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Elastic N V (ESTC) Q4 2021 Earnings Call Transcript

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ESTC earnings call for the period ending March 31, 2021.

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Elastic N V (ESTC -0.02%)
Q4 2021 Earnings Call
Jun 02, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, and welcome to the Elastic fourth-quarter and fiscal 2021 conference call. All participants will be in a listen-only mode. [Operator instructions] After today's presentation, there will be an opportunity to ask questions. [Operator instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Anthony Luscri, vice president, investor relations. Please go ahead.

Anthony Luscri -- Vice President, Investor Relations

Thank you. Good afternoon, and thank you for joining us on today's conference call to discuss Elastic's fourth-quarter and fiscal 2021 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 the Elastic investor relations website, ir.elastic.co. Our discussion will include forward-looking statements, which may include predictions, estimates, our expectations regarding the demand of 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 the 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 first-quarter fiscal 2022 quiet period begins at the close of business Friday, July 16, 2021. During the week of June 8, we will be participating in the Bank of America Global Technology Conference, the Stifel Cross Sector Insight Conference, and the Baird Global Consumer Technology and Services Conference. With that, I will turn it over to Shay.

Shay Banon -- Founder and Chief Executive Officer

Thank you, Anthony. Hello, and welcome, everyone. I'm happy to be here with all of you today to share our fourth-quarter and full fiscal year results. We once again delivered strong performance, driven by broad adoption of our offerings and the continued growth of Elastic Cloud.

In Q4, revenue grew 44% year over year. And we once again saw robust customer acquisitions and expansion metrics. We ended the quarter with more than 15,000 subscription customers including over 730 with annual contract value of more than $100,000. Looking at the full fiscal year, revenue grew 42%.

This strong performance was fueled by continued adoption and differentiation of our solutions and features, expansions to new use cases, growth across all geographies, and increased strategic relevance at all levels of the business. Companies throughout the world are becoming more digital and distributed, especially as they move to the cloud, and they are generating an ever-increasing amount of data. The ability to search, observe and protect these data is critical to every company's success. We believe search is the most natural way for people to interact with data and find what they're looking for.

Elastic enables customers to quickly search across any data anywhere, anytime. From adding a search box to a website to monitoring applications, infrastructure, and cloud services and preventing, detecting, and responding to threats across their organization. Customers turn to Elastic for our deep expertise in creating world-class search experiences across our enterprise search, observability, and security solutions that are built into the Elasticsearch platform, our single unified technology stack. Now I would like to share some of the innovations we have made in our unified search platform.

First, I'm happy to share that the frozen data tier powered by searchable snapshots is now generally available. Data is growing exponentially, and our customers must be able to do more than just store it. They need data to be easily accessible and always on and fully searchable at a moment's notice, regardless of temperature. With searchable snapshots in the new frozen tier, customers can now search petabytes of data in just minutes anytime they want.

They will not be forced to delete data to reduce cost with the power to easily balance the speed of results with the cost of storage. In fact, one of the world's largest telecommunications companies will leverage searchable snapshots and the frozen data tier to better manage their high-volume login data and storage requirements. The customer started with our free basic tier and needed a reliable and cost-effective way to keep up with growing data volumes and -- during major launch events. In addition, new business requirements demanded, they store their login data for 60 days instead of seven.

They upgraded to an enterprise subscription to take advantage of the tremendous value provided by searchable snapshots. Now the customer can more effectively manage their growing data volumes in Elastic while meeting their data retention requirements. Our differentiated implementation of schema on read, what we call runtime fields, is also now generally available. Runtime fields provide an easy and flexible way to onboard data and make it searchable.

Users can immediately interact with and enrich their data without defined fields. In 1 click, they can switch to the blazing speed of schema on write, benefiting from the power of choice and speed in a single integrated search platform. Moving on to Enterprise Search, which powers search across websites, applications, and workplaces. We continue to build powerful modern search experiences for our customers that are easy to implement, use, connect and scale.

As customers continue to grow their digital footprint and generate more and more data, we're enabling them to search everything anywhere so they can find a signal through the noise. One example of this is a deal we closed in Q4 with a major enterprise that enables customers to manage electronic agreements. They were looking to evolve the search functionality within their platform to give customers a faster and more user-friendly way to search across contracts and agreements. Leveraging the power of Elastic's search capabilities, the customer is able to meet the growing demands of their customers and scale their top-line growth.

In another example, a longtime customer, one of the largest global banking and financial services companies in the world, expanded their business with us considerably in Q4 as they look to deliver Elastic's technology more broadly within their company. The customer started with a large observability deployment to power their internal logging and observability center of excellence. Then as other groups within the organization saw the value of Elastic, the company expanded with Enterprise Search, one step, one pricing model, and the ability to move between solutions. This resonates with our customers.

It's gratifying to see how they are growing with us as they realize the power of Elasticsearch platform. We're also seeing recognition from industry analysts. In Q4, Elastic was recognized as a challenger in the 2021 Gartner Magic Quadrant for Insight Engines. This is our first time participating in this Magic Quadrant.

And it's exciting to see this recognition of the innovations in our Enterprise Search solution. And we're continuing to innovate in this space, with new connectors for Workplace Search, including the new Dropbox integration and an enhanced custom sourced API. Now the development team can more easily ingest and manage content of any content source, including legacy and custom applications. Now on to our observability solution.

Enterprises continue to expand their digital footprints and move to the cloud at an ever-increasing pace. They need to observe their applications. And cloud infrastructure to keep these complex digital ecosystems available and performing is becoming more and more critical. Elastic Observability helps customers by unifying the various types of observability data like logs, metrics, and APM places into a single search platform.

It allows customers to easily monitor and respond to any event happening anywhere in any environment. In Q4, we closed business with a major national home improvement retailer who was looking to gain better visibility and performance insight into the more than 40 mobile and in-store applications. These applications are used to manage their retail operations across over 2,000 locations. The company chose Elastic over their current provider because we delivered significantly faster speeds and better integrations of logs and APM data.

This enables them to better monitor and respond to events happening in their order management and supply chain management applications, point-of-sale systems, and other digital environments. We're seeing recognition from industry analysts in the APM space as well. Elastic was recognized for the first time in Gartner's evaluation of APM vendors and was named a visionary in the 2021 Gartner's Magic Quadrant for Application Performance Monitoring. And we continue to simplify the ability to onboard any data into Elastic Observability.

We announced native support for open telemetry, providing even more flexibility for customers to onboard data. In addition to using our unified agent to collect and send data to the Elastic stack, organizations can now directly send data collected by open telemetry agents to the same Elastic deployments. I'm also excited to share that we announced an expanded integration with Microsoft that featured enhanced support for Azure monitoring use cases, which was just demoed during the Microsoft Build conference last week. Customers can now easily onboard logs and metrics for their Azure services directly in Azure to our Observability solution in just a few clicks.

Moving to our security solution. Companies are continuing to generate more and more data everywhere, and this data plays a critical role in their ability to protect themselves from attacks. Elastic Security helps protect companies by making all of these data searchable and actionable, from the endpoint, to the data center, to the cloud. It unifies security capabilities such as SIEM, endpoint security, and threat hunting in a single search platform, equipping analysts to seamlessly prevent, detect and respond to threats.

This quarter, we closed a deal with a major real estate developer in Japan with more than 20,000 employees. They were looking to protect their large remote workforce using a scalable and easy-to-maintain solution that offered a simple pricing structure. Using Elastic Security on Elastic Cloud, the customer established a security operations center in just a few months and quickly launched our SIEM to drive their security operations. We also expanded business this quarter with a major public research university in the U.S.

Their security team's scope expanded to include both the campus and the university hospital. The customers have been using our SIEM capabilities under a gold subscription and upgraded to a platinum subscription to take advantage of our machine learning and alerting capabilities. Now even though the customer's scope has expanded and they are ingesting far more data than they were before, they are still able to stay on top of threats across their entire environment. It's great to see real-world examples of how our solutions are able to flexibly grow with customers, giving them the added functionality they need when they need it.

We accelerated hunting and investigation with the general availability of analyst-driven correlation powered by EQL. This critical correlation capability provides a new type of search experience for practitioners to quickly identify threats. Additionally, we launched support for central management and deployment of osquery, a large and rapidly growing open source project. This integration allows customers to reach out to host and endpoints and search them, effectively folding them into our search platform.

It is useful to threat hunters, security analysts, and IT operations everywhere. Now if a report comes along for malicious a Chrome extension, finding who has it installed across the organization is just a simple search query away. We continue to invest in our cloud offering, expanding strategic partnership with cloud providers and supporting customers with a simple, worry-free, and easy-to-use cloud experience. In Q4, we closed a deal with one of the largest U.S.

retailers of automotive parts and accessories. We are supporting them in their decision to move all of their Elastic usage to Elastic Cloud. Like many of our customers, the company has grown with us over time, starting with logging and APM and expanding to Security and Enterprise Search as different groups across the business saw the value in leveraging our platform. As adoption of Elastic within the company has grown, we have recognized the value of our Elastic Cloud worry-free managed service.

We have also expanded our strategic partnership and first-party integration with Microsoft. Customers can now deploy on Elastic Cloud as if it was a native Azure service. They can also shift monitoring data to it as if it was a native Azure service. The Elastic team enjoys working closely with Microsoft, and we look forward to continuing our deep partnership to bring our joint customers the search experience they deserve.

I'm thrilled with the momentum we are building with all of our partners to enable our customers to bring together and understand all their data, no matter where it resides. Our continued investments across the business to drive rapid innovation help us bring the best search experience to all of our users and customers and enable us to build strong product differentiation in the market. I'm incredibly humbled as I think about all the people who make it possible, from employees to our community, customers, and partners. Also, I'm very proud to share that in fiscal '21, our Elastic Cares program raised $1.3 million for charitable organizations around the world, and Elastic employees volunteered more than 4,000 hours as part of our volunteer time-off program.

Moving into fiscal '22. I'm confident in our ability to execute, and I'm looking forward to supporting our growing customer base as they leverage the power of search to gain actionable insights from their data. And looking further forward, I believe that we're on our way to becoming a $1 billion-plus revenue company in fiscal '23 with style. And with that, I'll hand it over to Janesh.

Janesh Moorjani -- Chief Financial Officer

Thanks, Shay. Q4 was a great finish to the year, continuing our momentum of strong execution against the backdrop of a gradually improving global economy. Our solutions continue to resonate with customers, our cloud momentum was strong, and we are continuing to invest against the rich market opportunity ahead of us. Let's get into the numbers.

Total revenue in the fourth quarter was $177.6 million, up 44% year over year. We finished fiscal '21 with $608.5 million in total revenue, up 42% year over year, reflecting strong revenue growth at scale. We are very pleased with our performance, ending the year significantly better than expected given our strong execution. Subscription revenue in Q4 totaled $164.5 million, comprising 93% of total revenue.

Within subscriptions, revenue from Elastic Cloud was again strong at $61.3 million, growing 77% 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. Elastic Cloud revenue for fiscal '21 was $166.3 million, up 80% year over year and comprised 27% of total revenue. We also passed another significant milestone.

As of Q4, our Elastic Cloud business now has an annual run rate of over $200 million. Professional services revenue in Q4 was $13.1 million, growing 34% year over year. As I've said before, services revenue can fluctuate across quarters depending on the timing of projects and delivery. Moving on to calculated billings.

Calculated billings in Q4 grew 38% year over year to $240.9 million. The demand environment in the quarter played out better than expected as we experienced early signs of a recovery. The quarter's strength was broad-based across our three solutions driven by strong new and existing customer growth across segments and geographies. At the end of Q4, total deferred revenue was $397.7 million, up 53% year over year.

Remaining performance obligations totaled approximately $796 million, up 49% year over year. Customers continue to make multi-year commitments to us, reflecting the increasing strategic relevance we bring to their businesses. Contract lengths remained over one and a half years on average and were slightly shorter compared to the prior quarter as well as compared to Q4 of fiscal '20. As a reminder, we do not actively manage the business to a target contract length, and our multi-cloud business has no deferred revenue or remaining performance obligations.

Turning to customer metrics. We ended Q4 with over 15,000 total subscription customers. We saw significant strength in customer additions in Q4, driven by new customer momentum for Elastic Cloud. We also ended the quarter with more than 730 customers with annual contract values above $100,000 compared to more than 670 such customers at the end of Q3, reflecting continued strong expansion trends.

The sequential increase in customers over $100,000 ACV was the strongest in two years. Our net expansion rate was relatively consistent with Q3, but dipped slightly below 130%, reflecting the broader environment. We also achieved another important customer milestone in Q4. We now have over 75 customers with ACV over $1 million versus over 50 such customers at the end of fiscal '20, reflecting the increasing strategic importance of our unified technology stack and the success of our go-to-market model as we move further up within the enterprise.

Now turning to profitability, which is non-GAAP. Gross profit in the fourth quarter was $137.9 million, representing a gross margin of 77.6%. We managed our overall gross margin well during the year despite the increase in the cloud mix. Looking ahead, Elastic Cloud will remain a modest headwind to gross margin overall as we continue to invest to drive growth.

Looking at operating expenses in Q4, we increased our investments in the business as we laid out in the prior call. These investments were spread across all functions. Our operating loss in the quarter was $1.2 million with an operating margin of negative 0.7%, which was significantly better than expected, primarily due to the strong revenue performance in the quarter. This reflects the operating leverage inherent in our business model.

We also benefited as expected from lower travel and event spending given the pandemic. Net loss per share in Q4 was $0.08 using 90 million weighted average shares outstanding. Turning to free cash flow. Free cash flow was negative $3.1 million in Q4 and positive $18.3 million for the year.

We are proud to have turned free cash flow positive this year, yet another important milestone as we scale. We expect our free cash flow margin to remain slightly positive in fiscal '22 as we invest more aggressively to capture the long-term opportunity. I'll touch on the investments in a minute. We ended the year with approximately $401 million in cash and cash equivalents.

We remain comfortable with our cash position from an operating perspective. Before I move to guidance, I'll briefly discuss our overall framework for fiscal '22. We remain very excited about the long-term opportunity ahead of us. We continue to believe the best path to capturing the long-term opportunity is to further accelerate our investments in the near term.

We plan to accelerate investments in all functions. Some of these investments will support growth in fiscal '22, while others will be more long term in nature. A significant portion of our investments will be in sales and marketing, where our core strategy of driving initial adoption and then scaling up through the enterprise remains unchanged. It's been a highly successful model for us that has allowed us to get massive reach and scale.

We are expanding our capacity across deals and segments as well as scaling our velocity sales motion to further drive our cloud business. At the same time, we are continuing to focus on moving further up within the enterprise with field investments that support our solution strategy. Our full-year outlook also assumes a gradual improvement in the macro environment weighted in the second half of fiscal '22. Given this backdrop and in combination with our investments taking greater hold over time, we expect our calculated billings growth in the second half to be greater than the first half.

Further, we remain confident that Elastic Cloud will continue to deliver faster year-over-year growth than our overall business, given our feature advantages over other offerings and our investments in expanding our reach and partnerships. In addition, we do not expect a meaningful return to travel and in-person events in the first half of this year but are expecting such spending to increase in the second half of the year. Finally, we expect cash taxes to be slightly higher in fiscal '22 as we scale in a number of our international subsidiaries. Turning to guidance.

In terms of our approach to guidance, we continue to look at a number of inputs and guide based on what we know. What's different now compared to last year is that there is less uncertainty in the broader economic environment, so we reflected this better visibility and confidence in our guidance. With that context, for Q1, we expect revenue in the range of $171 million to $173 million, representing a growth rate of 33% year over year at the midpoint. We expect non-GAAP operating margin in the range of negative 5% to negative 4% and non-GAAP net loss per share in the range of $0.13 to $0.10 using between 91 million and 92 million ordinary shares outstanding.

For full fiscal '22, we expect revenue in the range of $782 million to $788 million, representing a growth rate of 29% year over year at the midpoint. We expect non-GAAP operating margin in the range of negative 5.5% to negative 4.5% and non-GAAP net loss per share in the range of $0.60 to $0.51, using between 92.5 million and 94.5 million ordinary shares outstanding. As we look further into the future, we remain confident in the longer-term opportunity and are investing toward that. As Shay said, we believe we are well on our way to becoming a $1 billion-plus revenue company in fiscal '23.

And with that, let's go ahead and take questions. Operator? 

Questions & Answers:


Operator

We will now begin the question-and-answer session. [Operator instructions] And our first question today will come from Matt Hedberg with RBC Capital Markets. Please go ahead.

Matt Hedberg -- RBC Capital Markets -- Analyst

Oh, hey, guys. Thanks. Great. Thanks for taking my questions.

Great quarter. I mean there's lots of positives. Obviously, the Elastic cloud growth, the -- I think what was a record new customer add and now this -- the $1 billion fiscal '23 or $1 billion-plus fiscal '23 target. You know, I guess when we start thinking about the progress to that target, Shay, it seems to me that security is going to be an increasingly important part of your business.

And I guess, you know, following all these breaches, it really seems like we have a data problem. With all the security solutions out there, can you talk about your ability to perhaps consolidate some spend, help customers feel even more secure, really harnessing the power of data to maybe make smarter security decisions?

Shay Banon -- Founder and Chief Executive Officer

Yes. You know, of course, happy to. So first of all, at Elastic, we don't treat data as a problem, but as a feature and capability that we can go and use in order to better search, observe and protect customers and companies. And we're happy about the ability to do that.

Specifically, with what you mentioned, I think that's, you know, critical aspects of why our security product is growing as a greater proportion of our corporate operations are tied to IT systems. Actually, they're presented with more opportunities to prey on links in critical supply chains, and we help customers search and observe and protect all of the data, as you mentioned, that is generated by all these systems. Even last quarter, we launched this sort of ransomware protection, for example, on the endpoint itself and bringing, you know, similar protections to the endpoint to the data center and to the cloud. Security is our fastest-growing segment within our business.

Observability represents north of 40%; Enterprise Search, less than 33%; and Security represents around 20% of our business now, and it's our fastest growing. But we treat all of that as the same data. And while you observe, want to protect, and we believe that all the Observability data can be heavily used and harness toward better protecting companies as well.

Matt Hedberg -- RBC Capital Markets -- Analyst

That's super helpful. And then I guess, you know, maybe to sort of double click on that a little further. With your success in Enterprise Search, it strikes me also that you're in a really good position to help organizations with a data governance risk. Really, you know, your search engine, being able to identify sensitive information, monitor access to this, you know, wherever that might sit, whether it's on-premise or in cloud data stores.

Am I right in thinking that this could be a growing trend for you looking forward?

Shay Banon -- Founder and Chief Executive Officer

It's definitely something that we're thinking about. Towards the long term, though, I would say, currently, the focus that we have with our Workplace Search product specifically is to be able to easily onboard any type of SaaS-based data focusing on the most popular sources like Google Workplace or Microsoft data sources and Salesforce. Once we have access to this data and make all of that content searchable, which is critical to workplaces today as they become more distributed, we can actually provide additional value over time. For example, who accessed what data at what time because we know the content, we crawl it, we make it searchable, so we know what changed in it.

Those are definitely areas that we're thinking about. We like the idea of being able to build it on a single search platform. But it's more of a long-term implementation for us moving forward.

Matt Hedberg -- RBC Capital Markets -- Analyst

That's great. Thanks, guys.

Operator

And our next question will come from Raimo Lenschow with Barclays. Please go ahead.

Raimo Lenschow -- Barclays Investment Bank -- Analyst

Hey. Thank you. Two quick questions. First, Shay, you talked a lot about the from the enterprise SKU that you saw with searchable snapshots, etc.

Can you talk a little bit about where your customer base is in terms of adoption of the different SKUs and what's the opportunity to kind of move customers to the higher value-add services? And then Janesh, one for you. If I look at the guidance, etc., that's almost a step change because you've been a very, very conservative CFO, and this looks -- sounds a lot -- you sound a little bit better or a lot better actually, and the guidance looks very good. What are the -- what's the stuff that drives your optimism here in terms of data points that you're seeing out there? Thank you.

Shay Banon -- Founder and Chief Executive Officer

Yeah, I'll start to talk about the enterprise SKU. So I'll mention a bit about the history of the enterprise SKU. A few years ago, we introduced the enterprise SKU to provide our on-prem or self-managed cloud products. So our orchestration product was provided as part of the enterprise SKU.

As we started to add more value to this enterprise SKU, advanced endpoint protection capabilities, but really, the most significant one is searchable snapshot and we just GA-ed what I would consider to be the biggest aspect of -- within frozen tier. That's when I think enterprise SKU really starts to shine and be more applicable to more and more customers out there, especially on our cloud, and like, the enterprise SKU is only recently available on our cloud, thanks to the searchable snapshot in frozen tier. It represents a relatively small amount of business for us. And I suspect that over time, there will be a tailwind to it.

It will take some time as users start to see the value of searchable snapshots specifically. And as we add more features to the enterprise SKU, which we believe provide greater value to customers, we will see probably more adoption of it.

Janesh Moorjani -- Chief Financial Officer

And Raimo, from my lens, a bit that I'd just maybe add to that point also is that when we think about the distribution of solutions across our customer base, one of the statistics we've shared before is that over half of our customers that are more than 100,000 ACV have so far adopted only one solution. And then if I think about the $1 million-plus customers, they've adopted two or more solutions. So that to me represents the opportunity that we've got to continue to drive greater cross-sell, upsell and generate much more value from that. And then on the guidance question, well, you know, look, the way I characterize our guidance approaches, as I did in my earlier remarks, that Q4 and all of fiscal '21 was a very strong year for us.

Nothing has fundamentally changed, though, in terms of our core approach to how we think about guidance. We look at a number of different inputs for the year. We guide based on what we know. Those inputs will include, for example, funnel conversion rates, hiring plans, productivity ramps, product road maps, and of course, the general economic landscape and customer spending patterns.

And at this time last year, when we were initiating guidance for fiscal '21, we were in the very early stages of the pandemic as you'll recall, and it was incredibly difficult back then to predict what the economic impact would be and how customer spending patterns would evolve. So naturally, at that point, it was appropriate for us to guide quite cautiously for fiscal '21. What's different for us now this time compared to last year is that there's much less uncertainty. Customers have adapted their business practices.

We know how to work with customers. They are focused on digital transformation initiatives. And the global economy is gradually improving. And so we've reflected all of this better visibility and confidence into the guidance that we provided.

Raimo Lenschow -- Barclays Investment Bank -- Analyst

Perfect. Very clear. Congrats on the quarter as well. Thank you.

Operator

And our next question will come from Brent Thill with Jefferies. Please go ahead.

Brent Thill -- Jefferies -- Analyst

Thanks. The $1 billion fiscal '23 target is implying roughly 28% CAGR. So, you know, that's around 30% for the next couple of years. What's giving you confidence in that milestone at this point? Can you kind of unpack what the drivers are and the confidence around that target?

Janesh Moorjani -- Chief Financial Officer

Yeah. Happy to, Brent. Maybe I can take that. So, you know, I think the strongest indication for us is that our customers continue to tell us that their spending priorities are aligning with areas where our solutions are focused.

We are seeing significant traction in a number of different fronts. We've clearly, through the course of the pandemic, demonstrated strong execution. And when we just think about the magnitude of the market opportunity ahead of us and the fact that we're investing toward capturing that opportunity in the long term, all of those indications give us the confidence that that's an achievable milestone. I think about investments from a number of different dimensions, including our ability to move further up within the enterprise.

When I think about how we're progressing quite nicely in cloud, we've seen incredibly strong momentum there. And just the fact that the underlying market trends and dynamics are playing to our advantage where data volumes are exploding and customers are continuing to adopt us for more solutions and investing data from multiple sources and continuing to expand their usage of our technology. So it's all of those things that give us the strength of -- and conviction around the long-term future for the company.

Brent Thill -- Jefferies -- Analyst

And just a quick follow-up. You had mentioned you had accelerated your hiring pace. Can you just give us a sense of – you know, on the quota-carrying reps side, are you hitting your goals, you're overachieving? Where are you at as it relates to the build-out of the go-to-market?

Janesh Moorjani -- Chief Financial Officer

Yeah. So Q4, you'll see that we added across the company, 95 people, and that's faster than the pace over the past couple of quarters. And looking ahead, what I'd say is, if I think about the investments that we're making broadly in the field, first off, as we went through the planning process and thought about the opportunity and where we want to make investments, it was a fantastic partnering with Paul. He's been a great addition to Elastic, and it was really great partnering with him as we think about where we need to make those investments looking ahead.

What we also said earlier is that any changes that we make will be evolutionary, not revolutionary. And so consistent with that, we're making investments in all areas in the field organization. We're also investing in the marketing function, which is just a core part of the overall go-to-market strategy. So the investments in sales will be not just in sales reps that are covering enterprise and commercial and public sector accounts, but also in all the roles around them that make them successful.

We're also scaling the velocity model quite heavily as we drive the cloud business forward. So we're investing in all of those areas and investing over the course of all of fiscal '22. So we're quite optimistic about the longer term there.

Brent Thill -- Jefferies -- Analyst

Thank you.

Shay Banon -- Founder and Chief Executive Officer

Thank you, Brent.

Operator

Our next question will come from Tyler Radke with Citi. Please go ahead.

Tyler Radke -- Citi -- Analyst

Good afternoon, guys. Thanks for taking my question. I wanted to ask you about the -- I think, record net adds that you saw this quarter, a little over 1,000 new customers. I was curious, number one, a, if the majority of those net adds are coming through in your SaaS business and if indeed, you did see a record net adds quarter in the SaaS business.

And, you know, number two, I just wanted to understand what you think is driving that. Obviously, you made a licensing change that I think was viewed pretty positively by some. And just curious if that's had any impact on the record net adds that you saw. Thank you.

Janesh Moorjani -- Chief Financial Officer

Yeah. Tyler, this is Janesh -- well, maybe I'll kick us off, and, Shay, then you can talk about the licensing piece. So on the new logos, Tyler, we were quite pleased with the new customer additions in the quarter, especially in light of COVID-19. Obviously, it was much stronger than prior quarters.

We've continued to add many customers, both on Elastic Cloud as well as on self-managed. And a lot of our new customer additions were, in fact, in the cloud business, where we've seen really strong trends. As you know, we've invested quite heavily in cloud, both in terms of marketing as well as partnerships on the product side, clearly. So it's really been encouraging to see the results of these investments play out.

And maybe, Shay, I'll let you touch on the licensing piece.

Shay Banon -- Founder and Chief Executive Officer

Yeah, of course. So first of all, just in terms of overall how our license changes are going, they're going very well from our perspective. We made this change to protect our products, brand, and IP, and we feel confident about our ability to execute against it. I'll remind you that none of our customers were impacted due to the licensing change.

And out of the free and open tier, the vast majority of our users that download our software, they were already using our proprietary distribution under the Elastic license. So there's no impact to them as well. And we do expect over the long term to see a tailwind toward our cloud business, and we're excited about that. Tactically, for this quarter, we haven't been able to correlate it directly to our licensing change.

We do think that this will play out over time versus a one-time bump or during one quarter or another.

Tyler Radke -- Citi -- Analyst

Thanks. That's helpful. Janesh, I think you talked about the quarter just seeing stronger macro recovery trends than you had anticipated. And in the guidance for next year, you talked about stronger second-half billings versus the first half, kind of implying that they should reaccelerate.

I wanted to ask you about net expansion rate, which I think remain just below 130%. Would you expect that to kind of tick back up, you know, in the back half of the year, particularly as you're selling kind of more strategic use cases and onboard incremental sales capacity? Thank you.

Janesh Moorjani -- Chief Financial Officer

Yeah. I'll touch on that, Tyler. And you're right. I mean, Q4 was very strong for us.

Fiscal '21 overall, I think turned out to be much stronger than we had expected. And, you know, if I think about fiscal '22 and the general outlook, there's a couple of things that are driving the billing seasonality, which I'll touch on. So one is the general thesis we have that the economic environment will gradually improve globally. Obviously, the U.S.

is showing really encouraging signs. And other parts of the world are a little bit behind but headed in the right direction. So generally, we expect that things will improve in the macro over the course of the year. And the second piece is that our investments will also continue to take greater hold.

One of the other pieces, which is a little bit more of a modeling point really is if you think -- you might recall that also in Q1 of last year, we had a billings benefit from a multiyear deal that we had built upfront, and that transaction back then had full $5 million of billings into Q1 of '21 and pulled it out from Q1 of '22. So that does present a headwind to billings growth in Q1 of this year. But thinking about the net expansion rate and some of the drivers there, again, I think the underlying individual metrics depend a little bit on how that overall business unfolds. As I mentioned earlier, the underlying drivers for us remain strong.

They are playing to our advantage with the explosion of data volumes and customer adoption of our solutions and just the strong traction we've been seeing. You see that in the customer account that's greater than $100,000 ACV as well, which was the strongest data point that it's been in at least a couple of years. So all of those give us the confidence in the long-term opportunity, and we will see how the net expansion rate unfolds over time. I think over the course of fiscal '22, the, you know, the net expansion rate is one of the metrics that will unfold just based on how the overall business unfolds.

And overall, we've seen just great strength in all of our expansion dynamics.

Operator

And our next question will come from Kash Rangan with Goldman Sachs. Please go ahead.

Kash Rangan -- Goldman Sachs -- Analyst

Thank you very much. One for Shay, one for Janesh. Shay, with respect to the cloud as a future of the company, do you believe that pivoting to the cloud is ultimately the -- I don't want to use the word end game, but the strategic outcome for the company, granted that your cloud business is doing well, it was up 77%. So what kind of opportunity do you see in your installed base to get everybody on the cloud platform ultimately in the future? And I'll stop with that question before I ask Janesh's question.

Thank you so much.

Shay Banon -- Founder and Chief Executive Officer

Sure. Happy to. So when I look at our ability to -- where can we provide the best service for our customers, everything else being equal, we definitely believe that our cloud service provides the best service for our customers. We are the creators, maintainers, and builders of our products, and we know how to manage them well, and we know how to build cloud dedicated features that help, for example, scale them automatically, upgrade them, and manage them efficiently, you know, at almost like a worry-free experience to our user base.

Sometimes, there's still cases where customers might want to run self-managed for various reasons, and I'm happy about our ability to go and provide it to them. And obviously, you know, during the next few years, the immigration happens and not -- everything suddenly moves to the cloud. So I'm happy to do -- therefore, our customers as they migrate from on-prem to the cloud. I do think that a big part about our cloud strategy is to be there for our customers wherever they are.

That's why we're partnering with all cloud providers. And only recently, we announced even an expanded strategic integration with Microsoft Azure that has been received well by our joint customer base and the Microsoft team. And I'm excited to be able to provide our products, exactly the same experience, and exactly the same behavior across multiple cloud providers to provide our customers with more options.

Kash Rangan -- Goldman Sachs -- Analyst

Wonderful. And one for you, Janesh. As the company transitions to the cloud, how should we think about how you're going to be managing -- you've been fantastic as a public company, managing your expenses and whatnot, proving that the guidance has good visibility. How should we think about how you'll be managing through the business model transition if there is any transition at all as part of the consideration? Thank you so much and congrats on the quarter.

Janesh Moorjani -- Chief Financial Officer

Yeah. Thanks, Kash. So obviously, we were very pleased with the cloud performance here in Q4, growing 77%. We also had just a large number of net new customer additions that we talked about.

So I think the cloud strength that you saw was not from any transitions in the customer base. A lot of that was net new adds. Of course, we also saw strength on the self-managed side of the business here in Q4. So, you know, as we've said before, I think our growth in cloud will generally mirror customer preferences and where their workloads reside.

And sometimes customers will move existing workloads to the cloud-like they do. But generally speaking, the way we think about it, there's just an enormous opportunity for us to grow our business, both in the cloud as well as on the self-managed side. And our promise to customers is that we will help them by being wherever they are. But a lot of the strength that you're seeing in cloud is actually reflective of the investments that we've made between the marketing side of the house, the sales side of the house, our partnerships with some of the cloud providers as well as on the product side and building out our presence.

One of the other things that we've also seen is that more customers are continuing to select a usage-based model that better accommodates their uneven consumption patterns. And so that's another factor that's at play as well. In fact, at this point, over half of our annual cloud revenue is now on a pure usage model. So the way I think about it is that we do think that cloud will continue to grow faster than the self-managed business overall, but our opportunity is quite large.

The penetration rates are still low. So we've still got plenty of room to grow in both the cloud and the self-managed side.

Kash Rangan -- Goldman Sachs -- Analyst

Thank you so much.

Operator

And our next question will come from Mark Murphy with J.P. Morgan. Please go ahead.

Unknown speaker -- J.P. Morgan -- Analyst

Hi. This is Benjamin on behalf of Mark. Congrats on the quarter. Shay, I wanted to talk about the Microsoft relationship.

I think you alluded to it. But I was trying to understand if -- I think if Elastic can now be deployed within the Azure console itself, does that mean that customers can actually consume Azure credits to buy and use Elastic? And is there any go-to-market incentives in place for Azure sellers to focus on Elastic?

Shay Banon -- Founder and Chief Executive Officer

So yeah, thanks. First of all, yes, to be honest with you, yes. And we integrate with the Azure marketplace and customers can take their Azure credits and spend it with Elastic. It's at a varying level of integration.

We still have a bit of road left to go when it comes to providing all of our services under Azure's credit-based system. We're working very closely with the markets team to be able to do that, and we expect to -- but the vast majority of our use cases can be done through it. When I'm thinking about our Microsoft integration, at least from a product perspective, I'm thinking about it in three ways. The first one is an integrated product experience directly in the Microsoft Azure console.

And now the user can log in to Azure and deploy Elastic on Elastic Cloud as if it was a native Azure service. The second one is the ability to shift data from all of the various Azure services directly into Elastic. That helps us observe Azure and protect it and obviously make certain content types searchable. So that's also within the Azure console and Azure experience, you can now shift data into Elastic.

Obviously, there's only -- it doesn't support all the services yet, but we're working closely with Microsoft to enable that as well. And the last part is full billing and marketplace integration and making sure that people take -- can spend all of their credits across any type of consumption model and usage model, monthly, annual to be able to do that with Elastic. That part, it can also already do about 80% of that use case. Beyond that, we're working very closely with Microsoft.

Obviously, every time we seal a deal with Microsoft, we end up benefiting and working very closely with the Microsoft field team. Our team enjoys working with Microsoft and the Microsoft field team, and we think we have a great opportunity ahead of us to provide tons of value and make any data searchable for our joint customers.

Unknown speaker -- J.P. Morgan -- Analyst

Understood. Very helpful. And Janesh, one question for you. On the expansion metric, it down-ticked a bit, but I think it's mainly because of the math.

Is there -- if you look at the absolute value, which I guess we cannot see since it's a TTM metric, is there any integration? Or are you seeing actually it improve? And any qualitative commentary on the gross retention side?

Janesh Moorjani -- Chief Financial Officer

Yes. It's a great question, Benjamin, you're right. It's fundamentally a question on the math on that net expansion rate because it is a trailing 12-month metric. And it declined a little bit each quarter through the pandemic, and it's only now that it encapsulates the full 12 months of the pandemic effect because we've just now come up to the anniversary of that.

So I'd say the net expansion rate was consistent with Q3, and it just moved a few points as it does every quarter. You know, in terms of the underlying dynamics, there's no particular thing I would call out in terms of churn versus expansion or upsell. Generally speaking, I think our underlying metrics over there stayed very similar to where they've been in the past. So nothing, in particular, I would call out.

We continue to see customers drive pretty strong expansion dynamics as we've seen. I look at -- when I think about expansion, I consider not just the net expansion rate, but also the customer metrics that are indicative of expansion. So I think of it more on a composite basis. But since NER is a backward-looking trailing 12-month average, I'd expect in fiscal '22, the net expansion rate will probably be in that 120% to 130% range as we start to work some of the effects of the math off.

But as I said, I look at all of these as a composite set of metrics around customer growth and expansion and some of the other metrics around customers that are more than $100,000 ACV and more than $1 million have been incredibly strong for us.

Unknown speaker -- J.P. Morgan -- Analyst

Understood. Thank you.

Operator

And our next question will come from Brad Reback with Stifel. Please go ahead.

Brad Reback -- Stifel Financial Corp. -- Analyst

Great. Thanks very much. On the velocity sales investments that you guys had mentioned a couple of times on the call, do you think there's the opportunity with that to get customer growth to grow faster than revenue growth again?

Janesh Moorjani -- Chief Financial Officer

Yeah. Brad, so -- sorry, there was slight audio delay, but maybe I can just touch on it. And Shay, if you've got additional thoughts then maybe you can add to that. But as I think about it, Brad, you know, from a velocity perspective, there's a number of customer additions that we can drive.

A lot of those are on the cloud side, some on the self-managed side as well. Overall, when I look at the strength that we've seen in customer additions, I think there's a number of factors that go into that, including the investments we've made beyond just some of the field investments. A lot of those go into the product and the marketing side as well. And when I think about the overall comparison for the customer account versus the revenue that we generate overall as a company, I think over time, we would naturally see that as customers come on board and then eventually start to expand their usage and expand their spend with us, it's just a factor of how both of those dynamics play out because we will keep attracting more customers that are -- that have lower initial land sizes, but then they -- we expand and grow those customers over time.

So the revenue and customer account comparison, I think, just depends on how those two dynamics play out. But we're optimistic on both fronts, and you've seen us reflect that in the outlook for the year that we provided.

Brad Reback -- Stifel Financial Corp. -- Analyst

Great. And then maybe a quick follow-up, not sure if you'll answer it, but should we think about cloud being 50% of revenue in fiscal '23 when you hit $1 billion?

Janesh Moorjani -- Chief Financial Officer

Well, as I've said, cloud will continue to grow faster than self-managed for us. And we continue to be just super excited by the preference that customers are continuing to demonstrate for Elastic Cloud. So we won't put a number out there for fiscal '23 just yet in terms of what that mix could potentially be. But we do expect that in fiscal '22, it will grow faster than the overall business.

And so you'll see the mix in fiscal '22 move up.

Brad Reback -- Stifel Financial Corp. -- Analyst

Thanks very much.

Operator

And our next question will come from Ittai Kidron with Oppenheimer. Please go ahead.

Ittai Kidron -- Oppenheimer & Co. Inc. -- Analyst

Thanks. Really great numbers, guys. A couple for me. First, Janesh, I want to make sure that we put the results in the context of also the price increase you instituted in February.

Can you tell us how did that affect the numbers themselves in the quarter?

Janesh Moorjani -- Chief Financial Officer

Yeah, I'm happy to. And maybe just as a reminder for a number of folks, we had increased the prices on the Enterprise subscription tier back in February. And look, we've been very pleased with our progress on the enterprise tier overall. I think that's played out just as we expected.

But that said, it's still very early days for the Enterprise subscription tier. That tier has not been around as long as the Gold and Platinum has, and so it's not a large part of the business today, and the price increase, therefore, really didn't have a meaningful effect on total revenue in the quarter. That said, we did see excellent customer reception of the searchable snapshots feature and of course, the underlying security features as well that are embedded in enterprise. So we're seeing great traction on enterprise overall.

Shay provided an example of that in his prepared remarks where there was a customer who was using only the free version that became a paying customer directly at the Enterprise tier level given the value that they see in searchable snapshots. And then more recently, as you may have seen in 7.13, we created an even more compelling value proposition with the introduction of frozen tiers of storage, so enterprise customers who are on that Enterprise subscription tier can now search across those -- across frozen storage using searchable snapshots as well. So overall, I'd say we remain very excited about the Enterprise subscription tier becoming a more meaningful part of the business over time, but it didn't have much of an effect in Q4 itself.

Ittai Kidron -- Oppenheimer & Co. Inc. -- Analyst

OK. Very good. And then as a follow-up, regarding your investments in sales and marketing, it's absolutely clear why you'd want to do that. But maybe you can help me think about in what way your priorities going forward are going to be a little bit different than your priorities looking back with respect to how you deploy your sales and marketing investments, whether it be by region, named accounts? Are you more focused on getting new customers, you know, going wider or going deeper, you know, or driving more, you know, kind of 6K-type of engagements? Help me think about how the priorities are changing going forward on the sales and marketing side?

Shay Banon -- Founder and Chief Executive Officer

Yeah. I'm happy to take it here. You know, if I had to characterize it, as Janesh said, we have -- we're making investments across the board on sales and marketing and customer success. There's two areas that I'm very interested about, which is the duality of our go-to-market.

We want to make sure that we invest heavily in our velocity business, drive land and expand, especially on our cloud, especially surrounding our self-service monthly business on cloud. You know, more and more of our business is becoming usage-based on cloud, and we're very excited about it. And thanks to the fact that we're making it simpler and simpler to the product to add more and more data to Elastic. And the fact that our pricing model is directly correlated with the amount of data that users store, we believe that we have strong opportunity to increase investments in the Velocity business, either through marketing or to sales and customer success account executives.

And the other part is -- another side of the equation, as we grow within an enterprise, we start to go up. One of the things, by the way, that I find interesting in the security market is that when you grow up within the security space, you reach the CISO faster than you would reach the CIO in the observability space. We believe, by the way, that these two markets are going to converge over the next few years while you observe, why not protect them. But we want to build our value-based motion and value-based selling as we go up to the enterprise to provide all the things that our customers need.

Ittai Kidron -- Oppenheimer & Co. Inc. -- Analyst

Good stuff. Thanks. Thanks, guys.

Operator

And our next question will come from Andrew Nowinski with D.A. Davidson. Please go ahead.

Andrew Nowinski -- D.A. Davidson -- Analyst

Thank you. So Splunk put up some very good strong cloud revenue tonight as well. And I'm just wondering if you're seeing Splunk more in the cloud now than you have in the past on the self-managed side.

Shay Banon -- Founder and Chief Executive Officer

Yeah. This is Shay here. Our experience or what we see Splunk hasn't changed significantly over the past few quarters. Obviously, we are -- we consider ourselves to be one of the leaders in the Observability space.

Actually, probably one of the products leading this space when it comes to realizing the value of the full observability as a single product or a single search experience. And we're doing the same thing in Security, and Security is our fastest-growing business today, representing around 20% of our business. So we're very excited about both. In our self-service monthly business practitioner base, the opportunity is so vast.

And typically, we're just, you know -- our customers and our users start to adopt us there and start to use us, and we don't see Splunk that much except for when we start to replace it. As we go out through the enterprise, obviously, Splunk has been around for longer, and we start to see Splunk more and more. And we're very happy and excited about our ability to go and replace Splunk using our superior product.

Andrew Nowinski -- D.A. Davidson -- Analyst

OK. Thank you. And then I think you called out an Observability win with one of the big or the major home improvement vendors in the market, and you said they chose Elastic over the current vendor. I'm wondering if you could just provide any more color around that, who you replaced or beat in that deal and why they chose you?

Shay Banon -- Founder and Chief Executive Officer

Yeah. It was, you know, a relatively well-known player in the observability market specifically focused on logs. One of the reasons why they loved our product is the fact that we take logs and APM data, so take the log information that applications generate or infrastructure generate and the application performance monitoring data that the applications themselves generate, put them into a single search platform that has unified experience and provide visibility across that. We like to say at Elastic that we don't build technology suites or Observability suites, we build a single product with a single cohesive user experience.

We spent the last few years investing heavily in doing that, and that's reflected within customer adoption.

Andrew Nowinski -- D.A. Davidson -- Analyst

Great. Thank you.

Operator

And our next question will come from Koji Ikeda with Bank of America. Please go ahead.

Koji Ikeda -- Bank of America Merrill Lynch -- Analyst

Congrats on a great finish to the year. Thanks for taking my questions. Maybe first question for Shay. You know, being new to the story here and with the release of 7.12 and 7.13, I definitely see a bunch of new features across the board.

I was just wondering maybe you could talk about what you view as maybe one or two of the features that you're most excited about within those releases.

Shay Banon -- Founder and Chief Executive Officer

Yes. Happy to and welcome. You know, it's one of those, it's very hard to choose which feature you would want to highlight. First of all, maybe I'll touch on searchable snapshot and frozen data tier.

I think that speaks into our capabilities as a search platform, where our three solutions: enterprise search, observability, and security are built into it. That means that you can store years' worth of data, petabytes' worth of data at a very low cost. Obviously, speed of retrieval is going to be slightly slower, but that opens up a whole breadth of new use cases that you can do. Take Enterprise Search, now you can use Elastic as an email archiving system and make it searchable.

Take Observability and suddenly, you can store years' worth of logs to be able to go and allow others to audit your system. And if you take Security, well, there's the common press that we see now in the news, it happens with something called living off the land. And that means that attackers are staying around for much longer, moving much slower. And in order to be able to protect against that, you need to be able to store data for much longer, obviously, and be able to connect the dot.

And search is the best way to connect these dots. So I'm super excited about the searchable snapshots in the present tier and our ability to provide that. I also mentioned maybe I talked about security. We folded malware protection, thanks to our Endgame acquisition about two years ago into our technology stack, our search platform.

And only recently, last quarter, we folded our ransomware protection. And ransomware is becoming more and more critical for organizations around the world as you see -- as you saw just this week, and I'm excited about the ability to bring this level of protection to the endpoint, to the data center, and to the cloud.

Koji Ikeda -- Bank of America Merrill Lynch -- Analyst

Got it. Thank you. And just one follow-up for Janesh. Looking at the operating margin guidance for Q1 and for the full year, just thinking about the transition out of the pandemic.

I was wondering if you could maybe talk a bit about the overall direction of operating margins throughout the year? Is there any sort of seasonality or maybe abnormal seasonality because of the pandemic playing into operating expenses that we should be thinking about in our models? Thank you for taking my questions.

Janesh Moorjani -- Chief Financial Officer

Yeah. No worries. So nothing unusual that I would call out in terms of seasonality other than, of course, the fact that we will keep adding more investment as the year progresses. And then the other one that I'll mention is what I covered in my earlier remarks as well, which is that in terms of travel and events, we're really not expecting that to pick up in a meaningful way in the first half, but we expect that that will gradually start to ramp in the second half of the year.

Koji Ikeda -- Bank of America Merrill Lynch -- Analyst

Got it. Thanks for taking my questions and congrats on a great quarter. Thank you.

Janesh Moorjani -- Chief Financial Officer

Thank you.

Operator

And our next question will come from Jonathan Ruykhaver with Baird. Please go ahead.

Jonathan Ruykhaver -- Baird -- Analyst

Yeah. Hey, guys. Congrats on the strong performance. I just have one question on the security front.

And it relates to just where you feel you are in terms of maturity for both SIEM and EDR. You made some comments in the past about needing some more time to really build functionality features specifically around SIEM before you could really go head-to-head with some of the other vendors. So I'm just wondering if you could provide an update there?

Shay Banon -- Founder and Chief Executive Officer

Yeah. This is Shay here. We feel our SIEM solution is mature by now. And as we see other SIEM players in the market, the set of features that we have out there to be able to go and replace them, I'm very excited about the progress that we made in the -- in our SIEM solution.

And also very excited about the fact that about two years ago, we got into the endpoint security market, because the markets within the SIEM market is starting to converge, and we're excited about our ability to go and future-proof ourselves, like the ability to provide more security capabilities to our customers that obviously, they need. When it comes to the endpoint security, we're still in the process of folding the Endgame technology that, as a reminder, was always like at the top when it comes to its ability to provide EDR capabilities. We folded malware and now ransomware into the system. We're planning to do more in the next quarter.

And hopefully, in the next -- in the following -- in this financial year, basically, we'll be able to reach parity with the existing EDR market.

Jonathan Ruykhaver -- Baird -- Analyst

OK. That's helpful. Thanks, Shay.

Operator

And this will conclude our question-and-answer session. I'd like to turn the conference back over to Shay Banon for any closing remarks.

Shay Banon -- Founder and Chief Executive Officer

Thank you for joining us today. Q4 was an excellent ending to an exceptional year, and we look forward to continuing the momentum in fiscal 2022. Thank you very much. [Foreign language]

Operator

[Operator signoff]

Duration: 66 minutes

Call participants:

Anthony Luscri -- Vice President, Investor Relations

Shay Banon -- Founder and Chief Executive Officer

Janesh Moorjani -- Chief Financial Officer

Matt Hedberg -- RBC Capital Markets -- Analyst

Raimo Lenschow -- Barclays Investment Bank -- Analyst

Brent Thill -- Jefferies -- Analyst

Tyler Radke -- Citi -- Analyst

Kash Rangan -- Goldman Sachs -- Analyst

Unknown speaker -- J.P. Morgan -- Analyst

Brad Reback -- Stifel Financial Corp. -- Analyst

Ittai Kidron -- Oppenheimer & Co. Inc. -- Analyst

Andrew Nowinski -- D.A. Davidson -- Analyst

Koji Ikeda -- Bank of America Merrill Lynch -- Analyst

Jonathan Ruykhaver -- Baird -- Analyst

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