HUBS - Earnings call transcript Q3 2021

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Operator

Good afternoon. My name is Jen, and I will be your conference operator today. At this time, I would like to welcome everyone to the HubSpot Q3 '21 Earnings Conference Call. [Operator Instructions]. Chuck MacGlashing, Head of Investor Relations, you may begin your call.

Charles MacGlashing

operator. Thanks, welcome Quarter and Call. Earnings HubSpot's to afternoon, XXXX Third Conference Good we'll announced market after results discussing closed. the Today, the issued in be press release the With CTO; and Yamini Bueker, our afternoon Officer; me Officer. Shah, Kate call Financial Chief Dharmesh and our Executive is Co-Founder our Chief on the Rangan, this

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

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

will which that this the filed risks differ from expectations. language views press reflect statements. undertake we could to today's except and, required as update statements materially of the our Form today and only cause a discussion release law, Forward-looking and obligation XX-Q, with SEC uncertainties for the to be cautionary refer afternoon revise these of by to Please actual or forward-looking no results as in our

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

pleasure Rangan, the Chief it's Yamini Now to Officer, Yamini? call turn over HubSpot's Executive to my

Yamini Rangan

Analyst you sessions. I quarter and you we greetings, were for a Thank those third us results. covered today weeks HubSpot's We to as ago ground a at join of Chuck, XXXX us all our review INBOUND. hope few as Day Annual Thanks, of lot part able everyone. joining for

today, is us becoming QX our to great the do for well in strategic the on CRM results as want guiding platform the as path what So focus pillars scaling #X I to on to companies.

with see and Let's to the year-over-year, strong to at business, things more XX% kick revenue of results. continuing off XX% growing growth a We're customers performance year-over-year QX across than look constant with in our currency total XXX,XXX.

their embrace small age. we've digital modern and As CRM our year, businesses their to to customer continue medium and connect insights over the from the seen businesses for past interactions with customers, transform drive

overview fact for I strong foundation Our introduced our strategy an these is to and Analyst HubSpot results of that speak companies providing provided our At pillars growth Day, long-term X the right investments. strategic scale. our to the the guiding

like how at our share towards announcements are our goals. progress I'd today, helping us So to meaningful INBOUND make long-term recent product

extensibility and of Operations continue We'll we investing how hubs new the our Earlier this sales the platform. Hub Hub. always we ways like and customers explore new great in of development example Operations are well around like Our world-class launched in innovation hubs. accelerating a our first hubs is to to invest emerging is expand of address platform a Enterprise. to anchor addressable strategic accelerate in This as needs hubs, deliver for marketing and of hubs the front-office We're and market. looking existing as evolving by week, our driving emerging innovation officially pillar

all to advanced of Professional build into and automated help get know, Operations all launched you earlier more customers workflows. HubSpot we first year As data Starter their Hub this and

consistent and report Operations on customers more our ways to drive Enterprise, to Hub to able are data insights with generate Now connected that growth. in

announced work beta. seamlessly office and broad this assignments After to entire hubs implementing a managing and or now comes more multi-hub efficiency see a of flu vaccinations. and companies for and in that of comes invest X in CMS back-office much adopting of continue new going sales really doubled, systems for grew also example are from increased Triage they action our arranges to of HubSpot's portal A the seen and customer mobilize and performance e-mail with able in also staffing has sales, I'm the we and XX% U.S. will and is Triage, of to And runway so that to how to company. realizing Service the across platforms. and our with are us magic still excited that's our use. public important But it traveling that together. Hub, currently deep take connecting know COVID rate powerful quickly hubs our click-through to their needs surveys marketing, multiple hubs We platform its we There We'll easy Their comes left across that the when are than to next. from by where capacity team's nurses hubs, customers agency our advantage is know more half plenty custom great Operations including that platform. their Hub, improvements our more approach unique front individual our customers

strengthen ways. segmentation HubSpot this to Our product and second at driving approach product innovation go market key our strategic X is pillar and in across is to

First, customers. we're the in that our At and large of experience powerful year, traditionally latter tremendous we're bringing enterprises. purchasing human-friendly half announcing seen and a have strategy, INBOUND only value new, businesses up been traditionally and we product the to to to features add small second, mid-market enterprise focused this large down features available that and bringing easy-to-use tier. on mid-market to enterprises small high-end And our

that impacting primary a customers In test level their to targeted introduced addition new help to Business Marketing team's their new their multiple without of we keep audiences. consistent DOCSIS, And and permission Units, their a manage in a managers sets Enterprise, changes Hub In track plant-wide for to launched enables Hub progress feature governance enables new also account. we their feature to that logging, SAM like features audit Hub to customers goals. forecasting Service enterprise Sales towards ensure brands tools and experience more and portal

All our of usage in enhancements customers of larger customize approach. they without as our complexity seeing their these We're help continue grow. adding success to segmentation HubSpot

closing consistently On large end, QX an are year-over-year seen deals. deals high increase large the we XX% have and in more

to of our as few from segment Our of Starter addition total than That acquisitions. a percentage customer years of more customer QX. XX% customers ago also grown is our has small base fueling a

turn commerce third and let's pillar, our Now to investing in payments.

is fundamentally That about and are in different extension an we're CRM and as very the discussed not was back finance a cost for Analyst early stages efficiencies. saving still I years during excited opportunity, enabling of integrated It leaders, been and was this growth, about it's payment it of money. office. our part As sold for about But commerce solution. runway We're thought of has to traditionally opportunity driving said, collecting commerce Day, growth. of the as revenue an long-term of there

we with ZenPilot, to when in we to X companies market to we GMV significant a payments ability to but able we system. could while a was beta been by previous For payments only U.S.-based transactions business I'm Having is the work process can leads path now, ACH. month, fit international, quickly holds -- HubSpot ensures on BXB able product is therefore, tap via employees for capture by a the of the before we're geography that to long have only excited and One in deliver market focused deliver are what fit focus customers The an into customers experience. payments and than lead very accept go internationally. so fewer Payments, a to customers momentum HubSpot of with our ZenPilot strong ZenPilot's the reaching right required sales labor-intensive more term. available card future able enter. ZenPilot open on to country the start consulting we're on enabling is XXX operations like being buying for a generation With have system held from to process expanding we increased with that product ease. portion evidence activities seen back ACH BXB payments. in any and that manual feedback early about And The needed scale consumer-grade that operations team as about easily credit taking is it's adopter XX%. nice we early our payment

pillar and to final to is Our scale HubSpot. continue fourth

As Brian can a build we be before, heard and to Dharmesh company generations future that of. say want proud you've

I'll to initiatives, confident pillars, environmental of building strong chart and on and down next will in and customers both we're customers' meet vision, HubSpot that of the results. opportunity, over our it right and to that, right fantastic excited we Kate give the turn our place very Kate? and By diverse we of working our in to scaling about part growth. we're investing investing that investments phase execute I'm the hiring that protecting our their help overview on our I'm data X and have serve foundation With these long-term as our and talent, strategy, systems incredibly needs. win. an growing right financial in doubling a to us As team our

Kathryn Bueker

Thanks, Yamini.

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

above as-reported Third revenue QX, over X.X and strength on seen including a business. quarter strength revenue our increased also dollar Net continues our performance. into customer an year-over-year, currency upgrade in and grew activity the driver revenue with continued cross-sell constant reported. continuing XX% QX, third The revenue new XX%, seat year-over-year be revenue years revenue XX% of growth across Domestic while big XX% QX last reported. healthy saw as XX% continued XX% grew subscription and from We in currency retention broad multiple other of revenue constant XXX% strong while XX% retention was nicely in the trending overall momentum quarter to and in international services both the we've to strong with expansions. retention year-over-year basis. in grew drivers benefit as retention target level

enterprise customers While XX% per revenue in a we domestic a added strong by increased X,XXX count percentage our professional as continued and remained international customer rates in We shift revenue $XX,XXX to flat installed year-over-year mix customer our towards XX%. XXX,XXX. net international with to growing positive total Average of selling. currency X year-over-year the points year-over-year to quarter-over-quarter, our grew growth quarter, total X% and constant along as base revenue tiers, saw revenue subscription

impacted the of quarters, the X,XXX additions XX% growth customer growth of in single-digit constant As year-over-year the was in net currency last more of was discussed a installed as in ASRPC. remainder with plays increase growing mix XX% slightly QX Deferred COVID-related to into lower a Billings Calculated ago The revenue selling these we over in as and year-over-year a my billing billings XX% strong comments as of continue year-over-year. couple base of high million and to was end expect customer non-GAAP we've measures. of by the the period. will duration about comparison trends reported. year result and September quarter, difficult million, $XXX in QX $XXX refer

XX%, of our Third while margin usage margin gross EU a services new as gross and was of launch Subscription quarter margin XX%, down customer was center. X increased year-over-year gross data was negative points the X%. result

the XX%, costs, was $X.XX of $XX was year-over-year. same share. the fully employees, third or of quarter to up XX% quarter, million operating or diluted QX. cash or software nearly the compared in Third period X% in in we $XX per Free development revenue. X,XXX CapEx, margin quarter had including a was third At $XX flow end of Net was year million X the XX% revenue million up capitalized income quarter the ago. points

We continue million now percentage XXXX full a CapEx to be in $XXX to about for of be year. expect to expect and the about as free X% revenue flow cash

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

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

adjust expect headwind for slight I'll we in spot As mind over QX Thanks And FX year. tailwind lot, with remarks. her closing revenue your as expect the to for models, the back reported that, Rangan you still rates, Yamini keep be full to At X-point hand a current a Kate. following: in a things to Yamini and

have to felt I over extend partners to transitioned and the you quarter. last you thank with to and INBOUND, role. a want welcomed the was huge I Before your into we connect support our a during CEO energized wrap for as so customers, all such It I joy up, and employees

heard you experience journey. we're a at the want Customers expect buying INBOUND, customer. about of their every in step frictionless me now consumer-like and talk age As connected of the at

building we've HubSpot at quarter's been financial this meet to as new results. strong Fortunately, and for in uniquely this era evidenced the moment are suited

designed companies questions. to future. that, helping the us customer strategic grow better our help and continue to create deliver with will to relationship operator, recent our the on please in product announcements enable most of up companies some X open Our magic mission of call for millions And pillars are

Operator

Instructions]. [Operator

the Your Wolfe Alex first with Research. Zukin question comes from of line

Aleksandr Zukin

saw the we're in you, great you issues. you we headlines Did demand Yamini, And first summer holiday obviously Congratulations you then any about see of the particularly talk seasonality, news, quarter? -- on what quarter. one a the in weakness internationally? Can the supply environment. maybe on chain for see hearing

growth kind having that the of impact either you customer bit reports on all? the for pipeline hear QX? new from of expansion any a commentary And at the existing of companies or You customer seeing Are advertising little into consternation. any

Yamini Rangan

Alex, thanks a question. lot for the

terms outsized exposure the challenges, that here of say you of that headlines But in macro HubSpot. mentioned seeing We set have same a I'll not are environment. that supply chain there's to factors at

the want X looked customers have and need and In I about to and in changed digitally we world consumer-like feel good pretty expectations have it's One, for a demand this buyer they value changed. environment. digital demand able the to be be very perfect at the HubSpot Since significantly has to if the the And really where customers terms why want start we and proposition. look two, their unique connect it's They grow demand has buying of step solid. they the solution environment very things. patterns, for back to experiences. solutions have of to the pandemic, the that. growth a able and And accelerate environment,

well experience solution the that and provide market. with the We consumer-like have of and enterprise-grade user resonating crafted is really we features, terms in

across as our well as good demand both reflects business. pipeline. the what this about seeing America very North and So international I feel the in we And are environment business

So pretty good. feeling

Aleksandr Zukin

I for I super know constant -- to Kate, I'm look, I for basis, helpful. so, Got on a billings been don't it. it, going last, quarter, an or questions mean, X perspective. the the you, one currency in the adjusted of has quarters I think from growth And ahead then know, revenue tomorrow of get And even is call that's

were account. is billings headwinds some there that mentioned This you to take important into quarter, on the

also not can deferred it's in you this you're indicative, it's and strong subscription future it maybe mean kind think for specifically, the your indicative particularly necessarily on to QX why case -- suggests think So them, of Because I not revenue very revenue. just why of but guidance growth? the indicative growth I what seeing side again, of wouldn't through about walk usually be way

Kathryn Bueker

bit to Also may billings remarks that quarter it as installed duration. dramatically was quarter. that about you Yes. QX, relative from of Sure that I that course headwind to over we relates headwind actually this the particularly a headwinds recall did mention you delivering growth a start when noted in more deferred FX that deferred look to around on billings a tricky pretty has would basically good currency may in just euro currency QX. revenue. base particular the here dollar we selling a points saying a mid-XXs, comparison constant is thing. recall, the and the a in XX-or-so very were that of by billings And little sort things I strong especially against have my of the of QX There's I weakened the tougher that prepared few very little constant feel it's in in really you what difficult. also at bit

revenue much And revenue headwind basis is as-reported [Technical so the from Difficulty]. an X-point more FX versus on impact acute. on deferred a deferred about to constant a currency was There basis

Charles MacGlashing

Mark, are you there?

Mark Murphy

Yes, I'm here.

called. heard name Sorry, never my I

So a I was disconnected don't know moment. But if that's the for case. I

Charles MacGlashing

You can ahead, Mr. go Morgan.

Mark Murphy

Yes. Morgan. to Mr. called flattered be I'm

Yamini, the is touchless you that in I'm So your on to sale with open customers sale. you had so of yet. think payments? resonating companies the it HubSpot Day, wondering feedback who vision most this I their started And that And far? the Analyst mentioned fact at what haven't is the of are how beta BXB touchless

Yamini Rangan

Mark. question, Great Yes.

of, So other Analyst the and X I at that there the what sale. are the One said is typically the then Day, sale that touchless companies terms is ways was in rep-assisted sell.

in can And of companies and is them of cashless sales, a enable revenue gotten we of hypothesis software. processing services BXB new that streams terms haven't help terms in company. started really our online Now just and for

streams in example that's beta, terms -- and They of that's Mark. of seeing They an a that consulting mentioned I example business. before, haven't early in are wanted touchless open for services it the are we've we been company, an revenue to interest, for now, -- also It's and a Now this seamless is processing in In where an that definitely in them a are days. of seeing grow. sales the companies just to We're seeing we're in of prepared and new the about start remarks, are ZenPilot. opening weeks beta terms way thinking pretty streams. done new It's interest open online that revenue here but easy few

we'll So watching. keep

Mark Murphy

superb is actually the QX. Okay. Kate, is as revenue follow-up, than we're Understood. And quick pre-pandemic a growth growth noticing in Sequentially, stronger

growth blowout number interesting without So adds. customer is a of see reliance it's -- to upon stronger the

So you with part of I'm down-market? ASP of just sales increase more of objects is custom unlocking the I'm curious where the top most range some it the Hubs Enterprise the is marketing? of kind are more or even of target your across noticeably, and wondering seeing at larger the accounts board what Or

Kathryn Bueker

the Yes. question. Thanks for

where the is again, customer were we, we news think of in in those mix-driven again, came like, did that ASRPC are, positive highlight I'll kind I you is is to. And key Enterprise. and that that ASRPC growth. QX. And nice of see really momentum Pro and drivers that And installed told good The ASRPC additions of in range. that both We single-digit exactly towards mix high KPIs a commentary in pickup base that selling our moving customer of they going calculation. the strong for things ASRPC,

Operator

with from Jefferies. Samad line question of next Samana Your the comes

Samad Samana

get as congrats quarter just even a the tougher. the great echo I'll comps on

talk side. over maybe closely systems? competitors that and Yamini, you a entrenched tied has Can the office that more payments CRM follow-up accounting are advantages you, taking the HubSpot about to front more is I the payment back-office-centric So other for on to approach HubSpot first, have

Yamini Rangan

that think favorite commerce the payments it growth CRM And talking it's like can and -- cost customers part ways to quarters, embed Thank traditionally, as as few revenue about became we payments is is we payments, you, our revenues part collecting clear And about to of them it very, and we It on that as where really the which can CRM. my efficiency. enable we the to really needed gone part how from past Samad. about about we commerce our there focusing back have asked very And because question over finance growth. for of X of different. leader fundamentally customers. is and growth, commerce That's are way in and enabling is back different office, drive

about The Mark's team. with I new one revenue question, enabling first is is which what just talked

think not opportunities traditionally you this have is BXB to growth if touchless, where So provide we there. focused, want companies revenue new and enable and about so streams for

really sale. growth second helping The rep last-mile area assisted with the for is

So We crack. want the to core HubSpot last now what But I can on it sales. on reps focused that. And to has growth by initiatives historically, that is the to to mile, hardest have cash on streamline, we that activities. mean been we focus which the focus rep-assisted on nut demand-generation is simplify so want

And so do excited interaction. we right, customer actually third context growth for enable that super brings to thing customers. And to then every the going about we're commerce is our which I'm

information If you have when campaigns. marketing a you more embedded run can now object imagine, having you within deeply commerce CRM,

cart. run abandoned can marketing campaigns on You

You have the interactions sales much in where information stands. of know invoice you terms because more

You have purchase better prioritized service history. much it's by because the interactions

just enabling So really is deeply embedded commerce valuable growth. in terms CRM of

different for we're our customers. very growth And think and enabling so I taking approach a

opportunity the longer-term about So I'm here. excited

Samad Samana

haven't comp to impressive. SKU follow-up The the heard Very adopted. for the just I And deals, staying the the talk Kate. the around growth think quarter-over-quarter despite an I helpful. that a large which related a quarter. is stat in deals same really maybe is XX% about tougher in third And things increase large company XX% more, constant one being then of on currency was

how defining think contribution a And we and maybe standpoint? understand should So forward about should I'm then just large help you're it? how about that maybe you we curious if going can just us think how deals from

Kathryn Bueker

Yes.

seen year-over-year. large increased bit deals little $X,XXX Internally, we the greater anything pillar to the that we've segmentation. deals around is when MRR. about we call of those Analyst the highlight a strategic XX% that talked I as than And tried volume Day think we what look I at

Operator

question next Securities. line Wong the Guggenheim from of with comes Ken Your

Ken Wong

How see a see was strategy? running of tailwinds, out any an if occasional to guys peers wanted towards just INBOUND for think the the some love I impacting I of advertising question, earlier that you IDFA. First get potentially kind on with mentioned the into sense it issues that there HubSpot's headwinds Does push are front. Would in that customers do you business? more to running are

Dharmesh Shah

for Ken. the Thanks question,

get just the back, So -- The and too I reason is trouble reason our And anniversary world get birthday. doghouse personal some in recent doghouse a to know we when set sometimes when we get step privacy-centric the we remember here. is into we think, sent taking a developments or and of the that's, lives into in forget caused much. the things like what's an the

Now years. that, been the HubSpot's which our consumer-friendly to is privacy-forward all of a that of genesis having noted, stuck approach. idea around you INBOUND very this as for said kind we've has of kind XX in beginning, marketing, of And

been to that happened So kind industry have to as HubSpot. neutral forward, the they've in of developments positive are privacy moving

changes, massive of of important, running into the tracking advertiser going a some And impact don't either tracking doesn't running mobile think happened massive the impacted the some ones a different, of specifically I the on of are any recently, that the are network recent stuff these app that's you're if categories. companies those applications is where you're recent fall to of most some which for you're feel developments, super HubSpot direct

interesting meaningful that the a don't as of are any developments some all we expect result business of at impact our really happening. on So

Ken Wong

then, Got it. shape that about I thinking of the And really Kate, appreciate just Dharmesh. quarter. the

mentioned sense I linearity also saw think how of that higher the you of break September out through in played on a can July, life the guys demand November to that PTO. how kind the you and think, cycle of that, of than October, potentially extent I kind looks? HubSpotters typical had comment past, were July Any in the given from kind

Kathryn Bueker

of a landed at for I employees. exactly as to to the mean result couple a of Yes. have And break well-deserved feel give quarter, of break momentum quarter, saw the I'll on definitely memory. I think QX, and stick for we We the the of behalf a of the but to bit a global creates We very obviously our quarter. made second beginning had in decompress organization that a and decision full about great I employees. that, slow start where our we right you're a months but a great all would of the say, we

Operator

question next line Stanley. the Zlotsky Your comes Stan from of Morgan with

Stan Zlotsky

as starts as beta in we program? that it the far looking involved should wanted be I of on bit. milestones and broadening are payments How for disclosing I'm to as What are a getting business you'll that out a Perfect. investors on really as, as ramp? touch are the far set business just thinking seeing that for looking to that be that you the like, from little sure one. questions lot the initial you're traction of the you're customers in

Yamini Rangan

be going terms strategic for maybe then in address it I'm perspective to we'll thanks of and have I'll from address question. Kate it. tracking Stan, to broad this the a how

targeted both we are a services market, specifically, customers Day, a it allows large build domestically opportunity she focused share term, very, we I'll And And it how BXB, as grow software. have we longer significant there our going we features experience product of want delivering us we And that a market, market. features, start within heard terms And that The tens that is, in we're to Kate so segment. upmarket As to about us both pretty And mostly as think results. that market a to for that in is I U.S. delightful The are your Analyst focused with commerce are a reason and within track love. market well make after it to focused can we about. very excited of see that are at international. even driving on companies and on as that and pass going first, with XXX on as market approach. well we're sure us will employees is that talk and the adoption billions you long-term address or as we GMV this opportunity the can to target payment less that question

Kathryn Bueker

Yamini. Thanks, Yes.

I step depend covered a in back of that BXB and the as software that less to customers in going Analyst services we And on is going couple payment just at the Yamini the credit on sort millions interchange tens-of-billions-of-dollars-of-GMV that's transaction recognize that be more a customer translate payment fee. the if a fee amount at next fee think will associated transaction potential And transaction space, It's fee us. would transaction, that on with There'll payment HubSpot's something XXX an So of and us we depend as for that going most U.S.-based like HubSpot. take cost as outlined the for and to employees look I notably that card of Yamini Day, or that's said size, over And years. for segment that volume. of the with into volume hundreds the looks market of to revenue method. to this it, transaction that specific earn

going business, be a HubSpot time also what software for the business about respect really growing overall the different the with we core That to the than going the on software is good payments sales And business over in margin lower very said, much for be to the than margin payments. feel different the and so and side. were gross to expense gross used margin is

to revenue in revenue is that near record revenue that we to services it the call stream. evaluate time up time, term, will any out. break we under And what the likely, ramp will over as we and appropriate other when have We

Stan Zlotsky

wanted may maybe more And Kate, component together go magnitude one? what to great I then, of duration the you of second. were a to for back did you And the FX the material and give to a been job material between billings duration us the you billings to if But in kind well? of saw was versus a of put the it. a -- to of think the quick kind we FX billings, of Got in just just headwind it. billings overall end I bit quarter billings revenue. of mean FX as on that quarter which of little duration, Got at outlining saw actually headwind have the that tailwind headwinds the the kind FX one just

Kathryn Bueker

Yes.

overall the to are headwind right? deferred FX a tailwind And the a combination, billings. more you revenue with that's billings was, headwind component of was headwind, extreme as a to X% net, So of revenue indicating to

installed base combination relative that terms I the up of we the impact versus the currency difference duration that, between the make sort of of higher think that fact mix of other part it's In selling currency billings. FX, a have revenue constant of of a and duration and constant

Operator

Bank Sills comes of next of Securities. Brad with America from the Your question line

Bradley Sills

nice in way. a on the ASP Congratulations question another I'll quarter. Maybe on another question ask

With with there, kind or marketing customer has are so where see a entry will growth CMS, net sales or later. the customers a in or past? cross-sell you'll great more X HubSpot historically, and landing hubs with points for we I seeing then of you're now the revenue Are been several multiple year think start accelerating retention think quarters. the than of those

commit multi-hubs moving Now seeing you more are mean of for And you're enterprise additions, and that kind more expansion to does potentially? initial future there's land an opportunity so? what of deal kind kind customers that of up market

Yamini Rangan

things say for base. I'd Brad, we see that customer the that question. our across thanks happen X

Kate Day. more that shared reflected at is, you first multi-hub. you can the see in which The what said, numbers Analyst is that And the

so front marketing, hubs gotten customers still We're really months. XX with of we doors Each the good those the And to definitely good over sales have seeing past XX land. multi-hub see hubs. really

very doors. front And are so they good

know, at that see then really launched doors. front And as you motion. starter land-and-expand we we well good as both also suite, the CRM the those and the go so level And level are as

And are seeing the so board, motions. all we across X

much sub it's will We a Marketing CMS I a or get Hubs, much Hub same Hub model or plus powerful when sales with Sales Hub Sales just see Hub when Marketing Hub had adopt higher. Service and data because of our just because the say It's it's view multi-hub, single in customer. single that when terms there adopt interface a value because of they multi-hub, more combination loans, Now seamless is they customers user the customers Marketing the and they Hub. get leased

is The growing terms front doors as adoption. multi-hub in adoption. I of ASRPC are so There think also kind well all you of what into growth. great seeing combination a that what is trend as there And suite of you're towards as X results are see

Bradley Sills

service a hear. can more service of small -- I upmarket-type solution, then businesses view separate a and And sales. There's one done don't of run to Great lot may. if Service be is customer a it of that within support the kind Hub, desk an necessarily on

you -- with but attach moving guys focused, as upmarket As out you this enterprise even we business, perhaps guys view? are more And potentially into Hub, do of we've acceleration expect seen you Service already well, good that of strong an could then greater one, two, there? kind agree results

Dharmesh Shah

Yes.

customers think increasing end. larger think in -- adoption or over e-mail call of We if it a a even number interest chat. center, terms not support, relegated online it's might of Service it's or enterprises. on to over So to don't an it's We want lower the be provide just

definitely is need. that a So

of of several We the in recently of door think portal and to HubSpot And adoption custom will log those of that Service the the that just we some feature INBOUND, Hub, where and once with well. over them. for we see a go what we're happen launched we're a of interact their start similar their platform. years, can really see on-ramp then at something We customers progressing doing And and Hub. we sales recent customer terms is tickets and with in see with asking front and knocking we where -- rate one further which the big Service over, was are one was to in dominoes -- becoming puts those path path need dominoes kind the accounts. hub objects an looking our us up. up the down sales been And is of In minds the customers last saw That for you to repeatedly product data it there that of their kind what have similar that and features with key the be.

for employee sort So The execute. sector XXXX we customers, we of market exciting think and be our the we're of and Service Hub. -- across are, an what opportunity X,XXX looking needs know customer is to X,XXX year going massive to is to just we're

Operator

Raymond comes from of question Brian with next the Your James. Peterson line

Brian Peterson

they this in you're have of new be digital or I from of this actually really or engagement. at are look customers a follow they X across what I'd to but wanted models? hubs point kind X all now they're to to And of they where I or right? frontier -- that hearing engagement And ability digitally seeing their maybe frontier customers what or given vision digital execute? not of willing buy, new going channels to like kind are answer once, X kind just to Or understanding still to hubs or is guess your or at question. the are I to what up pick still Brad's to are terms -- regards extent it that because curious are have X, is do to just X Yamini, they even say the the all in at limited curious at point they going of I'm for time

Yamini Rangan

question, It's a good Brian.

customer different. I maturity it's the across think base of are quite our board, within the levels

complete there they've are digital-first, digital-ready, putting expanding. have need and that to that with use to in I be what pretty one all order customers in they their and the them and accelerate couple toe you their the years one of So realized in able in of given gave of hub of early, past that to are that seeing. they kind starting growth then the need platform digital that where example they is remarks be then like realize prepared customers And all case this some for Triage are front they they're and -- office

it a unique. And of really thing and very really would I to on it's well the so crafting one say taken depends has maturity been different very, building customers. is that resonating the our solutions, customers. and We've the our with approach And that approach

of really to customers have suite cobble They with don't see is or crafted within market. we customers that the in can a which within all start the our bunch different go but building the value together in resonating approach X and our tech products in, So or their way applications therefore, multi-hub stack. full

Brian Peterson

Kate. Maybe Great. That's good to hear. a follow-up quick for

normal for Day at you indicated above the that I forward. takeaways Analyst believe the of going revenue be XXX. new bullish the me was the kind net would retention of it, One

of that looking maybe lagging the how if have not just of growth? the I per by any trend? that couple we can I'm from curious, customer at should think the I'm I average XXX think know figure revenue of a curious cohort in revenue per that terms terms I be frame But overall. customer it's the we NRR same right. points? that should we about But the read-through there's in

Kathryn Bueker

Yes. Thanks for question. the

shared XXX%. above or we a of I that couple what was we Analyst are target And right a different at about net you Day, think at new retention level talked revenue for drivers.

what strong half of And as about those internally; refer retention. it That's associated of was retention. is to what really first net dollar was revenue may gross drivers we customer impact The on improvements total said on retention. dollar we the call with retention customer it

our retention platform higher is driving net piece improving, of also adoption that of that greater that helping driving. right? is help drive ASRPC. second set a are not we of of retention to net it's The is drivers same the of a portion that upgrade core that and drivers the diverse ASRPC So and revenue those increase that revenue half, the both retention other growth, It's will are upgrades have sort

Operator

Your Capital comes next line Markets. Turits from question Michael the with of KeyBanc

Michael Turits

how very longer about for you. excited about then is broadly? thinking you about e-commerce term for Kate. payments. I've Can talk two questions. you're everyone And Obviously, Yamini, So the more

Yamini Rangan

will I yes, say payments equally think we about about core excited that business, the are like, excited we're that. I

this, embed in in focus really, pages this our embedding which we way requests payments, ways, is a it the are of adoption. going that, meeting couple In as terms lot Embedded to the really we've perspective, the opportunity, us suggests going that a a grow. in is there on that can in drive of back, all, just we're different payments step almost and informed web to first every of and longer-term if do payment said name help is this from customers And way. we help just will we to

a so drive And from you see payment will us map, road adoption.

That's vice opportunity marketing context excited I'm sales commerce think whether that open it's to by value both versa. road can going deliver up in is second customers sure interaction, to a those CRM are and service, we into it's I about or going what every commerce for and customers. is huge map the part we of there significant context where our our the us, of the in building also making enable see or that to growth for but that

is business as that's a and we're driving the payments. all the talked of we about But So longer-term invest in and terms in think -- to growing strategic of pillars core focused business we've road platform. also strong, world-class on terms how our is of about, map and continuing point that really the opportunity I'll core CRM and well, really

kind as core of opportunities across business. well new balanced as it's So

Michael Turits

some may what's of or what's Kate, then in what said the in 'XX, to terms margins the are of next a to expect not headwind Can And meaningful takes that about you the and and puts how for be may that balances not you shifting they improvement year? there talk and out margins. how just tailwind

Kathryn Bueker

continue for very expand growth specific And the focus on trying do of about to been it, regular the try overall, for the to we conviction, guess we about -- to Analyst to it targets how think we What that. and financial think was to profitability. And high and durable try company. drive what talk return growth And our will don't clearly basis way to Day long-term would to highest forgo balance we deliver bit from I is on future Yes. at to is do building we the that really do leverage about opportunities leverage at do you can a want we look next. to have long-term to just sort so high level, framework tried year really margins. this I the a we ways that is we what and if growth really one

so heard us And you about Yamini hear talk you about it at talk Analyst it. Day the

want Now to to we really of and good that us, feel that the about we we continue front sure make opportunity into in opportunity. invest

to couple think In be And the invest particular, in innovation drive that's going seeing going over us are the durable see we want to to where into areas strong leaning that of sure our so engine us the we R&D XXXX growth. to years. you've you're areas last are same where been because we invest organization and make the for

would have going we of places to ROI takes invest seeing specific we're we where product. strong see the in what continue and that we have tell ROI, is but in XXXX the don't puts and innovation primarily you can in to been continue believe that's I and I the to strong So

Operator

Wells Your comes next from Turrin Fargo. question Michael of with the line

Michael Berg

environment? hiring people a retention, you're Dharmesh. Turrin. for for now, appears environment. Any on In to or focus Berg And Congrats you worse board a such a within Michael of quick seeing can is difficult a culture getting retention seeing and then base? what with follow-up your environment we're on any the and through I kind a question HubSpot being great this walk it employee be hiring quarter. or better strong This have on Michael on pretty right in trouble

Dharmesh Shah

your for Thanks question.

-- made that in in it's these investments culture long-term now has kind of brand employer we've off paid really the with pleased really and we're tough times. So

But which seen world of this at some leaned impact activity a now. know strong into very so-called out the to workforce, a we even haven't even Great Resignation, direct We better we and the in a there we of pre-pandemic of notion kind So large. that remote going have and hybrid we're employer but brand. there's at continue

we coming more of before. So I position than even were a so personally, we're strength feel from

that as main I in we And we actually product we a have is the including doing think appreciated. second the very is build. well. that said think product long value of our culture that culture, workforce flexibility our our product, the of We've value of

thanks So question. the for

Operator

next Your question comes with line the Parker from Stifel. Lane of

Jeffrey Lane

At go-to-market partners. of versus you've looks investments remainder direct of break here, of XX% business you made enterprise the like year. what with the solution past from could about there the coming customers in down some you Day, mentioned particularly if over Analyst coming Wondering composition is the that the the the

Kathryn Bueker

right. for the speaking, that's thanks Parker, Broadly a So lot question.

between more more I more reasons. our all CRM if focus you customer but for upmarket the partners kind down obvious More think of implementations, integration, on -- break customization. -- it more segments, much

clear weighted segment. bit And Solution has with the strategy our in terms And little our upmarket ecosystem. of so towards been higher very it's working very, Partner a look,

If you where the revenue pleased investments with the very pretty in and X,XXX for us. look solution we we're at strategy with when our of enabling doubling strategy matching our Solution and in And for and partners of investments They job It's our a of high and hefty had retention. customer partner that, as servicing we understand helping we partners Partner one well base. level down talked lot making right building historically They we dollar those with within our customers as do were a customers. fantastic Partner as marketing agencies, event partners as understanding selling and get strong. customers expertise of the moats them, about retention INBOUND partners, an in but done upmarket it's about expertise engaged, well see Solution have And products. to competitive our ecosystem, we of we're ecosystem, diversify that after

excited thrive. And to see ecosystem so that we're

Operator

line comes with question the RBC from next Rishi Your Jaluria Markets. of

Rishi Jaluria

of Just and to really maybe to self-service kind XX% give that QX how these that us of us what customers, I balancing that net for impact a I that Maybe historically. to larger for has can sort the you wanted in worked you're tends on end. drill keep understand in large retention? your back that see sense think with this upmarket one penetration. really, wanting Yamini, and upmarket from And with to directionally, year-over-year you have you're on same approach investments that. increase to great the dollar can e-commerce-type help my some with making there of deals penetration, you approach

Yamini Rangan

thanks for Rishi, question. the

back goes is strengthening really it our strategic think to segmentation I pillar, which approach. our

at Day we of Analyst as that So both every the make investments making to the optimized. remarks, as sure are are we prepared one about segments talked our well

key segments. have broadly We

from this, both product-led You've a heard sweet The speak about perspective we is segment, as investments. X,XXX before, and are making we've making very where to our product X product And to are us and XX go-to-market where segments which investing the we're which is we XX XXX growth. deliberate XXX a as segment, traditional thoughtful being in to of segment, and mentioned upmarket lot as the well go-to-market investments. spot in

to view of execution. in clear complete of Our is in terms that both need these lockstep be

the of because is product. the one, So you're with success seeing the that upmarket

efforts. partner product that the worked and about have have on invested consumer-grade look and feel enablement we powerful of we've as in and in to in talked brand to enablement, beginning And We sales features marketing extensively, well wanting while is go-to-market, as investing a work. maintain terms

Kate reflected mentioned comments the results of as And And segmentation what in revenue both well her retention terms this of so is as revenue dollar earlier our of retention. is strategy about what retention. customer kind is in

Operator

from line of next the Your Ryan question & Needham with Company. comes MacDonald

Ryan MacDonald

questions. I two the last, guess, in Yamini,

the X sort of focus launched. of officially since the And curious, how here. about partner motion higher gotten only deals. channel announced upmarket think of of you Hub. channel sort to talked I You've market But and from over on been can how you've end it's It's the launch segment market what -- maybe you wanted offering? And or partner announcement Operations that to business that up time? on And the whole the of days feedback in that's your the a driving just unlock INBOUND, since upper continue the

Yamini Rangan

launched the Yes, that's as of And was Hub we where the of launched example so know, Starter partners. just an this well we all the hubs you Operations Operations you April. Ryan, earlier Thank year Hub Enterprise this actually as in it co-launched for And with one Pro question. week. as much,

cases. Operations has in early beta co-launched identifying of community Hub. just the use incredibly And we been terms incredibly partner were involved program. involved Our terms in They of

we In highest was And all fact, very, very that that as of had the launch terms in Hub positive. NPS from well partners partner been have year. Operations feedback probably event event promising as the has

broader point we the upmarket. in go-to-market Now partners terms are with how enabling of

been working As beginning expertise partners hand-in-hand I'm we been we've our as product investments as complex with take the enable that's teams teams in driving optimize our pleased implementations within year. collaboratively well them work. partner direct and go-to-market ecosystem with investments, have And to working to more how very this to partner

Operator

Arjun with comes William Your question Bhatia from next line the of Blair.

Arjun Bhatia

It you. multi-hub temporary expansion, suite necessarily trends of including don't Kate, upsell, those -- trends. been about seem a adoption. lot maybe that one for talking like suite adoption, we've the like Those with are seems

where not QX, and single-digit model shifted well? as look but in XXXX out having we we of can high in QX, the mid, beyond beyond should remain when structurally just in think that ACV range, So as growth

Kathryn Bueker

Yes. Thanks question. the for

have like in QX. continue I shared, we saw feel going are think in QX the we and into what that to we trends Arjun, that is QX

Yamini the we And not at innovate lower KPIs. to movement business in upmarket, longer are those talk the heard end where see of these about strategy to segmentation more the manage of is that one metrics continue Velocity but with end. you another segment both both as to we that terms term, year or also against. And intend innovate that In we at

it's think that we're term. over little more to I term, in the short But continue to to So fair say longer a bit volatility. see the going

Operator

of with line Materne Evercore. Kirk comes question the next Your from

Stewart Materne

part to those I you are you U.S. in looked could the different of companies taken management, at are tends is follow content the other more Cloud, U.S.? if to Service business curious just I'm international part business are the was of in much seeing about being rate of of in of products upper whether where the versus just if Or I balanced. same the your what your internationally. that the you're all we've at any uptake upper kind you seen U.S. know -- if SaaS similar trends up wondering talk it internationally maybe market

was just that. I So curious on

Yamini Rangan

of consistently about in international very very, been really we've revenue growth of talk North our as growth. well. international is about, growing heard terms and balanced us well Yes, you And XX% America both as as

similar. of it's for has trends, digital example, quite products. a adoption quite of a going done terms and bit terms Operations earlier there. has they well international lot and In done still of with Hub In marketing in digital multi-hub markets, And are there. really overall, well of But adoption CMS transformation

And the both markets. of so across are trends consistent the pretty

Operator

question the comes from with Mizuho. of Siti next Panigrahi line Your

Matt Diamond

quick One I'm that is INBOUND This the curious about customer after of on actually Matt Diamond one. Siti's conference. magnitude came the engagement behalf.

super helpful. you If could compare that past, to be years would that

Yamini Rangan

in as the breakouts the some customers. good both year. feedback than NPS really had the That's favorable Overall, good product question. the even very terms We better positive well and last sessions were announcements, of as very, the for sessions from of engagement a spotlight INBOUND,

INBOUND engagement features the It's overall, terms just early a announcements couple of INBOUND. in weeks well. customers the Business we that very been a landed really positive. of announced very, It's since The been there, Operations has those feedback of for at still good Enterprise, and has our days. So feedback really Hub lot Sandbox, of Units, INBOUND been

so we'll QX the announcements momentum more likely see on in at INBOUND. And based

Operator

Terry the comes question next with Truist. Your from Tillman line of

Joseph Meares

Meares Joe actually Terry is for Tillman. on This

that the weeks last have the major the most level since You made announcements, of X just high think, a the talked you noise which made I announcements the the but Day? from customers wondering guys call, about Analyst X a in product about on very lot I'm

Yamini Rangan

That's a question. good

think our I announcements X I broadly product categorized in areas.

really earlier The first is as for launched Hub we very Operations the just year. Starter not as this for just also well good one Pro the positive seen feedback. releases but November, Enterprise in that momentum Enterprise We've product,

consistent seeing feedback there. So good we're

powerhouse is I domino Hub another us you right? which, So we think big the class talk of features that the about lot is Business Marketing upmarket-related a second heard launched, feature Units, again, within just Enterprise.

terms sales. of talk forecasting, in You Sandboxes us big pretty is about and which heard

future as of then that engaged are been in customers Payments Payments. And about terms we lot experiences. a looking revenue lot as So early is are of excited consumer-like can have days, features. this enable in new streams of or how well will had category the and a customers that but need of in conversations they buying

are interactions And so those say, X, customers. of probably the would big with categories I

Operator

this the at you. call to There are over no I Yamini questions further time, turn back Rangan.

Yamini Rangan

you INBOUND work a seeing of in new you lot We'll so in and was great see It great Thank much. do you year. at the QX.

Operator

conference This concludes call. today's

disconnect. You now may

HubSpot (HUBS) 4 Nov 212021 Q3 Earnings call transcript