Photo Credit: Bethany Drouin from Pixabay 

According to an IDC report, the global public cloud services market is expected to grow to $676.1 billion by 2024. Within the market, infrastructure, security, networking, and applications markets are estimated to grow from $41.7 billion in 2021 to $72.5 billion by 2026. San Francisco-based HashiCorp is a leading player in the market that recently went public.

HashiCorp’s Offerings

Founded in 2012 by Armon Dadgar and Mitchell Hashimoto, HashiCorp (HCP) is an open-source software company that provides tools and commercial products that enable developers, operators, and security professionals to provide security and run distributed application infrastructure.

It uses its technologies to solve core infrastructure challenges in cloud adoption by enabling an operating model that unlocks the full potential of modern public and private clouds. Its cloud operating model provides consistent workflows as well as a standardized approach to automating the critical processes involved in delivering applications in the cloud such as infrastructure provisioning, security networking, and application deployment. Its solutions allow companies of all sizes and industries to accelerate their time to market, reduce their cost of operations, and improve their security and governance of complex infrastructure deployments.

HashiCorp has four key commercial products – Terraform, Vault, Consul, and Nomad. Terraform is its cloud-neutral infrastructure provisioning product that allows users to set up and manage IT infrastructure. Terraform enables IT operations teams to use Infrastructure-as-Code where processes and configuration required to support applications are codified and automated instead of being manual and ticket-based. Vault is its secret management and data protection product that allows security teams to apply policies based on application and user identity, integrating with both on-premise and cloud-native identity providers. Consul is its application-centric networking automation product that enables practitioners to manage application traffic, security teams to secure and restrict access between applications, and operations teams to automate the underlying network infrastructure. Nomad is its scheduler and workload orchestrator that enables organizations to deploy and manage applications. It provides practitioners with a self-service interface to manage the application lifecycle.

HashiCorp’s Financials

HashiCorp’s suite of technologies has helped it deliver strong financial metrics as well. Its revenues grew 75% from $121.3 million in fiscal 2020 to $211.9 million for the fiscal year 2021. Net loss was $53.4 million in fiscal 2020 and $83.5 million in fiscal 2021.

HashiCorp recently announced its fiscal 2022 earnings. Revenues grew 51% to $320.8 million. Losses more than tripled to $290.1 million. For the fourth quarter, revenues grew 56% to $96.5 million. The loss was $0.24 per share compared with the loss of $0.08 per share a year ago.

Among key metrics, it ended the year with 2,715 customers, up from 2,392 customers a year ago. Customers with ARR of $100,000 or more grew to 655 from 595 last year and accounted for 89% of its total revenues. Total GAAP RPO reached $428.8 million at the end of the fourth quarter of fiscal 2022, up from $349.0 million in the previous quarter and $263.9 million in the fourth quarter of fiscal 2021. The company’s trailing four-quarter average Net Dollar Revenue Retention rate was 131% at the end of the fourth quarter of fiscal 2022, up from 127% in the previous fiscal quarter.

For the first quarter, HashiCorp forecast revenues of $92-$96 million and a loss per share of $0.30-$0.28. The market forecast revenues of $96.52 million and a loss of $0.25 per share. For the fiscal year, HashiCorp forecast revenues of $413-$423 million and a loss per share of $1.30-$1.26. The market forecast revenues of $320.77 million with a loss per share of $0.61.

HashiCorp’s Growth Focus

Earlier last quarter, HashiCorp released several product upgrades to help the developer community. HashiCorp’s Consul API Gateway helps users manage access to service mesh applications. It released the Consul service mesh on Amazon ECS that allows users to deploy Consul in a secure configuration on Amazon ECS.

Recently, it also announced the expansion of its partnership with Microsoft to provide a solution that makes it easy to securely access services, applications, and hosts, as a part of a zero-trust security framework using HashiCorp Boundary and Microsoft Azure Active Directory. By combining HashiCorp’s solution Boundary with Microsoft’s Azure AD, customers will have easy access to applications and critical systems. The solution will enable the use of fine-grained authorization policies based on an organization’s trusted identities. It also announced the expansion of its partnership with Cisco that will allow it to sell HashiCorp Terraform Cloud Business alongside the Cisco Intersight platform. The agreement will provide customers with the ability to create a hybrid cloud operating model using Terraform’s Infrastructure-as-Code for infrastructure provisioning and management of private data centers with Cisco Intersight.

HashiCorp has a slew of competitors to deal with. It competes with big tech players such as IBM, VMWare, Azure’s Management Tools, and Apptio’s Cloudability, to name a few. It is counting on its growing partner network and improving product offerings to help it grow in this crowded space.

Prior to going public, HashiCorp raised $349.2 million in five rounds of funding led by Geodesic Capital, Franklin Templeton Investments, GGV Capital, T. Rowe Price, Redpoint, Mayfield Fund, Institutional Venture Partners, and True Ventures. Its most recent round was held in March 2020 where it raised $175 million at an undisclosed valuation. It went public in December 2021 at a valuation of $16.2 billion when it raised $1.2 billion by selling the stock at $80 per share. Its stock is currently being traded at $37.74 with a market capitalization of $6.1 billion.