Pinjalim Bora: Understood. And Janesh, another one for you, the , the net retention rate trending down, I want to ask about the retention, the growth tension side, has that €“ is that getting impacted because of the SMBs? Is that fair to assume? And then how the €“ or is it mainly on the expansion side?
Janesh Moorjani: Yes, it’s a great question, Pinjalim. So a couple of thoughts that I’ll put out there in terms of the net expansion rate. So in terms of the gross renewals, we actually didn’t see any significant change in the gross renewal rate for our subscriptions. We don’t break out the numbers specifically because individual projects obviously introduce some level of noise into the measurement. But as we looked at the renewal rates internally, they were very consistent with what we’ve seen before. And when I think about how that played out in terms of the expansion dynamics, we did see expansion slow a little bit, and I think that’s partly the effect of the €“ some of the trends that we talked about that we saw in the month of October.
Within the net expansion rate, that does include some effect of SMB and monthly cloud consumption, which is annualized for the purposes of that net expansion rate calculation. So the softer SMB performance in October also would have had an adverse impact on that. But the way we think about that is that even at 125%, it is still a world class expansion rate. And when you look at the customers over $100,000 ACV, which is the other way that we think about expansion, we have continued to grow that number in a pretty solid way. And that’s a more current data point that indicates the expansion momentum that we are seeing. So when I think about it more broadly, the underlying trends continue to play to our advantage where customers continue to adopt us across multiple solutions.
We continue to move further up within the enterprise. We are getting closer to the customers and becoming more strategic to their businesses. So, for all of those reasons, I actually feel quite good about the longer term opportunity ahead of us.
Pinjalim Bora: Got it. Thank you. I will get back in the queue.
Ash Kulkarni: Thank you.
Operator: The next question will come from Joel Fishbein with Truist Securities. Please go ahead.
Joel Fishbein: Thank you for taking my question. Janesh, I would love to just here what happened in monthly customer cohort? I know you mentioned something about it on the call, I just want to go a little bit deeper. And what percent of business is that now? And where do you think that, that trends? And then the second follow-up to that is just how is the government business for you guys been specifically? Thanks.
Janesh Moorjani: Yes, happy to take both of those, Joel. So, in terms of monthly cloud performance, Monthly cloud was about 16% of total revenue, and that was a tick down from where it’s been in the past. In prior quarters, it was roughly 17% of total revenue. And I think that just reflects some of the consumption trends that we talked about, particularly on the SMB side because a lot of those customers are on monthly cloud. And in terms of context, 1% change there obviously translates to a few million dollars in revenue. So, it is quite meaningful. But monthly cloud continues to be a great way for us to acquire and scale new customers. We have talked already about some of the changes that we are making to double down on those and focus with even greater investments in digital demand, and in particular, as one example.
So, those are some of the trends that we saw from a monthly cloud perspective. And then in terms of the Federal business, Fed continues to be a very strong practice for us. We have invested in the Fed business for some time now, and that team has been really successful in prosecuting many use cases and ensuring that we are used in mission-critical workloads across multiple agencies. In Q2, we were actually quite pleased with our performance in Fed. The team did well to close all of the business that we were looking to close, and we are excited about the opportunity in Fed looking ahead.
Joel Fishbein: Thank you so much.
Operator: Your next question will come from Raimo Lenschow with Barclays. Please go ahead.
Vinod Srinivasaraghavan: Hi. This is Vinod Srinivasaraghavan on for Raimo. Thanks for taking my question. You had mentioned 30% of Elastic clusters are using APM now, just wondering if you could give us a sense of how that’s progressed from last quarter or last year? And from a sales perspective, how do you kind of go about incentivizing more customers in this type of environment to try and use and scale up on APM or security or some of your newer product areas?
