HashiCorp, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the HashiCorp's fiscal 2024 fourth quarter and full year 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, Vice President of Investor Relations and Corporate Development. Thank you. Please go ahead.

Good afternoon, and welcome to HashiCorp's fiscal 2024 fourth quarter earnings call. This afternoon, we will be discussing our fourth quarter financial results announced in our press release issued after the market closed today. With me are HashiCorp's CEO, Dave McJanet, CFO, Navam Wilienda, and CTO and co-founder Armand Daguerre. 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 first quarter and the full 2025 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.hashleycorp.com. With that, let me turn the call over to Dave. Dave?

Thank you, Alex, and welcome everyone to our fourth quarter earnings call for fiscal 2024. We reported solid fourth quarter results that exceeded our top and bottom line guidance, with revenues of $156 million, representing year-over-year growth of 15%, and are pleased with our current non-GAAP remaining performance obligations performance, which reached $483 million, representing 21% year-over-year growth. I want to start today's call by thanking everyone on the HashiCorp team for the solid fourth quarter close to our fiscal year. Through their hard work, we exceeded expectations in the quarter with important new enterprise logo wins and CRPO growth that demonstrated continued demand for our products as customers trust us with their most important cloud projects. More broadly, based on conversations we had last quarter, we believe that the optimizations that enterprises undertook over the past 18 months are showing signs of abating. and we are seeing early signs of re-engagement on new cloud initiatives. Our confidence here comes from tangible proof points during the quarter, specifically improving renewal rates and overall better pipeline conversion. This is in line with what we've expected since the start of this cycle. And while there is some ongoing consumption of historical self-managed entitlements among portions of our customer base, The move to cloud is a secular trend with a clear business need, and there's still a long runway ahead for the largest global enterprises as they mature their cloud efforts. Today, I want to focus on our path to accelerated growth as we enter the new fiscal year. And to be direct, we are behind where we wanted the company to be at this point in our growth cycle, and we have work to do. We are on a path back to 20% quarterly revenue growth during FY2026, and I want to outline the top three initiatives taking place at the company to drive this acceleration. At a very high level, we're moving quickly to improve sales execution, turning the dial even more on commercial differentiation, and in Q1, rolling out a plan to reallocate more R&D resources to our cloud products. The first initiative is simplifying our go-to-market strategy. which consists of a more prescriptive go-to-market approach and increased process rigor driven by our president, Susan St. Leger. We began implementing these initiatives back in the back half of FY24 and are completing the rollout with the field teams this week at our sales kickoff. On the first front, we are shifting from best-in-class standalone products to infrastructure lifecycle management and security lifecycle management. That messaging is finding early traction with our sales teams and potential customers. On the second front, Susan will continue to drive sales process discipline, emphasizing speed, efficiency, and simplification in the field, while also concentrating our sales investments on additional technical field resources. We saw some early evidence of positive results in our fourth quarter with improved field execution and improved renewals. To give you an example of these efforts, I'd like to discuss a customer that extended from a single product to include a second one of our security offerings, Vault to Boundary in Q4. This software company initially used Vault in conjunction with a homegrown solution to manage and issue one-time credentials for developer access to cloud infrastructure. After facing challenges enabling their R&D team to access their cloud infrastructure in a self-service manner, this customer quickly realized they needed to replace their homegrown privilege access management solution. Given the customer's existing deployment of Vault, our field teams were able to show that adding Boundary would provide comprehensive security lifecycle management, reducing time to value. This customer started with just 500 engineers running on Boundary and now expects to grow to over 6,000. We strongly believe the simplified multi-product messaging will help us win more deals like these in FY25. The second initiative is about commercial differentiation, greater separation between our commercial and free community offerings. While the ecosystem has clearly standardized on our community edition products, we need to drive more value for our commercial customers. Our product development efforts over the past two years have increasingly been oriented towards enterprise capabilities in our commercial offerings. We are further turning the dial toward commercial differentiation, which we believe will have a positive impact on wind rate and on renewals. One major example of commercial differentiation is Terraform stacks. We gave a preview of stacks in HashiConf last year, which will bring major new functionality to Terraform and the ability to manage infrastructure estates that span multiple environments. This feature is now in private beta with our commercial customers and will be made available through Terraform Cloud exclusively to our commercial customers later this year. This will drive significant differentiation, especially for our large customers with complex estates. During the fourth quarter, one of our larger land deals on Terraform Cloud demonstrates the power of our differentiated commercial products for customers. Our global pharmaceutical company opted to replace their homegrown infrastructure provisioning process built on our Community Edition with Terraform Cloud. They became a paying customer for the first time because of Terraform Cloud's specific features, including no-code provisioning and the upcoming Stacks rollout, as well as our RUM pricing model update in Q2, which aligned pricing more closely with their cloud budgeting process. But in addition to focusing on differentiation through new capabilities, we know enterprise customers have elevated expectations for the lifecycle of software that they deploy, with a strong preference to minimize production changes. Earlier today, we introduced long-term support, or LTS, releases for our commercial customers. The LTS releases enable customers to stay on a supported version for up to two years at a time, with the promise to backport critical fixes, security patches, and hardened upgrade paths. Prior to the LTS announcement, customers needed to do regular major version upgrades to remain supported. This provides significant value for customers who want to manage their risk and operational efficiency, and we believe will be another significant driver to land new opportunities and strengthen renewals. The LTS releases will be available with the upcoming versions of Vault, Console, and Nomad. In contrast, users of the Community editions will have access to critical updates in the latest version and will have to perform frequent updates to stay current. While we continue to offer innovative technology to the community, our outside focus is on providing value to paying customers. Our prior approach provided the same lifecycle for commercial and community versions, and we are now driving a clear differentiation. On that note, our third major initiative is to deliver the enterprise-ready Hashgraph cloud platform across infrastructure lifecycle management and security lifecycle management. We are seeing strong customer interest for this and are taking steps to expedite our delivery. Our new Chief Product Officer, Michael Weingartner, is focused on enterprise cloud delivery and is moving quickly to organize our product development team to drive cloud innovation at a faster pace. We have already reallocated resources to this initiative, as it is central to an overall company-wide shift to lead with our cloud offerings. As we mentioned last quarter, we are defaulting enterprise land to cloud, beginning with Terraform Cloud in Q1. As part of this shift, incentives for our field teams are weighted towards cloud rather than self-managed software. We will prioritize enterprise land across infrastructure lifecycle and security lifecycle management with HCP. Landing our customers on cloud first with HCP enables them to realize value faster. As we deliver more cross-product experiences, it enhances our ability to drive and extend motion from our core land products as well. As our R&D teams continue to deliver new product innovations, having customers on the cloud platform enables customers to use those new capabilities immediately, in contrast to self-managed software, which requires planned upgrades. Combined, these facets will drive improved net retention rates over the long term. To show how this works in practice, here's an example of a customer that expanded both Vault and Terraform Cloud in Q4, doubling the size of their initial land deal. This travel agency had experienced significant resource constraints that made it difficult to deploy applications on bare metal as fast as they needed. They were also dealing with subsidiaries operating at different levels of cloud maturity. As a result, this customer realized that only Terraform Cloud could keep pace with their infrastructure complexity. They standardized on Terraform Cloud not just for its portability and lower operating costs, but also because Terraform Cloud enabled them to deploy new applications much faster, improving their competitive positioning. To summarize, our goals for this year are to simplify our go-to-market, expand the differentiation of our commercial products, and shift our business to focus heavily on our HashiCorp managed cloud products. Now, I'll turn it over to Navam to walk through the details of our Q4 and full year performance, forward-looking guidance, and then we will be happy to take any questions. Navam?