Good afternoon and welcome to the Elastic First Quarter Fiscal 2022 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Anthony Luscri, Vice President, Investor Relations. Please go ahead.

Thank you. Good afternoon and thank you for joining us on today’s conference call to discuss Elastic’s first quarter fiscal 2022 financial results. On the call, we have Shay Banon, Founder and Chief Executive Officer and Janesh Moorjani, Chief Financial Officer. Following their prepared remarks, we will take questions. Our press release was issued today after the close of market and is posted on our website. Slides which accompany this webcast can be viewed in conjunction with live remarks and can also be downloaded at the conclusion of the webcast on Elastic’s Investor Relations website, ir.elastic.co. Our discussion will include forward-looking statements, which may include predictions, estimates or expectations regarding the demand for our products and solutions and our future revenue and other information. These forward-looking statements are based on factors currently known to us, speak only as of the date of this call and are subject to risks and uncertainties that could cause actual results to differ materially. We disclaim any obligation to update or revise these forward-looking statements unless required by law. Please refer to the risks and uncertainties included in the press release that we issued earlier today, included in the slides accompanying this webcast and those more fully described in our filings with the Securities and Exchange Commission. We will also discuss certain non-GAAP financial measures. Disclosures regarding these non-GAAP measures, including reconciliations with most comparable GAAP measures can be found in the press release and slides. The webcast replay of this call will be available for the next 60 days on our company website under the Investor Relations link. Our second quarter fiscal 2022 quiet period begins at the close of business Friday, October 15, 2021. During the week of September 13, we will be participating in the Piper Sandler Global Technology Conference, the Jefferies Software Conference and Citi’s Global Technology Conference. With that, I will turn it over to Shay.

Thank you, Anthony. Hello and welcome everyone. I am happy to be here with all of you today to share our first quarter results. We are off to a very strong start of the year. We once again delivered strong performance driven by broad adoption of our offering and the continued growth of Elastic Cloud. In Q1, total revenue grew 50% year-over-year. Revenue from Elastic Cloud grew 89% year-over-year, and we once again saw robust customer acquisition and expansion metrics. We ended the quarter with more than 16,000 subscription customers, including over 780 with annual contract value of more than $100,000. The strong performance was fueled by continued adoption and differentiation of our solutions and features, growth across all geographies and increased strategic relevance and expansion across our customer base. Today’s accelerated digital transformation is fueling the creation of an ever-increasing amount of data. This, combined with the rise in advanced cyberattack techniques, means more organizations are falling victims to threats and attacks and the number and size of breaches and attacks isn’t slowing down. We believe that a unified search platform is the answer to these challenges. Every organization needs to be able to search across all of its data to find relevant information, keep systems up and performing and protect against threats. Customers turn to Elastic to connect the dots between diverse data challenges from simple endpoint security to observability to enterprise search. Now I would like to share some of the innovations we have made in our unified search platform, starting with our security and observability solution. Search has the power to converge data silos, to look around data corners. That’s why we believe every data problem can be solved by looking at it through the prism of a search box. Years ago, even as we were…

Thanks, Shay. Q1 was a great start to the year, continuing our momentum of crisp execution against the backdrop of a gradually improving global economy. Our cloud momentum was strong with robust usage trends, and we expect that cloud will remain a deal win for the longer term. Our solutions continue to resonate with customers, and we are continuing to invest against the rich market opportunity ahead of us. Let’s get into the numbers. Total revenue in the first quarter was $193.1 million, up 50% year-over-year, reflecting continued successful execution of our strategy across enterprise search, observability and security delivered on a unified search platform with a unified pricing model. We are very pleased with our performance, which was significantly better than expected, primarily driven by significantly stronger-than-expected usage in Elastic Cloud. 47% of our revenue came from outside the United States. We continue to view this geographic distribution as a long-term strength of our business model. Subscription revenue in Q1 totaled $177.2 million, comprising 92% of total revenue. Within subscriptions, revenue from Elastic Cloud was again strong at $61.5 million, growing 89% year-over-year, driven by strong customer growth and usage. We once again saw strength in both our annual cloud business as well as our monthly cloud business. Our feature advantages over competitors, our expanding reach and our partnerships continue to give us confidence that Elastic Cloud will grow faster than our overall business. Professional services revenue in Q1 was $15.9 million, growing 111% year-over-year. Services revenue can fluctuate across quarters depending on the timing of projects and delivery, and we saw an approximately $3 million benefit from that in the quarter. Professional services remains mainly a product enabler and we do not expect professional services to increase significantly in mix over the year. Moving on to calculated billings,…

[Operator Instructions] Our first question today comes from Matt Hedberg with RBC Capital Markets.

Great. Thanks for taking my questions. Congrats on really strong results again here. Shay, for you, I mean, lots of positives to drill into. But the surge in customers off of what was a really strong 4Q is impressive. I’m wondering, at a high level, do you think the licensing change that you guys previously made is having a positive impact on customer adds? And maybe secondarily, when you look at growth in Elastic Cloud customers, how much of that is – or I should say Elastic Cloud revenue, how much of that is being driven by new customers versus expansion from your base?

Yes, of course, hi, Matt, happy to answer. I think the first part is around the license change. I’ll remind that we did the license change a few months ago, with the main goal of trying to make sure that we address the confusion and the misdirection that was happening with the competitive service from Amazon. And first of all, I’ll say that we’re very happy with the change. Over the last couple of quarters, we’ve innovated quite significantly. We released a few minor versions. And at Elastic, we say every minor release is a major release, and you can see it with the recent one when we announced our Limitless XDR capability. So we’re running ahead fast and innovating for our customer base, and that’s really resonating also with our community. We have – Based on all the metrics that we’re looking at, downloads, engagement on forums and GitHub and others, our users are just running ahead with us and are very excited about all the innovations that we do across all of our three solutions and our foundational search platform. When it comes to how much it applies to our growth in new customers, our analysis and expectations is that this will play out over the long-term. Obviously, a license change applies only to new releases that we have. So it’s only a few quarters in. And we think that over the long-term, that will start to have an impact on new customers or customer adoption as they start to migrate, as they upgrade to new versions and start to see the differentiation and come along for the ride with us. Beyond that, you’ve mentioned the new customer growth and, obviously, Elastic Cloud. I would say that I think a big part of our new customer growth is coming from our monthly SaaS and in our self-service SaaS, and a big part of that is just the amount of investments and innovations that we put into our products and Elastic Cloud specifically. We mentioned this quarter and over the last few quarters, for example, the significant innovation and investments that we make in the various cloud marketplaces and native integrations that we do with all of them but specifically focusing and integrating natively into Microsoft Azure and Google Cloud. And I think our customers are seeing that. It’s much easier for them now to go and consume us on various cloud providers; Microsoft, as easy as going to the Microsoft Azure console and deploying Elastic Cloud within the console itself without leaving it even. So I think that, for example, is a great example of something that drives new customer adoption.

That’s super helpful. And then, Janesh, just a quick one for you, sort of on the Elastic Cloud comment. You noted that the monthly usage doesn’t impact deferred revenue and, thus, billings. I was wondering if there is a way to kind of think about what that headwind represents to billings growth. And maybe a different way of asking it would be, of your Elastic Cloud revenue, how much of it today is monthly versus annual or something beyond annual?

Yes, Matt, I’ll touch on that. So stepping back, first off, when I just think about the cloud business overall, at 89% year-over-year growth, we thought that was just extraordinary performance. And we are very pleased with that. Monthly cloud business has increased a couple of points in mix versus Q4. It was close to 15% of total revenue in the quarter, and it continues to grow quite nicely. I think we’ve been calling out for some time now that it’s been increasing slightly in mix, and it’s continued to inch up. And as Shay said, the web-based self-service option is just a great way for us to acquire new customers. So the vast majority of our new customers do come in via monthly cloud. They are usually small customers that then gradually increase their spend with us over time. And the pace of customer additions, as you noted, was quite strong, and we are pleased with that. But it wasn’t a massive step function change to indicate any kind of shift in workloads to the monthly format. The billings growth rate headwind that you’ve mentioned, that comes mainly from just the billings timing point that I mentioned earlier in the prepared remarks, where there was that $5 million that had gotten pulled out of Q1 this year into Q1 of last year. I would not correlate that to the monthly cloud business. I think the strength in monthly cloud comes from just the fact that we’ve made heavy investments in cloud and marketing with our partners, as Shay was talking about, and strength in cloud was really a result of all of these factors. And it’s great to see those investments paying off.

Great. Thanks a lot. Congrats again.

Thank you.

Our next question comes from Raimo Lenschow with Barclays.

Hi. This is Pree Gadey for Raimo Lenschow. I wanted to ask, a lot of news around the security space with security build and the acquisition you guys announced today. Can you talk about the go-to-market strategy with security? And any update you can provide on the partnership with Palo Alto that you announced last year?

Sure. This is Shay here. I’ll take it. So first of all, as you mentioned, we’re making significant investments in the security solutions that we have. Over the years, we started with Enterprise Search. And we mentioned that we became obviously, a leader over the years as was denoted by Forrester, which we’re very proud about. We’ve been leading the charge in observability, starting from logging and then extending to APM and now the observability market. And we’ve been used in the security space for a few years now, but people have to go and roll up their sleeves and build their own makeshift SIEM, if you will, on top of this very, very powerful search platform. In about 2.5 years ago, we started to build a SIEM solution, we joined forces with Endgame around endpoint security and the 7.14 release, the last release that we had. We announced our Limitless XDR, and the fact that we’ve folded the Endgame technology, almost all of it into our unified search platform, into the Elastic Stack and provide it to our customer base. We’re also very excited about, as you mentioned, build.security and Cmd, another two great companies with very impressive technology that we’re looking forward to embedding to our security solutions. And we think that, that would end up providing a much broader applicability of security to a much broader user base, helps support the foundations to the merging, if you will, of endpoint security, cloud security and SIEM. And also over the years, the merging of big parts of observability and security, which we deeply believe in. When it comes to GTM itself, first of all, our stand that we’re also very focused on trying to build bottom up, free and open community-driven approach to the security market. We deeply…

Thanks, Shay. And just, I guess, one more question. You guys have introduced quite a bit of cloud native solutions this year. I want to understand how the code base is shared between the on-premise product and the cloud product. Basically, I’m trying to understand how simple it is for customers to deploy in a hybrid environment.

Yes. So as you’ve seen in the context of the security market, big portions of what we do can run on-prem. So I’ll give you an example. Cloud-native workloads, certainly a big part of them are containerized workloads or Kubernetes level workloads that customers can definitely, and they do, go and run on-prem. And the Cloud-native Foundation has many projects that can go and run on-prem or in a hybrid environment. The build.security, for example, are focused around something called Open Policy Agent, again, something that helped manage and enforce policies, specifically, in cloud-native workloads. But those also can run on-prem or more specifically, as you said, in hybrid environment. I’ll probably say that the vast majority of our technology can run in hybrid environments. We always prefer for customers to run on our cloud because we believe that it’s just a significantly better user experience, but we know that not all can move quickly to the cloud. And we’re happy to engage with customers through our security solutions. And by the way, observability and Enterprise Search and allow them to run it in a hybrid environment as they transition to the cloud. And a big part of it, for example, is to move their workloads to become containerized on Linux, obviously, under Linux, and then running on Kubernetes and then make the jump to the cloud. And while they do that, we want to provide them with the right level of observability and then detection and protection that they deserve.

Thank you.

Our next question comes from Brent Thill with Jefferies.

Shay, I like the reference to spinal tap and going to 11. I guess talking about going to 11, the last two quarters you’ve seen an acceleration in the business. I’m just curious if you could set the stage of what you think is causing that. Is this effectively a larger commitment to the broader platform you’re seeing in bigger initial purchase orders? Are you seeing divisions that have opened up that you’ve never seen before? Just give us a sense of what you’re really seeing through your lines and what’s happening with the inflection in the numbers that we’re seeing.

Yes, of course. So first of all, as Janesh mentioned, it’s broad-based. Like, the company that we are, we’re a bigger company now. We address multiple personas, multiple solutions, multiple opportunities. I do think that we have a wonderful leverage point with our unified search platform from both the product and a go-to-market perspective. But we’re addressing customer needs across multiple fronts. And when we take all of these – and all of them, by the way, are growing fast, right? It’s like enterprise search and companies moving to become more and more digital. They are moving more and more assets to become digital, workplaces are communicating mostly in an online fashion. And all of that data needs to be searched. And that’s a great sweet spot for our Enterprise Search product and specifically, for example, our Workplace Search product. More companies go online, they are running applications that need to serve their customers and those need to be observed and they generate more data. And the same thing with security, as companies go online, their surface areas become bigger and they generate more data that needs to be used to detect very slow-moving threats that are faster changing and its best at. And all of that, if you take, can go even a step back, as data volumes grow, the best and most natural way to explore data is by searching it. And we see aside from these three use cases, we see usage of Elastic just as a general search platform that is very useful to do many, many different things. So we’re excited about that. And obviously, if you take that and put it together with cloud and our significant investments in cloud and our partnership with Microsoft and Google, for example, within the cloud providers, that helped accelerate and increase our growth. So I’m excited and happy to see all of that innovation within the product, all the innovation that we’re doing on the more go-to-market, all the investments that we’re making and we mentioned going up into the enterprise while maintaining our base of developers and practitioners, doing both high-velocity sales but also value-based selling to our enterprise customers, cloud focus, solution focus, all of these things that we’re doing as a company realizing itself over the last few quarters.

And for Janesh, I know growth has been the number one focus. But when you think about the bottom line over time and sustainable profitability, can you just talk to how you’re thinking about balancing both?

Yes. Happy to talk about that, Brent. So as I think about our performance here in Q1, we were obviously very pleased with the results. You saw that the operating leverage that we have in the model becomes really visible as the revenue performance largely made its way to the bottom line. As I step back and think about it, and as Shay painted the picture of the broader environment where we don’t feel constrained really by demand or the size of the markets in which we play, these are very large opportunity sets. And the unit economics in the business are very strong. And so we feel the right thing for us to do is to continue to make investments in the business to drive growth. That’s the plan that we laid out in the last call. We are continuing to make those investments. You’ll see that reflected in the outlook for the year as well. And when you look at the implied spending in the business in fiscal ‘22, when you look at the year-over-year increase in the spending in the business in fiscal ‘22 compared to fiscal ‘21 that’s implied in the guide, you’ll see it’s a significant step-up because we’re making the investments now to capture the opportunity ahead of us. And I think that’s the best thing we can do in the business at this stage to drive growth.

Thank you.

Our next question comes from Jonathan Ruykhaver with Baird.

Yes. Hi, good afternoon. So the question I have is really on the XDR solution. It seems obvious to move in that direction just given your SIEM focus and your EDR product. But I’m wondering, Shay, if you can talk about product positioning, just how is Elastic different from the numerous other vendors we see emerging in that category? And I know it’s very early days there, but any early customer feedback you can provide that might validate your differentiation would be helpful?

Yes, of course, happy to. So first of all, I think XDR is an interesting term because it starts to with extended which makes it, by definition, very broad, extended detection and response. And we believe that any level of security solution needs to start with data. You need to be able to observe threats, in order to be able to detect them and then in order to be able to then go ahead and protect them. And we spent the last 10, 11 years building what I believe is to be one of the, if not the most, advanced search engine today to be able to go and find, amongst other things, threats. And data is not an easy problem to solve to make it searchable, being able to search across trillion threats, hundreds of machines, petabytes of data and return results in millisecond or second, that’s not an easy task to do. And over the last few quarters, we’ve innovated significantly in the search platform. The ability to go and store data natively on cloud object stores and then you can pick and choose between the cost of storing 10 years’ worth of data versus a month’s worth of data and the speed of how fast you want to get the results, that some people will provide our customers with exactly the same interface, same API, same UI, our skim on read and skim online integrations, all of these things make a big difference for threat hunters. And even like 6 years, 7 years ago, advanced security researchers and threat hunters out there were taking Elastic Search and Kibana core products and were using it to build their own SIEM. And when I asked them why they were doing it because it was not easy, they have to…

That’s helpful. And just the monetization path, I understand you have a free version. When would you expect that to take place?

Sure. First of all, the monetization in security for us is exactly the same that we have across the board. So, if someone goes to deploy on our cloud, obviously, everything is paid for. And we are making significant investments in our cloud product, free and open and people can take our products and run it themselves, that’s very empowering. But obviously as we see, we see more and more users choosing our cloud, which we are very proud of. If someone does decide to run on-prem or in a hybrid environment, then we have additional commercial capabilities that they would go and then can use and provide them with more value and then they become customers of ours. So for example, within security, malware protections are free, but ransomware is a paid for feature if you are running us on-prem. So, we have found that balance. It’s free and open over the years, and we are finding that balance also in the context of security. And so far, I think it’s been resonating really well with our customer base.

That’s great. Thank you very much.

Our next question comes from Brad Reback with Stifel.

Great. Thanks very much. Janesh, maybe a couple of quick tactical ones, on the free cash flow commentary around unlevered, just on a reported basis, should we expect it to be about negative 20 because of the interest expense?

Brad, I have not put a specific number out there in terms of what the unlevered amount will be. I will say it’s consistent with what we laid out at the start of this year, which is slightly positive. Cash flow can be incredibly lumpy, as you know, and there is seasonal and timing effects that play into it. So, we will monitor that as we go and track that for the next couple of quarters as well, and then we can provide a more thoughtful outlook for the rest of the year. But at this point, I would be thinking about it just in terms of slightly positive on an unlevered basis.

Got it. Okay. And then on RPO going forward, I know you mentioned earlier that a lot of the month-to-month cloud customers are fairly small. And as they get larger, they contract with you. That being said, how should we think about the potential impact from the cloud business getting much bigger to RPO growth rates going forward, if at all?

Yes. I would say it’s similar to what I have mentioned earlier in that, as customers sign up with us on monthly cloud and they increase their business gradually with us over time, eventually, they sign annual contracts and that’s when they potentially add to deferred revenue and RPO. So, in terms of the RPO connecting to monthly cloud, again, I would not make any connection there at this point. When I just look at the overall reported RPO number at 35% year-over-year, we were actually quite pleased with that growth. I think that sets us up nicely for the rest of this year looking ahead. If anything, that’s connected to the slightly shorter contract length that I mentioned. But overall, we are actually quite pleased with the way that played out in conjunction with the overall business performance.

Great. Thanks very much.

Our next question comes from Rob Owens with Piper Sandler.

Hi guys. Ben Schmidt on for Rob. Thanks for taking my questions. So, looking at the guidance, given the beat in the quarter, it looks like a relatively modest increase to the rest of the year for revenue, about $6 million or so. Given how much of revenue now is ratable or usage-based, just wondering, I guess we were kind of thinking that we would see more flow-through into the coming quarters given the beat in this quarter. And wondering if you can just add some color there and if maybe there is more conservatism in the usage-based amounts and potentially given some potential seasonality in the usage-based revenue?

Yes, I am happy to talk to that. So, in Q1, we had very strong growth not just on the cloud side, but also in the self-managed business, so across the board, we were actually quite pleased with the results here in Q1. In terms of the revenue performance in the quarter, as I mentioned, it was driven in part by significantly stronger than expected usage on Elastic Cloud, which I think is just a great indication of the success of the investments that we have been making in that part of the business. Now as I think about the full year, we had already factored strong growth into the model over the course of fiscal ‘22. And in Q1, we just saw that strength come into the model earlier than expected. So, it provided a little bit of a benefit in the quarter earlier than we expected it would. But as I think about the full year, we have already factored the second portion of that into the year. The other piece that I will point out is the roughly $3 million benefit that we had from the timing of professional services revenue. And both of those helped us achieve revenue growth even well ahead of our expectations here in Q1. So, as I think about the guidance then for Q2 and the rest of the year, the way I would characterize it is the same as I did previously. If I think about the full fiscal year ‘22, we have got a lot better visibility this year than we had in fiscal ‘21, for example. And that’s mainly because the broader economic and business environment is a lot more clear and customers know how to adapt their businesses in the face of a pandemic and so forth. And that’s what we factored into the guidance. So, I am not holding back or being unduly conservative with respect to usage or any other factor of the business. We already considered all of those things as we laid out the plan at the start of the year. So, we feel pretty good about how Q1 played out. We feel optimistic about the rest of the year and looking forward to updating you again next quarter.

Okay, got it. And so on customer adds, really impressive acceleration there. And wondering if you can add some color to what products customers are landing in, whether security, Observability or search and if that varies at all from the broader trend you guys see in your customer base.

Yes, I am happy to take that. So, in terms of the customer adds, to your point, we are quite pleased with the additions that we had in the quarter. This is the second quarter in a row where we have seen a very high rate of customer additions. And we continue to add customers both on cloud as well as self-managed. A lot of our new customer additions tend to be on the monthly cloud side where, again, we saw very strong trends. If I think about the products or the use case solutions for which they initially adopt us, it really can be across the board. The way we think about it is we provide those curated search experiences across enterprise search, Observability and security. And when customers sign up for a subscription tier, a subscription level, it could be for any one of those solution areas. And over time, I think you will start to see some of those lines start to blur. We have talked quite a bit about convergence between Observability and security on the call over here. And it’s sometimes tricky to see where a certain use case might end and another one might begin, particularly in monthly cloud where, because it’s all self-service and customers are signing up without necessarily advanced human engagement from us, we may not have visibility into what a customer’s end use case might be. But broadly speaking, the way we have seen it play out is that we see strength across the three solution areas as was reflected in all the numbers. And we see that convergence happening even more over time.

That’s helpful. Thanks a lot guys.

Thank you.

Our next question comes from Steve Koenig with SMBC Nikko.

Hi Elastic. Thanks for taking my questions. Congrats, first of all, on a great quarter. It looks like you are crushing the Stonehenge monument onstage. I wanted to ask you about your hiring. There is lots of hiring. Your job postings are like 3x the level they were even pre-pandemic. And so I am kind of wondering – and sales hiring looks like it’s increased a lot too – kind of maybe some color on what’s behind those trends and on how you are seeing productivity of new hires trend and systemic productivity as well. And then I have just got one other question for you.

Yes, happy to. Maybe I will start us off. So, in terms of the level of hiring and the level of investments, as we said last quarter, as we mentioned earlier on this call as well, we just see a very significant opportunity ahead of us. And we think that the right answer for us here is to invest now to capture that growth. Some of the investments we are making will drive growth in the current year, some of them are more forward-looking in nature. As we think about investments that we make, particularly on the sales side, people that we hire now will start to gradually ramp into productivity and will hopefully contribute a little bit towards the growth in the back half of the year which is why, in the prior call, we had mentioned that we see and expect stronger billings growth in the second half of the year compared to the first half. And I think that just sets us up nicely with momentum going into fiscal ‘23. In terms of where those investments are going, it’s across the board in all functions, clearly in the sales side, but also in the engineering and product organizations as well as in the G&A teams to support that scale and to support that growth as we go. We have seen, I think, broadly speaking, sustained levels of productivity across the board in the entire organization. I think there is a lot that people are getting done. It’s quite visible obviously and easiest to measure in the field organization. And I think there, all of our internal metrics have been holding up quite nicely. On the field side, Paul has just been a great addition to Elastic and it’s been great partnering with him over the course of the last year as we first built the plan for this year, and we are now executing against that. So, I think that’s all been working out quite nicely. And as I think ahead, as I mentioned just a short while ago, the unit economics in the business are strong. So, as we make these investments and continue to drive them, that sets us up very nicely to capture the growth opportunity ahead of us.

Great. Thanks Janesh. And if I could do one follow-up per se. Shay, you have already talked about your differentiation in XDR, very helpful. I am wondering, could you just maybe educate us a little bit? Are you seeing your XDR solution as a replacement for what you have had? And is it an alternative to what you have had in SIEM or traditional SIEM out there or is it complementary? Kind of how do you view that? How are customers viewing that as well? Thanks very much.

Yes. Happy to. I think that it’s like our single unified search platform, the wonderful thing about it is that every upgrade, every time you deploy on cloud and happen to log in again, you suddenly get all the features deeply integrated into a single solution. So, it’s not like we have a SIEM product line and then a separated XDR product line and a separated Observability line or something on those lines, it’s all built on the same unified search platform. If you go and deploy our solution on the cloud, you can go and crawl a website, monitor the web server that serves that website and protect the host that runs that website all at the same time with the same product. So, the wonderful news for all of our SIEM users out there is that once they go and upgrade to a new version, they just got an XDR. And one of the aspects of Limitless XDR that I love the most is that it’s limitless when it comes to its usage. So, all of our SIEM users that are used to us having resource-based or the base pricing, we charge based on the resources that are needed to store and run your data, then they just got XDR, this is part of the same package. If they are an enterprise customer of ours, they now have and can go and deploy as many endpoint security – endpoints as they want and they get malware and ransomware protection as part of their agent that collects data as well. So, I think that, that’s very exciting. And we love to pleasantly surprise our customers with over-the-air updates, if you will, and we are delivering another one where they wake up in the morning and suddenly got more, and they can go and deliver more on actually building value for their customers.

Sounds perfect. Thank you very much. I appreciate it.

[Operator Instructions] Our next question comes from George Iwanyc with Oppenheimer.

Thank you for taking my question. Shay, maybe just following up again on the security side, you mentioned the go-to-market and approaching the threat hunters from a bottom-up approach. Can you give us the top-down and the success you are having with the traditional security buyer as the platform matures?

Of course. First of all, we like to say at Elastic that bottom-up has up in it. So, I think the best companies in the world that start with bottom-up adoption are ones that obviously focused on the practitioners and building tools that practitioners love. But at the same time, you go up to their managers and directors and VPs and CIOs and CSOs, more than anything, by the way, because you want to have the practitioners’ back, if they go and trust your product and make a bet on it, you want to go and have their back and present yourself well and support them while they go, and that product spreads and being used. We make significant investments in going up. I don’t know, you probably saw our investments in analyst relationship which is just one of it, one example, and we have done it – we started to invest heavily only over the last year, and we are already presented well in three Magic Quadrant and Forrester waves, and we are making additional engagements as we speak. Those are all things that we are doing in order to be able to go up. I will say that one of the things that I care a lot about is to make sure that while we go up and support our practitioners, we are also still being focused and build towards that practitioners’ love because the best companies in the world, I think, are ones that can do both, and that’s something that we are definitely aiming to be.

Yes. With XDR now on the table, maybe sharing a longer term security vision over the next, say, 3 years to 5 years, how do you feel that can evolve over time?

Of course, 3 years to 5 years is a long period of time. But I will mention briefly how we are looking at the market. The first part is just to make sure that we are the best data platform out there for any type of threat or security data. And that’s a lot of work, making our software faster, more relevant, more scalable, running on multiple cloud providers, everything around that. Endpoint security is a big part of it, as I mentioned, so bringing all the capabilities of an EDR or the best-of-class endpoint security across Windows, Mac OS and Linux. Obviously, that’s a critical part of it. build.security and Cmd help us invest towards cloud workload native securities, whether it’s container security and Kubernetes connecting to cloud data sources and helping protect the cloud, policy management and enforcement around the same type of workloads. We also want to bring this level of protection and support not only from runtime but to deployment time. So, as you deploy, we want to help you protect at the time of deployment, not only when something is running. And then going even further and help you protect a build time. And then take all of that, by the way, and connect to all of the existing tools that you have there because all of them are generating data, whether it’s a CICD pipeline that is controlled, huge applications are ending up being shipped to the cloud and deployed, that generates data, that’s data that can be stored and e-stored in Elastic, it can be observed and can be used for threat hunting. So, we believe that every piece of data is important when it comes to securing an organization, and we are investing heavily in being able to store all of it and being able to do both manual threat hunting, but also automated, machine learning-driven threat hunting that we provide out of the box and our community provides that rest of all community can benefit for.

Thank you.

This concludes our question-and-answer session. I would like to turn the call back over to Shay Banon for any closing remarks.

Yes. Thank you. And thank you, everyone, for joining us today. Q1 was a great start of the year. We look forward to sharing updates with you as we execute through the year. Take care, and ciao.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.