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The emergence of GenAI applications, combined with the ongoing efforts from customers to consolidate their observability tools onto Elastic's (ESTC) platform, led to another impressive beat-and-raise earnings report from the company. Following a rebound performance last quarter, ESTC reported 3Q25 results that easily exceeded EPS and revenue expectations, as the number of customers spending $100,000 or more on its platform grew to 1,460 from 1,270 in the year-earlier period

ESTC, which provides a search and observability platform that helps businesses organize, analyze, and visualize large amounts of data, has also recovered from sales segmentation changes in Q1 that impacted revenue.

• More specifically, the company began focusing more on selling into its largest accounts and reduced the number of accounts per sales rep, while also creating distinct greenfield territories to focus on winning new customers. These changes led to a drop in some customer commitments in Q1, but ESTC stated last night that its now back to the level of sales execution it has experienced in the past. In fact, the company is now starting to see a positive impact from these segmentation changes.
• ESTC's beat-and-raise Q2 report on November 21 put the company on the map as an up-and-coming AI play. Last night's strong Q3 earnings report further solidified that notion as ESTC disclosed that more than 1,750 Elastic Cloud customers are using the platform for GenAI use cases with over 270 of those customers spending $100,000 or more. Customers are shifting from textual search to a deeper semantic search -- or search that focuses on understanding the meaning and intent behind a user's search query -- in order to build GenAI applications. Accordingly, ESTC expects GenAI-related tailwinds to continue.
• At the same time, customer consolidation onto ESTC's platform is continuing, culminating in the company securing multiple large deals in Q3. This is reflected by the company's strong net expansion rate of 112% and the aforementioned growth in accounts with over $100,000 in annual contract value.
• Separately, ESTC also announced the appointment of Navam Welihinda as its new CFO, effective today, who joins the company from Grammarly, where he also served as CFO. The company filled this role quickly, announcing in the Q2 earnings press release that CFO and COO Janesh Moorjani was stepping down to pursue another opportunity. 

The main takeaway is that ESTC's beat-and-raise Q3 earnings report put the company under the spotlight once again as an emerging AI play. As an increasing number of businesses launch chatbots, demand for ESTC's search tools should only rise as the need to extract information from unstructured data grows.