HubSpot, Inc. · NYSE:HUBS
HubSpot — Q3 2022 Earnings Presentation
27 slides from HubSpot's earnings presentation, Nov 2, 2022
Slide 1: HubSpot Overview Q3 2022
HubSpet HubSpot Overview Q3 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 Q3 2022
HubSpot at a Glance Q3 2022 $1.6B $197M ~160K 7.4K+ TTM Revenue TTM FCF customers employees 38% 12% 120+ 13 YoY growth margin countries office locations TTM = Trailing Twelve Months. FCF = Free Cash Flow is a non-GAAP metric. Please refer to the end of this presentation for a reconciliation of GAAP
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, Operation
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 CMS Hub Launch Launch Payments Launch 100K customers PieSync $1B Acquisition CRM Launch ARR Marketing Hub Service Hub Launch Launch Sales Hub* Launch Hubspot Performable founded Acquisition $500M $250M $100M $50M '06 Revenue * Originally launched and branded as “Si
Slide 14: Winning combination for growth
Winning combination for growth Strong culture & team Pace of innovation + Breadth of distribution Large, expanding TAM 14
Slide 15: Financial Overview Q3 2022
Financial Overview Q3 2022 I
Slide 16: Strong Revenue Growth
Strong Revenue Growth Quarterly Revenue ($m) Q3’22 revenue $444m revenue growth yoy 31%1 Q1’17 Q3‘22 1. Q3’22 revenue growth was 31% as reported and 36% in constant currency. Constant Currency is presented by converting current and comparative prior period operating results for entities reporting in
Slide 17: Strong Revenue Growth (Annual)
Strong Revenue Growth Annual Revenue ($m) 35% CAGR 2017 → 2022e 2017 2022e 2022e: based on midpoint of 2022 full year revenue guidance of $1.706 billion. CAGR: compound annual growth rate; based on as-reported revenue from 2017 to 2022e. 17
Slide 18: Growing Profitability with Scale
Growing Profitability with Scale Quarterly Non-GAAP Operating Profit ($m) Q3’22 operating profit $41m operating profit 9.2% margin Q1’17 Q3‘22 Non-GAAP Operating Profit excludes expenses associated with stock based compensation, amortization of acquired intangible assets and acquisition related expenses.
Slide 19: Strong Profitability, FCF + Cash
Strong Profitability, FCF + Cash Annual Non-GAAP Operating Profit ($m) $195 million FCF, 2022e $1.4+ billion in cash, Q3’22 2017 2022e Operating Profit Margin (%, as reported) Operating Profit Margin (%, constant currency)1 1. Excludes the impact of foreign currency fluctuations and is presented by conve
Slide 20: Increasing Free Cash Flow Generation
Increasing Free Cash Flow Generation Trailing Twelve Month Free Cash Flow ($m) Free Cash Flow Margin (Trailing Twelve Month, %) Free Cash Flow (Trailing Twelve Month, $m) Q1’17 Q3‘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
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 2017 2018 2019 2020 2021 Q1’22 Q2’22 Q3’22 Long Term Target Gross Margin 81% 82% 82% 82% 81% 82% 82% 82% 81% - 83% R&D % of revenue 15% 18% 18% 19% 18% 19% 21% 19% 18% - 20% S&M % of revenue 52% 46% 45% 45% 45% 46% 45% 45% 30% - 35% G&A % of revenue 12% 11% 11% 10% 9% 9%
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