Hubspot, Inc. · NYSE:HUBS
Hubspot — Q4 2022 Earnings Presentation
27 slides from Hubspot's earnings presentation, February 2023
Slide 1: HubSpot Overview Q4 2022
HubSpet HubSpot Overview Q4 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes certain “forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management’s expectations for future financial and operational performance and operational expenditures, exp
Slide 3: HubSpot is a leading CRM platform for scaling companies
HubSpot is a leading Customer Relationship Management platform for scaling companies. Our mission is to help millions of organizations grow better. 3
Slide 4: HubSpot at a Glance
HubSpot at a Glance 2022 $1.73B $191M ~167K 7.4K+2 revenue FCF customers employees 39%1 11% 120+ 13 yoy growth margin countries office locations 1 2022 revenue growth was 33% as reported and 39% in constant currency. Constant Currency is presented by converting current and comparative prior period o
Slide 5: The SMB market is underserved
Sales Data Acquisition Productivity Service The SMB market Ticketing Analytics Reporting Acquisition Websites Acquisition Data Sync is underserved Messaging Acquisition Marketing Service Automation Acquisition Reporting Marketing Automation Acquisition Disconnected point solutions Cobbled enterprise
Slide 6: HubSpot is well positioned to solve this problem
HubSpot is well positioned to solve this problem Sales Data Acquisition Productivity Service Ticketing Analytics Reporting Acquisition Websites Acquisition Data Sync Messaging Acquisition Marketing Service Automation Acquisition Reporting Marketing Automation Acquisition Disconnected point solutions
Slide 7: Our customers are challenged by a crisis of disconnection
Our customers are challenged by a crisis of disconnection Disconnected point solutions Disconnected systems are not the solution People need more than software to thrive Disconnected people and crave community Old GTM strategies will Disconnected customers NOT work in this new world 7
Slide 8: From a Single App To Platform
To Help our Customers Make Connections, We’ve Transformed From A Single App To Platform Single App To Connected Platform Commerce-Powered CRM Data Reporting Automation Content Messaging Payments Payments Network Marketplace Academy 8
Slide 9: We help customers scale across all stages of their digital journey
We help customers scale across all stages of their digital journey Newer to digital Early to digital Digitally Mature Industrials Software Electronics Manufacturing Marketing Hub Marketing, Sales, CMS Hubs Marketing, Sales, Service Hubs 9
Slide 10: Our TAM is large and expanding
Our TAM is large and expanding 10% CAGR $72B1 1000 - 2000 1 $45B 100 - 999 employees 1 - 99 2022 Software TAM for Marketing, Sales, Service, CMS, and Ops 2027 1 Includes Total Addressable Market for software in HubSpot’s core product groups including Marketing Hub, Sales Hub, Service Hub, Operations
Slide 11: Wide Breadth of Distribution
Wide Breadth of Distribution Product Partner Direct led led led 11
Slide 12: Award Winning Culture
Award Winning Culture #2 Best Place to #1 Best CEOs for 100 Best Best Workplaces Work in 2022 by Women by Companies to for Millennials™ Glassdoor Comparably Work For® by by Great Places to Great Places to Work Work 12
Slide 13: The HubSpot Journey
The HubSpot Journey Operations Hub Launch CMS Hub Payments Launch Launch 100K Customers PieSync CRM Acquisition Launch Service Hub Launch $1b Sales Hub ARR Launch Performable Acquisition $500m Marketing Hub Launch $250m $100m $50m '06 HubSpot founded Revenue Sales Hub originally launched and branded
Slide 14: Winning combination for growth
Winning combination for growth Strong culture & team Pace of innovation + Breadth of distribution Large, expanding TAM 14
Slide 15: Financial Overview Q4 2022
Financial Overview Q4 2022 I
Slide 16: Strong Revenue Growth
Strong Revenue Growth Quarterly Revenue ($m) Q4’22 revenue $470m revenue growth yoy 35%1 Q1’17 Q4‘22 1 Excludes impact of unfavorable foreign currency. Q4’22 revenue growth was 27% as reported and 35% in constant currency. Constant Currency is presented by converting current and comparative prior pe
Slide 17: Strong Revenue Growth (Annual)
Strong Revenue Growth Annual Revenue ($m) 36% CAGR 2017 → 2022 2017 2022 CAGR: compound annual growth rate; based on as-reported revenue from 2017 to 2022. 17
Slide 18: Growing Profitability with Scale
Growing Profitability with Scale Quarterly Non-GAAP Operating Profit ($m) Q4’22 operating profit $64m operating profit 13.6% margin Q1’17 Q4‘22 Non-GAAP Operating Profit excludes expenses associated with stock based compensation, amortization of acquired intangible assets and acquisition related expenses
Slide 19: Strong Profitability, FCF + Cash
Strong Profitability, FCF + Cash Annual Non-GAAP Operating Profit ($m) $191 million FCF, 2022 $1.5 billion in cash, Q4’22 2017 2022 Operating Profit Margin (%, as reported) Operating Profit Margin (%, constant currency)1 1. Excludes the impact of foreign currency fluctuations and is presented by converti
Slide 20: Increasing Free Cash Flow Generation
Increasing Free Cash Flow Generation Trailing Twelve Month Free Cash Flow ($m) Free Cash Flow Margin (Trailing Twelve Month, %) Free Cash Flow (Trailing Twelve Month, $m) Q1’17 Q4‘22 Free cash flow is a non-GAAP metric. Free cash flow is defined as cash and cash equivalents provided by (used in) operat
Slide 21: Long Term Financial Framework Focused on Profitable Growth
Long Term Financial Framework Focused on Profitable Growth High Growth Growth Moderate Growth Revenue Growth > 30% ≈ 30% < 30% Operating 1% - 2% 2% - 3% 3% - 4% Margin %* increase per year increase per year increase per year Operating Cash ≈ Revenue Growth Flow Theoretical operating margin % is non-G
Slide 22: Long Term Financial Targets
Long Term Financial Targets 2020 2021 2022 Long Term Target Gross Margin 82% 81% 83% 81% - 83% R&D % of revenue 19% 18% 19% 18% - 20% S&M % of revenue 45% 45% 45% 30% - 35% G&A % of revenue 10% 9% 9% 8% - 9% Operating Margin 8% 9% 10% 20% - 25% These estimates reflect our current operating plan as of
Slide 23: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 24: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 25: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 26: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations * All amounts are trailing twelve months