HashiCorp, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the HashiCorp's fiscal 2024 first quarter earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, 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, VP of Investor Relations and Corporate Development. Thank you. Please go ahead.

Good afternoon, and welcome to HashiCorp's Fiscal 2024 First Quarter Earnings Call. This afternoon, we'll be discussing our first quarter fiscal 2024 financial results announced in our press release issued after the market closed today. With me are HashiCorp CEO Dave McJanet, CFO Navam Willienda, and CTO and co-founder Arman Daggar. In conjunction with our earnings press release, we have published an earnings presentation that provides additional financial information about our quarter. We encourage you to review that presentation in advance of our call. You can access it 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 second quarter and full 2024 fiscal year. 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 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 welcome, everyone, to our first quarter earnings call for fiscal 2024. pleased to report first quarter results that exceeded our top and bottom line guidance with revenue of 138 million representing year-over-year growth of 37 and solid improvements in our profitability with our first quarter of positive free cash flow as a public company current non-gap remaining performance obligations reached 394.6 million dollars representing 29 year-over-year growth And compared to last quarter, we added 32 customers with greater than or equal to $100,000 in annual recurring revenue to reach a total of 830. Our HashiCorp cloud platform offerings reached $16.5 million in revenue, representing 12% of subscription revenue in the quarter. We remain excited about adoption trends as we continue to roll out new features and new capabilities during FY24. Against a challenging environment, I'm pleased with the solid Q1 results that the team delivered. However, macro challenges continue to impact our business, and I'd like to provide more color in what we're seeing in the market. During Q1, Armand and I spend much of our time speaking with customers. The key theme from these discussions, regardless of customer size, is the uncertainty that they are feeling about the economy and what it means for their own businesses. As we have mentioned in the last few earnings calls, we saw this budget uncertainty start in October of last year as higher interest rates began to impact our customers thinking about their FY23 budget cycles. This economic uncertainty is driving organizations to optimize their software spend. Procurement teams are scrutinizing many larger software purchases and stretching deal cycles. The deepening inspection of budgets is happening across all of our customer segments, but most noticeably in our largest customer deals. Despite these near-term challenges, we believe the long-term trend to cloud computing remains unabated. We continue to see demand for our products as customers continue to plan their cloud initiatives for the next several years. I would highlight the customer stories we have outlined in our earnings presentation on the IR site to give us confidence in our market opportunity and product fit. These customers include a large US-based financial services company, a back-of-office software platform, and a European stock exchange, all very diverse verticals and all very early in their cloud adoption journey. We are laser-focused on building trust with these customers so that we can be a central partner as they continue to invest in their cloud initiatives. In addition, our focus on adding larger new customers produced solid traction during Q1 as we added 26 net new Global 2000 logos, the largest number we've added in five quarters, and we continue to add a healthy number of greater than $100,000 ARR customers as well. These large customers are an important part of our future, and our model is built to grow our footprint with them as we become an increasingly critical piece of their infrastructure over time. So while we're seeing heavy budget scrutiny on our large expansion deals, these entry-level deals with large companies give us confidence about the long-term shift to cloud and our role as the enabler of that transition. We also continue to see strong and growing interest in Boundary, which we introduced late last year. As a reminder, Boundary solves a key security challenge for organizations by using identity secure remote user access. As I noted earlier, Arman and I spent much of Q1 on the road with customers. In nearly every meeting, customers proactively inquire about Boundary, which is a great signal as to the longer term opportunity we see for the product. Next week, we will host Hashi Days, our European user conferences, where we will make a series of announcements that highlight ongoing product innovation, particularly around cloud security automation. I look forward to sharing more details during next quarter's call. Before handing it over to Navam, I want to provide more detail on the announcements we made after the market closed today. First, we announced a reduction of our workforce by approximately 8%. I want to acknowledge that a lot of talented people who made meaningful contributions to HashiCorp are leaving the company. This was not a decision we made lightly and is part of a necessary effort that Navon will describe to reduce our operating costs to reflect the current customer spending environment. Second, we are excited that Susan St. Leger will be joining the company in July as president of our worldwide field organization. Susan is a master of scale and a deeply technical sales leader who understands how to make the most of complex product portfolios. Susan has been on our board since 2019, so she's already well acquainted with HashiCorp, our products, and our team. With Susan, we get the rare opportunity to work with an experienced leader who has done this multiple times, having most recently led the field organizations for Okta and Splunk, where she helped them each surpass a billion dollars in revenue. We have trust and confidence that her experience and leadership will serve our field and overall organization well, through the current economic conditions, as well as through our next phase of growth. I believe strongly in our opportunity given the long-term trend of cloud adoption and believe we are now better positioned to take advantage of that opportunity. And in line with the guidance we provided last quarter, we continue to operate against an aggressive goal to achieve profitability next fiscal year and remain on track to meet this goal. Now, I'd like to turn it over to Navam, and I look forward to answering any questions.