HashiCorp, Inc.

Ladies and gentlemen, please stand by. Your conference call will begin momentarily. Once again, ladies and gentlemen, thank you for calling. Please remain on your lines. Your conference call will begin momentarily. Thank you for your patience. Thank you. Thank you. Thank you. Thank you. Good day, ladies and gentlemen, and thank you for standing by. And welcome to HashiCorp's Fiscal 2022 Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentations, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Alex Kurtz, Head of Investor Relations. Thank you. Please go ahead, sir.

Good afternoon, and welcome to HashiCorp's fiscal 2022 fourth quarter earnings call. This afternoon, we will be discussing our financial results for the fourth quarter announced in our press release issued after the market closed today. With me are HashiCorp's CEO, Dave McJanet, CFO, Navam Waliunda, and CTO and co-founder, Arman Daggar. At the close of the market today, and in conjunction with our earnings press release, we have published an earnings deck that contains additional financial information pertaining to our quarter. We plan to do this each quarter before our earnings call and encourage you to review the deck in advance of our calls. You can access the deck on our investor website at ir.hashicorp.com. Today's call will contain forward-looking statements, which are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning financial and business trends, our expected future business and financial performance and financial condition, and our guidance for the first quarter of fiscal 2023 and the full fiscal year 2023. These statements may be identified by words such as expect, anticipate, intend, plan, believe, seek, or will, or similar statements. These statements reflect our views as of today only and should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward-looking statements by their nature address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations. During the call, we will also discuss certain non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. The financial measures presented on this call are prepared in accordance with GAAP unless otherwise noted. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as how we define these metrics and other metrics, is included in our earnings press release, which has been furnished to the SEC and is also available on our website at ir.hashicorp.com. With that, let me turn the call over to Dave. Dave?

Thank you, Alex, and good afternoon, everyone. Welcome to our first earnings call as a public company. We're excited to share with you that Q4 was a strong quarter for HashiCorp as we continue to execute on our vision of unlocking the value of the cloud for our customers through our automation offerings. We strongly believe that the move to a cloud operating model is the foundation for how enterprises everywhere will manage their infrastructure and application environments going forward. We reported revenue of $97 million representing year-over-year growth of 56%, along with the trailing four-quarter average net dollar retention rate of 131%. But before diving deeper into Q4 results, I'd like to quickly reflect on our initial public offering we completed in early December. The IPO was a tremendous milestone for the company and reflects the hard work our team members have put in to build an incredible product portfolio for what we believe is a once-in-a-generation software business. We're very proud to have some of the largest enterprises running their most critical applications on our products and view the IPO as the next step to support these customers with continued investments in our products and in our ongoing vision for enabling their move to cloud and multi-cloud, providing them cost savings, risk mitigation, and revenue generation opportunities. Organizations right now are undergoing a digital transformation across every business function driven by competition and ever increasing consumer expectations. Key to this digital transformation is a re-platforming from static on-premises infrastructure, dynamic and distributed cloud infrastructure. We realized early on that everything about the cloud requires new thinking. The existing procedures are too inefficient to scale with the distributed multi-cloud infrastructure reality that these organizations are adopting. What's needed are consistent workflows, a new cloud operating model for enterprise IT to provision, secure, connect and run infrastructure and applications. across multiple public and private cloud environments. Enterprises want a system of record for these workflows and for managing their significant investments in cloud programs. This system of record is what the HatchCorp product portfolio provides. To make the most of this opportunity, we take a long-term view on making our market function. We build our products using an open-core software development model with large communities of users, contributors, and partners collaborating on their development. Our commercial software builds on our open source products with additional enterprise capabilities. Our sales efforts build on our broad open source reach and are driven by an enterprise sales force that focuses on being a strategic partner to some of the most significant organizations in the world as they move to the cloud. In addition, our cloud offerings supplement our direct sales motion with a self-serve offering for small and medium-sized businesses. And to support all of these efforts, we have an ecosystem of partners, including cloud service providers, independent software vendors, and system integrators that standardize around our offerings and help to support our customers' needs. These elements are the foundation of our durable growth opportunity and are the critical components of our adopt, land, expand, extend business motion. One more thing before I discuss the results for the quarter. I'd like to talk about the steps that we see enterprises taking in adopting this cloud operating model for infrastructure that I discussed earlier. Organizations typically move through multiple predictable stages of cloud maturity. Their initial forays into cloud are usually driven by teams looking to build net new applications. Over time, the best practices and expertise learned from these siloed efforts can become a common, consistent foundation to achieve cloud infrastructure automation. This common operating model is often centralized through a cloud program office or a cloud platform team, which is often the second step in a company's journey to a multi-cloud estate. This centralized model ultimately becomes the basis for how enterprises interface to cloud infrastructure. As organizations mature, we see this model being applied to increasing amounts of their infrastructure, including private cloud and data centers, providing similar gains in consistency and automation. Our foundational technologies solve these challenges of cloud adoption by enabling this model and providing a system of record that unlocks the full potential of modern public and private clouds. We are excited by what we see our customers doing so far, and even more so about the road ahead. Now, taking a closer look at our results, a few highlights stood out in the fourth quarter. We added 10 new million-dollar or greater ARR customers and 60 new $100,000 or greater ARR customers in the quarter for the company, a strong signal of our adoption within the largest IT organization. And we're excited to share with you that we crossed a corporate milestone during the first quarter, with our first customer reaching more than $10 million in annual recurring revenue. A Fortune 10 company that, after starting their journey with us as an open source customer all the way back in 2015, has made repeated investments in both Terraform and Vault, along with the major renewal and expansion of Vault in the fourth quarter. Another key theme from the quarter was the momentum with customers purchasing multiple products. We continue to win the position of trust within the platform teams, and as an example from Q4, we saw a solid number of console deals as we remain highly focused on driving our cloud-based networking framework into the marketplace. And to frame the progress we've made with the penetration of our core products of Terraform, Vault, and Console, the absolute number of $100,000 or greater annual recurring revenue customers that have purchased multiple products increased 42% year over year. This represents 45% of our $100,000 or greater ARR customers who are now using multiple products in the fourth quarter. We believe that the three layers we are focused on, infrastructure, security, and networking, represent extremely large total addressable markets. each of which are moving through generational changes, and we are investing against all of these opportunities. Finally, we made steady progress in the adoption of our HCP cloud product offering in the quarter, growing nearly 350% in the fourth quarter from the prior period. As we previously discussed, FY23 will be a year of ongoing R&D investment into HCP capabilities, as we increase the number of cloud services and enterprise features, as well as additional cloud regions. Now turning your attention to notable fourth quarter transactions, I'd like to highlight a few examples of strategic deals that were completed and that demonstrate our execution in the marketplace and showing our adopt, land, expand, motion, and action. As an example of a land transaction, a European-based consumer goods company standardized on Vault Enterprise after starting out as an open source user. Vault will now provide a common workflow across clouds and enable a standardized approach to authentication. Vault also enabled this customer to save budget dollars through the consolidation of engineering resources and tools. I'll note that Amazon Marketplace was a central part of the sales process, demonstrating the go-to-market alignment we have built with the top cloud platforms. An example of an expand transaction was a deal with one of the top consumer brands in Asia. This customer expanded the secrets management that was already in place on Amazon into their Azure environment with Vault, expanded Terraform license to support that Azure cloud deployments, and further expanded console into additional business units in the quarter. At the core of this opportunity, our products accelerate this customer's time to market with new consumer services and simplify their compliance regime. Finally, an example of an extend transaction, we had a global energy services company that extended into Vault during the quarter after starting out as a Terraform customer. This customer is using Vault to help centralize and protect its Azure and Google secrets as the company expands its multi-cloud estate. This customer chose Vault as it will enable faster development cycles and at the same time reduce costs. I'd like to thank our entire team for their continued focus on delivering on our product roadmaps, as well as engaging and delivering for our customers in the field. In addition, we wouldn't be where we are without our open source community and the ecosystem of partners that work with us, and I'd like to also thank them. With that, let me turn the call over to Navam.