Elastic (ESTC 1.18%)
Q3 2023 Earnings Name
Mar 02, 2023, 5:00 p.m. ET

Contents:

• Ready Remarks
• Questions and Solutions
• Name Contributors

Ready Remarks:

Operator

Good day, and welcome to the Elastic third quarter fiscal 2023 earnings outcomes convention name. All contributors can be in a listen-only mode. [Operator instructions] After right this moment’s presentation, there can be a possibility to ask questions. [Operator instructions] Please notice that right this moment’s occasion is being recorded.

I’d now like to show the convention over to Nikolay Beliov, vice chairman of investor relations. Please go forward, sir. 

Nikolay Beliov — Vice President, Investor Relations

Thanks. Good afternoon, and thanks for becoming a member of us on right this moment’s convention name to debate Elastic’s third quarter fiscal 2023 monetary outcomes. On the decision, now we have Ash Kulkarni, chief govt officer; and Janesh Moorjani, chief monetary officer and chief working officer. Following their ready remarks, we are going to take questions.

Our press launch was issued right this moment after the shut of market and is posted on our web site. Slides, which accompany this webcast, could be seen along with stay remarks and could be additionally downloaded on the conclusion of the webcast on the Elastic investor relations web site, ir.elastic.co. Our dialogue will embody forward-looking statements, which can embody predictions, estimates, our expectations concerning the demand for our merchandise and options, and our future income and different data. These forward-looking statements are primarily based on components presently identified to us, communicate solely as of the date of this name, and are topic to dangers and uncertainties that might trigger precise outcomes to vary materially.

We disclaim any obligation to replace or revise these forward-looking statements except required by legislation. Please consult with the dangers and uncertainties included within the press launch that we issued earlier right this moment included within the slides accompanying this webcast and people extra absolutely described in our filings with the Securities and Trade Fee. We may even focus on sure non-GAAP monetary measures. Disclosures concerning non-GAAP measures, together with reconciliations with essentially the most comparable GAAP measures could be discovered within the press launch and slides.

The webcast replay of this name can be obtainable for the subsequent 60 days on our firm web site beneath the Investor Relations hyperlink. Our fourth quarter fiscal 2020 quiet interval begins on the shut of enterprise on Friday, April 14, 2023. On March 6, 2023, we can be collaborating within the Morgan Stanley Know-how, Media and Telecommunications Convention. With that, I will flip it over to Ash. 

Ash Kulkarni — Chief Government Officer

Thanks, Nikolay, and thanks all for becoming a member of us. I am happy with how we carried out this quarter within the context of a difficult market setting. We stay fully centered on our clients and our enterprise and proceed to be excited in regards to the alternative forward of us. Our whole income within the third quarter grew 27% 12 months over 12 months in fixed forex, whereas we handle the enterprise with self-discipline to ship stronger-than-expected non-GAAP working margin of seven.9%.

Elastic Cloud comprised 40% of whole income, up from 36% within the year-ago quarter, and grew 40% 12 months over 12 months in fixed forex. We noticed robust buyer contractual commitments, and clients continued consolidating on our platform. Earlier than I focus on — the important thing focus areas for our enterprise, I want to contact on three subjects: first, the macro setting; second, how we’re executing within the present setting. And third, the platform consolidation alternative forward for Elastic.

First, per Q2, third quarter deal cycles proceed to be elongated with extra ranges of approvals, and the SMB phase remained difficult. Additionally, as we had anticipated, clients proceed to optimize their utilization. We noticed this throughout clients of all sizes and throughout industries. We anticipate that consumption optimization will proceed within the close to time period.

Regardless of these difficult instances for everybody, we’re centered on constant execution. This leads me to the second subject. The steps now we have taken to regulate and optimize our investments throughout the enterprise, show our stable execution and provides us continued confidence within the long-term market alternative. We’ve got continued to selectively spend money on our enterprise and business gross sales capability and have seen these parts of the enterprise carried out properly with a wholesome pipeline and robust buyer commitments.

On the SMB facet, we proceed to refine our buyer acquisition and enlargement motions and stay centered on attracting clients which have the next propensity for development. Janesh will contact on this shortly. The steadiness between development and margins is a key focus for the corporate, and we’re demonstrating wholesome margin enlargement as we drive stronger return on investments throughout our investments. Third, our platform capabilities play to our strengths on this macro setting as clients look to consolidate suppliers with out sacrificing innovation.

Our land-and-expand technique is working with each expansions inside options and throughout options, bolstered by continued improvements in our underlying platform. We win by serving to clients ship higher enterprise outcomes, not limiting what knowledge they’ll convey into Elastic whereas on the similar time, decreasing their whole value of possession. Elastic is mission-critical for patrons, who want unified visibility throughout their enterprise to maintain their programs safe, dependable, and acting at scale. Now I might wish to share our progress throughout our three key focus areas: driving sturdy development, widening the aggressive moat, and fueling worthwhile development.

Beginning with sturdy development. We consider the consolidation of IT budgets is benefiting the Elastic platform as clients wish to Elastic to simplify the setting, cut back prices and enhance productiveness and visibility. Over the previous quarter, I met with dozens of shoppers throughout our key geographies, and so they constantly expressed their need to do extra with Elastic as a central pillar of their IT infrastructure. We additionally continued to see robust development in clients adopting Elastic Cloud and increasing throughout options.

Our income by way of the cloud hyperscaler marketplaces doubled 12 months over 12 months together with a number of transactions over $1 million ACV. For example, this quarter, we closed an eight-figure cope with a Fortune 100 monetary companies supplier that’s utilizing Elastic Cloud on AWS to consolidate its observability and safety infrastructure. The corporate selected Elastic to streamline operational prices and achieve higher visibility throughout its setting whereas safeguarding delicate buyer knowledge and assembly regulatory compliance necessities. We additionally closed one other eight-figure cope with a high 10 multinational monetary companies firm that’s increasing on Elastic to consolidate its observability, safety, and inner and exterior search capabilities on our platform.

They proceed to develop use circumstances with us, most not too long ago increasing their use of monitoring and AIOps and superior capabilities like tiered storage and machine studying. On the go-to-market entrance, final quarter, Elastic participated in 30 occasions and go-to-market applications with our cloud hyperscaler companions, together with AWS Reinvent, the place we met greater than 5,000 clients and prospects and held a joint session with our buyer, DISH Media. Our stage of funding and engagement on this flagship occasion is a testomony to the momentum of our partnership and the rising base of mutual clients that we serve. Lastly, I am excited to share that now we have not too long ago welcomed a brand new chief advertising and marketing officer to Elastic, Matthew Donoghue.

Matt brings a powerful cybersecurity advertising and marketing background and intensive expertise growing and executing go-to-market plans to assist firm development. His expertise in growing demand and driving gross sales will assist us speed up our journey as we construct a generational firm. The long-term alternative for Elastic is evident, and we’re positioning the enterprise to emerge even stronger as we undergo these difficult financial instances. Now on to our widening aggressive moat.

Our options proceed to be bolstered by innovation on the Elastic platform, pushed partly by our AI and machine studying capabilities. As business analysts have reported and our personal buyer surveys additionally point out, investments in ML are elementary to IT leaders’ capacity to ship on digital enterprise transformation. ML continues to be a significant driver for patrons adopting our increased subscription tiers. A key a part of our method to machine studying is permitting our clients to combine their very own fashions along with leveraging the fashions that we provide.

By natively integrating machine studying into the core of Elasticsearch, now we have enabled our clients to undertake new ML-based options throughout every of our answer areas. Now I’ll share some particulars about extra innovation and buyer wins throughout our safety, observability, and enterprise search options. Beginning with safety. This quarter, we renewed enterprise with a number one multinational telecommunications firm, which is utilizing Elastic Safety to bolster its cyber defenses with menace detection and response.

A longtime Elastic buyer, they expanded the enterprise with Elastic through the Google Cloud Market with the aim of consolidating and standardizing their safety operations throughout greater than 10 international locations. We additionally renewed a seven-figure multiyear cope with a high 250 MSSP utilizing Elastic Cloud on AWS to increase their safety use circumstances throughout SIEM, XDR, and Endpoint. They selected Elastic Safety for our easy, consumption-based pricing that allows them to increase their use of elastic as their buyer utilization grows. We delivered a number of new capabilities in Q3, together with interactive investigation guides, new deception-based ransomware protections, and improved protections towards knowledge exfiltration by way of entity analytics.

Elastic Safety additionally continues to be acknowledged by main business analyst corporations. In our first look within the Forrester Wave for Safety Analytics, Elastic was named a frontrunner, reaching the very best rating for technique. Elastic was additionally named a significant participant within the 2022 IDC Marketscape for SIEM. Now transferring on to Elastic Observability.

This quarter, we renewed and expanded a seven-figure cope with Deutsche Telekom, a number one built-in telecommunications firm. As an Elastic Observability buyer, they use Elastic for multi-cloud monitoring, in addition to superior capabilities like machine studying to forecast bandwidth calculations that help them in planning their networks after which optimizing prices. The corporate additionally makes use of Elastic Safety for SIEM, Endpoint, and EDR to safe its personal inner networks. In Q3, we launched improvements, together with a brand new curated journey that accelerates root trigger evaluation by aiding within the identification of efficiency or availability points brought on by utility dependencies.

Elastic additionally appeared for the primary time within the Forrester Wave for AIOps, being acknowledged as a powerful performer and receiving the very best attainable scores in 13 analysis standards. Now on to Enterprise Search. This quarter, we closed a brand new seven-figure deal in APJ with a significant social e-commerce platform in India, which moved from AWS Open Search to Elastic Cloud through the Google market. With Elastic Enterprise Search, they have been capable of dramatically cut back search latency throughout a mean of two.8 million transactions per day whereas optimizing the purchasing expertise for his or her customers.

On the innovation entrance, we launched new instruments to implement and handle pure language processing throughout search indices, accelerating each time to worth and higher-quality search outcomes. I am additionally happy to share that Elastic was acknowledged as a frontrunner within the 2022 Gartner Magic Quadrant for Insights Engines, positioned furthest to the best for our completeness of imaginative and prescient. Shifting on to our long-term mannequin and our concentrate on worthwhile development. Once we first shared the $2 billion FY ’25 income goal in June of final 12 months, it mirrored the market alternative in entrance of us and the expansion trajectory of our enterprise on the time.

Though we absolutely count on to be a multibillion-dollar firm over time, given the present macro setting we’re working in, we don’t count on to realize the $2 billion income mark in FY ’25. Equally, whereas we’re seeing wholesome buyer commitments, given the softer consumption patterns within the close to time period, we count on Elastic Cloud income exceeding 50% of whole income will take longer than we initially anticipated. Having mentioned this, I’ll reemphasize our conviction within the long-term alternative in entrance of us, particularly in Elastic Cloud. That conviction is based on the power of our product improvements and continued buyer confidence in Elastic as mirrored in buyer commitments and in all of the examples I shared earlier.

Now on profitability. As we have demonstrated this quarter, we’re dedicated to managing the enterprise with self-discipline and stay extremely assured in our capacity to ship the ten% FY ’24 non-GAAP working margin goal we established final quarter with additional enlargement in fiscal ’25. Our fundamentals stay robust. We stay dedicated to persevering with our development technique whereas delivering growing profitability.

In closing, I wish to thank our workers for his or her dedication and contribution to our efficiency. I additionally wish to thank our clients, companions, and buyers for his or her continued assist and confidence. With that, I will flip it over to Janesh to undergo our ends in extra element. 

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Thanks, Ash. We’re happy that we as soon as once more got here in above the excessive finish of each our top-line and bottom-line steering for the quarter regardless of the present financial setting. We delivered 27% year-over-year constant-currency development in whole income, and Elastic Cloud grew 40% 12 months over 12 months in fixed forex. Let me begin with two distinct enterprise themes we noticed within the quarter.

First, we noticed robust ranges of buyer contractual commitments to Elastic. Prospects wish to do extra with Elastic, and our gross sales crew executed properly within the quarter to safe these commitments. As offered a number of examples of marquee clients experiencing the advantages of the Elastic platform and options, this is a crucial indicator for us because it straight interprets into future income. The second theme we noticed pertains to consumption patterns.

Prospects proceed to search for methods to optimize their utilization. We noticed this throughout segments of our buyer base. Though it is a near-term headwind, our platform naturally helps clients drive efficiencies with capabilities like searchable snapshots and frozen storage. Mixed with the advantages of a consumption mannequin, our platform allows clients to consolidate extra workloads on Elastic over time.

Placing these two items collectively, as clients look to scale back prices, they’re selecting Elastic as their accomplice for the long run whereas additionally leveraging the capabilities we offer to assist them optimize utilization within the close to time period. The expansion and commitments that clients made to us in the course of the quarter provides us confidence within the underlying power of the enterprise and our capacity to efficiently tackle the market alternative over time. Now let’s get into the Q3 outcomes and our outlook. Complete income within the third quarter was $275 million, up 23% 12 months over 12 months or 27% in fixed forex.

Subscription income within the third quarter totaled $256 million, up 22% 12 months over 12 months or 26% in fixed forex, comprising 93% of whole income. Inside subscriptions, income from Elastic Cloud was $111 million rising 38% 12 months over 12 months or 40% in fixed forex. Elastic Cloud represented 40% of whole income within the quarter, up from 36% a 12 months in the past. Elastic Cloud income primarily based on month-to-month consumption preparations proceed to be 16% of whole income, much like the prior quarter and in comparison with 17% within the year-ago quarter.

Skilled companies income within the third quarter was $19 million, rising 32% 12 months over 12 months or 37% in fixed forex. We noticed sequentially decrease income from skilled companies given the timing of completion of tasks. Though skilled companies might fluctuate throughout quarters, we don’t count on it to range considerably in combine over time. So as to add extra context round deal circulate and efficiency by area, we noticed balanced deal circulate throughout geographies on a currency-adjusted foundation.

APJ grew the quickest, adopted by EMEA and the Americas. We additionally noticed a wholesome steadiness throughout the options and proceed to take care of an identical answer combine in annual contract values versus the prior quarter. buyer metrics. We continued our technique of specializing in clients with the next propensity for development.

This technique was mirrored in our outcomes. Within the third quarter, we added over 100 clients above $10,000 in annual contract worth to finish at over 4,000 such clients. clients over $100,000 ACV, we added over 60 clients in that class, representing a powerful variety of sequential additions and bringing us to over 1,110 such clients as of the tip of the third quarter. That is indicative of buyer commitments that I referenced earlier.

The shopper rely on this over $100,000 ACV class continues to be a powerful underpinning of our land and increase movement as we construct a multibillion-dollar firm over time. Our whole buyer rely additionally continued to extend, ending at roughly 19,900 whole subscription clients. As I discussed earlier, these metrics point out the power of buyer commitments to Elastic. Turning to the online enlargement price.

Our web enlargement price was roughly 120%, pushed partly by slower consumption. As a reminder, for patrons on consumption-based preparations, our web enlargement price displays solely their precise consumption and never their dedication. Our buyer metrics point out that our core technique is sound. Prospects are making robust commitments to us, and we stay assured in our capacity to deal with the massive market alternative.

Our options are utilized in core mission-critical use circumstances, and we give clients huge flexibility with the consumption-based enterprise mannequin on cloud. Now turning to profitability for which I will focus on non-GAAP measures. Gross margin within the quarter was 75.5% versus 74.5% within the prior quarter with the sequential enchancment pushed primarily by higher subscription gross margins, which elevated to 80.1% versus 79.2% in Q2. working bills within the third quarter, we proceed to handle our bills and investments within the enterprise properly.

Our working margin within the quarter was 7.9%, which was considerably higher than anticipated because of the earlier-than-planned exit of some workers from our restructuring actions, higher gross margin, and, to a lesser extent, a shift in timing of some bills to This fall. Diluted earnings per share within the third quarter was $0.17. Free money circulate on an adjusted foundation was roughly $19 million within the third quarter. Primarily based on our robust efficiency, we’re growing our outlook for the 12 months and now count on adjusted free money circulate margin to be within the low single digits for full fiscal ’23 in comparison with our prior outlook of roughly breakeven.

As a reminder, that is after the outflows associated to the restructuring we introduced within the second quarter. We proceed to take care of a powerful steadiness sheet. We ended the third quarter with money and money equivalents of $878 million. We stay comfy with our money place from an working perspective.

Turning to steering. As I discussed earlier, we exceeded our expectations for the third quarter, and we additionally noticed greater-than-expected power in buyer commitments. Moreover, clients of all sizes proceed to optimize consumption. We consider that it’s prudent to contemplate that consumption developments would possibly gradual additional earlier than they enhance once more.

We’re incorporating this risk into our steering for This fall and are modestly decreasing our outlook for the complete 12 months. Given the macro spending setting, we’re merely being cautious as we monitor near-term developments. Additional, as a reminder, our fiscal fourth quarter has solely 89 days in comparison with 92 days within the third quarter, and this presents a headwind of roughly 3% to sequential development charges. 12 months-over-year development charges aren’t affected by this.

We additionally proceed to handle bills tightly whereas investing with self-discipline within the enterprise, together with an enterprise and business gross sales capability. Given our robust efficiency to date, we’re elevating our non-GAAP working margin outlook for the 12 months. The outlook for the fourth quarter displays roughly $10 million in seasonally increased bills than the third quarter associated to the timing of worker profit bills and our engineering all-hands occasion. With that background, for the fourth quarter of fiscal ’23, we count on whole income within the vary of $276 million to $278 million, representing 16% year-over-year development on the midpoint.

On a constant-currency foundation, we count on whole income development of 18% 12 months over 12 months on the midpoint. We count on non-GAAP working margin within the vary of 4.8% to five.2% and non-GAAP earnings per share within the vary of $0.08 to $0.10 utilizing between 100 million and 101 million diluted weighted common extraordinary shares excellent. For full fiscal ’23, we now count on whole income within the vary of $1.065 billion to $1.067 billion, representing 24% year-over-year development on the midpoint. On a constant-currency foundation, we count on whole income development of 28% 12 months over 12 months on the midpoint.

We count on non-GAAP working margin for full fiscal ’23 within the vary of three.3% to three.4% and non-GAAP earnings per share within the vary of $0.11 to $0.14 utilizing between 99 million and 100 million diluted weighted common extraordinary shares excellent. Lastly, looking forward to fiscal 2024. As you understand, we offer steering for the subsequent fiscal 12 months on the This fall earnings name. We’re in the course of our planning course of, and we nonetheless have a big quantity of enterprise to shut within the fourth quarter.

Having mentioned that, we do wish to offer you a way of how we’re presently seeing subsequent 12 months’s form up given the statements now we have made about our confidence in delivering robust income development on a sustainable foundation. First, we stay centered on delivering sturdy long-term income development as we construct a multibillion-dollar income enterprise. We’re assured that we’re nonetheless within the early phases of this development journey. But, we stay prudent in our view of the macroeconomic setting.

Accordingly, as of proper now, we count on whole income development in fiscal ’24 to be within the mid- to excessive teenagers. We count on first half year-over-year development in whole income to be barely decrease than our expectation for the complete 12 months given harder comparisons towards the primary half of fiscal ’23. We are going to proceed to carefully monitor buyer commitments and consumption patterns, and we’ll present formal steering on the subsequent earnings name. Second, we count on cloud will stay a income development driver for us.

Our development in cloud is pushed predominantly by new and enlargement use circumstances slightly than migrations from self-managed. Third, we are going to proceed to spend money on the enterprise with self-discipline in assist of our drive to sturdy long-term development. We stay dedicated to delivering non-GAAP working margin of 10% subsequent 12 months, and the actions now we have already taken are enough in that regard. A few of our bills are seasonally increased within the first quarter, whereas income will ramp over the 12 months.

Accordingly, we count on Q1 to be the low level on non-GAAP working margin. We additionally count on to have adjusted free money circulate development in fiscal ’24, per the non-GAAP working margin enhance. Long run, we proceed to count on to ship a number of factors of non-GAAP working margin enlargement in fiscal ’25 as we develop income quicker than bills. In abstract, we stay centered on execution and consider that we’re well-positioned for long-term sturdy development and profitability.

And with that, let’s go forward and take questions. Operator? 

Questions & Solutions:

Operator

We are going to now start the question-and-answer session. [Operator instructions] At this time’s first query comes from Pinjalim Bora with J.P. Morgan. 

Pinjalim Bora — J.P. Morgan — Analyst

Hey, thanks for taking the questions. First query, I simply needed to unpack the steering a bit to excessive teenagers. Janesh, possibly assist me perceive sort of the assumptions there. Are you assuming sort of the month-to-month cloud combine to proceed to take a step down or the remainder of the cloud enterprise, which is to sort of proceed to average as consumption developments average? How ought to we take into consideration the online enlargement price or the brand new logos? Simply attempting to grasp the sort of completely different drivers that leads you to the fiscal ’25 development developments.

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Hey, Pinjalim, glad to take that. So, look, as we take into consideration the outlook for subsequent 12 months, I might say it is nonetheless early, however we needed to not less than offer you an preliminary view right this moment of how we see issues shaping up. So, give it some thought as an outlook or a framework. And inside that, there’s clearly a number of drivers, not within the least of which would be the broader setting, however we’re not attempting to make any assumptions or predictions in regards to the macro.

I feel inside that vary that we have offered, we are able to definitely accommodate some variations within the macro setting from this level. However the bulk of it actually will come all the way down to consumption patterns after which, after all, simply to our personal execution. We have delivered very robust buyer commitments right here in Q3. We nonetheless have This fall forward of us.

That is often our seasonally largest quarter within the 12 months. So, we’re centered on simply ensuring we execute properly right here in This fall, and we have additionally — that we additionally entered subsequent 12 months with applicable promoting capability. And so, as I take into consideration a few of the underlying drivers, consumption continues to evolve. We’ll clearly be monitoring that very rigorously, however the commitments that we have secured from clients and the momentum that we proceed to get pleasure from with clients continues to be a very robust indication for us across the future.

So, after we get to the subsequent name, then we are going to present a bit of bit extra of a proper view on a narrower steering vary, however these are a few of the places and takes that we’re desirous about internally at this stage as we construct our fashions.

Pinjalim Bora — J.P. Morgan — Analyst

OK. Obtained it. Thanks, Janesh. And one query for you, Ash.

AIOps has been a bit of bit topical. And now we have not — I do know you had had ML for a while within the X-Pack. We’ve got not likely a lot heard about IP on a broader context from Elastic. How do you concentrate on AIOps? Do you consider it as a function? Do you consider it as sort of an intern manner of working product or future state of the product sooner or later? 

Ash Kulkarni — Chief Government Officer

Yeah, the best way I give it some thought, Pinjalim, thanks for the query, is basically that AIOps is core to the way you guarantee that you may allow observability customers to do their job in essentially the most environment friendly manner attainable. On the finish of the day, AIOps is all about guaranteeing that you may, at the beginning, herald all related knowledge, whether or not it is logs, metrics, traces, profiles, actual person monitoring data, and so on., all into one place after which apply the best sorts of machine studying to it to make sure that you may shortly floor these points that may be most related. So, you are lowering the extent of fatigue {that a} typical web site reliability operator has to undergo to get to root trigger evaluation to make sure that they’re assembly their SLOs and SLIs. I feel that is very, very vital, and that is how we have a look at the AIOps use circumstances.

And it is nice to see that each one the work that we have been placing into machine studying, into incorporating that in core into our platform, ensuring that we at all times make it attainable for customers to herald all of their TRACE knowledge, metrics knowledge, log knowledge in a single place and apply the sorts of algorithms that we offer, but in addition algorithms that customers would possibly convey, all of that work, it is truly being acknowledged. We’re seeing nice — I talked about a few of the buyer examples that I gave, included clients utilizing AIOps, however it’s additionally the analyst recognition, which actually makes me be ok with the truth that the work that we’re doing is being seen, it is being acknowledged, and we really feel very assured about how that is going to assist proceed to make us a stronger and stronger participant in observability.

Pinjalim Bora — J.P. Morgan — Analyst

Obtained it. Thanks very a lot.

Operator

Our subsequent query comes from Tyler Radke with Citi. Please proceed. 

Tyler Radke — Citi — Analyst

Yeah. Thanks for taking the query. And I needed to first begin. Ash, you talked about a few of the ML use circumstances, sort of a associated query to the one Pinjalim requested.

However how are you simply seeing that broader alternative past the ML and AIOps? However simply given there’s been loads of attention-grabbing utility of huge language fashions on search, how are you approaching that? After which when you might simply give us an replace on the enterprise tier adoption? How are you seeing the uptake of that premium SKU on this setting? What p.c of the bottom is migrated over there? Thanks.

Ash Kulkarni — Chief Government Officer

Yeah. No, completely. So, clearly, machine studying has been a really core ingredient of what we have accomplished at Elastic for the final a few years. I’ve talked about it prior to now.

Once we got here out with model 8.0. We talked loads about vector search and machine studying. Proper now, I do know that there is loads of curiosity on this space, AI and machine studying, because of ChatGPT and Open AI. And in some methods, like we see ChatGPT and the very giant transformer fashions that they’ve launched has been actually complementary to what we do.

And in the long run, it is a actually thrilling alternative. Although, I feel we are able to all agree that it is nonetheless early phases. If you concentrate on Elastic in our platform, we offer the muse for our clients to construct purposes on high of our platform with their knowledge utilizing vector search, utilizing machine studying. And within the final many releases, we have been making some investments on this course very thoughtfully within the space the place we have now added the power for patrons to straight load giant transformer fashions into Elasticsearch.

So, they do not should take the information out of Elasticsearch, and so they can carry out all of the actions on knowledge in Elasticsearch utilizing these giant transformer fashions, carry out inference on them straight. And lots of of those transformer fashions, like those constructed by Open AI, they usually depend on embeddings. The core performance that they usually require is vector search, vector search sorts of capabilities. So, these are the areas that we have talked about prior to now.

However hopefully, now you get a way of how these items are coming collectively. And clients can construct new pure language search purposes on our platform powered by vector search utilizing these sorts of machine studying functionalities. So, in the long run, I really feel that that is going to be a very superior alternative, however it’s nonetheless very early days. So, we’re engaged on it.

We have been innovating on this space for a very long time. And we consider that the function that we play as a foundational platform that clients can use to convey their knowledge after which use these sorts of ML fashions on that knowledge, on Elasticsearch is what is going on to be actually compelling for us.

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

And Tyler, on the enterprise tier adoption, that is Janesh. I will add that we have continued to see power there. We proceed to see wonderful buyer adoption, significantly pushed by options like searchable snapshots. We count on that as with options like hybrid cross-cluster search — I feel I’ll lastly be taught to pronounce that sometime.

However with options like hybrid cross-cluster search, there you go, we count on that we’ll proceed to get additional traction. And so, we’re excited in regards to the enterprise subscription tier, and I feel that can proceed to be a development driver for us. You will keep in mind that it was 13% of whole buyer spend on Elastic Cloud final 12 months, and it stays the fastest-growing subscription tier for us. And possibly simply as a closing reminder for a few of the people on the market that might not be as conversant in this.

The enterprise subscription tier, as you understand, just isn’t a proxy for our gross sales progress within the enterprise phase. Lots of our giant enterprise clients are, in actual fact, on the platinum tier. So, that is only a naming factor. 

Tyler Radke — Citi — Analyst

Thanks, Janesh, and second query I needed to ask is simply in your feedback in regards to the good contracting within the quarter. Clearly, you noticed billings develop fairly properly, 35%, properly above income. What drove that? Was there early renewals in there? And I suppose simply the place — by way of the robust contracting you are seeing, is it possibly coming in a stronger on-prem combine than cloud, given that you take down sort of your medium-term cloud targets? Simply assist us perceive the sort of the disconnect between robust contracting and a weaker income outlook. Thanks. 

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Yeah. Joyful to take that. So, by way of the billings, in order you understand, there’s quite a lot of methods through which we have a look at the enterprise. We have a look at it primarily from the standpoint of income, and holding apart the entire causes to have a look at or not have a look at billings, basically, what we noticed within the quarter was simply robust gross sales execution.

So, this was not about early renewals. It was not about any explicit profit from offers from Q2 that pushed out. We at all times see some ranges of pushouts and pull-ins. Essentially, the setting by way of gross sales cycles and enterprise buyer shopping for habits has not modified.

I feel it was simply good old style execution on the a part of our gross sales crew that did rather well to adapt to the circumstances that we noticed on the finish of Q2. So, we felt fairly good about that. And when you then type of take into consideration the self-managed and cloud parts inside that, we noticed a good quantity of power on the cloud adoption truly by way of contractual commitments on cloud. That got here in considerably stronger.

So, it is nice that we’re seeing that. I feel that displays buyer preferences. On this setting, clients are on the lookout for software consolidation over time. And the commitments that they’ve made will simply assist us consolidate extra workloads onto Elastic Cloud over time, and all of that can ultimately translate into income as a result of these are contractual commitments.

In order that’s largely a query of the timing across the consumption patterns. And what we have seen within the consumption patterns, as we talked about is that this near-term pattern towards optimization as clients are persevering with to have a look at methods to make each greenback go additional, and I feel you have seen that extra broadly as properly. So, that is a few of what we noticed within the quarter as properly, and that is what we factored into the information for This fall, in addition to a few of the early outlook for fiscal ’24.

Tyler Radke — Citi — Analyst

Thanks.

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Thanks.

Operator

The subsequent query comes from Koji Ikeda with Financial institution of America. please proceed. 

Koji Ikeda — Financial institution of America Merrill Lynch — Analyst

Yeah. Hey, guys. Thanks for taking the questions. I sort of needed to return to the fiscal 2024 information and dig in a bit of bit deeper there.

As a result of after I have a look at the fourth quarter information, it actually sort of assumes a 1 percent-ish sequential development price, and the mid-teens development for 2024 is kind of a bit increased than a 1% sequential development price to get there. And I recognize all the colour that you just guys gave, a few of the issues that you just’re seeing from a consumption patterns and bookings perspective and utilization perspective. However I suppose the query right here is that this information for 2024, this early look, does it imply that the macro will get higher from right here? Or does it — the patterns that you just’re seeing throughout the enterprise now and the macro stays the identical can get to that mid-teens goal? 

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Koji, I will take that. So, possibly simply to make clear on the This fall information. Simply as a reminder, This fall has 89 days, and each different quarter has 92 days this fiscal 12 months. So, that represents a couple of 3-percentage-point sequential development headwind in This fall.

And in order that’s simply one thing that it’s worthwhile to consider, and we clearly had that final 12 months as properly. So, it doesn’t have an effect on the year-over-year development charges, however it does have an effect on the sequential development charges as you construct that out. And so, if you concentrate on our year-over-year development price information for This fall, that is 18% in constant-currency phrases, and so the FY ’24 development price is basically per that. And clearly, we have offered an preliminary outlook.

We are going to formalize this as steering later, however in that mid- to excessive teenagers vary. So, inside that, we’re not assuming something considerably completely different in regards to the macro. It is nonetheless very early. We’re not predicating this on some thesis of macro enchancment.

We definitely aren’t able to foretell that. We offered the outlook primarily based on the present state of what we all know and what we see on the market right this moment. After which as I mentioned earlier, inside that, we clearly have some extent of capacity to soak up some additional variability on that in any of the course actually. So, that is the best way we’re desirous about fiscal ’24 at this stage.

Koji Ikeda — Financial institution of America Merrill Lynch — Analyst

Obtained it. Janessa. Thanks a lot. I do know there is a bunch extra ready, so I will hop again within the queue.

Thanks a lot.

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Thanks, Koji.

Operator

Your subsequent query comes from Ittai Kidron with Oppenheimer. Please proceed. 

Ittai Kidron — Oppenheimer and Firm — Analyst

Thanks. Hey, guys. Two issues I wish to dig in. Initially, the optimization course of that you just’re seeing with clients.

Are you able to give us examples of what are the precise actions? Generally they take in an effort to optimize their deployments, primary. And quantity two, why would not one suppose that when a buyer takes an optimization exercise, why is that this one thing that is accomplished in a short time after which transferring on? Like why does optimization processes, why can they linger over a number of quarters slightly than be executed pretty shortly? 

Ash Kulkarni — Chief Government Officer

Yeah. Hey, Ittai, I will take this. Thanks for the query. So, optimization can take a number of varieties, proper? So, for instance, clients can briefly select to retailer much less knowledge.

That is only one instance. In some circumstances, they’ll speed up their plans to possibly shift extra of their workloads to much less performant storage like our frozen tier at a lower cost level. They might select to optimize how they ingest knowledge. For instance, they could do some quantity of sampling.

And in some circumstances, it would simply be that they’re beginning their enlargement a bit of slower simply because they’re attempting to consider the prices concerned, and so on. I feel the essential takeaway in lots of of those optimizations is that a few of these optimizations are momentary. And in some circumstances, there are limits to what they’ll optimize. Having mentioned that, the best way we have a look at it’s if a buyer is attempting to optimize, on the finish of the day, we wish to ensure that our consumption-based pricing mannequin makes it attainable for them to try this optimization.

As a result of what we have seen over and over is when clients see that we’re capable of present that sort of worth to them and the truth that now we have a platform that’s each open and versatile that they’ll use to do a number of use circumstances, it incentivizes them to convey extra workloads to make use of us for extra sorts of use circumstances. And a few of the issues that now we have seen by way of buyer commitments mirror that, proper? These buyer commitments are as a result of clients consider that they’ll do extra with Elastic on our Elastic platform. And so though there may be for the prevailing use case, there may be some optimization within the close to time period, we consider that it makes us not solely a greater accomplice however capable of take a bigger share of their total spend over time. So, that is how it’s best to give it some thought, and that is successfully what we’re seeing. 

Ittai Kidron — Oppenheimer and Firm — Analyst

That is useful. After which, Janesh, I wish to sort of dig in a bit of bit into the commentary on the macro and execution. It looks as if you are not calling out execution as a problem. That is purely a macro name.

And I am simply attempting to tie that into your ’24 information, that means, beneath the idea that your salespeople are as productive as you count on them to be and beneath the idea that their capability since our income remains to be rising, their capability to do extra is slowly dwindling? I am simply attempting to think about the crew’s steering for ’24. Why would that assume a macro setting that is weak? Why couldn’t that additionally assume that you just’re at a degree the place you are underinvesting actually in your development alternative? Would not that — I imply clearly, you rationalized headcount. I’d suppose — I do not know, however you have not talked about, however the place they’re hiring in ’24, I’d suspect it is going to be decrease than ’23 from the present standpoint. So, once more, why would not we predict that the ’24 is basically simply underinvestment slightly than macro impacting you?

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Yeah, Ittai, it is a fantastic query, and there is clearly many transferring components in there. So, let me try to unpack that, and I will discuss in regards to the macro about our gross sales execution and consumption patterns and likewise the place we’re making investments. So, if I take into consideration the macro, to start out with, as I discussed, we’re not assuming any change within the macro. I feel it will be laborious for us to name that.

So, we are going to simply see how the macro evolves broadly, and that is why we offered a comparatively wide selection at this level that we’ll then formalize right into a narrower vary on the subsequent name. By way of gross sales execution, sure, the crew executed rather well right here in Q3, and we’re truly pleased with the best way we executed. That mentioned, This fall is our largest quarter. There’s loads of work to be accomplished, loads of offers to be closed.

And one quarter of nice execution in a troublesome macro setting, we clearly have to proceed to construct on that basis and proceed to ship robust ends in This fall after which clearly by way of all of the 4 quarters of fiscal ’24 as properly. So, we’re very, you understand, considerate and real looking about — and centered on the necessity to proceed to drive sustained execution over time. With respect to hiring patterns, earlier than I speak about consumption developments, with respect to hiring patterns, we’re investing in gross sales. Once we took the actions that we did on the finish of the second quarter or within the early a part of the third quarter right here, we have been clear at the moment as properly that we see a long-term market alternative, and we will proceed to spend money on enterprise promoting capability, and that is what we have continued to do.

However it’s about driving considerate investments and never making investments with a number of experiments and high-risk investments, however investing diligently and investing in areas the place we all know we are able to drive development and the place we’re finest positioned to drive that development. So, we’ll be sure that now we have the best promoting capability getting into fiscal ’24. We do not wish to compromise on the top-line development, however it’s about guaranteeing balanced development and profitability, significantly once more, towards the backdrop of the setting through which we’re proper now. After which lastly, with respect to consumption patterns, that is clearly one thing that is laborious for us to straight management within the close to time period.

However what provides us consolation there’s the power of the commitments that clients are making on Elastic Cloud, which as I discussed earlier, will ultimately translate into income over time. 

Ittai Kidron — Oppenheimer and Firm — Analyst

Admire the colour. Thanks.

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Thanks.

Operator

The subsequent query comes from Raimo Lenschow with Barclays. Please proceed.

Raimo Lenschow — Barclays — Analyst

A fast query on cloud versus on-premise. What are you seeing there by way of habits from clients in the intervening time by way of like — clearly you have seen the cloud numbers decelerating a bit of bit. However like what are you seeing by way of willingness to remain longer on-premise and make the most of the property folks have with cloud? Is that one thing that could be a theme for you because it was identified by a few of your opponents? Is that one thing we should always sort of take note of?

Ash Kulkarni — Chief Government Officer

Yeah. I feel it is essential to acknowledge that we have by no means pressured our clients emigrate from on-prem, self-managed to cloud, proper? We have at all times given it as an choice. Clearly, we consider that Elastic Cloud is one of the simplest ways to expertise our choices. However on the finish of the day, clients have that alternative.

We have seen robust commitments, as Janesh known as out, each in self-managed and in Elastic Cloud. In Elastic Cloud, clearly, that interprets into income as consumption ramps up. And sometimes, after we promote a contract, it takes a while for patrons to start out bringing knowledge onto the cloud platform. And since we acknowledge income solely on consumption, that simply takes a bit of little bit of time to indicate up.

However basically, we have been seeing good traction. And in our annual cloud or our sales-driven movement, we’re undoubtedly seeing good momentum in cloud. So, the issues that you just talked about, we have not explicitly seen that in any significant manner, and it would simply be due to the truth that we have by no means pressured folks to maneuver in a single course or the opposite in any case. 

Raimo Lenschow — Barclays — Analyst

Yeah. OK. Excellent. Is sensible.

After which the opposite query was on buyer retention, and so on. So, if I have a look at the variety of clients added this quarter, it was a bit of bit smaller, however then we do know that you do not actually concentrate on SMB that a lot anymore. Are you able to discuss a bit of bit in regards to the places and takes for us to sort of take into consideration this going ahead by way of like deemphasizing SMB? That sort of clearly would possibly decrease the brand new buyer add quantity, however then you definately get extra increased value-add clients in, which truly is best for the long term. Like what are the dynamics that you just’re seeing there by way of buyer renewal, attrition, and so on.? Thanks.

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Yeah, Raimo, possibly I will take that one. Look, you hit it on the top, proper? We aren’t attempting to maximise the amount of the variety of buyer additions as we have shared earlier than. We’re rather more centered on the composition of our buyer additions as we drive worthwhile development. So, the client web provides mirror our concentrate on clients which have the next propensity to spend.

And we have seen fairly good momentum on that entrance, and in order that’s one thing that we have been happy with. In the event you have a look at the shoppers that spend over $10,000 a 12 months with us, that was a rise of roughly 100 clients versus the prior quarter. And that is a bit of bit higher than the prior quarter. So, we exited with over 4,000 clients in that class.

After which as you concentrate on the bigger clients within the greater than $100,000 class, we reported web additions of over 60 clients there. And that buyer rely in that $100,000-plus group, that is a vital a part of the general enterprise underpinning of our land-and-expand movement. So, that is all actually simply a part of our concentrate on driving worthwhile development, and we predict a extra environment friendly strategy to entice the best clients and develop our enterprise over time. After which if I take into consideration the whole variety of clients that we reported, that can bounce round each quarter.

However as we mentioned, that is not our foremost focus by way of the lengthy tail of quantity. It is actually on guaranteeing that we entice and develop high-quality clients over time, and we’re fairly proud of the result there.

Raimo Lenschow — Barclays — Analyst

Yeah. OK, excellent. Thanks. 

Operator

The subsequent query comes from Kash Rangan with Goldman Sachs. Please proceed. 

Kash Rangan — Goldman Sachs — Analyst

Howdy. Thanks very a lot for all the main points. Ash, I used to be curious to get your perspective on what’s taking place on the high finish of the funnel. And in addition, since we have had the luxurious of the — possibly not a luxurious, however a month and a few weeks into the quarter, what are a few of the developments that you just’re seeing with respect to the entrance finish of demand gen? And in addition, when you might simply take a step again.

While you have a look at cloud consumption, are you seeing any noticeable developments, giant enterprise versus SMB, AWS versus Azure? Any coloration we are able to provide with respect to any developments you are seeing inside your buyer base? Thanks a lot. That will be nice.

Ash Kulkarni — Chief Government Officer

Thanks, Kash. Possibly I will tackle a few of the questions in type of reverse order. So, by way of the developments out there, by way of the selection that clients are making, bigger clients are making on one cloud supplier versus one other, we actually have not seen any change per se. Like so I feel a few of the coloration commentary I gave on a few of the giant clients, the — a few of the giant offers that we did this quarter, a number of of them have been by way of our cloud market companions.

I talked about the truth that our income by way of our enterprise to the cloud marketplaces has doubled. And we did some — we had some very giant multimillion greenback clients. That type of provides you a way that there’s a lot that we’re doing with giant clients within the enterprise and business segments by way of these cloud marketplaces, and we’re seeing good traction there. By way of — you requested the query on optimization of consumption.

Like I discussed in my ready remarks, we’re seeing that not simply in SMB, however we’re additionally seeing that in different segments and bigger clients as properly. And it is successfully just like the sorts of issues that I talked about earlier and the query that I consider Ittai requested on the varieties of how through which persons are optimizing. And our focus has been quite simple, proper? As clients wish to optimize, now we have the capabilities that enable them to successfully do extra with our know-how, do it in an economical manner. And admittedly, given the present setting, like I really feel that what I am seeing is that our capacity to place ourselves as a accomplice that gives large worth for a specific worth tends to be very, very advantageous.

Like that is one of many issues that is — aside from simply the innovativeness of our options, that is the opposite issue that is serving to us by way of ensuring that we’re capable of drive good buyer commitments. And by way of the highest of the funnel, we have not seen something completely different apart from in SMB, like I talked about there. There’s been — and I talked about that even prior to now. Like that is undoubtedly been considerably constrained.

So, even by way of the place we’re focusing, we’re getting loads of success with enterprise and business accounts, SMB continues to be constrained. However past that, I do not suppose that is — I might particularly name out any completely different patterns within the giant clients throughout cloud suppliers, and so on.

Kash Rangan — Goldman Sachs — Analyst

Fantastic. Thanks a lot.

Operator

Our subsequent query comes from Matt Hedberg with RBC Capital Markets. Please proceed. 

Unknown speaker — RBC Capital Markets — Analyst

That is Anushtha on for Matt Hedberg. Thanks for taking my questions right here. Possibly simply to start out with macro. In the event you might simply discuss in regards to the linearity within the quarter, how did the macro setting change in Q3 versus Q2? And what have you ever seen to date out in This fall? 

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Yeah, glad. I will fortunately take that. So, linearity by way of our gross sales exercise was truly fairly good throughout the months, and linearity in any quarter can at all times be affected by the timing of particular offers. And we noticed good linearity and deal velocity earlier within the quarter.

So, that was one thing that labored fairly properly for us. Additionally, Q3 has the vacation season, so it is at all times distinctive relative to the opposite quarters in a 12 months. And by way of what that translated to by way of consumptions, I feel outcomes can simply range for various clients throughout completely different months. However throughout the complete quarter, we did see the consumption developments that we known as out earlier.

There generally is a little little bit of noise within the month-to-month knowledge round that. However total, as I mentioned, we’re anticipating that the developments we noticed in Q3 will proceed into This fall, which is the muse for the outlook that we offered. 

Unknown speaker — RBC Capital Markets — Analyst

Obtained it. After which when desirous about the 13% danger you introduced not too long ago, when you might simply speak about how we should always take into consideration the price financial savings or the margin influence of that in fiscal ’23 and financial ’24? Thanks. 

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Yeah. So, we offered a view on that. Once we reported, the 13% rift was a bit of bit greater than 400 folks. That is actually what helped us to drive the sequential enhance within the working margin from Q2 to Q3 and allowed us to boost our outlook for the 12 months after we took that motion as properly.

And that truly performed out as we anticipated right here in Q3. In actual fact, if something, we noticed a bit of little bit of timing that a few of the actions occurred sooner than anticipated. So, that is factored into the outlook now for This fall and likewise for fiscal ’24. As I mentioned, I feel that motion was enough for us.

We need not take any additional actions on that entrance. And from this level, primarily based on the run price of working margin that now we have, reaching the ten% aim for subsequent 12 months is essentially going to be a operate of the working leverage that’s already inherent within the mannequin as we develop income quicker than bills.

Unknown speaker — RBC Capital Markets — Analyst

Obtained it. Thanks.

Operator

The subsequent query comes from Joel Fishbein with Truist Securities. Please proceed. 

Joel Fishbein — Truist Securities — Analyst

Thanks for taking my query. I even have one for Janesh and one for Ash. Ash, are you able to tackle the safety market particularly and developments you are seeing and any adjustments within the aggressive dynamics? After which, Janesh, I simply needed to ask in regards to the places and takes on the web enlargement price. Thanks. 

Ash Kulkarni — Chief Government Officer

Yeah. Thanks for the query. So, by way of safety, we’re seeing actually good traction on SIEM and XDR. I talked about a number of examples.

We’re additionally seeing loads of curiosity in our cloud safety capabilities. Final quarter, I talked about the truth that our CSI benchmarks, the work that we have been doing for cloud safety there, we had about 30 clients utilizing that functionality. That quantity is now nearer to 300. So, we’re seeing good curiosity.

We have been acknowledged, as you have seen in a few of the ready remarks that I made, in safety analytics as one of many leaders. And all of that’s benefiting — we’re seeing our capacity to essentially differentiate ourselves and do properly in these offers. So, from a aggressive standpoint, I really feel actually good, particularly provided that underlying all of that is our capacity. We current a really scalable and open answer to our clients, which is getting loads of curiosity.

And so, loads of the client commitments that we talked about, and even in a few of the examples that I gave, I gave some safety examples in there, loads of that is coming from all of the work and innovation that we have accomplished in safety through the years that has simply strengthened our capacity to compete. So, we really feel superb about how that enterprise is continuous. 

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

And Joel, on a web enlargement price, the decline that we talked about, that basically displays the 2 themes that I discussed earlier on commitments and consumption. So, as I discussed on the ready remarks, for cloud contracts, commitments usually do not rely towards the online enlargement price, however consumption does. So, the stronger commits that we noticed within the quarter aren’t mirrored in that quantity, however the slower consumption is. So, over time, as consumption of dedicated contracts ramps, that can assist the online enlargement price.

After which to unpack the drivers a bit additional, if you concentrate on expansions, that was a bit of bit slower than a 12 months in the past on the self-managed facet. And on the cloud facet, the place the commitments have been robust, as I mentioned, these commitments have been usually not included within the calculation till consumed. After which if I have a look at attrition, the gross retention price, which measures solely attrition, that has remained regular. So, these are a few of the places and takes.

And if I then take into consideration what meaning by way of how that metric would possibly evolve, it’s a trailing 12-month measure. So, more moderen knowledge factors within the present macro local weather are softer than the year-ago knowledge factors. So, we do count on that the online enlargement price will soften a bit additional for the subsequent couple of quarters till now we have a extra regular comparability. And so, one different manner to consider enlargement, as I’ve talked about earlier than, is to have a look at the client rely that is greater than $100,000 ACV.

That could be a extra present measure of enlargement dynamics with clients as a result of most of our clients in that class get there by increasing their spending with us as a result of our land sizes are sometimes a lot smaller. And that buyer rely just isn’t affected by the trailing 12-month calculations, and it additionally considers cloud commitments. And as you noticed, that metric was very robust for us this quarter. So, we proceed to maneuver additional up throughout the enterprise.

We’re getting nearer to clients, turning into extra strategic to their companies. And all of that makes us simply really feel superb in regards to the alternative forward.

Joel Fishbein — Truist Securities — Analyst

Nice. Thanks a lot.

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Thanks, Joel.

Operator

This concludes our question-and-answer session. Right now, I want to flip the convention again over to Ash Kulkarni for any closing remarks. 

Ash Kulkarni — Chief Government Officer

Thanks all for becoming a member of us. The factor that I might say in closing is whereas we’re happy with the power of buyer commitments in Q3, we stay centered on execution in This fall and past. We stay assured in our capacity to drive each development and profitability as we have demonstrated by way of all of the issues that we have accomplished. So, thanks once more, and have a fantastic day. 

Operator

[Operator signoff]

Period: 0 minutes

Name contributors:

Nikolay Beliov — Vice President, Investor Relations

Ash Kulkarni — Chief Government Officer

Janesh Moorjani — Chief Monetary Officer and Chief Working Officer

Pinjalim Bora — J.P. Morgan — Analyst

Tyler Radke — Citi — Analyst

Koji Ikeda — Financial institution of America Merrill Lynch — Analyst

Ittai Kidron — Oppenheimer and Firm — Analyst

Raimo Lenschow — Barclays — Analyst

Kash Rangan — Goldman Sachs — Analyst

Unknown speaker — RBC Capital Markets — Analyst

Joel Fishbein — Truist Securities — Analyst

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