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Elastic is like 'Google for a company's internal data and applications.'

Elastic is like 'Splunk for real-time search, observability, and security solutions.'

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• Elasticsearch: A distributed, RESTful search and analytics engine for storing, searching, and analyzing various types of data.
• Kibana: A data visualization and exploration tool for Elasticsearch, allowing users to understand and interact with their data.
• Elastic Cloud: A fully managed service offering the Elastic Stack (Elasticsearch, Kibana, etc.) as a cloud service on major providers.
• Elastic Enterprise Search: Software solutions designed to power search experiences across websites, applications, and within organizations.
• Elastic Observability: A suite of solutions for unified monitoring, logging, metrics, and application performance tracing to maintain system health and performance.
• Elastic Security: Solutions for security information and event management (SIEM), endpoint security, and cloud security, enabling threat detection and response.

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Elastic (symbol: ESTC) primarily sells its software and cloud services to other companies (B2B model), rather than directly to individuals.

Elastic serves a diverse range of organizations across various industries globally. The company's business model is built on broad adoption of its products for use cases such as enterprise search, observability (logging, metrics, APM), and security analytics. Elastic does not typically disclose "major customers" in the sense of any single customer accounting for a significant portion of its total revenue (e.g., its SEC filings often state that no single customer accounts for 10% or more of revenue). This indicates a highly distributed and diversified customer base.

However, many prominent global companies publicly utilize and are customers of Elastic's solutions. Examples of such notable customer companies (which are significant users, though not necessarily "major" in terms of revenue concentration for Elastic) include:

• Uber Technologies, Inc. (UBER)
• Netflix, Inc. (NFLX)
• Adobe Inc. (ADBE)
• T-Mobile US, Inc. (TMUS)
• Cisco Systems, Inc. (CSCO)
• Goldman Sachs Group, Inc. (GS)
• Ford Motor Company (F)
• Workday, Inc. (WDAY)

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• Amazon Web Services (Symbol: AMZN)
• Google Cloud Platform (Symbol: GOOGL)
• Microsoft Azure (Symbol: MSFT)

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Ashutosh Kulkarni, Chief Executive Officer
Ashutosh Kulkarni joined Elastic as Chief Product Officer in 2021 and became CEO in January 2022. Prior to Elastic, he held senior product leadership and management roles at McAfee, Akamai, Informatica, and Sun Microsystems.

Navam Welihinda, Chief Financial Officer
Navam Welihinda is responsible for Accounting, Strategic Finance, Internal Audit, and Investor Relations at Elastic. Before joining Elastic, he served as the CFO of Grammarly and HashiCorp.

Shay Banon, Chief Technology Officer
Shay Banon is the creator of Elasticsearch, which he built in 2009, and co-founded Elastic (originally Elasticsearch) in 2012. He served as CEO of Elastic from 2017 until January 2022, when he transitioned to the role of CTO. His inspiration for Elasticsearch stemmed from developing a recipe application for his wife. Prior to Elastic, Banon was a Technology Director at GigaSpaces Technologies, Inc. He led the company through a successful IPO in 2018.

Uri Boness, Founder and Engineer
Uri Boness is a co-founder of Elastic, which was established in 2012. He has extensive experience with open-source Enterprise Java, particularly Apache Lucene technologies, and is an active member of the Apache Lucene community, also founding the Dutch Apache Lucene User Group. Previously, Boness was a software architect and head of the search department at Orange11.

Matt Riley, General Manager, Enterprise Search Solutions
Matt Riley is the former co-founder and CEO of Swiftype. Swiftype was acquired by Elastic in October 2017. At Elastic, he leads the product management efforts for the company's suite of search solutions.

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The key risks to Elastic (ESTC) business are:

1. History of Net Losses and Challenges to Achieving Consistent Profitability: Elastic has a history of incurring net losses, with operating and free cash flow margins often being negative. This ongoing challenge to achieve consistent profitability may raise concerns about its long-term financial sustainability and could impact investor confidence.

2. Intense Competition and Rapid Technological Change: Elastic operates in a highly competitive and rapidly evolving market, facing rivals with potentially greater financial and technical resources. The need for constant innovation and adaptation to keep pace with rapid technological advancements can strain company resources and potentially lead to a lag in market responsiveness. There is also a risk that cloud providers may enhance their search capabilities or other data analytics providers could pivot into similar use cases, further limiting Elastic's market share.

3. Vulnerability to Macroeconomic Conditions and Revenue Volatility: Elastic's performance is susceptible to broad macroeconomic factors such as economic downturns, inflationary pressures, and geopolitical risks, which can influence IT spending and sales cycles, potentially reducing demand for its offerings. Furthermore, an increasing mix of consumption-based pricing in its Elastic Cloud offerings introduces volatility, as revenue streams could decelerate rapidly if macroeconomic conditions worsen.

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The clear emerging threat for Elastic is the rapid emergence of highly capable, AI-native conversational interfaces and autonomous agents designed for information retrieval, data analysis, and security operations. This paradigm shift could fundamentally alter how users interact with and derive insights from data, potentially reducing the reliance on traditional search interfaces, dashboards, and manual querying.

Analogous to how Netflix disrupted Blockbuster by shifting from physical media rental and manual browsing to a streaming, algorithmic consumption model, or how the iPhone changed the entire smartphone interaction paradigm, these AI-native platforms aim to abstract away the complexity of data exploration. Instead of users navigating dashboards or constructing queries in Kibana or other tools, they could interact with an AI assistant via natural language, asking for synthesized answers, automated root cause analyses, or proactive security insights directly from vast, disparate datasets (logs, metrics, traces, documents, code, etc.).

While Elastic is actively integrating AI capabilities into its products (e.g., vector search, RAG, AI assistants), the threat stems from a potential new generation of "AI-first" vendors or open-source initiatives that build entirely new platforms from the ground up, optimized for this conversational and autonomous interaction model. These platforms could potentially offer a superior user experience and more efficient pathways to insight, thereby commoditizing or de-emphasizing the underlying search and analysis infrastructure that Elastic currently provides.

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Elastic (NYSE: ESTC) operates within significant and expanding addressable markets for its core product offerings, which encompass search, observability, and security solutions.

Total Addressable Market (TAM)

Elastic has identified its total addressable market (TAM) as substantial and growing. In 2023, the company estimated its TAM across its three main solution areas—Search, Observability, and Security—to be $88 billion globally, nearly doubling from $45 billion in 2018. Other estimates for Elastic's TAM as a search company range from $78 billion to $85 billion.

Market Sizes for Main Products/Services

Elastic's primary offerings are built on the Elastic Stack, which includes Elasticsearch, Kibana, and Logstash, and are delivered through solutions like Elastic Enterprise Search, Elastic Observability, and Elastic Security.

• Enterprise Search: The global enterprise search market is projected to reach approximately $6.83 billion in 2025 and grow to $11.15 billion by 2030, at a compound annual growth rate (CAGR) of 10.30%. Other forecasts estimate the global market size at $4.98 billion in 2024, expanding to $7.87 billion by 2030 with a CAGR of around 7.92%, or from $5 billion in 2022 to $12.2 billion by 2032 with a CAGR of 9.6%. North America held the largest share of the enterprise search market in 2022.
• Observability Tools and Platforms: The global observability tools and platforms market is expected to grow from $3.2 billion in 2024 to $9.2 billion by 2034, demonstrating a CAGR of 11.10%. A more recent and higher projection places the global market size at $28.5 billion in 2025, with an anticipated increase to $172.1 billion by the end of 2035, at a CAGR of 19.7% for the period 2026-2035. North America is a dominant region in this market, holding over 36.4% of the share in 2024, with the U.S. alone contributing $0.9 billion.
• Security (SIEM and XDR): Elastic is a significant player in the Security Information and Event Management (SIEM) market. In 2021, Elastic was one of the fastest-growing SIEM vendors globally, with over 80% year-over-year growth, and held the fifth-largest market share worldwide among more than 20 vendors. Elastic has also been recognized as a Leader in the IDC MarketScape: Worldwide Extended Detection and Response (XDR) Software 2025 Vendor Assessment. While a specific global market size for Elastic's security offerings alone is not readily available, the SIEM market is a substantial component of the broader cybersecurity market.

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Elastic (ESTC) is poised for continued revenue growth over the next 2-3 years, driven by several key factors including the robust expansion of its Elastic Cloud platform, accelerating adoption of Generative AI (GenAI) applications, and strategic gains in the security and observability markets. The company's ability to attract and expand high-value customer accounts further underpins its growth trajectory.

1. Elastic Cloud Growth and Cloud-Native Adoption

Elastic Cloud continues to be a primary driver of revenue growth, consistently outpacing the company's overall revenue growth. For instance, Elastic Cloud revenue increased by 26% year-over-year in Q3 FY2025 and 23% in Q4 FY2025, significantly higher than the total revenue growth of 17% and 16% respectively during those periods. This strong performance is attributed to the increasing demand for cloud-based solutions as companies migrate their search and analytics needs to the cloud. The company has also emphasized its focus on expanding serverless capabilities within Elastic Cloud, which is expected to drive future growth. The rising share of Elastic Cloud in the total revenue (reaching 47% of total revenue and over 50% of total subscription revenue in Q3 FY2025) suggests that its higher growth rate will continue to positively impact overall revenue acceleration.

2. Accelerating Adoption of Generative AI Applications

Elastic is experiencing significant momentum from the adoption of its platform for Generative AI (GenAI) use cases. The company's leadership in GenAI and the demand for its Search AI solutions are key growth contributors. By Q1 FY2026, over 2,200 Elastic Cloud customers were utilizing the platform for GenAI workloads, with more than 330 of these customers spending over $100,000 annually. Elastic has also reported adding more million-dollar Annual Contract Value (ACV) customers for GenAI use cases in Q1 FY2026 than in the prior two quarters combined, indicating increased AI workload intensity and early-stage consumption growth. Innovations like the integration of the Elasticsearch vector database as a native RAG (Retrieval Augmented Generation) option for Google Cloud’s Vertex AI Platform and partnerships with AWS and NVIDIA for GPU-accelerated indexing further enhance its GenAI offerings.

3. Expansion in Security and Observability Markets

Elastic's solutions for security and observability are significant growth drivers. In Q1 FY2026, one-third of new and expansion deals in the security segment resulted from competitive displacements, demonstrating Elastic's ability to take market share from legacy providers. The launch of the Elastic AI SOC engine (EASE) integrates advanced threat detection and alert correlation, further differentiating its security offering. Within observability, Elastic's platform addresses key enterprise challenges by providing comprehensive analytics and AI-driven insights, enhancing developer productivity and operational efficiency. The company's continuous investment in AI enhancements within these areas positions it to capture a larger share of enterprise IT budgets.

4. Growth in High-Value Customer Accounts and Net Expansion Rate

Elastic consistently reports an increase in its customer base, particularly those with high Annual Contract Value (ACV). The total customer count with ACV greater than $100,000 grew to over 1,460 in Q3 FY2025, and further to over 1,510 in Q4 FY2025. The company also noted an increase to over 210 customers with more than $1 million in committed ACV by the end of FY2025, with approximately 45 net new customers added to this cohort in Q4 FY2025. This growth in large customers, combined with a Net Expansion Rate of approximately 112% in Q3 and Q4 FY2025, indicates that existing customers are increasing their spend on Elastic's platform, either through expanded usage or adoption of additional solutions (cross-selling across search, observability, and security).

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Share Repurchases

• Elastic's Board of Directors approved a share repurchase program of up to $500 million on October 9, 2025.
• This repurchase program does not have an expiration date.
• The company anticipates utilizing over 50% of the authorized amount in fiscal year 2026 and expects to allocate 50% of its free cash flow to repurchases thereafter, unless more attractive acquisition opportunities arise. This marks Elastic's inaugural share buyback authorization.

Share Issuance

• Elastic's ordinary shares issued and outstanding increased from 101,705,935 as of April 30, 2024, to 105,534,887 as of April 30, 2025, reflecting an issuance of approximately 3.8 million shares during fiscal year 2025.
• Proceeds generated from stock option exercises and purchases through the Employee Stock Purchase Plan (ESPP) contributed $19.8 million to net cash provided by financing activities during the six months ended October 31, 2023.

Outbound Investments

• Elastic completed the acquisition of Jina AI on October 9, 2025, to enhance its vector search and retrieval-augmented generation capabilities; financial terms were not disclosed.
• In May 2025, Elastic acquired Keep Alerting Ltd ("Keep"), an open-source AIOps company focused on unifying alerts and automating incident remediation, with undisclosed financial terms.
• In 2021, Elastic made multiple acquisitions including Cmd (Linux environment monitoring) and Optimyze (cloud computing) in October 2021, and build.security (cloud security) in August 2021, with most terms undisclosed.

Capital Expenditures

• Elastic's capital expenditures were $4.345 million for fiscal year 2025, with an estimated $4.922 million projected for fiscal year 2026.
• Capital expenditures amounted to $3.45 million in fiscal year 2024, $2.684 million in fiscal year 2023, and $2.485 million in fiscal year 2022.
• During the six months ending October 31, 2023, the company incurred $1.5 million in capital expenditures.