HCP - Earnings call transcript Q4 2022

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Operator

Good day, ladies and gentlemen and thank you for standing by. Welcome to HashiCorp, Fiscal 2022, Fourth Quarter earnings call. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. to Alex conference Relations. Kurtz like first to now today, speaker head would turn over the your I of Investor you. Thank Please go ahead, sir.

Alex Kurtz

Earnings welcome XXXX and HashiCorp's Call. Quarter afternoon This Good afternoon. to Fourth Fiscal

in earnings release, quarter. call, information each me we our Dadgar. discussing to an with and be deck today deck that financial CTO Navam our published the encourage this conjunction the for additional earnings review quarter, issued the financial We pertaining in in and At earnings CEO press of to our quarter before today. David market do will release With We advance have our press you closed calls. Welihinda, Armon contains the HashiCorp's of the our to close & results plan our fourth Co-Founder, announced are market CFO, after McJannet,

Investor the the will Provisions under access of on contain deck XXXX. Litigation statements can the which forward-looking call You at made Private Act Reform are our ir.hashicorp.com. of Today's Harbor Securities Safe website

believe, date subsequent any should be any statements. relied not do plan, similar statements. representing as and only views full to statements statements financial by quarter and And These we year such and business will, are future at duty intend, seek, financial expected, and and performance These identified as financial anticipate, or guidance statements concerning these XXXX not views upon or the fiscal for today XXXX. statements the reflect our Forward-looking of may business update first be of our and our trends include expect, undertake fiscal as words condition.

that and differ results expectations. to materially cause that are Forward-looking statements by actual nature, their subject could to from risks matters uncertainties address

financial in in measures, we is to well financial reconciliation Accepted otherwise Principles. on Dave. at prepared financial the how will ir.hashicorp.com. as discuss this over During website turn with Generally these financial prepared the has not which we measures, call is non-GAAP GAAP, measures metrics in also of the directly call noted. The as earnings measures are Accounting included define release, A accordance accordance on our unless to with non-GAAP presented are GAAP certain which most call, to that, these me metrics the Dave? let and our furnished comparable press SEC, available and other With been also

David McJannet

in offering multiple infrastructure and requires connected, managing early development and generation provision that their driven digital multi-cloud, or business We running model thinking. secure, what record now provides. infrastructure on public our is everyone. to across adopting. work on-premises of running portfolio we our inefficient step initial and have What's that enterprises expectations. unlocking static our revenue Thank for that for infrastructure tremendous rate to Key consistent IPO next distributed private our the results, Cloud Organizations have the put open procedures applications providing was team what and and a completed Welcome a offerings. in we system representing scale business. and from workflows you into the for this of we to significant on company. products to transformation QX to dollar quarter our But IT as retention members This to an for cost-savings, build with development. in them model users, earnings ever and and continued the incredible the are deeper distributed to the existing are early investments of hard on to reflect of proud communities operating record Cloud million foundation XXX%. of as a of the is is one first very making the right The collaborating these large reality for IPO I'd applications diving for company re-platforming infrastructure like in infrastructure. this critical on view product We through about risk everything everywhere with and strong execute of needed support the HashiCorp cloud investments of application a afternoon, are by market products revenue our vision to these some QX trailing is their of competition partners portfolio system we contributors, product quickly and organizations a customers view most long-term The Enterprise reflects in December. products call consumer To most before and dynamic forward. mitigation, you, is software good every using how once-in-a-generation enterprises cloud transformation software vision We're a with an believe move the excited programs. opportunities. operating function, customers public these and believe across We the of increasing the our our to net that HashiCorp automation We largest will their make the with undergoing cloud as opportunity, under milestone ongoing enabling value too workflows a manage on our Alex new cloud for model to the our multi-cloud share growth realized digital $XX was new We're cloud are four-quarter Cloud and XX%, to public to for take of move build going continue year-over-year with strongly along reported Enterprise their the core environments for average our a function. environments.

builds Our on capabilities. enterprise commercial with additional software source open our products

to broad move the they source significant by Our partner, an Cloud. of to sales some being are on efforts focus a organizations build driven world sales the on our reach enterprise open the force and strategic in most as

but step cloud initial to earlier. cloud best is foundation platform net automation. through looking common move these needs. second and small To and support sales our often discussed businesses. enterprises addition, integrators cloud a offering we'll usually software durable basis the typically more expertise offerings I the are all predictable growth cloud about In talk infrastructure. steps cloud cloud elements operating we model foundation forays stages common discuss our Adopt/Land/Expand/Extend journey team, by teams tend build are for Multi-Cloud applications. becomes efforts, the driven that Over these and Officer, support practices cloud that One medium-sized of know consistent into our infrastructure taking a that standardized interface achieve partners, probably system enterprises thing a to of ecosystem service our centralized time, opportunity to adopting providers, business supplement like and operating have our siloed an This motion. components and model multiple to of helped new model to Organizations ultimately critical infrastructure from program This around how a offerings come vendors, customers’ direct to our the These of of which self-serve for to we maturity. and for cloud Their often learned efforts, independent the company's motion cloud I'd is of this server including with results quarter, for in the the see centralized state. the

mature, we increasing data of organizations see providing applied automation. private consistency cloud infrastructure, their amounts including and to being As model similar centers, gains and this in

see potential solve full of technology enabling modern about more of foundational record the private We're customers this our adoption far and cloud so Our a providing so ahead. these that of excited clouds. and unlocks the what road system challenges doing we by model by and even public

revenue. a a stood or quarter in quarter. Now, greater ARR We in crossed largest added fourth with all new that XXXX, quarter signal that made a investments Fortune along in the during a with us and company, of IT $X greater XX way a adoption the renewal major milestone taking after ARR as A in $XXX,XXX and first than customer in the fourth the few look an with XX our their We're Terraform company customers Vault has million closer ten at in within starting $XX expansion source organization. repeated excited you with the of Vault the million and more for our we corporate fourth strong customers the the annual share journey or both out new reaching customer highlights back open results, recurring our quarter.

the a key with quarter multiple Another theme products. from customers purchasing momentum was

the win of the teams. to position platform We within trust continue

Vault all represents our markets. are and believe the the the our have recurring and a extremely As opportunities. annual an framework we remain these of as the of number progress and number This $XXX,XXX against quarter. $XXX,XXX year-over-year. customers greater revenue total solid networking, we've of in core absolute focused networking with XX% example three XX% our We we're increased or or a made saw multiple are of Each marketplace. driving we infrastructure, using Consul QX, security, of To represent frame fourth Terraform, changes layers who focused the moving that now that cloud-based with investing the highly products on, products customers are deals large products, addressable penetration into on of we Consul, ARR through which multiple generational from purchased greater

in product the offering our in progress quarter fourth from in period. steady the Finally, XXX% the HCP quarter, we made of nearly the prior growing cloud adoption

investment HCP discussed, additional As as of enterprise capabilities, we FY we increased well services features, 'XX of will and the as a year regions. ongoing as into previously cloud cloud be R&D number

like our examples expand action. and strategic adopt fourth our quarter Now in were notable showing the marketplace transactions, deals that to turning I'd demonstrate few and completed to and your motion highlight attention land a execution of

time-to-market Azure support console with core cloud At provide of services top top workflow the also alignment process management As Vault enabled their Asia. This that standardized Terraform Enterprise expanded an environment accelerate this will of platforms. An customer's budget to customer in Amazon on our compliance transaction go-to-market clouds the marketplace expanded consumer consolidation user. Vault the in one regime. dollars an common part and note and save goods into example I Azure central Vault place deal consumer with opportunity, in with products deployments, customer companies starting through in authentication. consumer the a this transaction, open demonstrating and their that land a will as expand units Amazon the cloud was brands traditional an on license Vault, business already new of with the that was quarter. simplifies expanded of with secrets the enable of further of engineering standardized built a have out approach to the this a resources now sales after we example a tools. the and source across European-based

example using Azure an an help the into state. engaging that at centralize Vault after Finally, had would extended costs. as enable the team faster to This in protect and chose a Terraform its services our expands same will company our their to global multi-cloud Vault as to roadmap, and its field. we our Vault And on time as for transaction, development thank energy on customer of out the entire reduce extend customer customer. delivering during for well quarter continued in cycles. the delivering a it customers like product focus as company starting secrets as Google is This I

thank And In I'd and the Navam. be over we partners of are without With our to like open source be us. me also work community addition, that ecosystem wouldn't that let to turn call where with them. we

Navam Welihinda

everyone and thanks Dave for Thanks, joining today. us to

two, historical income, to the RSU as trailing would and and $XX.X revenue of incurred total in year-over-year, compensation, of a which we GAAP with our fourth serve; Turning believe retention the results was the income our of XXX%. million, metrics range. in amount all help in XX% recognized. be resulting that to in share plans. structure million key a came 'XX, we we ARR, a in derived we first financial We their rate well a five, X-quarter the XXX,XXX We the cash ahead in four, performance recognized non-GAAP customers business SBC our durable in normalized in to revenue results, well non-GAAP financial the $X.XX Our gross growth X. stock-based expect quarter margins, equal revenue; as non-GAAP total our We net from contribution which aggregate and understanding quarter rate; revenue quarter, operating several margin, strong the in growth basis. our XX-month to three, share produced $XX of and track attention our average or business a of trailing GAAP net fourth number focus $XXX that dollar net your represent expenses of total non-GAAP in We and on growth due customers to as million the maintained on starting we will up of the note total revert a of We HashiCorp journey platform; of deliver the on: we to our to per $X.XX per number SBC customers greater flow in free loss cloud our one, basis which on we growth. more as

Our non-GAAP RPOs.

contains Our information metrics. earnings detailed on deck these all

solid or during core one metrics, the greater the progress cohort, XXXK on these of to quarter. we Focusing equal fourth made customer

trailing quarter model XXX customers and the spoke year-over-year from a by $XXX,XXX XX% the which as customer quarter, revenue to per grew continued basis, customer adopt, in their we these customer We in execute to Dave extend expand, and increase. On activity outlined per XX-month about. added $XXX,XXX a of the our land,

We business are by HCP also during saw the strong signals. demand because we encouraged quarter our

forward compared continued strong bookings cloud and providing more year-ago than doubled Two final the showed for our revenue Our period, to performance. solid setting thoughts numbers stage a growth, cloud before guidance.

we ARR driven of remain high or quarter customer pace pleased our with greater the by demand plan on we on our durable XXXK CAGR. First, of executing And long-term are delivering track activity. very and revenue in the

we sizable other purchasing enterprises where in buying decisions, benefit our business. to enterprise similar end-of-year patterns large leading make Second, to to seasonality businesses, tend some most software from

to secular coming We greater of from our XXXK that happening position is We company in annual signals leverage GXK as beginning long-term quarter continue intend and capture part demand shift cloud signals of see invest to fourth or the technology the large Further continue the stack the to $ expect our consumption. to customers. TAM give us These in strong in a and critical in and in transition. our our ARR go-to-market this product underpinning to teams the confidence Cloud, we place XXXX. the Fiscal model

the to the quarter want provide first for guidance our FY I XXXX. full-year Now, and

we million total revenue For $XX fiscal the first quarter expect of million. the $XX 'XX, in to range of

We expect non-GAAP that to million. in $XX $XX QX the range million loss of operating

and million shares outstanding. We average, $X.XX expect non-GAAP on net a between fully $XXX loss basic based be per and share $X.XX diluted weighted to

total in million and For the full $XXX the revenue million. range be fiscal year of 'XX, we $XXX to expect

'XX million expect of operating in We FY loss non-GAAP range the $XXX and $XXX million.

company based net our with average, loss $X.XX to $X.XX a first a share We for weighted per expect closing, per diluted non-GAAP accomplished public be loss fiscal we between in very non-GAAP what In net and share. million and used are in pleased quarter computing basic $XXX on and XXXX. as shares we

We your year are I the of that, With and looking forward any to take Dave, happy questions. ahead. to Alex? are

Alex Kurtz

Thanks, let's first with Navam. question. Operator, start the

Operator

Ladies and Instructions]. [Operator gentlemen,

Wong Morgan line comment from or from Stanley. question of Bob the first Our comes

Your line is open.

Bob Wong

Sanjit question. a here I'm for Stanley. great for for at the filling Hi, Morgan in Singh quarter. thanks Congratulations

at your first the us XXXk XXXK forward. would there growth would on very maybe lead you customer quarter about or XXX we would the for the factors Are potential ad. looking customer maybe it us that consider sustain little the Just Obviously level? Can that trend customer customer strong. think K believe this a to question down help bit was should that base going trend at you ad when current

David McJannet

your Wong. Bob Thanks, this is answer To question, Dave.

and that to our inevitability. going spend underscore and -- cloud categories these obviously all we model, are are transitioning to they're Just huge multi-cloud

by source we drive the is of open our -- at in hand Then think our they for of with practitioners. stat remarks. is very million XXX% got product. When source is proliferation going a open one which in the one Fundamentally, We to of period time. as source huge is for rate customers, that model source $XXX,XXX million earlier a that starting allows $XXX,XXX and we products Adopt $XX down of approach of that model customer, road, the $XXX open that customer as part that saw prepared commercial some the customers, becomes accompanied portfolio. of dollar actually speed expansion investments community the open starts the project, another the about point net point, customer then long to to Our and become to running. when indicated the a

cloud scale walk tied As And the generally grows portfolio a time, relationship of the estate. multi-product they to they with the with inferring. product our up it. course consumption speaking, But Fundamentally, us we then company, are product. of for as added that another opportunity they to programs the were over cloud of grow, that

a, base, treadmill, I they think tend unique an to there's they that grow that as that's grows. there's that, to cloud anything So once on are state just a indication XXXK

Navam Welihinda

Yeah, Bob is and Navam. I'll This add to that.

You the got was about our we think strong. XXXK group growth. fourth in quarter the it is exactly really right. The the the growth way momentum of And customer business

added net and his as Dave by XXX us evidenced our of you year. during as customers for each a mentioned we strong retention know, comments, XXXK of those continue XXX%. to as XX grow rate So customers new net And the with

also by among strong a and that remains was group. So growth customers momentum that the very XXXK in XXX% driven

Bob Wong

That's very Okay, helpful. thank you.

came to it specifically what has maybe how Consul in terms that the compare out adoption like trends you Consul if Just and For you my for at your type key comment Terraform, just maybe second not, Vault provide or of trended? curious question, point? can to split percentage this some on quarter, can from revenue revenue last just the products, and Vault of some of of if

David McJannet

We into Navam have that question?

Navam Welihinda

customers. were two core products, in the our way also our one Terraform lands don't Consul. or me were across let our take Vault. that think have any Emerging Bob, shifts and there adopted by Then we products I The so our Product significant Yeah,

were to adopting So I is multiple the users saw also over quarter. those our products. three of XXXk point customers growth strong lands think base given note products continued in any we a grow The multi and some product to what were of

and So is mix XX% growth which in of products group, adding usage. year-over-year But is third a terms multi second momentum. product, shifts obviously product fantastic that XXXK Thanks. their strong

Alex Kurtz

Bob. Great, thanks

Next question.

Operator

you. Thank

from Our from Zukin Research. or the comes comment Wolfe line next of question Alex

is line Your open.

Alex Zukin

customer truly some you're Hey maybe guys, the question. Dave, taking thanks and guess, I for signing customers unbelievable first sizes.

As we for this of do -- they budgets every forward? on about going relationship percentage ultimately, is like and think, largest And HashiCorp? follow-up. for or think architecture, think just cloud dollar quick what the spend And you a about these how you customers, level their their infrastructure I've do where go a to then solution dollars got

David McJannet

That's appropriate the That's it. question.

we I think but to keep right? what mind how percentage explain, for are normalizes. early that to we early us think we have sort all it's have in it's think hard of still our And to began XXXX. that company know I Do you evolution, in and

to Our are spend the large-spend [Indiscernible] million-dollar third billions inside dollars our view, not just that think are first these XXXX of Global categories. of the late They service, market. But these the scale second size customers until early. after infrastructure your the underscores the customers. is on XXXX for categories really I of commercial was customers markets is -- in really was XXXX product. super which XXXX Which our were product. which appears products would I and

highlight Other So a that we're early truthfully that very that than number evolution. it's the in math. tough on to put

to in is where That's people why multi-cloud be. on are investing, for partner relationship. really we their we're think view strategic That's who this going infrastructures I state are. making our

correlated. number stabilizes, clear don't very we think that I that it's but it's the exact know

we commitments. but also existing products seeing, I gives can't the the exactly, think you But extend really conviction NDE the it. answer and seeing, for I expand products. comes size on people you think the about use of adjacent sense a of the both that for we're from how to and hopefully

Armon Dadgar

a excited our color but about, we quarter, is Armon. context is we're at even additional multi-billion-dollar wall-to-wall have when would mark look and driving who of most deploy super we budget. of this that, not customer IT The first like is $XX which singular single million the product I the add is customer, we that This the a here, crossed shared, this a within this larger

that I of one there's what as So [Indiscernible]. of broader that's ceiling there. hopeful within any think like looks representative And we we of these spend ton a about headwinds like think the accounts, feel

Alex Zukin

And Perfect. then you. for maybe one Navam,

year become mix you at about how more to cloud sell platform as If deals, product, your look future? we also split customers, of one of in you the should and the strategic trending between booking split with that more continue but think multiyear the

Navam Welihinda

Good question. Thanks, Alex.

our revenue ratable. is you most than XX% revenue of since ratable our As more know, of is

forward we're visibility revenue. So think the regardless our ratability into of mix, I good holding and

Now want don't mix year terms that deals. anything engagement longer I mix so we're being think of have a said, do with good in what the compared of multiyear seeing year a to to expecting us shift. a different duration strategic in just customers of happened this next we are

As we journey to stabilization and And few very quarter how going next Overall, customers the be much large you and of the that's in strong it's in saw prior continue supporting quarters. quarters. cloud. proud to this few these their pretty duration saw,

Alex Zukin

so you much. Thank

Alex Kurtz

Next Question.

Operator

you. Thank

Goldman Rangan from comment comes or next question the from line Kash of Sachs. Our

line Your is open.

Kash Rangan

guys. Congratulations to to be able Dave, talk to Navam. Arman, and Good you

broader it total the So you a some but quick question broader were XXXK accelerated that little highest the looks have in customers are curious. the too of there seem seen, going several I far from have security might implications the not added. stat landscape number products. what core breakaway some of your the It's we've for conclusion, your and customers implications positive that fetch talk IS it's a trends. to What little of I'm obviously that added, to follow-up of Maybe have The seen any relative Can foresee quarter you you the the you've vertical even you changed? $ do -- just in across-the-board an in trends Maybe number just too. your all. at like there of trends and seasonality. And that's growth? QX a quarters, strong about acceleration

David McJannet

Dave.

if it's think to favorable reality. the we consistent honestly can multi-cloud see the the from And shift see results pretty I Cloud. hyperscalers, through you next the is

growing remind we degree, myself scale continued joined coupled early with So when ago, I people our really large that always scale. only it's really, obviously, think, but are how Again, shift a organization I grown six of I to to we have were XX the our has rapidly. years

our we've just fact event, us how big remind kickoff which organization In our had sales is becoming.

I think that's our to And the with improving scale. we with second progress is part of engage as pleased it the certainly market ability the there.

infrastructure yes. category, of terms In a as

infrastructure velocity underscore decisions. right? deeply of deeply conversations and we We but But just realm strategic the consider world are of would are that happening these -- decision in in as a are of, but lost the the also of the supporting customers initiatives result infrastructure Important us. probably consider not I many security that's upticks and what's our These of also on not most just the and network, in

us I So we're pretty open-source your if that be kind about expect proliferation, are continue to would of three that. and probably coupled extend that question. land expand with of But excited cadence habits, to the and answers to those measured, drive

Navam Welihinda

Yes Kash. add let to me And it.

Kash Rangan

Sure.

Navam Welihinda

to me it. Yes let add

QX think quarter strong of point conversion and about the with the On pipeline very quarter good with we we a the for QX, that ended pipeline in I started QX.

turned quarter that out. positive very, very about So how

purchase patterns the I year year were the of like well. that seasonality we with we the that being demand towards the our experienced more software we comfortable of reminder, recipient seasonality. enterprise the of to end there, company of other for as strong just QX as are said, you remind buyers a that the and in We of products. QX, a any guidance tend and signals Just but buying We're had, the rest Thanks. to wanted

Kash Rangan

making Terraform like was, easier, far Consul Got Terraform to terms sell is to of maturity overcoming Vault getting Any productivity? and easier in the standard course, thoughts customer of etc. a sales any the a bit so products industry, are of one and you couple sales it. breakaway too there? hesitation, maybe and curve, it not other adoption, behind trends the in started see little Of Final

David McJannet

There's answers a of couple to that.

think think argue. answer I is, the would still short it's similar, I relatively I

highlighted, of think that I our lot infrastructure security maturity, and in seeing market is you in of where it's a I what we're this is generalization for tech. pretty But I maturity think the think the markets are consistent. and broad of they for able open the to way the generally in reasons sort increasing that community meet outlined and about source both on we're us. we've A are market productive

think the I think market as faster But a into ecosystem, we're about still watch. future all networking little --they're signs Global of notion as cloud-native on the our on would the of signs early. moving for transitioning. market, -- bit say of That's that the service-based I seeing, networking. the seeing XXXX great same is probably a earlier. Consul, of bought bit little there it The Vault, a I would

Alex Kurtz

Kash. Thanks

question. Next

Operator

you. Thank

line the next Morgan. question Our JP Murphy from or of comment from comes Mark

is line open. Your

Mark Murphy

low Several all of fluctuations more in the of of speak saw did it what us, resilient? curious, recent that companies in any you, sequential consumption in see just a I'm cloud trend? you consumption months. that cause software has effect congrats. Thank Can HCP some patterns or and to that my can you is been with remind revenue

David McJannet

see shifts today The base prominent is, don't the the still. in I'll answer of answer other first we actually folks cloud We have. model the the entitlement -- in consumption our for is fact one. the

can Your perhaps the -- Navam answer question.

Navam Welihinda

Yes.

that us see demand of I up signals and as revenue, the the this but conversion turned below more new with we for the customers line. enterprises. way the skews think continue also emerging time positive the important moves HCP part more we're Today's of you'd consumption line the of broad-based very see point, to revenue Over reflecting within out to is to entitlement way. pleased HCP note strong strong our it's it's But is group, that and that forward it's segment the opening which our is about pricing, a consumption-based about that new based. momentum overall, of GXK, trend and

David McJannet

and really I five the also first towards offering continue end is we -- Vault first roll of and it. year to but is cloud only new version in That of that added regions. our quarters apologize jumping the Last underscore in, with for new for time one products the out year product on old

for So talk for coming And it's answer the we happy us really Otherwise, we're cloud pipe, which best question. a different down what's little you're is us milestone bit it's early. a about interested. bookings to had that our really, can we cloud a ever, quarter the early in actually if but super

Mark Murphy

today I synergy You know one ask I about Hashi's mean together is ecosystem works on multi-product just the IT. you together. I vision. suite maturity had products Apple customers --Indirectly, a want how harmoniously and just do everything Armon your like of said how you Can What but that love is, that. of is Yes, reached that they're mind customers was also of this the realizing Dave. It What my describing have products? for speak woven many across and to was to point where

David McJannet

Armon let that answer question. I'll

Armon Dadgar

question. I know it's great a

in shared, to Navam XXXK of growth as segment if aspects multi-product, at customers where I of to a One it. we from look different of think there's the growth of math year-over-year sort the we XX% are. going few is terms and

zero-trust your are think is are standard infrastructure. customers we're a investment. as I integrated even of they're this of hey, They're And perspective, can experience. customers appreciating, seeing standard part into certainly of increasingly to if of well, as as of question We years Adding know we're the sort many partner back seeing a kind a be that platform I us as shift things of to that one security. the with platform in you think value console, strategic a many, So come. Vault for to seeing going Terraform previous leaning in going kind from math seeing HashiCorp to see

mentioned around us sense to well the invest seeing broader sort governance, a terms that going acknowledging, in opposed actually It giving under as as market to partner, acceleration Now of that that just platform think strategic with public comfort. HashiCorp where single people are And the product. a we're components we're the customers for necessarily huge to a networking integrated. well Dave through vision sort really was as aspect that actually of that in are be I is HashiCorp us in coming for makes of

David McJannet

comment. had one I I connected. Is these are fundamentally apologize. problems

to I understand that. important people think for it's

world, one. to of is the we let have problems. But but talk in the customers, books scale some our adopt are more customers, of the Cloud they know is you a piecemeal. a not a security a that native we thousand those there the certainly see and if If mature ecosystem, the all on cloud and have you of products, of aspect. There all way, all of designed come bit news, people we using future In little that the aspect. all sense, The our eventually you networking the most that provisioning from like also those customers our also portfolio sort a is from problem, product

Alex Kurtz

Thanks, Mark.

question. to go the Let's next

Operator

Thank you.

the Blair. or Jason Ader next William line from Our of from comes question comment

open. is line Your

Jason Ader

biggest Dave, Hey what are Thanks. the two is And about I three priorities? what think guess guys. you growth -- right your now? what or when your constraint top on XXXX,

David McJannet

the of same more really truthfully. It's

is, it's, to think Global point I engagement continue the our XXXX. number one scale let's with

and new when taught deeply convicted in period to grow going transitions, we're there through is those where has we're a us that that, history stack think markets after time software made terms of were decisions aggressively. and committed about I it the

our see we that, terms to the you add in growth We're quarter. doing want in number going to XX of saw priority organization. You is partner to the keep last us one, to number sales Global with. one. of XXXX Priority That that our

is priority Perhaps, Armon products continued are some evolution second of the an The on can important our talk just of our happening there. new things about that us. for distribution channel That's HCP.

Armon Dadgar

Cloud at Cloud That product year As us available skews initial the start on is and we of Terraform, investment year, a Dave which for an an went mentioned, few the single from major is was from Consul. Cloud bringing Vault perspective. to a R&D Last regions. just the

since capability. adding we richer available, the we were of of then, number that year, skews through the were So so regions that number expanded in, the

but the providers additional into about same, regions products carrying that Cloud today's is additional of point, year, As more bringing we online, additional online. it think bringing Cloud bringing it this is online,

tools wherever terms heavy So really as the of consume service, a in enabling HashiCorp Cloud of consumed a R&D it. wants to investment be all to the customer

Jason Ader

Gotcha.

as And to that HCP as so capture up GXK many across it's, adding and -- regions. basically the fair? getting opportunity, sounds you're saying that major salespeople kind ramped Is fully people support offering of the cloud can that like you biggest constraint well as right that all now,

David McJannet

one. for they have reason point off this can considered decisions Again, first I are and are doable. the make these I a because

the Like the also right? sales regions. than And can regions more of certain other an there's so it organization, address mature market, we are but with aspects

in that's on. Cloud mature. less example, an keep regions, the we I aspect global North that other America, is In shift X,XXX important an to pretty For eye mature. And think actually it's

like mature. infrastructure to So And say, if Mississippi. you'd markets, move the like that's inexorably

Alex Kurtz

are the Thanks, get the we queue interest going to to to throughout Jason. one in of remaining time, stick And on question here. just

So, Operator.

Operator

you. Thank

Our comes comment from or from line next Derrick the Company. and Cowen of question Wood

Your line open. is

Derrick Wood

think It and out product. to the want back to bigger Thanks the quarter, go quarter strong know like an emerging had console more deals. of great it's sounded pension a I topic. guys. I you I console generate gate Great. of

what announced proactively a recently, tech bit can help you Just and little of kind know about curve an wondering curious there. entering gateway I that you lies of opportunity market adoption the anything and feeling there's preview API tilt in you're operating to guys if more FYXX. just how do

David McJannet

I'll first the the answer one. me Armon let Let second. answer

transition terms ecosystem truth. to if the is is and XXXX broadly just and native the one first Global into into in provisioning The think look community, to cloud-native used. run of problem digital security Consul again, either is the early tend simple that's first, they super I really you actually cloud

It's are well many that a ecosystem. have above than that obviously, a think accounts product which we the constraints, within is message that's market in it's push think the very to constraint. the technology and the because forward native I constraint digital light continued proven I Honestly, continued outs demonstration it's more continued evangelism. adopting this, scale that

with see will in leaning the lot of us do Microsoft to really cloud in we work better themselves, Amazon heavily providers a Consul. link, and You to on the with a managed the Azure. service We run runtime platforms

the we do. that's think second I that lever can

us the investing there. You've deep will talk other Navam seen question. about

Navam Welihinda

accelerating Dave I first overall, there, -- is when really few think I talked is a Consul as the component. need about fold mentioned delivery we there Cloud so think

is the As of I the Cloud a expand mentioned, skew the really availability, year availability. middle year region only became and as available initial to to Cloud the This around Consul, last versions. service continuing

will Consul, think But go make of trial just of whole that it as add well an the purchase beyond as I to as option all experience. that we through self-managed. easier as

really was historically networking intersection The separate Cloud an approaches, seeing networking gateway invested manage do continue be to I do ground second a vendors. enable how set of about piece is a the what that as through future versus or networking? completeness is about thought markets, approach understanding, think networking is customers capabilities what that we're to to they Then customers different that will as XXXX different what deeply we zero-trust Historically, of right? API continued of our of is scale. an the very There's different need those to what in large our of going they're or will multi-cloud capabilities vision, transition the east-west. north-south to approach, hey, two

is architectural think very globally increasingly. the we're as and a driven, being blurring line that multi-region shift services seeing micro-service to being patterns I deployed way

out part east-west versus round as think story and networking gateway the think, that with of I logical So API one north-south I Consul.

Alex Kurtz

Thanks, Derrick.

Next question.

Operator

comes line Sills Securities. comment Bank Brad of the of Our from from next question America or

is open. Your line

Brad Sills

usage Great. quarter question. ask that tipping that get talked million the guys, here. you point this a in their wanted really to I footprint exception, on in of their the of see the point, -- a contract. base Obviously really nice to congratulations on to at about the just Thanks you but in stride hit see which expansion, that customer you start of or kind applications you number see to that certain customers $XX after for HashiCorp? those that is customers are Hey one for scale there

David McJannet

given Thanks appropriate a Brad. That's question how our days. spend we very

there's think that transition happens. I a

for plenty categories are a moment million companies the that some mark we that is when as these early between so application a I some I is Cloud then concept, think $X business platform is that there of team. which groups, more goes. maybe of are there's a being and of team a on that I of our Maybe is that's standardization by think it a it business it and being point business And these established really building a groups, often single we products. can and adopter those, but an where big reach that it’s a tipping There business you have certainly for customers without in an the inside see the up standard big that platform group -- three at think couple difference issue. are ends probably point gets

Brad Sills

Great.

David McJannet

Brad. Thanks,

next Operator. to the question, go Let's

Operator

Turits comes Our Michael from next comment the KeyBanc. question or from line of

is line open. Your

Steve Enders

deals just Enders Is comment ask pipeline the got to Michael. there of I ahead Hi, taking for the you question really about of around had any forward pulled Sean they this I felt kind wanted guys. Appreciate expecting you a This And of fiscal is seeing are 'XX maybe conversion Steve XQ. XQ. general here. into and on pipeline on are kind point? the dealing in at how that

Navam Welihinda

Steve. question, is Good Navam. This Yeah.

the unusual have. we of and And have was pipeline was give comfortable compared in expect first the that I are pipeline. high, quarter the in in It with comfort quarter very that seeing first we're we we fourth-quarter. our us guidance I we good the think to fourth-quarter pipeline the wasn't And conversion strong. So what saw in strong signals we think

landed think we about year. happy the I where So with optimistic and we're full we're

Alex Kurtz

Steve. Thanks,

Next question.

Operator

you. Thank

Kidron Ittai Our next question from from Oppenheimer. comes

open. Your line is

Ittai Kidron

you've is at also CRPO year. the The faster much as year-over-year at And Thanks the a than. margin, the way. us If and the HCP the can for same sure between is for congrats, it growing on XX% a gross my help CRPO I make your guys. right, the you just Great couple mid-point reconcile math growth. want got I you. correlation Maybe about quarter. the mix. Navam, growing two. and guidance to understand

gross How think Your higher. margins the through about gross should moving year? we margin

Navam Welihinda

Thanks, on And metrics. very Ittai. good our questions two

driven CRPO saw. the and we're you growth, So normalizing result I and as we saw movement quarter, that's growth We the CRPO CRPO seeing. gross gross you're bookings the That durations And the good that -- is of margin in The that in which basically are the a what margin gross part CRPO. sorry, margin, the by CRPO, note a company. driving seeing very is that's very what's in growth to being was company, that duration. strong high about movement our growth, very optimistic normalization of we're pleased mentioned, high strong that the On momentum to it. point

Cloud of margin. terms that for of driver plan I is of well ahead think terms the in main our Gross in

XX% time, to a company, the believe high we'd margin. to we reached So margin the But year hig And expect over expect grow and us, seventies. as bookings we're at as that up XXs a will normalize we remain next -- we a about cloud high able margin. we XX% be confident the an to gross be Overall to at we'll scale strong business.

Ittai Kidron

Thank you.

Alex Kurtz

Next question. Ittai. Thanks,

Operator

you. Thank

comes Walravens the line from question Our from next JMP. Pat of

is line open. Your

Pat Walravens

and my Thank congratulations quarter. you a let add great on me Great.

this great on down all us, to done help are of lots year? most you things Maybe Dave, next So or get for what two information this to for in call. boil the important it three

David McJannet

world is deeply the That to their which onto XXXX is highlighted of pursue That there's the around tail Those trying position aggressively by trust but appetite field and investment we to opportunity. customer Global infrastructure. merchant distribution unit think we new in focused with in Like continuing and our engage one win not High-gross we're continuing consumers fundamentally this right of base market doing. in us. side in from channel Armon invest it about longer investment to also aggressively margin -- important our to company strong that it. one, the our on with clearly that's I I And the business. That's front our organization, to business, continuing field. said now, our driving our two we're is this things are being really larger an the pursue one partner. the previously. priorities. covered invest two, it's, company is first and some well-capitalized And opportunity have comment services for the of more economics Number organizations is be of massive driving to we're what a opportunity the on. the as of the adding investment to to of us That's is against going business, number first our be and to HCP, virtual just in

Alex Kurtz

that. for Thanks

Next question.

Operator

you. Thank

Boolani of from Our line Fatima the comes next Citi. from question

Your is open. line

Fatima Boolani

able are Good wanted respect that afternoon of year. for and of you to to talk into again. questions all and operating non-GAAP to next help my baked for you to assumptions nice be that unpack you us the primary you thank with some to -- guidance. profile expense my to I the Navam, ask questions you loss taking

challenging areas deck be back curious you certain or your this environment. I'd around plan remarks might and your If opinion recruiting to you tracking prepared might you're on specifically to at the indexed understaffed expenses the through to and you how about or on where of be can in pre business point. under us where walk be some you're behind trying if get of back to -COVID thinking levels, in your comments a

David McJannet

to form and in the time. Yeah. good appreciate first in economics investing keep underscore in to It's fun. question. for our the business comes strong talk expenses my point I'll the about I It's against this this that unit desire just our opportunity.

on expense I'll more to comment the our I'll underscores it environment. Navam that deeply, but communicated. that Navam hand think recruiting comment to just I over profile

a the fortunate and recipient net very we're I that migration. of think we're lot of

in but We hiring goals. good almost actually people position, in we're thousand year. I a last think we've been also hired our a very aggressive

to year those of We're your optimistic in people. an issue much are We not there. seeing keep investing

we're that goals. aggressive we have think in I a Navam? position just fortunate

Navam Welihinda

XXX%, a What I'll the will rates, consistent which spend in little at bit dollar as our The retention in that across that telling and extend, best-in-class a about us was well. to of our customers philosophy opinion. net -- and comment thing is our been that's that's landed were expand remember is key once past.

Net that what us retention and high to gross is very our doing our what's next so right rates, strong to the to we're do unit we product That's economics, us good the see, the margin, to and for into invest to do the thing sheet flexibility invest the right high that's group balance for few quarters. term. is the net continue the the group. and long So go-to-market over give in

going leverage, of quarter towards I'd convicted point. the long But back market. fourth see we the think say, I now, the at half the for going and consistent leverage where to You're term to the of in that we're we're year are are start looking annual -- after [Indiscernible]

Alex Kurtz

taking next for my Thanks you. question. Thank

Operator

Thank you.

Needham. Our line next from question from Alex of Henderson the comes

is line Your open.

Alex Henderson

primary typically questions the And into of how here me with perhaps start what is two increasingly application, to off get you data the technology wanted workloads your coder product you writing a community currently growth One you seeing got center way or customers terms are Do I which talk their I deployment, with finding transactions I've start that or DevOps number then to say understand are in target to portion is that for flow? bit they Cloud adoption. you. Cloud and to their and about question codding process have for center, a Terraform about more in to the and it? driving the that’s primary Thank customers. population rate generally Can the of or adoption move utilizing the little it the to at all enterprise is back second seem would community experience getting and the enterprise with the then on-premise data the centric you.

David McJannet

to just that. happy Thanks, answer I'm realized.

the try Cloud. pattern to I question where the on the first is it. see open the is it We starts what's [Indiscernible] think adoption things adoption will are I of by fundamentally practitioners new building That's pattern? with an -- who source. tasked

XXXX. very that early. that They're using of out mentioned in a instance. that we centers. applications. in charted Cloud how For But your example, for a that customer application. happening basis maybe $XX they're It But that million starts tactical is environment. Vault console one it's The And bit purposes is that in or the building Terraform, of two

go to Cloud. to they're It's they source how going private what that using center they What on standpoint standardize instance, the they're It's project. corporations Amazon have. is that [Indiscernible] multi-cloud Vault. of From it's Cloud call And to sensitive there a already months in in way. a project not So happens, going bunch hold are that they shouldn't the a instance security that is a interfacing moment, and that secured. And when open into get apps overspend bill be se. when contract, are that do they in and per becomes for on out into we XX their And and because running data that we We're particular second. not literally need to our realize projects. some that

are products version they use of those Let's for. the that's commercial designed because what

by consistent responsible, very, think off as to a about much Cloud do two, the let's second, that makes that to used as Question That's very a of dev people. customer of are in is our users target that's when is the a but In a not people we're number being a customers. already the how really decision they point sense, one. are practitioners, conversion say number the terms way they're organization lot going So in to mechanism.

I think there's riveted parallel.

community. You deaf get offs' community the analog and where the up, focus it's on the

in see think growing. some stages this where people of of But it. number year. how also we That I certifications community what has We're Obviously, certainly QX of around of saw to platform. think is that's our that downloads key we in Cloud a continued We another the million the That That's data uptick. I think our people anything, Learn quickly. about know transition in measurement. grown that if to basis the use products shortage of staffing of early we best disclosed certainly is XXX there way last and Cloud. community measure

Alex Kurtz

the question. thanks well, Alex Operator, next Alright, for question.

Operator

you. Thank

comes from question the from Rob Our line of Galvin next Stifel.

Your line is open.

Rob Galvin

HCP cohort of Brad this much Reback. the the Hi the Rob XXXk portion question. customer the in of contribution either XX% from or ARR is everyone, wondering just for in number is taking Thanks customer that in how revenue the of of terms cohort? HCP, customers for I'm

David McJannet

answer let that. I'll Navam

Navam Welihinda

I like They scaling medium-sized Yes, thanks the for as business and adding is right and mostly happen. so businesses. to also start growing extensions we'll for the expansions standing from start It's We're that where we question, move sizes, Rob, a emerging the pleased a new are progress. customers size. line we new group this for before, now. of the year of enterprises, in right are very We of us. HCP is customers, We're small essentially where optimistic last a around mentioned to with are

Rob Galvin

thank Great, you.

Operator

over conference to Mr. closing to for remarks. like back Thank the McJannet any you. Dave I'd turn

David McJannet

express of you speaking to to soon. look to participation from appreciate the questions the you and dialing everybody all like in forward you. just and and I I my thanks Thank for for

Operator

the this today's concludes thank in gentlemen, conference and you Ladies program. for participating

now disconnect. wonderful day. have You may Everyone, a

HashiCorp (HCP) 11 Mar 222022 Q4 Earnings call transcript