The rise of GenAI applications and the consolidation of observability tools onto Elastic's (ESTC, Financial) platform have driven another impressive earnings report. In Q3 2025, ESTC exceeded EPS and revenue expectations, with the number of customers spending over $100,000 growing to 1,460 from 1,270 a year earlier.

Elastic's platform, which helps businesses manage and analyze large data sets, has rebounded from earlier sales segmentation changes that affected revenue. The company has focused on larger accounts and reduced the number of accounts per sales rep, creating new territories to win customers. These changes initially reduced customer commitments, but ESTC has now regained past sales execution levels, seeing positive impacts from these adjustments.

ESTC's Q2 beat-and-raise report on November 21 highlighted its potential as an AI player. The strong Q3 report reinforced this, with over 1,750 Elastic Cloud customers using the platform for GenAI applications, and more than 270 spending $100,000 or more. Customers are moving from textual to semantic search to enhance GenAI applications, and ESTC expects continued growth in this area.

Customer consolidation onto ESTC's platform is ongoing, resulting in significant deals in Q3. This is demonstrated by a strong net expansion rate of 112% and growth in accounts with annual contract values exceeding $100,000.

Additionally, ESTC appointed Navam Welihinda as the new CFO, effective today. He joins from Grammarly, where he also served as CFO. This appointment follows the announcement of CFO and COO Janesh Moorjani's departure in the Q2 earnings release.

In summary, ESTC's Q3 earnings report highlights its growing role as an AI leader. As businesses increasingly deploy chatbots, the demand for ESTC's search tools will likely grow, driven by the need to extract insights from unstructured data.