Information technology automation firm HashiCorp. Inc. beat expectations by a fairly wide margin today but couldn’t prevent its losses from growing quite substantially, and its stock fell in the extended trading session.

The company reported a loss before certain costs such as stock compensation of 17 cents per share on revenue of $100.9 million, up 51% from a year ago. That was better than expected, with Wall Street looking for a much bigger loss of 29 cents per share on lower sales of $94.7 million.

Even so, HashiCorp’s net loss for the period rose to $78.2 million, compared with just $15.4 million in the same period one year before. Following the report, the company’s stock fell more than 6% in the extended trading session, after gaining more than 15% earlier in the day.

HashiCorp sells software that’s used by enterprises to automate the management of their information technology infrastructure. Its flagship product is Terraform, an infrastructure-as-code offering that enables system administrators to write scripts to define the configuration of cloud and on-premises IT infrastructure, instead of navigating through management consoles.

Terraform eliminates the need to configure and adjust hundreds of settings manually. HashiCorp claims it can save weeks of work for administrators in some cases. It also reduces the risk of human error.

HashiCorp Chief Executive Dave McJannet (pictured) said that as global enterprises invest in their cloud programs, the company’s products are uniquely positioned to benefit from what he thinks is an extremely large market opportunity.

HashiCorp saw solid growth in more than just its revenue, expanding its customer base by a significant margin too. At the end of the first quarter, it said it had 3,240 customers overall, up from 2,715 at the end of the previous quarter and 1,736 a year ago. Of its customers, 704 are generating annual revenue of $100,000 or more, up from 523 that were doing so a year ago. Those big-ticket customers are important for the company, as it revealed they accounted for 88% of its revenue in the first quarter.

“Our go-to-market teams remain focused on our adopt, land, expand, extend and renew sales mode,” McJannet explained. “They benefit from ongoing usage of our open-source software, which helps drive licensing of our primary commercial products.”

It’s a model that seems to be succeeding, at least for some of those products. For instance, HashiCorp said quarterly subscription revenue from its HashiCorp Cloud Platform hit $8.8 million in the quarter, up from $6.9 million in the previous quarter and just $2.5 million one year ago. HashiCorp also reported a net dollar retention rate of 133% at the end of the quarter, up from 131% one year ago. The NRR metric measures the company’s ability to squeeze more revenue from its existing customer base, with any score of greater than 100% meaning that progress is being made.

Holger Mueller of Constellation Research Inc. told SiliconANGLE that HashiCorp seems to be thriving as enterprises move to the cloud.

“Revenue growth of more than 50% is impressive, and HashiCorp also broke the $100 million per quarter barrier, another big milestone,” he said.

Although HashiCorp’s growth was impressive, the analyst said the company still has a lot of work to do. In particular he said he was worried that its subscription revenue grew less than one might have expected.

“The transformation from a service to a software company seems to have stalled a little,” Mueller warned. “And it continues to lose a lot of money each quarter, even though the management beat expectations. The next few quarters will be key to show that HashiCorp can keep growing in a more challenging economic environment.”

In terms of guidance, HashiCorp had more encouraging news. It said it’s looking at a loss of between 30 and 32 cents per share on sales of $101 million to $103 million. Wall Street is modeling a loss of 33 cents per share and revenue of $100.9 million.

For fiscal 2023, HashiCorp said it’s looking at total revenue of between $422 million and $432 million, nicely ahead of the consensus estimate of $420.1 million.

Photo: HashiCorp/YouTube