Elastic N.V. (NYSE:ESTC) Q3 2023 Earnings Call Transcript

And then if I look at attrition, the gross retention rate, which measures only attrition, that has remained steady. So those are some of the puts and takes. And if I then think about what that means in terms of how that metric might evolve, it is a trailing 12-month measure. So more recent data points in the current macro climate are softer than the year-ago data points. So we do expect that the net expansion rate will soften a bit further for the next couple of quarters until we have a more normal comparison. And so one other way to think about expansion, as I’ve mentioned before, is to look at the customer count that’s more than $100,000 ACV. That is a more current measure of expansion dynamics with customers because most of our customers in that category get there by expanding their spending with us because our land sizes are typically much smaller.

And that customer count is not affected by the trailing 12-month calculations, and it also considers cloud commitments. And as you saw, that metric was very strong for us this quarter. So we continue to move further up within the enterprise. We’re getting closer to customers, becoming more strategic to their businesses. And all of that makes us just feel very good about the opportunity ahead.

Operator: This concludes our question-and-answer session. At this time, I would like to turn the conference back over to Ash Kulkarni for any closing remarks.

Ash Kulkarni : Thank you all for joining us. The thing that I’d say in closing is while we are pleased with the strength of customer commitments in Q3, we remain focused on execution in Q4 and beyond. We remain confident in our ability to drive both growth and profitability as we’ve demonstrated through all the things that we’ve done. So thank you again, and have a great day.

Operator: The conference has now concluded. Thank you for attending today’s presentation, and you may now disconnect.