HashiCorp Is Cruising Along


By: R. Scott Raynovich

Hashicorp, a leader in the infrastructure-as-code movement, delivered solid results Thursday for its fiscal fourth quarter.

Fourth-quarter revenue totaled $135.8 million, representing an increase of 41% year-over-year. Revenue for fiscal 2023 totaled $475.9 million, representing an increase of 48% year-over-year.

The news may come as relief to many investors in cloud infrastructure, as many companies have seen their shares and results pressured by a slowdown in the technology markets.

The news shows that Hashi’s products are still in strong demand. HashiCorp’s open-source Terraform product enables engineers and developers to program infrastructure using code such as YAML. It’s also doing well with its Vault product for securing valuable assets such as tokens, passwords, certificates, and APIs.

McJannet Likes the Trend

In another important development, Hashi, as the company is often referred to, narrowed its losses. The company reported a GAAP operating loss of $63 million, compared to $227 million for the period earlier.

HashiCorp CEO Dave McJannet said he was pleased with the progress in the quarter, as the company broadened growth across the portfolio despite a weakening tech economy.

"We were pleased ... that Q4 represented our highest transaction count ever, indicating that customers were making smaller purchases than in previous periods and which is what we would expect at this stage of the current economic cycle," said McJannet. "But it is clear that the transition to cloud is ongoing and it requires these organizations to operate their infrastructure in new ways. This remains a key driver of our market opportunity."

Analyst: HashiCorp Is a Key Company to Watch

HashiCorp has been closely followed by cloud investors since its IPO in late 2021, when it achieved a lofty valuation of about $15 billion shortly after the event. The valuations of many young technology companies have since deflated, however, and HashiCorp more recently traded at a $5 billion market capitalization.

Regardless of the positive news, shares did not respond positively, dropping 6% in Friday’s morning trading. However, the news came as a number of larger issues swirled around the market, including the failure of Silicon Valley Bank, which was put into government receivership on Friday after large losses on its treasury portfolio ignited a run on deposits.

Jason Ader, an analyst with William Blair, said he expects that HashiCorp deserves a premium valuation because it has become a check-list item for many infrastructure providers that depend on its products:

“Because its products sit at the mission-critical infrastructure layer (versus more volatile up-stack consumption-based solutions), we believe HashiCorp’s business should remain relatively resilient and stable despite the tough macro backdrop,” wrote Ader in a research note on Friday.

For the forthcoming 2024 fiscal year, HashiCorp issued a forecast above most analyst estimates, expecting 32% growth and non-GAAP EPS guidance that's slightly above consensus estimates.