Microprocessor 1971 Modern OS 1981 WWW 1989 Mobile 2007 Cloud 2006 Generative AI is disrupting every business 72% 300M 10n ORGANIZATIONS have adopted AI in 1 or more business functions* JOBS AUTOMATED Forecasted impact of Generative AI TECHNOLOGY SHIFTS Personalization, automation & productivity Source: https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai https://www.gspublishing.com/content/research/en/reports/2023/03/27/d64e052b-0f6e-45d7-967b-d7be35fabd16.html 6
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Search is critical for Generative AI Relevance & natural language understanding Search is at the forefront of latest advancements Optimized to scale large data volumes Search delivers results with speed and at a lower cost Foundational framework for AI apps Search is an investment in harvesting data and building for the future 7
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One Search AI Platform Two Out-of-the-Box Solutions The Freedom to Build Anything Out-of-the-Box Solutions Observability Security Build Your Own Elasticsearch Ingest Visualization Workflow Automation Process Search AI Platform Storage & Replication Search AI & ML Analysis Search AI Lake 8
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A Comprehensive and Open Platform that Delivers Relevant Results in Real-time Business Outcomes for Everyone 69% Improvement in customer and employee satisfaction 60% Reduction in risk 62% Reduction in revenue disruption Any Data, Any Source Public Cloud On-Premises Databases Legacy Systems Applications SaaS Apps Web Services Files Validated by third-party research Out-of-the-Box Solutions Observability Security Build Your Own Elasticsearch Ingest Visualization Workflow Automation Process Search AI Platform Storage & Replication Search AI & ML Analysis Search AI Lake Elastic Self-Managed Elastic Cloud Hosted Elastic Cloud Serverless 9
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Featuring the Industryʼs Only Search AI Lake Out-of-the-Box Solutions Observability Security Build Your Own Ingest Visualization Workflow Automation Process Elasticsearch Search AI Platform AI & ML Analysis Storage & Replication Search Search AI Lake 10
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Lakehouse Response Time: Seconds Data Lake Response Time: 10s of Seconds Data Warehouse Response Time: Minutes Search AI Lake Response Time: Milliseconds Elasticʼs Search AI Lake is a stateless, AI-optimized data repository for both structured and unstructured data that supports context-aware search and retrieval for both real-time and analytical applications. Search AI Lake: A Whole New Architecture for the Gen AI Era 11
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Adopting Search AI Has Never Been Easier Elastic Self-Managed Elastic Cloud Hosted + Elastic Cloud Serverless + Spin up Elastic Self-Managed with one simple command. AutoOps on Elastic Cloud Hosted provides easy cluster management, with performance recommendations, resource utilization, and cost insights. Deploy and use Elastic via Elastic Cloud Serverless without managing the underlying Elastic cluster, such as nodes, data tiers, and scaling. 12
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The Speed, Scale, and Flexibility of the Search AI Platform WHY CUSTOMERS CHOOSE THE SEARCH AI PLATFORM + One of the world's leading digital travel companies, ingesting 100 terabytes of data per day to support customers + Chose Elastic to tackle the challenges of unparalleled growth, complexity, and scale with Elastic Security, Search, and Observability on Elastic Cloud + Now they can minimize risk and fraud while reducing the chance of damage to the reputation of the Booking.com brand Out-of-the-Box Solutions Observability Security Build Your Own Elasticsearch Ingest Visualization Workflow Automation Process Search AI Platform Storage & Replication Search AI & ML Analysis Search AI Lake 13
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The Flexibility to Build Your Own Search Experiences + Customers worldwide searching across millions of unique permutations of car configurations + Chose Elastic for the ability to deliver a centralized, searchable repository, tailored to different sales channels, markets, and audiences + Now they are driving increased revenue across the globe WHY CUSTOMERS CHOOSE ELASTICSEARCH Native Connectors Store, Search, and Analyze Databases Network Custom Connector Clients Customize and Extend Freely Databases Network Collaboration Tools Framework Build Your Own Elasticsearch Ingest Process 14
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A Comprehensive, AI Driven Observability Solution + Ingests 400 terabytes of telemetry data per day with Elastic Observability + Provides a single view across infrastructure, monitoring changes including more than 50,000 software builds a day + “Elastic provides us with the essential feedback that enables our engineers to iterate faster and increase the speed of innovation.ˮ WHY CUSTOMERS CHOOSE ELASTIC OBSERVABILITY 15
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A Comprehensive, AI Driven Security Solution + Over 1,000 pieces of internal network equipment and multiple security data silos + Chose Elastic for the ability to ingest all their security data, standardize it, and automatically detect threats + Now they can concentrate all their security workflows into a single solution - reducing MTTX 16 WHY CUSTOMERS CHOOSE ELASTIC SECURITY 16
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Years of Search and AI Expertise ⟶ Search AI 2018 2021 2022 2023 Support for supervised and unsupervised learning Bring your own transformer models (e.g. Hugging Face, or proprietary) Native support for vector search and embedding creation Support for domain- specific generative AI models 2018 2019 2022 2023 Support for forecasting in Observability Support for anomaly detection and AIOps Support for ML-powered detection rules in Security Support for GAI-powered security playbooks, O11y runbooks, AI Assistant Foundational technical building blocks within the Elastic Stack AI-powered features that enhance our solutions 2024 2024 Most downloaded Vector DB 4.5BN Downloads) Attack Discovery Powered by Search AI 17
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Elastic provides ALL the capabilities you need to power GenAI The full scope of necessary capabilities for Generative AI applications, beyond those provided by point-solution vector databases Create Vector Embeddings Hybrid Search (text + vector) Choice & Flexibility of embedding models Filtering & Faceting Autocomplete Optimized for text, geo, & other data Ingest Tools (web crawler, connectors, Beats, Agent, API framework) Search AnalyticsTrained model out-of-the-box Document-level Security On-prem / Cloud / Hybrid Store & Search Vector Embeddings Most Vector Databases Some Vector Databases Elasticsearch Aggregations Inference API Retrievers Reranking Native Chunking AutoOps Inference Service ES|QL for Search 18
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A safer, more cost effective approach to GenAI for more relevant results Delivers the most relevant content Before GenAI composes a response, Elasticsearch delivers the most relevant content to best answer the query Maintains security and confidentiality Recognizes and implements the appropriate access to the user and data, removes private information Reduces costs By providing the information most relevant to the query, less compute and storage resources are required Complete platform for AI apps End to end platform to build and deliver AI search applications 19
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Search AI Expertise Built into Each Elastic Solution From Search to Observability to Security Observability Anomaly Detection AIOps Automatic Import Interactive Root Cause Analysis Integrated Case Management AI Assistant LLM Observability Elasticsearch Semantic Search Image Search Sentiment Analysis Recommendations Named Entity Recognition Better Binary Quantization Semantic Re-ranker Model Security Threat Intelligence Automated Alerting AI Assistant Attack Discovery Automatic Import LLM Security 20
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Recognized Leadership in Search, Log Analytics, and Security Analytics Leader in the Gartner® Magic Quadrant™ for Observability Platforms, Aug. 2024 Strong Performer in The Forrester Wave™: AIOps, Dec. 2022 Leader in IDC Marketscape for SIEM 2024 Leader in The Forrester Wave™: Security Analytics Platforms, Dec. 2022 Visionary in Gartner® Magic Quadrant™ for SIEM, Oct. 2022, May 2024 Major Player in the IDC MarketScape: Worldwide SIEM 2022 Vendor Assessment Leader in the IDC Marketscape: Knowledge Discovery for External-Facing Use Cases 2024 Strong Performer in The Forrester Wave™: Cognitive Search, Dec. 2023 Leader in the IDC MarketScape: Knowledge Discovery Software 20232024 Observability Elasticsearch Security 21
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Trusted by Organizations Around the World TECHNOLOGY FINANCE TELCO CONSUMER HEALTHCARE PUBLIC SECTOR AUTOMOTIVE / TRANSPORTATION RETAIL 22
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Why Elastic Wins Power of the Community ●Millions of developers with billions of downloads ●Facilitates bottom up adoption within enterprises ●Generates an entry point into new markets ●Engaging with open communities across solutions Open Security, OpenTelemetry) Power of Partnerships ●Strategic partnerships with hyperscalers, including co-investments ●Powerful technology integrations ●Preferential access and relationships ●Joint sales pursuits Power of the Platform ●Solving problems from a search and AI lens: speed, scale, relevance ●Strong foundation in AI/ML, with support for AI across solutions ●Unstructured data from any source ●All solutions on a single stack ●Deploy anywhere - cloud, hybrid, on-prem Power of the Commercial Model ●Compelling TCO advantages and greater business value ●Uniform resource-based pricing model ●Consumption-based model for Cloud 23
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Elasticʼs Growth Vectors Customer data volume grows Customers adopt the cloud Customers adopt higher subscription tiers Customers adopt more use cases Customers adopt more solutions New customers adopt Elastic 24
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Distribution and Monetization Model Free & Open Paid PaidElastic Cloud Self-managed No Support Platinum Enterprise ● Resource-based pricing model ↔ Consumption-based subscriptions on Elastic Cloud ● Subscriptions generally 1 to 3 years, invoiced annually in advance ● Elastic Cloud also has month-to-month web-based self-service option 25 Search Observability Security Hosted Serverless Standard Gold Platinum Enterprise
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Low-friction Go-to-Market Model Direct Sales Services Partner Ecosystem Cloud, OEM/MSP, GSI, Resellers) High automation, self-serve product-led motion Customer Segment Coverage Model Enterprise Commercial SMB 26
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Scaling with Hyperscaler Cloud Partners ●Multi-year strategic agreements with co-investments ●Powerful technology integrations to accelerate Elastic Cloud adoption ●Preferential access and relationships under ISV programs ●Joint sales pursuits with sales incentives for hyperscaler sales teams 27
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Amazon Web Services Google Cloud Microsoft Azure Public Cloud Hybrid On-Premises Elastic is Wherever Your Data Lives 55 Cloud Regions Globally 28
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Sustaining the Cloud Momentum Robust Expansion Thriving Hyperscaler Partnerships Strong Customer Acquisition GTM Momentum Sustained, Organic Mix Shift to Cloud Organic Growth Track record of growth at scale Strong Consumption Patterns 29
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Q3 FY25 Results 3030
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Q3 FY25 Results At a Glance 17% Total Revenue Growth year-over-year 17% Non-GAAP Operating Margin* 1,460 Customers with ACV $100K 26% Elastic Cloud Revenue Growth year-over-year 47% of Total Revenue 31 ACV Annual contract value See appendix for reconciliation to GAAP operating margin
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Revenue Highlights $ millions Q3 FY25 Y/Y Y/Y CC Total Revenue $382 17% 17% Total Subscription Revenue $358 16% 17% Elastic Cloud Revenue $180 26% 26% Subscription % of Total Revenue 94% Professional Services Revenue $24 18% 18% CC Constant Currency 32
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Strong track record of driving growth As Reported Y/Y Growth % Constant Currency Y/Y Growth % As Reported Y/Y Growth % Constant Currency Y/Y Growth % Cloud Revenue as a % of Total Revenue 33 18% 19% 29% 29% 44% 20% 20% 32% 32% 44% 18% 18% 30% 30% 45% 17% 18% 25% 25% 46% 17% 17% 26% 26% 47%
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$100K ACV Customer Trend Change from Prior Quarter 60 50 30 34 30 50 60 40 50 40
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Change from Prior Quarter 100 70100 $10K ACV Customer Trend 35 60 60 80 60 50 60
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Healthy Net Expansion Rate 112% Q3 FY25 Trailing twelve month measure Includes only consumption, not commitments, for customers on Cloud consumption contracts 36
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Non-GAAP Income Statement Highlights $ millions, except per share amounts Q3 FY25 % of Revenue Total Revenue $382 100% Gross Profit/Margin $293 77% Research & Development Expense $68 18% Sales & Marketing Expense $131 34% General & Administrative Expense $31 8% Operating Income/Margin $64 17% Earnings per share - Diluted $0.63 See appendix for reconciliation to GAAP 37
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Select Financial Measures $ millions, except employees Q3FY25 Adjusted Free Cash Flow* $99 Cash, Cash Equivalents, and Marketable Securities $1,284 Total Deferred Revenue $707 Remaining Performance Obligations $1,354 Employees 3,403 See appendix for reconciliation to GAAP 38
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Q4 and Full Year FY2025 Guidance Q4FY25 FY25 Total Revenue $379M - $381M $1.474B - $1.476B Year-over-year growth % 13% 16% Constant currency year-over-year growth % 15% 17% Non-GAAP Operating Margin 13.5% 14.7% Non-GAAP Diluted Earnings Per Share $0.36 - $0.37 $1.91 - $1.96 Diluted Weighted Average Shares Outstanding 107.5M - 108.5M 106M - 108M A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for operating margin and diluted earnings per share is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, many of the costs and expenses that may be incurred in the future. These items necessary to reconcile such non-GAAP measures could be material and have a significant impact on the Companyʼs results computed in accordance with GAAP. 39
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Appendix 40
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GAAP to Non-GAAP Reconciliations Gross Profit and Gross Margin Sums may not add to totals due to rounding 41 1 % $ in millions except percentages Q3 FY25 GAAP gross profit $285 Stock-based compensation expense and related employer taxes 7 Amortization of acquired intangibles 2 Non-GAAP gross profit $293 GAAP gross margin % 75 % Stock-based compensation expense and related employer taxes 2 % Amortization of acquired intangibles — % Non-GAAP gross margin % 77 %
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GAAP to Non-GAAP Reconciliations Operating Expenses Sums may not add to totals due to rounding 42 $ in millions except percentages Q3 FY25 GAAP sales & marketing expenses $154 Stock-based compensation expense and related employer taxes (23) Amortization of acquired intangibles — Non-GAAP sales & marketing expenses $131 Y/Y 9 % GAAP research & development expenses $94 Stock-based compensation expense and related employer taxes (26) Acquisition-related expenses — Non-GAAP research & development expenses $68 Y/Y 11 % GAAP general & administrative expenses $42 Stock-based compensation expense and related employer taxes (12) Acquisition-related expenses — Non-GAAP general & administrative expenses $31 Y/Y 12 %
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GAAP to Non-GAAP Reconciliations Operating Loss / Income, Operating Margin, and Loss / Earnings per Share 43 GAAP to non-GAAP diluted net (loss) earnings per share is not reconciled due to differences in the number of weighted-average shares used to calculate GAAP and non-GAAP diluted net (loss) earnings per share. Sums may not add to totals due to rounding $ in millions except percentages and per share amounts Q3 FY25 GAAP operating loss $(5) Stock-based compensation expense and related employer taxes 67 Amortization of acquired intangibles 2 Acquisition-related expenses — Restructuring and other related charges — Non-GAAP operating income $64 GAAP operating margin % (1)% Stock-based compensation expense and related employer taxes 18 % Amortization of acquired intangibles — % Acquisition-related expenses — % Restructuring and other related charges — % Non-GAAP operating margin % 17 % GAAP net loss per share - basic and diluted $(0.16) Stock-based compensation expense and related employer taxes 0.64 Amortization of acquired intangibles 0.02 Acquisition-related expenses — Restructuring and other related charges — Tax adjustment 0.15 Non-GAAP earnings per share - basic $0.65 Non-GAAP earnings per share - diluted $0.63
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GAAP to Non-GAAP Reconciliations Adjusted Free Cash Flow Sums may not add to totals due to rounding. Adjusted free cash flow is a non-GAAP financial measure that we define as net cash provided by operating activities adjusted for cash paid for long-term debt interest less cash used for investing activities for purchases of property and equipment. Adjusted free cash flow margin is calculated as adjusted free cash flow divided by total revenue. Adjusted free cash flow does not represent residual cash flow available for discretionary expenditures since, among other things, we have mandatory debt service requirements. 44 $ in millions Q3 FY25 Net cash provided by operating activities $88 Less: Purchases of property and equipment $(1) Add: Interest paid on long-term debt $12 Adjusted free cash flow $99 Net cash provided by operating activities (as a percentage of total revenue) 23 % Less: Purchases of property and equipment (as a percentage of total revenue) — % Add: Interest paid on long-term debt (as a percentage of total revenue) 3 % Adjusted free cash flow margin* 26 %