HubSpot (HUBS) 6 May 212021 Q1 Earnings call transcript

Company Profile

Participants

Chuck MacGlashing	Head of Investor Relations
Dharmesh Shah	Co-Founder and Chief Technology Officer
Yamini Rangan	Chief Customer Officer
Kate Bueker	Chief Financial Officer
Brian Peterson	Raymond James
Samad Samana	Jefferies
Alex Zukin	Wolfe Research
Stan Zlotsky	Morgan Stanley
Mark Murphy	JPMorgan
DJ Hynes	Canaccord Genuity
Brad Sills	BofA Securities
Arjun Bhatia	William Blair
Terry Tillman	Truist Securities
Parker Lane	Stifel
Chris Merwin	Goldman Sachs
Ken Wong	Guggenheim Securities
Michael Turrin	Wells Fargo Securities
Michael Turits	KeyBanc Capital Markets
Kirk Materne	Evercore ISI
Michael Berg	Mizuho Securities
Andrew Sherman	Cowen and Company

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the HubSpot Q1 '21 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers presentation there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now today, hand Investor Chuck would to conference Relations. I speaker your MacGlashing, Instructions] like the to over [Operator Head of Thank you. Please ahead. go

Chuck MacGlashing

our quarter Officer; market Today, is Financial Co-Founder Good Customer earnings Kate press results this Chief release operator. afternoon, afternoon issued welcome Dharmesh Yamini me the HubSpot's Thanks, and Bueker, after on was the call and announced in our conference With and Chief be we'll Chief first call. Rangan, that discussing closed. Technology the Shah, Officer; to our XXXX the Officer.

to Before we start, your the I’d in release. like safe included harbor today's press draw statement to attention

performance, Exchange we'll XXE as considered statements meaning amended. XXA Exchange the management's year and the Act During to our those statements as Securities future Securities XXXX, for financial Section make other amended; and statements, financial full of forward-looking our this of Act fiscal forward-looking XXXX, than Section within All the business operational including expenditures, are that guidance statements of second of historical quarter call, the of expectations outlook, related fact of including operational and expected XXXX. regarding of and business growth

be today, reflect press release or no and our and Forward-looking as with cautionary XX-Q, we today's SEC in filed statements. will the the language these as only our Please law, statements forward-looking obligation required by views revise this except update of undertake to refer afternoon. which to Form

uncertainties to materially differ risks a For results discussion from the that could actual and cause of expectations.

our most of between G. discussed the quarter measure measures XXXX section press today's The Investor in refer and each non-GAAP or within Relations as Regulation financial first earnings our by be such non-GAAP directly a of certain to we'll of financial course the reconciliation found can website. differences call, comparable During GAAP release measures the financial measure used defined to

Dharmesh Officer, HubSpot's call pleasure Technology and turn Co-Founder over Chief Shah. my to the it's to Now

Dharmesh Shah

Thanks, as you first for joining Thank today earnings Chuck, results. and us HubSpot's review XXXX we greetings, everyone. quarter

in, continues on well give jump his all full in like And update we the looking to remains is a operations. way and forward recovery. day-to-day energized good to HubSpot Yamini and back, a we're team you while quick on having I'd He's her to Before continue Brian. both leadership, spirits lead well Under to and grow customers him positioned to helping better. our

Now the on which to have remarkable. been results,

part business. has working a As we to in round see and a a growth we've by for revenue from customer QX. accelerated transformation Both This shifting our of the customer more happens transformation. that to experience. a just digitally-powered, pandemic, are year years nearly XX full if founding evangelizing in midst ago. digital very significant continued companies It living since so of and across growth and More the driven strong been we've been not digital-first this demand

in said happen all X of business strong and platform together. a another, thing few adapting a vision important not has it matches online. part and the moment indispensable. feels Brian can't it companies in. CRM ties but This made like As customer just is first that your not we're seen to in ago, We've the an acceleration doing earnings CRM calls our Digital journey comprehensive

enterprises. platform and This friendly of excited number in really better. Our which platforms. platform power This in acquisitions. delivers and CRM The I'm all start, made only With the designed with excited more high-end delightful what customers ahead. customers we're I'll This to over to clunky the makes and two many for CRM and full one and suite, use mid-market to powerful ultimately, strong one off companies. a a and products is path we're the different. expensive in CRM bringing enterprise access that, easy keep to larger a introduced the Yamini. of customers we're it moves two, year, being and scaling instead towards but in-house, cobbled up position why human down seen in and enterprise win like great continuing platform. progress to platform heart the HubSpot traditionally is our price the to features replaces already the ways: the past scaling number our and experience HubSpot new for working businesses ambition suite With a not invest in is CRM helping create grow further the bundle product become operations it's to we've now companies, we're about Hub small significantly unlock to together professional to companies; our starter, and a for for bringing platform available includes their our point One, of experiences tremendous end-to-end that HubSpot CRM about I'm help even crafted of CRM and purchasing value. larger traditional suite and growth hand CMS being to XXXX the customers our customers towards enterprises key recently goal us at mid-market is hub. That's gives is We're to at our that

Yamini Rangan

touch I'm everyone. and product Dharmesh. update share much, you as our so with excited business all. Hey, our go-to-market upon as to innovation a Thanks well

records the We with new to continued heard, see tremendous growth just are and XX% position of As the retentions year-over-year performance from and in currency customer growth revenue revenue in QX quarter strength. in XX% you acceleration operating net customer business broad we've of a constant and additions across year-over-year. an set to of

to perform in on alignment. of well segmentation focus go-to-market, Our and I but particular geographies our and continued to in note products want QX, areas two partner

easy strategy to the customer and segmentation the use love be of customer our buy, approach. go-to-market support of and easy HubSpot in our XXX serve to fit great pillars product we how Historically, had we've to go-to-market We to sell with our companies for segments of One to the and needs are customers. key optimizing is to easy serving employees. and we want XX

Our to to live in which needs cater frees drive segment the companies. investing team X- the product enablement in in on to we're XXX- high larger to automation goal deals. the growth, expand segment. focus up and our low is we the the sales and end, and to investing at productivity sales larger to At to of in And increased sales improved X,XXX-employee XX-employee are the focus end, product efficiency

good strong the full These into deals, investments a and the early at the driven traction end. are at far. and We simplification result the implementing are low high customer seeing translating the additions automation across of as balanced seen strong thus in multi-hub by end, we larger we've about days deals of but platform deals still board. strategy, feel really the We're ASP

of strategy ecosystem. our in our go-to-market pillar investing partner is key Another

HubSpot platform, for of our we fruition. scaling ecosystem work of our we partners see drive to as us to solution broad-based $XX opportunity billion partners the IDC, partners the in come to represents our that HubSpot have grows of will nearly expand revenue billion partners XXXX. HubSpot from As starting serve seeing a our as diversify. than $X from moving That growth paper ecosystem and grow to are in to we This the and white opportunity companies, over faster for the we're new of is According application ecosystem types up already we diversification in and forecasted to forward. a continue to made XXXX needs

is the drivers and of them important research is our talking and pillar of of revenue heard little we've This clearly data to our launch and to gears Through and do bit to have about lack Now to functional business, to growth. work. in suite hub operations silos to a and I reactive We empower product. that to because automated they another talk switch our duplicative of in become tools designed want Hub. access customers, with recently operate and processes. role professionals clean professionals often very transform new This the Operations strategic expanded operations of our

we've be after key and needs. can XXX are our offering fast transform And the companies units flexible We decision provides HubSpot build hub. operations to also to address have feedback In their making professionals customers' seen keeps And We're our CRM as operations with of our in Our them clean launch. tech becoming they hub It better than customers foundation let launch, XX run since And CRM customer a And processes. for it to investment turn will that financial for Operations feel down single adjacent will in existing by the of operations of most for Kate office walk as keeps while balance they and part also better. new from driven helps their our entire We importantly, an platform. our the want makers on connect it them from it shared, we fighters. partners launch functional to to breaks know hubs momentum help Hub, automate companies. ever CRM. that, into work so and expanded front in revenue growth It choice hubs, customers while hub play investing about for scale. experience we've operations entirely persona HubSpot proactive their than the HubSpot's that grow friction-free we've experience to their incredibly strongly previously revenue source the become stack, customers new over results. easier firefighters. to far continued to Operations an customer teams silos truth. the between strategic me that the a of and across the and business more teams essentially first friction days important have the platform reactive data excited operations scaling With through purchased heard

Kate Bueker

Yamini. Thanks,

turn quarter and Let's guidance year quarter XXXX. our the for our full of results and financial first to second

both revenue constant XX% First XX% other grew reported. revenue XX% basis. as reported subscription while year-over-year quarter an grew and XX%, currency as services year-over-year, QX increased and in on revenue

would exclude revenue in other QX. the nonrecurring impact of the hustle grown If XX% services in and you quarter, revenue have

per and strong of XXXX. business constant $XXX are getting and very currency record reported. revenue and easier X was adopt XX% quarter, XX% subscription Yamini platform as The see of XX% activities. upgrade Average Deferred as remainder Calculated another This currency year-over-year. driven of all challenging across revenue my year-over-year We XX% the As sequentially the points point a up measures. two a was to in nearly constant revenue and X XXX,XXX, performance in revenue net year-over-year. but hubs hubs, in represented and revenue bringing nearly comparison retention X,XXX X comments in out in increase dollar to to over a in seat added constant customer was acceleration point $XXX addition to of growth today. million customers down year-over-year. million, XX% value March a billings of set to continue refer in will count was all-time customers expansion total retention of end up grew business overall peers addition as customer QX, of environment as QX, driven or revenue strength while XX% International our year-over-year. growth international QX an our XX% in currency the strength particular a XX% quarter QX, by in growing broad X,XXX March year-over-year continue geographies. in revenue of total we our record of reported. Domestic HubSpot Customers up by and result customer XX% more was non-GAAP billings high the as of indicated, in

was gross XX%, margin X%. was margin margin gross was slightly year-over-year. while down XX%, First Subscription quarter services gross

target. associated If with was services hustle the revenue our margin near of nonrecurring breakeven the you quarter, services exclude margin long-term impact gross in and gross profit, consistent

application flat X%, the a by costs quarter well compared infrastructure. incremental from quarter The as First with was in an period same investments hustle R&D the increase ago. in largely operating relatively revenue-related costs, the added revenue as expense to associated our as margin acquisition, year offset was overperformance in

long-term couple revenue first CapEx, $XX or software income aggressively in share. diluted of Net to quarters, $XX the the had our growth. business X,XXX the across of in million of As products $X.XX At over quarter, quarter demand revenue. first we're innovation flow was XX% drive the year-over-year. the I've we and meet for end discussed invest the market seeing per fuel continue to the development or Free we was was quarter to last plan employees, cash fully including in first costs, million to capitalized XX% $XX or million QX. X% of up

We free continue between to quarter with million, free flow revenue to X% expect $XXX expect $XXX million seasonally QX. another CapEx strong in as and cash a be to and be about XXXX, flow percentage of in cash now

marketable $X.X March. securities into for our and dive XXXX. at billion the Finally, totaled guidance and that, with quarter cash second of of the let's end full And year

income revenue Non-GAAP $X.XXX quarter, income revenue $XX $X.XX at total Non-GAAP the expected is the range of to $XX to between of up operating range the income million shares between million XX.X second year XX% and per is expected to up $X.XX. expected be now outstanding. is between $XXX diluted This year-over-year expected diluted and be net For be for and in assumes million the to fully million. shares This to operating is million. to $XXX million, be to million assumes $XXX Non-GAAP XX% $XXX outstanding. the midpoint. is the be diluted midpoint. of income $X.XXX to per total share expected year-over-year XX.X fully diluted billion net share now million billion, expected $X.XX. between And Non-GAAP full XXXX, now and $X.XX is be at in

tailwind remarks. X-point mind you X expect Dharmesh following: forecasting tailwind of I'll in full we're As a current still the FX At rates, to and closing hand that, revenue QX for spot his the over keep models, back as your year. in points with reported things And for an adjust to

Dharmesh Shah

the all their past especially over the livelihoods It world. of and partners has impacted a for customers support, Thanks, and of challenges over of the Kate. pandemic. We're year, the lives global millions to grateful all our

Our past year they sharp the in hearts as have fighting those the COVID around HubSpot the business the pursue please our especially a to team. grow continue for and like but in people XX brighter to our want up proud organizations They HubSpot's my world of of helping of mission partners. help some you increase the so also up it of number coming I is for extend done go better. our Operator, feels out We with ahead. are over we innings open weeks anniversary India. a few customers the wish work humanitarian to days of a in I'm your early millions call Thank still questions. to is the time. cases. impacted crisis thanks all the

Operator

[Operator Instructions] Brian comes from Your from Peterson first Raymond James. question

Brian Peterson

results. strong really the on Congrats

So start, and to thoughts Brian. I to hear know better. prayers with just great everyone's It's that he's doing

business results is in and share impressive like really you of it's return? anything Your hands terms sounds his But for timetable quarter. there some the this can good in

Dharmesh Shah

Thanks, Brian.

for Now wishes. the well

shows just in regularly. I doing Netflix And in is time. and talk humor. Brian we our favorite team well. things them are The So He's touch outside of with at about the good

we In terms for don't mind. of a return, date anything the have definitive

back sometime to going him having look -- we to take heal, this Brian the later is he have that and We needs forward to time year.

Brian Peterson

hear And is shift just quarter, a guys the spirits. SMEs? demand strength maybe joking with to Or you function a seeing great you're just it's that environment. the follow-up market? in this digital the else anything for Well, you good is in The might anything that seeing towards be Great. on transformation of ongoing that

Yamini Rangan

and in patterns Thanks quarters the environment the pleased that an sustained lot, saw we're last here demand take QX. question. Yes. of The see the is demand We solid. improvement of couple a in in I'll in Brian. to last year,

modern it's it's digital-first of seeing within our in base customers digital And to on to going the value we our customer think in we're to of are arc efforts. transformation, I'd stronger. focused I point CRM, continue they're still in accelerating our to we're and So in proposition got think say, has the ongoing your very and We lean the would early say, tailwind. there. lot days addition that, much certainly as continued on

companies their from years and help platform. made we've a are marketing paying product we TAM ideal as we've Our last few the much and investments front has to bigger gone company mid-market to an have digitize our over small The office. platform gotten off, CRM

our execution. a So expansion the go-to-market strong seeing lockstep very product with we're and is

about really we are So way things feel good the lining up.

Operator

Jefferies. comes from Samad from Samana next Your question

Samad Samana

First, growth doing when since XX% scale on at see great annual an for you that's first to a plus basically the time this return what were XXXX basis.

the can come So And congrats the market for start from be one have you was for then year. to is I feedback the about you cases? about little next hub one bit on the as on TAM customers strong guys could what for when or partners about logical operations thinking maybe early hub? to a either Maybe why hub, with? And and the well? Kate. Yamini And this but think operations I vision Dharmesh, talk how the maybe impacting to you follow-up just to And use this

Dharmesh Shah

chime and can off, later. start Yamini I'll in

newly-emerging So new very we're the pain the case the operations to when And at this looks opportunities in role. sales hub, persona ops, ops defined. on role hub, focused have a look the ops is people HubSpot and where very In well for those that of targeting that are revenue of we people points. that well-defined kind creating marketing we're try

work manual they're fragmented, growth that's three, lots number with the the to and implemented two, at kind every much inherent organization. within that either deal very have infrastructure those more within disconnected so manual, kind are distinct. That's those of of that teams the and point all throw issue; is just and problem. number number of these mid-market humans three using happening so kind or applications pain there's have data contending are silos, people. the with integration Pain to one is going more So points and of of And having their is through pain company

kind what of with do of off think to three hub, of started you they now, of and evolution so [indiscernible] and that of they're is little we role, about gotten and operations are of fragmented those bit up pain. a areas we more had buried kind So kind heads lifted if They've And kind now. the want better. their systems in like data silos. heads It's Emus their the

more quite of visibility, much want operations we there So them and elevate with around, not to they take look What kind is to much have where Eagles, hub they yet. them from Emus velocity. do more

about the are And excited Most these because points. customers our that three so very behind problems of a have pain few have. just of kind I'm of opportunity not things operations customers all

So I let think on. the opportunity Yamini I'll big. is

Yamini Rangan

Yes, I how I Dharmesh. it's bundle this. think completely we're say, thinking with terms you, we certainly good agree way I opportunity, about Samad, a would which the in in will of

really As operations Dharmesh supercharges hub mentioned, CRM.

system, And so is for which to which together data is us into so what crop to CRM And opportunity our done. suite more much the operations it's put CRM it first also we hub, exactly pickier. suite, have make our going brings

cross-sell We there also opportunity. think is an immediate

there's but and number market, addressable billion PR also a integration. on but data only have like initial analysis as small opportunity, opportunity partners think from traditional and installed and I a solution. we reaction the $XX I positive, the We well marketing as both customers our and as customers both it's to we've drive large well operations base not think consider been really opens been don't very the adopt multibillion has to do up And the to, are going customers as think growing really of mid-market a

how So is us. we're excited of opens it and how incremental kind up for this very about opportunity this

Samad Samana

where just again really, that works. increased And color. another Appreciate with the see And model We Great. adds it's net ASRPC really robust. Kate, don't quarter quarter-over-quarter. was was that it impressive really very way both often HubSpot's this sub then, yet,

not I'd driving between we vans or that further existing love net customers else And to what's even maybe so should dig maybe we're that there expansions something factor at considering versus in is in? initial larger that

Kate Bueker

frankly, set and We enterprise was had a quarter seeing we additions another customer also were deals. of and another X,XXX as prepared in very you are remarks, new of your with happy her really customers, certainly in starter Thanks, is, customers multiproduct landing sequential bit balanced to that particularly the net ASRPC. And we customer The of additions come professional combined across Yes. question are from a for quarter increasingly, growth with it's in noticing. and of bigger quarter on where QX new answer both. professional the enterprise. as seeing we heard ourselves Yamini Samad,

customers So ASPs of are new healthy.

in amount quarter We also that indicates certainly both which tailwind we're upsell, to highlighted of a another seeing another is QX, ASRPC. record retention which strong

contributing what trends the both you're highlighting on So those KPIs. things we're are that to of seeing

Samad Samana

Very he's helpful. Brian wishing congrats speedy And listening on a and quarter wherever right now. recover health the and from good

Operator

from Wolfe comes next Your question Alex Research. Zukin from

Alex Zukin

of and to got the I'll And wishes Kate. the a for question, I've team. general just echo well my follow-up and Brian a then a rest quick

The domestic clearly, are growth and same? first understand that in it Is products, talk love acceleration one, in just more. U.S. guys to it bit or nice about internationally? saw you versus a little in Is particular, maybe the driving really the a the different? here that geographies Can strength any Would you international.

Yamini Rangan

Thanks a take the Alex, this. Yes. question. for I'll lot,

acquire cost to continued The we solid is invest. of markets, innings momentum from results of most We we so kind are markets. and there flywheel kind really TAM large. if lifetime well. and take is spinning and did in XX% international operating the you across We all in these to these customer early time, our value It's our then same of growth. is and is seen penetration, strong At to value The XX% to that like the Unit of large. really that strong. really happy really still proposition are in across of theaters we step growth. the The geographies. went international of very economics broad-based saw, all they're these back, is U.S. relative markets across and is the pretty the market have really and much resonating and early a with it's all

we really balanced And that of all so pleased saw across geos. the the performance with we're

Alex Zukin

one just you've around fair into that you. it maybe awesome. And Kate, kind net retention a visibility quarter then That's metric better Is can tougher we And the don't think about as forward? linearity, ourselves we in going just too the linearity lapping billings the modeling? you comps, With respect but so new to share the sequential not clearly, how far of or and normal of now of wonderful retention. get start should got of kind for some trends another kind to we of ahead dollar-based say step-up

Kate Bueker

Yes. thanks with question. really the Maybe to We see quarter. start record. I'll another retention retention Alex, strong definitely another good set

I the we in this. more opportunity is into And March, Last strength share we really QX. good the what think in of be as that Customer that dollar saw what the and started saw more expectations. that Day, to a pretty like things And continued pronounced frankly, the retention customer detail half KPIs you've to retention seen, in dip we with simple. was, might for really really I of key occurred we're discovering pickup a is to tend customer dollar retention. quarter. again, in so What the dollar then overall say a It's year, QX. back year, is foundation retention to in the around specific some will again, Analyst reset at strength

some my we retention, In a really set drivers. are diverse customers a the top are installed selling from of And expansion that seeing as were retaining sales seat using benefits as across but Our And multi-hub the adoption really result, prepared from upgrades, a strong starting as remarks, strength of better. strong. customer more. we're And really base seeing they're particular from in starter-to-pro, pro-to-enterprise dollar customer then from product well I out the our called actually the then in on in real bigger. the the quarter we're the get both base, see also as of to additionally customers

on going the retention side. So of lots good stuff on

you metric. relates is it always to billings As like, a billings, as know, noisy

point tried QX billings, not growth that we've to is billings. with for to and constant to a to billings revenue. guide largely we've I growth be track That's think looking we're said from bit general, growth strange a more is mix for I that that expect maybe you billings going comparison. going a tracks consistently some in really true stuff. to currency. to revenue volatility quarter product true be as In going to would and going at revenue also just around It's FX something

Operator

from Your comes from . question Stan Stanley. next Zlotsky Morgan

Stan Zlotsky

a so strong on often to because from on my A return wishing of I couple very get very Dharmesh get excited questions speedy Congratulations and Perfect. we a quarter term the involved for to don't to them Brian. wanted we're in recovery end. call, have on.

approachable On within hub, customer the given limited do to with base inherent the fact you thinking you are initially low-code the product to your they the smaller about between how together resources? companies that were in of that when the guys really are developer balancing it some capabilities operations putting product the have need make the

Dharmesh Shah

all, of First thanks confidence. your for

mega operations customers. in make historically has And is kind and squarely HubSpot's code democratize smaller category. code, it always kind that in for no of mid-market kind enterprises of and and take it that's kind hub been to available our passion functionality So been low driving of of

the here's operations allows declare as want map example, you and our else the So how to say, without out, you you and And data what it. in to an system, want system, what this be. field express lets field I writing it engine of of this code, update kind this thinking outcome to in this any okay, particular

know that that, memorial to historically of kind run of to doing of I teams kind business and experts without to of the having operations code. write have heart model have to to at be And what so hard do automated their been is able a is or lot be business processes these think, able HubSpot things required that the to these make dev

Stan Zlotsky

exciting, seeing and really that's why some maybe launch. a for you're after I'm certainly uptake the Kate. follow-up reason customer That's sure quick strong XX And days just

in that the fact you're go momentum was guys you really to suggests pretty are end record revamp you ASRPC. you're net back there? strong in see up seeing maybe there the you of seeing driving quarter-on-quarter, adds products It sequentially me segment. of market? encouraging is actually hub to enterprise hub upper that Going and And kind do within which the marketing the qualitatively, seeing with What your the -- the to up that quarter, really put momentum sales up enterprise that what how along in of much the

Kate Bueker

will fill that Stan, start one, I'm in she let Yamini misses. going and maybe any I or that to details

Yamini Rangan

think Yes, Thanks you're Stan. I a right. lot, Yes.

enterprise years if I past you step think And a really, we've gotten has the powered the really strong. tier. over really enterprise tier our of couple take back,

of that with most like customers our AB reporting went enterprise, and launched account-based marketing, as hub for, know, that's resonated So a attribution really testing. have customers all really That we AI-powered asked ago are well. those -- that It really resonating well. marketing you revenue powerful year features

we sales the custom that terms In launched with of hub, an inbound objects.

as our while, intelligence. enterprise. powerful More Now obviously really recently for we of objects added have as was and new also a that CPQ for conversation in a sales customer And feature that well so a sales QX, been hub lot then supercharged tools customers has tools. asking and acceleration

to the and side for fine-tuning space. on as to terms different really very And I with fine-tune step we've optimized right the been we're that well of of segments. a momentum ton the now a been in XX we good, in And then to to approach. optimize years segments. of down XXX- say, is employee it product doubling investments now. on making in always X,XXX-employee we've XXX product now We're what go-to-market that is doing we're our approach addition the Stan, in the based And lock So couple would

We And are we're but necessarily process. moving get in upmarket, to optimizing enablement we the of and we sales and are the investing not are we're segment higher what wins. segment, sales in it's percentage that is doing

us well next of execution better, the and momentum, in enterprise puts got Products So terms aligned better, got simple. the into year. that

Operator

comes Murphy from Your next from question Mark JPMorgan.

Mark Murphy

you have were your haikus, I've listening, your Brian, in also you're I playlist case First, recovering. enjoyed and enjoyed while

an any you. soon. trend the a catching there I from There hustle, above energy, contribution I but tailwind. it look an instance, we're say, probably forward clearly at all for FX tiny trend other There's have anything been can think we positive I you easy are retention at they're is you to up would you current with mean, and look Kate, would a wanted see that -- asking to it's quite it's where looking just any for else it's the temporarily? I that think inspiration metrics was maybe kind or can you retention, you there running -- bit I kind you know a and you Alex for So say just an little you question and thank had above tell and metrics example, running for temporary. about, Are of of of that comp. that

Kate Bueker

the really that a durability strength some It has seeing feels to in like we're it. business

impact and FX that things revenue, trends quarter small. the the temporary of certainly I are sitting think are of world. couple some the sort we're a market is relatively need, product of current The very seeing you're but smaller and relatively calling positive the those ad in out are that across hustle of X

Mark Murphy

or do. the for one, descriptions then quick Dharmesh Yamini. Operations Great. what I've Okay. Hub all I is guess, going of And the heard a to

itself, a data it Is like engine? quality ticketing Just -- it workflow framework? business integration data clarify rules just fabric. a you is like system? Is it it a could or Is the a product

to more a little that product Just anything can that make us. help tangible

Dharmesh Shah

take this one. Sure. I'll

we to to intelligent venn broad whiteboard, be you are were draw other the want I Operations three better. do and of and kind kind based. reporting do be there's If for functionality of that able unified, against manage want in out ways better the how then the three automation, able meaningful that products and on says that processes want automate to the get the channeling of areas there data processes, of enterprise, and decisions. on in on data to able and data I at of model you hub broad kind business data synchronization categories, there's think it what we and imagine automated That's does those the how data do make There's the drawing intersection be kind we Brian, overlap to a about diagram. to things, And of especially hub the sits intelligence. which operations

Operator

next Hynes Your from Canaccord DJ question from comes Genuity.

DJ Hynes

learnings I'll your the the and suite. year part changes of CRM made for maybe hoping to Starter decision guess was Brian. by something I made guess you've you're seeing new how I this as in measures out wishes about else in talk specifically, echo the from results, the with Suite was you I driven stellar Growth much on the well relief the COVID packaging pricing versus direction there Congrats all that you could further that pricing of move last market? and the changes

Yamini Rangan

our DJ. for and step much are so. maybe is pricing interestingly, be at HubSpot remarks, suite mentioned we as actually I'll packaging scaling very didn't that year, and one. we adopting goal we wanted strategy last back, And And companies. this realized looked our and our bundling offered and marketing to And the one that in platform, as needed we we footprint. sales in is for take CRM we our aligned just that's Thanks, prepared that interested hubs. page growth specific something customers a the to our base, To service with product we that, it's a recap, broad do number offer to vision them easy and expanding to

also marketing it to buy of products, to velocity. suite operations the adopt more but last be learned adopt what full a And think point, lessons And learned? easy includes for the seeing includes biggest your the have we board, it gold it. I customers able not one the startup to that and to suite, was we and and to them like so the drives make we're simplicity we leverage across and year, introduced the CMS suite the OG and hub. wanting of it service we very only hubs, sales hubs And want CRM when

beautiful I we're So and want we want very going to for front to office, and double their think down it crafted solutions. also to easy on our customers to simplicity make digitize who our use buy across

So intent. whole that's the

Operator

Sills question Your BofA next from Securities. Brad

Brad Sills

for him cases of I wanted hope and well for Brian. wish to And hub, follow-up the you question, We sentiment will, kind you I the I'll Brian. please. of a another speedy myriad echo mean use to a if operations here. could recovery in ask can Where that you marketing, It's heavier modules? in hub more provide sales, see even of impact where attach perhaps, applicable do you see for over catalyst the perhaps to the then most And stack, operations CMS. initially? time, kind core the service, see

Yamini Rangan

thanks Brad, lot for Yes, that a question.

synchronization your across part to see is in actually driving that's you're hub, If of hub. as of be and well for lot it where you to mean of right? example to add You're and as need first a going a think about be in the our sales And I the and a cross-sell I opportunities. going part closes terms think you thing workflows. CRM bundle the it's it the commissions you the calculate of see board, rep attach simple a deal, lot maybe operations certain of to data value going

information custom sources product And an CMS can that's multiple pull that commissions. CRM. deal, an and from extension example actually able terms can that the you items, of objects and thing The the about hub. be sales in be same of calculate data of to how Now happens

be want it, some your to the can be easily to to website, manual able you showcase powering whether automate you're -- you it. on going If certain automate things pretty to able task of that, take you're to manual

expanding I be it's moving just think our all portfolio. fleet our to It's for power of going sweet So and suite. to across

reaction. the pretty we're So pumped about initial

Operator

Arjun from Bhatia comes Your from next question William Blair

Arjun Bhatia

just know relatively But starting hub the largely business? you've see it more higher over attached you marketing with are less that it's progress to or that about sales of the service to beginning suite? Yes. made the is I hub. to talk you still still part hubs than Great net last new year? service mature quarter. drive hub Can be other going Or to and

Dharmesh Shah

Yes.

said We over X are It's years, that So will hub evolution have further next of point course in along was growing sales that, its time. think another it platform. now, of door will sales really it X.X the still into X HubSpot well. hub the in actually Having years of right be most the service been actually has part the the overall suite. at a similar of year, kind

to new for the actually and to draw is We clear exciting independent platform. there So certainly relatively sales is the customers think opportunity we'll get the service deals hub that there get us. is path

excited about we're it. So

Operator

Needham comes question & from Company. MacDonald next Your Ryan from

Unidentified Analyst

increased in Thank win hub like seems target question. market. with opportunities? end greenfield the momentum is some you Alex legacy improved This market? sales in mid particularly the of for an focus the Are Are the It you platforms level and in Ryan. there's on CRM of upper seeing you for versus CRM, seeing rates

Yamini Rangan

of rates seeing there's not across just of all greenfield would the And segments, segment we're across say that the strong think pretty plenty I one I board. opportunity win left.

talk are we've it, than that taken homegrown base really end, powerful As we to out winning, different the really that the and when comes step a of together approach tax. of a approach zigging back, of like to And as portions consumer-like with we the as simple zag a go interface And user we down to small sometimes and others don't resonating spreadsheets taken figure kind And businesses, things. why different They decision-makers point a base, solutions, I solution. maybe it seems and themes into for a actually crafting want of of of solutions And they we we our there's cable still and like kind cobbling Brian ton rather back approach okay resonates very pay want customer might we've that's even segment. And are well. scalable, the to replacing. be CRM. our within that that few and would medium customer are say be with a larger very approach the our to

of years. or it's months to we are of innovation. implement pretty continue off, the reasons is in value. get to one on time why relatively It pretty value. product in takes to third, amount adopt. weeks is time We've take in It Those adoption. doesn't First CRM, short problems with It a we're are And the we HubSpot win, really maybe focused landscape. and begin the which happy pace where to and to hardest quick our easy of

Operator

comes question Truist next Your Terry from Securities. Tillman from

Terry Tillman

can great Maybe hub. CMS and hub. quarter, partners on talk by What combining about It's is question your the just it Congrats My relate launch about how the modern also makes from hub opportunity soon. so is say, I'll special makes CMS CMS been you about back with the since CRM? the Brian it CRM. of evolving a success to selling alongside I to CMS the hope the going year it with also hearing

Dharmesh Shah

I love this question.

the a there So it's And think since end, lots you been that look the connected it's in mega creating customer about about important tools CMS number There kind just and launch. there's CMS if a of why HubSpot problems. are on some is if some a that the delivering the are you're middle, lower products think hub a side in publishing And I a the the the website they're market. about and for of of great hundreds you I experience you at market talks of publishing website In the of not dollars year as can market. of handful end it's it's of and CRM. actually a of where here's tools, tools website spend lives, have where lower the -- on hole willing content, that to shaped thousands enterprise solve

give So a you example. quick I'll

you have people up, customers your also want bought that of certain say support to be you days. the and portion ticket in have some product a logged you to last only XX So and let's website visible the website have have your

classic have the sounds relatively in would to talent. like is off In CRM, CRM. tools. simple connected the kind but not HubSpot, a to case automation data that's long We pull that it take developer a the already CMS to that take that with already of of Now example, the time

We connected. all support system have this

like sweet the And it to for something never before. implementing that and without And kind is talent. case so developer that's of which CMS exposing is requiring been thousands HubSpot done together, has spot the mere CRM I think that of and use really combine kind particular do can mortals

Operator

next from comes question Lane Your from Stifel. Parker

Parker Lane

the you with X- investments on I like ecosystem? have it hub, the making? bit on you a what us And on a to you can point, the think an to little And for across operations platform looks basis? you you're monetization what X-year update opportunities but give the Dharmesh touched strategy guess that

Dharmesh Shah

Absolutely. Sure.

the So what companies, we're and scaling number for platform the CRM is focused HubSpot, the trying of and word platform on need functionality of we the partners vibrant a customers kind of a right that's now platform large underlying be extending there. building is we're to What one makes for kind developers goal. and pool and of

fair joy enlarging and use, a joint We're is to the joy platform amount time spending be we're to develop the what want core vibrant. a on on. to way the it in that HubSpot focused of making of the and kind we HubSpot now, right ecosystem more a is build product same on So that

just ran is that to We building although and the date. grow fuel and now, kind want as growing that. so later we that to today, are want that out But we ecosystem. We flywheel as And can can They're developer focus as right to value opportunities ecosystem be monetization there. there monetization patient community definitely a for and with discussions our much want there of even the minds. they're defer we and on much possibly delivering the particular as the

Operator

question Goldman Sachs. Merwin Chris from Your comes from next

Chris Merwin

to smaller for for is cases. is the starter in one your larger more as And looks use like to I larger different your well. this me could I is offer his towards pricing this of website ultimately of imagine wanted hub geared well But something of as a ask use It specifically, customers the customers? about let sorts that, your as tool is wishes recovery. And my well and Brian operations course, that all customers pro.

kind within as if for of could what well? go-to-market the strategy product? about over you And customer hoping that And see the segments? you was just So fit look could this the growing time like talk initial where bit a

Yamini Rangan

Chris, so for much Yes. you that thank question.

actually it's segments as think in small going be as mid-market we operating all a customers. well are I to fit for that

end our multiple I to They why systems. not of which are manual customer base, is automate anything, still be multiple to need opportunity think for in able feeling get need to smaller is data using processes. they be this they likely to us. most still able the across And a such

a going think as develop that they're able it's from our current a perspective, a automation Maybe using as for think currently going can start to a segment -- it's of to systems. something they And upmarket be using few a bundle they into automate to to something segment, well may again, have our over being on go-to-market but bit look installed going the little period front And as bundling as opportunity. there. go processes with really or and simple, we for to well simple. the something we're the be interesting And want be for business base they're connecting process like mid-market as tools. the And cross-sell Workato opportunity for so using something door time They focus right? you opportunity it first, I into itself,

Operator

Guggenheim question comes from Securities. next Wong from Your Ken

Ken Wong

customer single a jump realize for up Just it's I to net. adds one point quick QX data one XX,XXX seeing me. with

kind now? of right fact about that XX%, the we of we're As XX-K factoring should and net of the ahead think -- look as with adds number we kind going to grow going also forward

Kate Bueker

your before, the net happy quarter. were the said for and X,XXX in the We I thanks adds Ken, we were for optimism. question -- as with

we what X,XXX that it that, that and we behind something sustain to X,XXX think I we than X,XXX probably higher that about is X,XXX we you're can more as feel put what feels is fact indicating. quarter than the in the like new that to have customer us, range like that good really in

Operator

is Your open. Michael Securities. comes Wells from Turrin, Fargo next from your question Michael line Turrin

Michael Turrin

consistent, a for few any saw there's holding discounting the the comment talk was if see we to go more you're about color and different on hubs factors. the improve and maybe, moment you XXX-plus strength And a I and you when holding what as also to add whether whether to enterprise can could you're last was The well can year rates doing retention conversion are also productivity seeing segment. on customers you on longer. back you're That hoping as Yamini, there interesting.

Kate Bueker

Yes. Thanks, Michael.

last the that terms In predominantly. plays of the customer ran year, really we March, impact April of in May, and

that You were nature. in might remember short those plays to very term designed be

discount has sort the customers of in happened XXXX. the And renewal so those half of the back most part of for

we're is more renewal at a And now process seeing just this what normal point. course for so

a So associated not with impact retention the those on real statistic customers.

is around In us? terms think the with yes. sticking question are of customers answer your around general I

we quarter had a customer strong very whether seen time. of record have retention. dollar where retention, We customers HubSpot a was yet for with of customer longer period dollar is really another the indicator primary which are staying QX

Yamini Rangan

And Michael, where always last in of around yes, We've segment. we investments in terms in down doubled your the really that's sales months. have question the that over productivity, XX been

of world ensuring remote training even time optimizing are of kind in and a new join, we we're lot or on we're to making ramp. that the Now enablement and focusing reps their as investments

our as talking focusing well partners, And on sales customers work every customer success with talking as to discipline when work, customers our they reps process. that day also the we're every sure our that team is the to are We making within day. we're our

real in. of lot productivity involved improvement a measures nuts so And that we're investing

Operator

Turits Michael comes Capital KeyBanc question Markets. from next Your from

Michael Turits

last they're invest home framework? went to know do changes and the quarter. shift this on Best in longer quarter. worked Brian, to from back have moved to we've half investment But from said office to year there and what from wanted last plus been we started and to want doing? Brian into Peterson back from a And of where I come any continued now 'XX home course, we has that what reacting just as the demand So to any in I macro. great and them to into work you customers potentially

Yamini Rangan

approach for the from kind we That's customer lot of marketing, customers Yes. where the The all -- that in their modernizing in website that digitized. digital is shift customer other this Kate as from I is getting big see of customers tech presence, have of if to to to all going CRM. well where marketing completely can just or there's then our one, of the let the work leaning I'll And prioritization the the are happen started kinds service. shift and sure stages to the shift is kind on, shift to digital inside having way clean the priorities say focused That in. as a on entire chime presence I'd and they a with making needs maturity start experience points. presence, all of sales. they're in not the of we Dharmesh It's going do and that very marketing a demand. of sales maybe digital terms see

Operator

Kirk from . Evercore comes question ISI. next from Your Materne

Kirk Materne

charge is before Brian hear in still of to music very the Glad earnings doing and the hold Yes. well, he's call. much

front. more Maybe his Yamini, little opportunity. hear partnering talk bit that to glad on you a I'm could influence So the about

them. time platform. your For area as for to work on a never didn't expanded businesses that. just midsized SMB long area It a of seems lot partners didn't focused you've There was or -- product whole attract the that's enough

you're at You're that And now the them with outset. curious obviously, are your just customers that kind rates, have your with coming you big the enough, influencing landing deals close adds partners pipeline, more was I your in. how up of to multiproduct enough influence

wondering bit around how more just was the color add going a are things partnering you I could So on side. little if

Yamini Rangan

so Yes. partner channel kind building terms it Thanks, the they on we partners of diversifying expertise. to of continuem in marketing is lot of Yes here historically of services definitely lot Brian, of music Kirk. smaller our a providing really are our have but agencies kind controls interest

more is see you to two there's and our breadth the opportunity services. partners partner nearly integrations, remarks, the opening tremendous XXXX. of As you more our expanding, at heard next if say portfolio huge, by to over complex drive opportunity years customers, would for product look we the And in services really billion me more implementations of breadth $XX our

attention tremendous with And customers, really customers they really our year, so they One, They so in making couple well, get that different because expertise channel a engage building in when value. we've get and of they're focused sure this much up to partner on value. their our supporting their our do diversification fronts. them

lot direct about happens opportunities. the the that bringing traction. right is team. our And for customer So team win team it's for a of make earlier. now and and also lot sure of sharing between partner for They're working us the them the heavily investing win partner direct direct Traditionally, a bring well And when in for can HubSpot. together. been, in it's to engaged. team of customers, a We're you and that you're when earlier always partners information win then team kinds And the happens, that seeing There's the we're what's seeing hey, are right

how so in And with with are well partners a of goodness as of lot as internally. engaging terms our the customers

Operator

from comes from question Siti next Panigrahi Mizuho. Our

Michael Berg

is metrics, This cohort Berg relative Citi. on great that sort year And you on year. pandemic it's cohorts? last more out? Brian follow-up see retention a is to to And my Wars well. expansion of good of say moving can how the that I to have prior in quarter Michael that congrats in as one What now how metrics, started to the forward? produced for wanted some my on a wishes Star I and wanted

Kate Bueker

Yes.

starter the or similar particular, of product? to we earnings looking talked are As in cohorts talked few of It The been where initial a for adds. months have This we tool of expectations. the we've suite And news the yes. the variety continues us customers with was was yes. in a customer terms to to answer the fronts. calls, or that to net And line in is good very strong close starter very be very customers paid our were -- there these rates last we up of at on they renewal same over that grocery renewal. Are sized come a had see the those upgrading attention rates is at we of news starter healthy. couple first cohorts big answer about cohorts about is question good these And the similar we attracting as growth that

Operator

question Derek comes from & Cowen from next Wood Your Company.

Andrew Sherman

on Congrats for Brian. and quarter Derek. It's on best Andrew to the

sales call For motion. lot more more and enterprise revenue the investing but feel through talked in on you've a build up a and productivity sales do you need a direct more sales tools, capacity about rep Yamini, in drive to

Yamini Rangan

do right? balanced, It's to got Yes. You've both.

all in continued higher as across is the it's includes within to investments we'll to XX, hiring, it have focus not of And of the getting at we our engines it segments. And and segment segment, improving just where look includes and to it We We also fine-tuned X to X,XXX engines. it of each are automating initiatives. investments the kind think on in have optimized across but we and X,XXX quarters, the like where broader growth are productivity-enhancing productivity. the multiple continue segment. have the we corporate driving product-led And different

it's balanced So across both. pretty

Operator

our back at Chief Customer Rangan, any time. question Yamini comments. was will to hand last it Officer, That I last this for

Yamini Rangan

us hope talk joining quarter. we’ll for and call. the you to everyone, that safe next you’re healthy. do thanks, I on Well, And all

Operator

conference today’s call. participating. concludes for This Thank you

disconnect. now may You

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