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club Felene

HashiCorp Announces Third Quarter of Fiscal Year 2025 Financial Results

by GlobeNewswire
December 5, 2024
in Top News
Reading Time: 28 mins read
  • Third quarter revenue totaled $173.4 million, representing an increase of 19% year-over-year.
  • Trailing four quarter average Net Dollar Retention Rate was 109% at the end of the third quarter of fiscal 2025 as compared to 119% at the end of third quarter of fiscal 2024.
  • Third quarter GAAP RPO totaled $775.4 million, representing an increase of 14% year-over-year; third quarter current GAAP RPO totaled $481.4 million, representing an increase of 20% year-over-year.
  • Third quarter non-GAAP RPO totaled $795.6 million, representing an increase of 14% year-over-year; third quarter current non-GAAP RPO totaled $499.4 million, representing an increase of 19% year-over-year.

SAN FRANCISCO, Dec. 05, 2024 (GLOBE NEWSWIRE) — HashiCorp, Inc. (NASDAQ: HCP), The Infrastructure Cloud™ company, today announced financial results for its third quarter of fiscal 2025, ended October 31, 2024.

“The HashiCorp team delivered strong performance during the third quarter of fiscal 2025, with revenue growth of 19% year-over-year, and 8% growth in $100,000 customers year-over-year” said Dave McJannet, CEO, HashiCorp. “This quarter we gathered our community of customers, practitioners, and partners at HashiConf in Boston, where we announced critical updates across Infrastructure and Security Lifecycle Management product lines, and also continued work towards closing the company’s transaction with IBM.”

“HashiCorp continued to see promising growth in adoption of the HashiCorp Cloud Platform, with cloud revenues exceeding 17% of total subscription revenue this quarter” said Werner Schwock, Interim CFO & CAO. “New HashiCorp Cloud Platform features announced this quarter will continue to support our Infrastructure Cloud vision.”

Proposed Merger with International Business Machines (“IBM”)

As announced on April 24, 2024, HashiCorp and IBM have entered into a merger agreement under which IBM will acquire HashiCorp for $35.00 per share in cash, representing an enterprise value of $6.4 billion. HashiCorp stockholders approved the merger agreement on July 15, 2024. The transaction is expected to be completed in the first calendar quarter of 2025, subject to the satisfaction or waiver of the closing conditions in the merger agreement.

In light of the proposed transaction with IBM, HashiCorp will not be holding a conference call to discuss financial results or providing financial guidance in conjunction with its third quarter of fiscal 2025 earnings release.

Fiscal 2025 Third Quarter Financial Results

Revenue: Total revenue was $173.4 million in the third quarter of fiscal 2025, up 19% from $146.1 million in the same period last year.

Gross Profit: GAAP gross profit was $143.6 million in the third quarter of fiscal 2025, representing an 83% gross margin, compared to a GAAP gross profit of $120.5 million and an 82% gross margin in the same period last year. Non-GAAP gross profit was $148.4 million in the third quarter of fiscal 2025, representing an 86% non-GAAP gross margin, compared to a non-GAAP gross profit of $125.4 million and an 86% non-GAAP gross margin in the same period last year.

Operating Income (Loss): GAAP operating loss was $29.9 million in the third quarter of fiscal 2025, compared to GAAP operating loss of $55.6 million in the same period last year. Non-GAAP operating income was $11.0 million in the third quarter of fiscal 2025, compared to a non-GAAP operating loss of $10.5 million in the same period last year.

Net Income (Loss): GAAP net loss was $13.0 million in the third quarter of fiscal 2025, compared to a GAAP net loss of $39.5 million in the same period last year. Non-GAAP net income was $26.9 million in the third quarter of fiscal 2025, compared to a non-GAAP net income of $5.6 million in the same period last year.

Net Income (Loss) per Share: GAAP basic and diluted net loss per share was $0.06, based on 203.5 million weighted-average shares outstanding in the third quarter of fiscal 2025, compared to a GAAP net loss per share of $0.20 based on 194.6 million weighted-average shares outstanding in the same period last year. Non-GAAP basic and dilutive net income per share were both $0.13, based on 203.5 million and 211.7 million weighted-average shares outstanding, respectively, in the third quarter of fiscal 2025, compared to a non-GAAP basic and diluted net income per share of $0.03 in the same period last year.

Remaining Performance Obligation (RPO): Total RPO was $775.4 million at the end of the third quarter of fiscal 2025, up from $678.2 million in the same period last year. The current portion of GAAP RPO was $481.4 million at the end of the third quarter of fiscal 2025, up from $402.1 million at the end of the same period last year. Total non-GAAP RPO was $795.6 million at the end of the third quarter of fiscal 2025, up from $700.4 million at the end of the same period last year. The current portion of non-GAAP RPO was $499.4 million at the end of the third quarter of fiscal 2025, up from $420.8 million at the end of the same period last year.

Cash, cash equivalents, and investments: Net cash provided by operating activities was $38.2 million in the third quarter of fiscal 2025, compared to $8.7 million provided by operating activities in the same period last year. Cash, cash equivalents and short-term investments totaled $1,346.4 million at the end of the third quarter of fiscal 2025, compared to $1,255.7 million at the end of the same period last year.

Reconciliations of GAAP financial measures to the most comparable non-GAAP financial measures have been provided in the tables included in this release.

Fiscal 2025 Third Quarter and Recent Operating Highlights

  • HashiCorp ended the third quarter of fiscal 2025 with 4,856 customers, up from 4,709 customers at the end of the previous fiscal quarter, and up from 4,354 customers at the end of the third quarter of fiscal 2024.
  • The Company ended the third quarter of fiscal 2025 with 946 customers with equal or greater than $100,000 in Annual Recurring Revenue (“ARR”), up from 934 customers at the end of the previous fiscal quarter and 877 customers at the end of the third quarter of fiscal 2024.
  • Customers with equal to or greater than $100,000 in ARR represented 89% of total revenue in the third quarter of fiscal 2025 compared to 89% in the previous fiscal quarter and 89% in the third quarter of fiscal 2024.
  • Quarterly subscription revenue from HashiCorp Cloud Platform (HCP) reached $29.0 million in the third quarter of fiscal 2025, up from $26.5 million in the previous fiscal quarter and up from $19.9 million in the third quarter of fiscal 2024.
  • The Company’s trailing four quarter average Net Dollar Retention Rate was 109% at the end of the third quarter of fiscal 2025, compared to 110% in the previous quarter and 119% at the end of the third quarter of fiscal 2024.

About HashiCorp, Inc.

HashiCorp is The Infrastructure Cloud™ company, helping organizations automate multi-cloud and hybrid environments with Infrastructure Lifecycle Management and Security Lifecycle Management. HashiCorp offers The Infrastructure Cloud on the HashiCorp Cloud Platform (HCP) for managed cloud services, as well as self-hosted enterprise offerings and community source-available products. The company is headquartered in San Francisco, California. For more information, visit hashicorp.com.

All product and company names are trademarks or registered trademarks of their respective holders.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995, as amended, including, among others, statements about HashiCorp’s business strategy, go-to-market initiatives, revenue growth, and long-term opportunity related to HashiCorp’s product innovation, and the proposed merger with IBM. In some cases you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “likely,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms.

Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from current expectations and beliefs, including but not limited to risks and uncertainties related to market conditions, HashiCorp and its business as set forth in our filings with the Securities and Exchange Commission (“SEC”) pursuant to our Annual Report on Form 10-K dated March 20, 2024, Quarterly Report on Form 10-Q dated December 5, 2024, and our future reports that we may file from time to time with the SEC. These documents contain and identify important factors that could cause the actual results for HashiCorp to differ materially from those contained in HashiCorp’s forward-looking statements. Any forward-looking statements contained in this press release speak only as of the date hereof, and HashiCorp specifically disclaims any obligation to update any forward-looking statement, except as required by law.

Use of Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we have disclosed non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss per share, non-GAAP free cash flow and total and current non-GAAP RPOs, which are all non-GAAP financial measures. We have provided tabular reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure at the end of this release.

We calculate non-GAAP gross profit as GAAP gross profit before amortization of stock-based compensation included in the amortized expenses of capitalized internal-use software, stock-based compensation expense, and amortization of acquired intangibles included in cost of revenue.

We calculate non-GAAP gross margin as GAAP gross margin before the impact of stock-based compensation of capitalized internal-use software, stock-based compensation expense and amortization of acquired intangibles included in cost of revenue as a percentage of revenue.

We calculate non-GAAP operating loss as GAAP operating loss before amortization of stock-based compensation of capitalized internal-use software, stock-based compensation expense, amortization of acquired intangibles, and merger and acquisition-related expenses. We calculate non-GAAP net income (loss) as GAAP net loss before amortization of stock-based compensation of capitalized internal-use software, stock-based compensation expense, amortization of acquired intangibles, and merger and acquisition-related expenses, which comprise one-time costs associated with advisory, legal, and other professional fees, net of tax adjustments.

We calculate non-GAAP net income (loss) per share as non-GAAP net income (loss) divided by weighted average shares outstanding (basic and diluted).

We calculate non-GAAP free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment and capitalized internal-use software costs. Non-GAAP free cash flow as a % of revenue is calculated as non-GAAP free cash flow divided by total revenue.

We calculate non-GAAP RPOs as RPOs plus customer deposits, which are refundable pre-paid amounts, based on the timing of when these customer deposits are expected to be recognized as revenue in future periods. The current portion of non-GAAP RPO represents the amount to be recognized as revenue over the next 12 months.

Our management team uses these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In particular, other companies may report non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net income (loss), non-GAAP net income (loss) per share, non-GAAP free cash flow, non-GAAP RPOs or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, as presented below. This earnings press release and any future releases containing such non-GAAP reconciliations can also be found on the Investor Relations page of our website at https://ir.hashicorp.com.

    
HashiCorp, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share amounts)
(unaudited)
    
 Three Months Ended
October 31,
 Nine Months Ended
October 31,
  2024   2023   2024   2023 
Revenue:       
License$21,202  $15,973  $54,039  $47,855 
Support 117,656   106,098   347,455   312,008 
Cloud-hosted services 28,962   19,863   80,086   54,779 
Subscription revenue 167,820   141,934   481,580   414,642 
Professional services and other 5,569   4,191   17,527   12,712 
Total revenue 173,389   146,125   499,107   427,354 
Cost of revenue:       
Cost of license 525   293   1,532   1,376 
Cost of support 14,748   13,356   44,764   44,503 
Cost of cloud-hosted services 9,183   7,692   27,011   22,339 
Cost of subscription revenue 24,456   21,341   73,307   68,218 
Cost of professional services and other 5,332   4,264   17,002   13,509 
Total cost of revenue 29,788   25,605   90,309   81,727 
Gross profit 143,601   120,520   408,798   345,627 
Operating expenses:       
Sales and marketing 86,422   87,320   267,187   279,019 
Research and development 53,365   54,349   167,181   168,504 
General and administrative 33,696   34,424   115,321   104,083 
Total operating expenses 173,483   176,093   549,689   551,606 
Loss from operations (29,882)  (55,573)  (140,891)  (205,979)
Interest income 17,387   16,765   52,339   48,045 
Other income (expenses), net 100   (407)  (121)  (632)
Loss before income taxes (12,395)  (39,215)  (88,673)  (158,566)
Provision (benefit) for income taxes 611   258   1,923   480 
Net loss$(13,006) $(39,473) $(90,596) $(159,046)
Net loss per share attributable to Class A and Class B common stockholders, basic and diluted$(0.06) $(0.20) $(0.45) $(0.83)
Weighted-average shares used to compute net loss per share attributable to Class A and Class B common stockholders, basic and diluted 203,526   194,600   201,836   192,693 
                

  
HashiCorp, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share amounts)
(unaudited)
  
 As of
 October 31, 2024 January 31, 2024
Assets   
Current assets:   
Cash and cash equivalents$923,627  $763,414 
Short-term investments 422,774   515,163 
Accounts receivable, net of allowance 129,352   182,614 
Deferred contract acquisition costs 50,858   50,285 
Prepaid expenses and other current assets 26,215   30,075 
Total current assets 1,552,826   1,541,551 
Deferred contract acquisition costs, non-current 71,392   80,055 
Acquisition-related intangible assets, net 9,486   11,611 
Goodwill 12,197   12,197 
Other assets, non-current 47,016   46,533 
Total assets$1,692,917  $1,691,947 
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$21,052  $9,081 
Accrued expenses and other current liabilities 14,293   15,143 
Accrued compensation and benefits 44,126   56,007 
Deferred revenue 310,431   334,894 
Customer deposits 20,217   25,627 
Total current liabilities 410,119   440,752 
Deferred revenue, non-current 16,580   26,659 
Other liabilities, non-current 8,553   11,543 
Total liabilities 435,252   478,954 
Stockholders’ equity:   
Class A common stock, par value of $0.000015 per share; 1,000,000 and 1,000,000 shares authorized as of October 31, 2024 and January 31, 2024, respectively; 161,387 and 125,333 shares issued and outstanding as of October 31, 2024 and January 31, 2024, respectively 2   1 
Class B common stock, par value of $0.000015 per share; 200,000 and 200,000 shares authorized as of October 31, 2024 and January 31, 2024, respectively; 42,884 and 73,921 shares issued and outstanding as of October 31, 2024 and January 31, 2024, respectively 1   2 
Additional paid-in capital 2,318,947   2,184,451 
Accumulated other comprehensive income (loss) 379   (393)
Accumulated deficit (1,061,664)  (971,068)
Total stockholders’ equity 1,257,665   1,212,993 
Total liabilities and stockholders’ equity$1,692,917  $1,691,947 
        

  
HashiCorp, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
  
 Nine Months Ended October 31,
  2024   2023 
Cash flows from operating activities   
Net loss$(90,596) $(159,046)
Adjustments to reconcile net loss to cash from operating activities:   
Stock-based compensation expense, net of amounts capitalized 121,572   130,048 
Depreciation and amortization expense 9,907   6,586 
Non-cash operating lease cost 2,823   2,222 
Accretion of discounts on marketable securities (10,236)  (8,505)
Deferred income taxes —   (482)
Other 101   67 
Changes in operating assets and liabilities:   
Accounts receivable 53,155   54,116 
Deferred contract acquisition costs 8,090   (1,086)
Prepaid expenses and other assets 3,987   (11,843)
Accounts payable 11,970   (6,589)
Accrued expenses and other liabilities (1,197)  (3,403)
Accrued compensation and benefits (11,881)  (6,654)
Deferred revenue (34,542)  (12,042)
Customer deposits (5,410)  (4,526)
Net cash provided by (used in) operating activities 57,743   (21,137)
Cash flows from investing activities   
Business combination, net of cash acquired —   (20,860)
Purchases of property and equipment (434)  (491)
Capitalized internal-use software (7,394)  (8,536)
Purchases of short-term investments (612,520)  (691,220)
Proceeds from sales of short-term investments 80,159   26,372 
Proceeds from maturities of short-term investments 635,769   146,662 
Net cash provided by (used in) investing activities 95,580   (548,073)
Cash flows from financing activities   
Taxes paid related to net share settlement of equity awards (79)  (236)
Payments related to acquisition holdback (3,511)  — 
Proceeds from issuance of common stock upon exercise of stock options 3,817   2,943 
Proceeds from issuance of common stock under employee stock purchase plan 6,661   10,195 
Net cash provided by financing activities 6,888   12,902 
Net increase (decrease) in cash and cash equivalents 160,211   (556,308)
Cash and cash equivalents at beginning of period 763,414   1,286,134 
Cash and cash equivalents at end of period$923,625  $729,826 
        

    
HashiCorp, Inc.
RECONCILIATION OF GAAP TO NON-GAAP DATA
(amounts in thousands, except per share amounts and percentages)
(unaudited)
    
 Three Months Ended October 31, Nine Months Ended October 31,
  2024   2023   2024   2023 
Reconciliation of gross profit       
GAAP gross profit$143,601  $120,520  $408,798  $345,627 
Add: Amortization of stock-based compensation of capitalized internal-use software 717   511   2,017   1,343 
Add: Stock-based compensation expense 3,468   3,746   12,126   11,225 
Add: Amortization of acquired intangibles 625   625   1,875   1,042 
Non-GAAP gross profit$148,411  $125,402  $424,816  $359,237 
GAAP gross margin 83 %  82 %  82 %  81 %
Non-GAAP gross margin 86 %  86 %  85 %  84 %
Reconciliation of loss from operations       
GAAP loss from operations$(29,882) $(55,573) $(140,891) $(205,979)
Add: Amortization of stock-based compensation of capitalized internal-use software 717   511   2,017   1,343 
Add: Stock-based compensation expense 34,455   43,766   121,572   130,048 
Add: Amortization of acquired intangibles 708   709   2,125   1,181 
Add: Acquisition and merger related expense 5,029   46   22,119   502 
Non-GAAP income (loss) from operations$11,027  $(10,541) $6,942  $(72,905)
GAAP operating margin (17)%  (38)%  (28)%  (48)%
Non-GAAP operating margin 6 %  (7)%  1 %  (17)%
            

    
 Three Months Ended October 31, Nine Months Ended October 31,
  2024   2023   2024   2023 
Reconciliation of net loss and net loss per share       
GAAP net loss$(13,006) $(39,473) $(90,596) $(159,046)
Add: Amortization of stock-based compensation of capitalized internal-use software 717   511   2,017   1,343 
Add: Stock-based compensation expense 34,455   43,766   121,572   130,048 
Add: Amortization of acquired intangibles 708   709   2,125   1,181 
Add: Acquisition-related expenses 5,029   46   22,119   502 
Less: Tax adjustments (1)$(1,017) $—  $(2,371) $— 
Non-GAAP net income (loss)$26,887  $5,559  $54,866  $(25,972)
GAAP net loss per share, basic and diluted$(0.06) $(0.20) $(0.45) $(0.83)
Non-GAAP net income (loss) per share, basic$0.13  $0.03  $0.27  $(0.13)
Non-GAAP net income (loss) per share, diluted$0.13  $0.03  $0.26  $(0.13)
Weighted-average shares used in computing GAAP net loss per share, basic and diluted 203,526   194,600   201,836   192,693 
Weighted-average shares used to compute Non-GAAP net income (loss) per share, basic 203,526   194,600   201,836   192,693 
Weighted-average shares used to compute Non-GAAP net income (loss) per share, diluted 211,659   203,874   209,931   192,693 
        
Reconciliation of free cash flow       
GAAP net cash provided by (used in) operating activities$38,168  $8,657  $57,743  $(21,137)
Add: purchases of property and equipment (12)  (74)  (434)  (491)
Add: capitalized internal-use software (2,431)  (2,867)  (7,394)  (8,536)
Non-GAAP free cash flow$35,725  $5,716  $49,915  $(30,164)
GAAP net cash provided by (used in) operating activities as a % of revenue 22 %  6 %  12 %  (5)%
Non-GAAP free cash flow as a % of revenue 21 %  4 %  10 %  (7)%
        
Trailing twelve months (“TTM”) Total Revenue$654,889  $563,142  $654,889  $563,142 
TTM cash provided by (used in) operating activities 68,029   (19,559)  68,029   (19,559)
TTM free cash inflow (outflow) 57,198   (31,153)  57,198   (31,153)
TTM cash provided by (used in) operating activities as a % of revenue 10 %  (3)%  10 %  (3)%
TTM free cash inflow (outflow) as a % of revenue 9 %  (6)%  9 %  (6)%
            

(1) The adjustments relate to the tax impact of stock-based compensation expense and amortization of acquired intangibles.

  
HashiCorp, Inc.
RECONCILIATION OF GAAP TO NON-GAAP RPOS
(amounts in thousands)
(unaudited)
  
 As of
 October 31, 2024 January 31, 2024
GAAP RPOs   
GAAP short-term RPOs$481,442 $460,170
GAAP long-term RPOs 293,941  315,580
Total GAAP RPOs$775,383 $775,750
Add:   
Customer deposits   
Customer deposits expected to be recognized within the next 12 months$17,920 $22,882
Customer deposits expected to be recognized after the next 12 months 2,297  2,745
Total customer deposits$20,217 $25,627
Non-GAAP RPOs   
Non-GAAP short-term RPOs$499,362 $483,052
Non-GAAP long-term RPOs 296,238  318,325
Total Non-GAAP RPOs$795,600 $801,377
      

  
HashiCorp, Inc.
PRESENTATION OF KEY HISTORICAL BUSINESS METRICS
(dollars in millions, except customers and percentages)
(unaudited)
  
 Three Months Ended
 October 31,
2024
 July 31,
2024
 April 30,
2024
 January 31,
2024
 October 31,
2023
 
Number of customers (as of end of period) 4,856   4,709   4,558   4,423   4,354  
Number of customers equal or greater than $100,000 in ARR 946   934   918   897   877  
GAAP Remaining Performance Obligations ($M)$775.4  $771.5  $748.5  $775.8  $678.2  
Non-GAAP Remaining Performance Obligations ($M)(1)$795.6  $793.3 (1)$770.9 (1)$801.4 (1)$700.4  
Quarterly subscription revenue from HCP ($M)$29.0  $26.5  $24.6  $21.3  $19.9  
Trailing four quarters average Net Dollar Revenue Retention Rate 109 %  110 %  113 %  115 %  119 % 
Trailing twelve months cash provided by (used in) operating activities as a % of revenue 10 %  6 %  3 %  (2)%  (3)% 
Trailing twelve months Non-GAAP free cash flow as a % of revenue(1) 9 %  4 %(1) — %(1)
(2)
 (4)%(1) (6)%(1)
                 

(1) For the reconciliation of GAAP to non-GAAP for the historical periods presented, refer to our prior earning releases.

(2) Amount is less than 1%.

   
HashiCorp, Inc.
PRESENTATION OF KEY HISTORICAL FINANCIAL DATA
(amounts in thousands)
(unaudited)
   
 Three Months Ended 
 October 31,
2024
 July 31,
2024
 April 30,
2024
 January 31,
2024
 October 31,
2023
 
Revenue$173,389 $165,138  $160,579 $155,783 $146,125 
GAAP net cash provided by (used in) operating activities$38,168 $(8,573) $28,148 $10,286 $8,657 
Non-GAAP free cash flow$35,725 $(11,203)(1)$25,393(1)$7,283(1)$5,716(1)
                 

(1) For the reconciliation of GAAP to non-GAAP for the historical periods presented, refer to our prior earning releases.

Investor Contact

HashiCorp
ir@hashicorp.com

Media Contact
Kate Lehman
HashiCorp
media@hashicorp.com

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