Executive Summary

Q1 FY2025 delivered revenue of $160.6M (+16% YoY) and non-GAAP diluted EPS of $0.05; GAAP EPS was $(0.26) .
Results were a significant beat versus prior company guidance from March: revenue $152–$154M, non-GAAP operating loss $(19)–$(16)M, and non-GAAP EPS $(0.02)–$0.00; actuals came in $160.6M revenue, non-GAAP operating loss $(4.8)M, non-GAAP diluted EPS $0.05. Bold beat across all three metrics .
Gross margin remained strong: GAAP 81% and non-GAAP 85% in Q1; GAAP operating margin improved to (42)% and non-GAAP operating margin to (3)% .
RPO strength and cloud momentum: GAAP RPO $748.5M (+18% YoY), current GAAP RPO $454.0M (+22% YoY); HCP subscription revenue reached $24.6M vs $21.3M in Q4 .
Near-term stock reaction is anchored by the announced IBM acquisition at $35.00/share (EV ~$6.4B); HashiCorp did not hold a Q1 call and provided no guidance update given the pending transaction .

What Went Well and What Went Wrong

What Went Well

Broad-based beat versus guidance: revenue, non-GAAP operating loss, and non-GAAP EPS all exceeded March guidance; revenue $160.6M vs $152–$154M; non-GAAP operating loss $(4.8)M vs $(19)–$(16)M; non-GAAP diluted EPS $0.05 vs $(0.02)–$0.00. Bold upside execution .
HCP traction and customer growth: HCP subscription revenue rose to $24.6M; customers increased to 4,558; ≥$100k ARR customers rose to 918 .
Management highlighted significant strategic progress with the launch of the Infrastructure Cloud in April: “another quarter of solid performance… launch of the Infrastructure Cloud… build a unified SaaS offering for the world’s largest enterprises” — Dave McJannet, CEO .

What Went Wrong

Net dollar retention decelerated: trailing four-quarter average NDRR fell to 113% vs 115% in Q4 and 127% in Q1 FY2024, reflecting slower expansion against entitlement models .
GAAP operating loss remained elevated at $(67.7)M; merger-related expenses of $12.8M were a notable non-GAAP adjustment this quarter .
No guidance was provided with Q1 due to the IBM transaction; lack of forward visibility removes a traditional near-term catalyst from quarterly updates .

Financial Results

Metric	Q3 FY2024	Q4 FY2024	Q1 FY2025
Revenue ($USD Millions)	$146.1	$155.8	$160.6
GAAP EPS ($)	$(0.20)	$(0.16)	$(0.26)
Non-GAAP Diluted EPS ($)	$0.03	$0.05	$0.05
GAAP Gross Margin (%)	82%	83%	81%
Non-GAAP Gross Margin (%)	86%	86%	85%
GAAP Operating Margin (%)	(38)%	(31)%	(42)%
Non-GAAP Operating Margin (%)	(7)%	(4)%	(3)%

Segment revenue breakdown:

Segment ($USD Millions)	Q3 FY2024	Q4 FY2024	Q1 FY2025
License	$16.0	$19.8	$16.3
Support	$106.1	$108.9	$113.6
Cloud-Hosted Services	$19.9	$21.3	$24.6
Professional Services & Other	$4.2	$5.8	$6.0
Total Revenue	$146.1	$155.8	$160.6

KPIs:

KPI	Q3 FY2024	Q4 FY2024	Q1 FY2025
GAAP RPO (Total, $M)	$678.2	$775.8	$748.5
GAAP RPO (Current, $M)	$402.1	$460.2	$454.0
Non-GAAP RPO (Total, $M)	$700.4	$801.4	$770.9
Non-GAAP RPO (Current, $M)	$420.8	$483.1	$473.6
HCP Subscription Revenue ($M)	$19.9	$21.3	$24.6
Customers (End of Period)	4,354	4,423	4,558
Customers ≥$100k ARR	877	897	918
Trailing 4Q Avg Net Dollar Retention (%)	119%	115%	113%
Net Cash from Operating Activities ($M)	$8.7	$10.3	$28.1
Non-GAAP Free Cash Flow ($M)	$5.7	$7.3	$25.4

Non-GAAP adjustments detail (Q1 FY2025):

Non-GAAP operating loss reconciled from GAAP by adding stock-based comp ($48.8M), amortization, and merger expense ($12.8M), partially offset by tax adjustments; non-GAAP net income $11.2M vs GAAP net loss $(51.1)M .

Guidance Changes

Metric	Period	Previous Guidance (3/5/24)	Current Guidance (5/30/24)	Change
Revenue ($M)	Q1 FY2025	$152–$154	No guidance provided	Suspended
Non-GAAP Operating Loss ($M)	Q1 FY2025	$(19)–$(16)	No guidance provided	Suspended
Non-GAAP EPS ($)	Q1 FY2025	$(0.02)–$0.00	No guidance provided	Suspended
Weighted Avg Basic/Diluted Shares (M)	Q1 FY2025	197.9 / 205.8	No guidance provided	Suspended
Revenue ($M)	FY2025	$643–$647	No guidance provided	Suspended
Non-GAAP Operating Loss ($M)	FY2025	$(46)–$(43)	No guidance provided	Suspended
Non-GAAP EPS ($)	FY2025	$0.05–$0.07	No guidance provided	Suspended

Note: Company stated it would not provide guidance with the Q1 FY2025 release due to the pending IBM acquisition .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 FY2024)	Previous Mentions (Q4 FY2024)	Current Period (Q1 FY2025)	Trend
Go-to-Market Simplification	Focus on efficiency; early profitability progress	Explicit pivot to lifecycle messaging; process rigor under President Susan St. Ledger	No Q1 call; continued in press release with Infrastructure Cloud launch	Building consistency; operational execution improving
Commercial Differentiation (Terraform Stacks, LTS)	Product momentum; HashiConf announcements	Terraform Stacks private beta; LTS for commercial customers only	No call; strategy unchanged in context	Increasing differentiation to drive conversions
Cloud-First Enterprise Motion (HCP)	HCP revenue up; portfolio updates	Comp shifted to cloud land; default enterprise to Terraform Cloud	HCP revenue up to $24.6M; Infrastructure Cloud launch	HCP mix rising; faster feature delivery on cloud
Macro/Optimization	Ongoing macro headwinds	Signs of optimization abating; improved renewals/pipeline conversion	No call; YoY RPO growth strong	Gradual improvement; entitlement lag remains
Security Lifecycle (Vault/Boundary/Radar)	New offerings momentum	Portfolio positioning; Windows/RDP roadmap (back half)	No call; security focus consistent	Robust pipeline; fuller lifecycle narrative
Multi-Cloud & AI	Growing adoption	LLMs driving more true multi-cloud roadmaps	No call; consistent strategy	Tailwind for cloud-agnostic tools

Management Commentary

“The HashiCorp team delivered another quarter of solid performance in Q1 of FY25, with revenue growth of 16% year-over-year… launch of the Infrastructure Cloud… build a unified SaaS offering for the world’s largest enterprises as they mature their cloud estates.” — Dave McJannet, CEO .
Q4 call framing the strategy into FY2025: simplifying GTM, increasing commercial differentiation (Terraform Stacks, LTS), and shifting business to enterprise-ready HCP; aiming for ~20% quarterly revenue growth during FY2026 .

Q&A Highlights

Enterprise cloud-first motion and sales comp tilt toward HCP lands; large customers increasingly adopting Terraform Cloud as platform maturity improves .
Competitive posture: partnership with Microsoft; Entra seen as complementary vs competitive; stronger security lifecycle with Vault, Radar, Boundary .
Macro commentary: optimization abating; improved renewals and pipeline conversion; U-shaped recovery in revenue and cRPO growth with Q2 trough, exiting FY2025 at ~20% cRPO YoY growth .
Security pipeline robust; Boundary Windows/RDP capabilities targeted for back half .
Land vs expand: smaller initial lands with expansion over time; entitlement model drives lag between bookings acceleration and revenue growth .

Estimates Context

S&P Global Wall Street consensus estimates were unavailable for HCP at the time of this analysis; therefore, comparisons to consensus could not be provided.
As an alternative benchmark, results materially beat company’s March guidance on revenue, non-GAAP operating loss, and non-GAAP EPS .
If/when S&P Global consensus becomes available, we would reassess beat/miss status versus Street expectations.

Key Takeaways for Investors

Bold beat versus company guidance across revenue, operating loss, and EPS; execution momentum combines with seasonal strength and prior GTM/process changes .
HCP monetization is accelerating: cloud-hosted services revenue rose sequentially to $24.6M; continued emphasis on cloud lands and cross-product experiences supports net retention over time .
NDRR deceleration (113%) shows entitlement friction; management expects bookings-led U-shaped recovery with lag to revenue, implying better trajectory into back half FY2025 and FY2026 .
Non-GAAP profitability progress underpinned by cost discipline and adjustments; note merger-related expense ($12.8M) in Q1 non-GAAP reconciliation and strong non-GAAP FCF ($25.4M) .
The pending IBM acquisition caps near-term upside at $35/share and shifts focus to deal spread/regulatory timeline; absence of guidance removes typical quarterly catalysts .
Tactical implication: fundamentals are improving, but the primary stock driver is deal progression; for relative value or special situations investors, focus on closing risk and timing rather than incremental fundamental beats .
Medium-term thesis: if transaction closes, assets likely benefit from IBM distribution and integration; if not, GTM simplification, commercial differentiation (Stacks/LTS), and HCP emphasis provide a path toward reaccelerating growth and sustained margin improvement .

Appendices (Additional Data)

Cash and Liquidity (Q1 FY2025):

Net cash provided by operating activities: $28.1M; cash, cash equivalents, and short-term investments: $1,307.8M .

IBM Transaction Summary:

IBM to acquire HashiCorp for $35.00/share cash; EV ~$6.4B; expected close by end of 2024, subject to approvals .

HashiCorp, Inc. (HCP)·Q1 2025 Earnings Summary