HUBS - Earnings call transcript Q4 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, everyone, and welcome to the HubSpot Q4 2021 Earnings Conference Call.

Just a quick reminder, today's call is being recorded. At the end of today's prepared remarks, we will have a formal question-and-answer session. [Operator Instructions] And now at this time, I'll turn the call over to the Head of Investor Relations, Mr. Chuck MacGlashing. sir. ahead, go Please

Chuck MacGlashing

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

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

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

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

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

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

Yamini Rangan

everyone. for how fourth quarter immense able adapt and of meet welcome, the review of and was I'm Chuck, and the much, team incredibly Thank so and one us as was we HubSpot change, of Last proud to joining you you needs XXXX year our full execute results. year to Thank HubSpot's customers.

goal scaling our XXXX, significant in companies. for be progress into you Going that and X platform our goal, was CRM We number made to see towards can the that results.

closed We XX% $XXX fourth across than broad-based the revenue to have nearly currency with we and more $X.X with than customers XXX,XXX business in quarter. strength out the We see free cash more continued flow. in in generated XXXX constant growing year-over-year of ARR, billion million globally,

exciting hit who know marketplace. integrations and essential delivering milestone more We on to our customers the having successful, so in than are apps the of X,XXX vision. available We our having robust also recently more a use is platform ecosystem

medium has experience businesses remarkable doing competitive gone being advantage this quickly shift XXXX. have to Now trends accelerated back we shift I as That digital from had a rapid world business necessity. towards drove to macro of to to a In want take HubSpot's a our and and the inception, the transformation, look in around sustained world growth evangelized have providing at customer transformation. digital pivot being small step Since that the a online.

and tight they journey. functions we and navigate product did than that helps And more this need our experiences. create product powerful SMBs execution. provider things we exceptionally as for aligned of and those a is becoming a CRM well modern We choice for go-to-market these businesses them Now drove X ever, in HubSpot CRM XXXX: innovation,

we We This new to and with access operations new and more more that launched Hub, that insights more both that powerful. and make on drives in in and are XXX new to and have demand get expanded Hub, are to data, First, hub to Hub data, is HubSpot drive Hub which in customers automate it struggling XX,XXX of our into teams meets data April, of the native HubSpot bring than more report surpassed We very value, Operations anchor customers our adopting offerings. that on QX teams among grow. we data as CRM let's revenue Through integrations clean innovation. operations help both platform the suite. part it seeing of new using needs innovated one and talk Operations Operations the about strong CRM numbers. customers products. than supercharges hubs Operations those their even businesses seeing product our product CRM existing

CRM. built their when introduced SMBs believe really being CRM. is customers, their thrilled our businesses companies all having to actually grow I'm is to commerce also important when it's more visibility with fewer to commerce with a commerce-enabled segment for much a commerce ensures employees. growth We target We available growth HubSpot with teams inside are know payments new that it customer. U.S. interactions for our is for than a Payments Customer to the that solution and that comes widely feedback into all that of front-office context have lever now embedded natively This XXX drive powerful validating native with can online, CRM payments in our customers. hypothesis particularly and that share

encouraged with days, early seeing momentum offering. we're the very it's While we're payments our by

Sales ResellerRatings, We sustained Getting multiple platform-wide. drove our addition to products, XX% Multi-hub compared when have lead and new of accounts our Service. our to XX% CRM They're HubSpot those don't XXXX in in adopt in entire challenges, multiple of with enterprise-level grow new is which base our customers across visibility parts Take a business. the improvements invest to brands. to of features XXXX, is growth launching did that In value continued insights front across we in user-generated particularly powerful scaling bogged for scaling made their we indicator their companies, visibility across siloed, systems hubs. forced to extended customers tools at challenge The many the for helping huge still they a a in a platform many for not Marketing, companies. business. to multiple were office stack customer provide them seeing disparate that Like hubs solve anchor they need front-office are use disparate business. and the of a retail adopting that adoption down with are content now look give

suite. in a customer XX% traffic, consolidated on is we adopt to their churn expect This work all better is So decrease value their ResellerRatings their exactly and scaling XX% see XX% saw contract rate. teams and in experience customers our increase and with creating and HubSpot a of marketing customers increase sales for what HubSpot. when CRM in

go-to-market great let's talk alignment that between Now and in product and gears drove how the about XXXX. execution to shift

market, that internal the seeing to through our has all initiatives We're sweet working We're significantly of spot inside end we higher are higher sales lower are to to making and key At the that sales enablement to the buy, out Our continued driving X also experience we've team segments end, optimize it our rigor for better to adopt partners, alignment we in suite and and customer there. year. across to At within our momentum upmarket sales customers deals we're easy our have to to we that experience invest strengthen suite results that in solutions productivity. win better XX- between driving we use the XXX-employee see and enabling the value the historically strong and The which been is a process we sales. product, to across we touchless and momentum. providing contributed is easy segment. chat-assisted the the of year, HubSpot and seamless higher-value, that Last full set higher-ASP, saw communicate operate. we're the

As our insights increase made our in in need and businesses that foundation choice go-to-market platform XXXX. scaling accomplishments companies. execution, provide a growth becoming great path remarkable to front-office coupled I mean, Small can for product look for medium solid to our CRM on and drive That progress growth. of on XXXX, with us solutions the gives innovation strong back we

priorities going stay Day. Looking I to this to X year, outlined Analyst that the focused at strategic the on we're

platform driving extensibility as is Our a to continuing deliver of existing well priority first front-office invest world-class, by that in to as platform. new hubs and

second strengthen strategic is our and Our to priority segmentation across go-to-market. approach product

translate at the and to continue a will while enterprise deliver on enabling tier broad value gain That customers starter We tiers. professional more experiences adoption consumer-grade to focus suite powerful enterprise-grade features. from driving with will into

Our commerce. to in third invest priority strategic and payments is

to journey transaction. on full adoption We the driving payment will laser-focused from discovery entire be customer through

the We volume will transact merchants in product. increase to that also the look

ahead excited really our sustainable reporting customer to making privacy We'll about company. sustainable talent the to in XXXX results. hand a build we're in hiring am and practices to to discuss developing data investing and trust. execute Kate? that financial it that is I'll priority With environmentally opportunity. I over that, towards diverse build that opportunity adopting and the our investments Kate Finally, do and by on solutions

Kate Bueker

Yamini. Thanks,

of while XX% drive combination as Let's XX%, QX year and turn increased currency with strong in increased internal CRM and as-reported alignment product We end in revenue selling services on margin financial to that negative XX% closeout while in innovation revenue healthy down to in modestly a particularly X,XXX XX%. while as the was customer shift while duration. other along margin year-over-year. XXXX as was was revenue XX% slightly subscription services subscription and XX%, both year-over-year. was end quarter, XXX,XXX, towards the income in We $XX,XXX constant growing fully grew share. per results. gross growth was the XX%, mix installed increase as or quarter year-over-year slightly a $XXX to year and positive we XX% to suite customers rates mix continue XXXX non-GAAP margin again, margin customer tiers, full Full enabled enterprise outlined in are grew year-over-year. trended QX. remainder our million of constant Average our The for our as-reported from this growth QX, Domestic cash gross retention in down development was revenue year-over-year $XX XX% strength fourth the operating points was on including the margin beyond. in and fuel quarter. important in diluted as-reported and retention constant activity quarter, XX% XX%, grew that year full XX% currency were capitalized exceeded for retention of currency QX pleased X% in Customer of measures. to million lower particular international fueled margin was costs, revenue million dollar overall revenue retention our up a full XXXX performance an the multiple fourth us drivers, flow X XXX% QX, refer in upgrade in X results. selling fully the both million for was an operating or grew benefit overall the for to in to XX%, primarily gross was Constant increased we XX% percentage and We in base both above $X.XX XXXX, both was QX strong we continued basis. CapEx, in Net or be Full deliver saw year. Calculated or subscription The $XX was the in of Subscription strong $XX revenue installed gross and quarter revenue a grew that priorities compared million employees, revenue base the revenue revenue and of meet a year to $XX Free year-over-year. QX, year Fourth per year-over-year, will full nice X%, added and products the year. basis. in X,XXX comments X%. year. $XXX net billing XX% Fourth income for XX%, on Throughout services currency positioned with of year-on-year to XX% our strategic of million, XX% revenue innovation Full revenue currency demand up growth, quarter strong to strong and was XXXX financial Yamini XX% revenue up the gross total software nicely base while Net continued and an Deferred well strong quarter fourth nearly selling. quarter revenue or reported. point quarter an to other reported. and professional year-over-year. and billings grew basis. to cross-sell XXXX. share. $X.XX and my in year was quarter other X% December year-over-year, services and with year. currency of and Subscription bringing XX% installed margin count the both Net constant billings XX% year-over-year was gross QX. invested other revenue the constant the as revenue $XXX $XX and continued in revenue net total result year-over-year as as QX saw At the XX% Fourth XX% diluted million or million revenue XX% negative had customer and and QX International XX% year-over-year new growth our margin foundation full to of reported. full of per for

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

the expected XX% up million, to year-over-year in midpoint. at quarter, as-reported to range is revenue of million For $XXX the $XXX be first the total

to is as-reported per be million FX approximately Non-GAAP share is diluted up of assumes $XX be $XX to $X.XX net quarter. million $X.XX the to of billion XX% a the income in XX.X expected the Non-GAAP X-point and between million. revenue the as-reported total XXXX, expect is billion, outstanding. $X.XX. And headwind year-over-year first midpoint. diluted range year income growth to be to for and be full We This $X.XX between in operating at fully shares revenue to expected expected

to diluted net is shares growth $X.XX Non-GAAP share approximately operating year between XXXX. FX and be full as-reported assumes is expected XX.X expect per to This expected headwind $XXX million. the outstanding. $XXX diluted for between Non-GAAP revenue and fully be million We a X-point be $X.XX. income to to income million

models, keep As you your the adjust following. in mind

some have adds will be revenue as-reported the in comparisons change share we million year. XX% QX our throughout would of this anticipate first assumes year. XXXX, new half fully of we a growth standard, diluted growth fully diluted it some adopted the on count year-over-year At XXXX, cadence share We approximately standard. accounting in again embedded the beginning share our shares followed half in X color new unusual our in the shares provide of our second and fully share diluted full I to convertible revenue guidance. Under debt Given of thought by growth settlement the of XXXX, count the count. to to of notes, is year This the which XXX,XXX helpful our full XX%

things free year and over for We back her flow remarks. expect stronger cash flow be to X% closing hand QX. million percentage And seasonally a QX cash to Yamini I'll with CapEx revenue as about be of in roughly $XXX the for that, full XXXX, free and with of to

Yamini Rangan

our to workplace. I circling to by Thank close back today and you on diverse out a building inclusive commitments want much, so Kate.

to the inspired. companies. operator, to Work Glassdoor, about thankful for becoming to work, are included our for we month, open X essential some the last this feel so strong that please platform for X HubSpot amazing have named the I'm we make team and the continuing employees Just all such and investments With call questions. entire CRM culture excited Best to our to was company making up been that, in inclusive of an HubSpot scaling and multiple ensure the place I'm on number for on is the categories recognized and Comparably. similarly growing to team a number Having Place

Operator

this our with Stan from Instructions] we'll Zlotsky Morgan at question that, [Operator And take first Stanley. afternoon

Stan Zlotsky

billings just a on constant end QX Congratulations Could please? for to currency delta QX maybe between a one quarter you very the very you. unpack the just question strong billings us, reported strong and the and year. for Kate, again the

Kate Bueker

Thanks comments. thing. the for for and Sure question thanks Yes. the

constant we XX%. currency billings reported So of

was are that to currency difference. know. constant contribute growth X XX%, as Our revenue There the you things

quarter we a installed deals strong co-term on their existing with we again, we, The this had when very first selling. into to those sell focus contracts. what installed base is our happen tends is And that base

upfront revenue a currency with shorter. and second billing. actually So those relatively months was the are then accounted that constant modest thing decrease deals those associated in the together the there duration, currency between and And things is more than overall difference constant X for

Operator

from now next with Samana Jefferies. our take question We'll Samad

Samad Samana

a Just to and the transitions that. year miss didn't a beat, great congrats you company's everything, and employees all Yamini, on with even

Kate, I if quarter cadence. about think and, maybe appreciate growth the I So the

cross-selling one I'd that think settled as is about ask additional the driving about revenue that? to motion as cross-sell should what's think modules versus cohorts much into base we growth robust and still cohorts how how upsell is like And into the I it Because growth? the this you've billings into seen these of kind those adds, upselling really the stabilized, have X,XXX-plus even of higher-tier things of have net cohorts SKUs?

Kate Bueker

interesting It's an question. Yes.

really about from that, the in up. customer we me, what think -- was think was different of quarters, notable increase revenue QX dollar stepping this has in over I've customer particularly been start that and around being by addition is lot of last sort highlight has is increase the net factors, QX. and notable is the a as seats retention for a I the retention a of then change. places. But motion talked in of that, we that variety a cross-sell in And retention activity, of always finally, And consistently difference been driver foundation the in The dollar talk is said the when Hub, the so couple good driven upgrade upgrade retention, it's we've the notable I Operations of that think news coming driver. I And for coming with retention about right?

Operator

go next to now We'll Mark with Murphy JPMorgan.

Mark Murphy

some my seeing. guidance. it's largest add just guidance that year. your the around terms pipeline couple IT Yamini, or But an that I'll Could noticed you partners than believe last investor think history to preliminary going here in they us sales marketing help in were for that's the actually points underpinning are strong of faster in last you X incrementally what I of of else XXXX had gave And I a or kind congratulations. very the It's of from -- your XXXX kind pipeline, mentioned something there's SKUs pull-forward company I or of of maybe movement understand enterprise years. up customers narrative spending prioritizing maybe custom objects that? preliminary the

Yamini Rangan

lot, the a year the step things. I -- very we why we this and I a specific yes, are and have X solid is, And entering Thanks reasons of of year getting combination solid about the And question, Mark, think, pipeline. into I Yes. all feedback. your were this with if for to think a back appreciate pipeline

the perfect of were First for help inside a digital them a the get That's solutions HubSpot connected looking off, the solution inbound at sales, for stepping omnichannel back, that. -- customers the the to pandemic, and very way their beginning support, was to marketing, customers.

pandemic, as of productivity. getting grow, to now and are they're are looking the looking think increase small/medium front-office I to businesses we out slowly

the unique customers, it that are on so in is to markets can third this we proposition They well talk technology serve. lean a is that And service sales, and are have the factor value in visibility really continuing same at I very time, of we drive think that trends to resonates marketing, growth. that I investment. to looking the customer terms platform the on there for when keener so And they get

to easy the crafted, is buy, use meets easy what and to is of platform our needs Our it's it's exactly customers.

we're combination think So what the pipeline. the demand to seeing solid factors of lead I these and environment, in that's

Operator

Sills And to with of next, Bank we'll America. go Brad

Brad Sills

a hiring for challenging one on year. nice pretty end real well across see the Maybe a as me software. of you, from environment We Yamini. Congratulations

are year. constant to XX% for guys growth the You guiding currency

on there. to year are hiring the growth obviously, finding How lot a the that look you effort Any you commentary of as hiring? in So environment?

Yamini Rangan

Brad, have really Thanks and starts about a in that, general been I with has in factors look Look, that to has retain we time product But and for lot be talked continue kind particular lot, the for foundational and It's having a and a and at you case. HubSpot, how great culture HubSpot a continued the to talent has that important said are time we've evolve both That the thank hard our to it question. able been little hire SaaS culture. while. long overall We've I not culture. for products that. where that in remember to of at and for think demand in that us and how talent. very a equally to be case And invested talent

as Glassdoor. is to way Score, We on Just things thing Net And to that that at like look Promoter and our we internally. in rating of measure the like Score number comes with X culture. we awarded Same way product, terms Best the use Net on a Place Promoter shows both And the Glassdoor, strength culture. ENPS, product quality. got it just Work Employee is

choice the flexibility, means of team, we pandemic that providing on a we've made the hybrid The and foundation during work for lot very a really flexibility. We of for on rules. made provided part and our have early that and second hybrid is work, flexibility

or of us as well flexibility retain foundation even And has top market. really so combination the this as and in the talent hire culture helped

going So into I good year. this feel very

Operator

from Next William Bhatia Blair. we'll hear Arjun with

Arjun Bhatia

pure then last rev I'd I'm just competitive think Congrats seeing quarter, demand Yamini, released of in and was Enterprise market year Hub you that be hear year. are -- that in to the what growth some curious that edition any plays of there market. seen there late the terms cross-sell if ops dynamics you're both in as the great quarter. And because curious you've for driver Operations I mentioned you this on pent-up the major especially activity. a a

you do seeing this is other product? playing deals more are Hub -- with you your Or where greenfield? these in vendors in Ops success see So

Yamini Rangan

Great very so within with for the much that. momentum pleased you question, Thank Hub. Operations Arjun. Well, we're

As me Hub that's customers came also XX,XXX in Operations October. I have XX% of bookings And we launched. from QX on that that Operations in from Hub, talk new you've pleased enterprise growing to heard we that about, customers XX,XXX now very was and about tier recently see

is So resonating, there and of enterprise clearly that's that adoption and momentum tier.

other just back Hub. like of a the step Now We from all different Operations it's hubs. on slightly store. how supercharger. front Operations think like That's Marketing the and Sales at is Hub

to nice value. but a It the there's us. tastier. Operations a you song meal. platform whole whole then that main Hubs and makes great go of You like meal the There's in restaurant, just that just sing for course, CRM have terms makes a the

momentum it's and lot resonating. We saw really solid in QX. so of And it's a

advanced are grow. Now is edition customers edition you edition. about a suite that CRM can who Data to lot definitely reporting of our it. sets entire launched data We've the well asked the see within We're about insights those driving very Enterprise the will so insights the is key as And adopting seeing and there. a momentum. the Enterprise sets all enterprise drive as reporting continue feature

Operations overall momentum So overall, pleased we're launch that Hub. and seeing with went we're the within very look, how the

Operator

Michael Turits to next go now KeyBanc. with We

Michael Turits

them And churn commented stable expect on dollar on trends on through from the basis, churn. Do gross you a for? you net X,XXX, starting was customers? of and that that -- And which a are is churn want Congrats on starter are customers the XXXX we is to churn But like to to or feel quarter. stabilize? customer you is the be. adds, about Kate, it you where the

Kate Bueker

question. Yes. Thanks the for

of the will that first X,XXX-plus in have around new terms into But quarter customer good in Growth quarter XXXX. of that quarter continuing some we I in out. So Suite. seen about Starter more adds that around feel consistency one we've and We quarter comparison difficult say

It of over QX. obviously bit that the think XXXX. the balance a I trend We've there course in ASRPC. grew up XX% is seen

comfortable think Going double into high low ASRPC feel grow been XXXX, single digits. that in like -- feel now XXXX. we digits in we we've We can saying that

Operator

now we'll to with next, go And Securities. Ken Guggenheim Wong

Ken Wong

for that ad Are this Dharmesh. one to restrictions been probably data I to need their infrastructure Obviously, a even you management far impacting for express that guys customer Facebook is from marketing ROI. as think hearing kind should as heard rebuild across be We improve world have that resonating and that we your targeting. maybe data tailwinds restrictions about your marketing business? thinking of potential base? Anything

Dharmesh Shah

A for Yes. Thanks things. of couple question. the

now. HubSpot's So privacy movement the focus first consumer-friendly philosophy, our of towards which and for kind increased the on all is front, we've kind of XX privacy on seen of marketing of this years And kind up this inbound privacy-focused. kind very grew of with

seen we've that to front, of regulations on there's So kind as neutral around privacy. as positive have shifted increased scrutiny

into by are regulation BXB-considered tens our side like mobile customers we business. impacted of of kind ones users. of the that the most similar. in are a these consumer that advertising base kind have millions in fall application large a our much companies network that of And -- large shifts are I'd a They're note with The you're other purchase where is thing with things. of kind really seen haven't that massive on camp, doesn't so impact are of HubSpot the

So them measurably haven't regulation shifts either. really the impacted

the to of thing regulations. EU kind that's noted, you other data on closely. been watching of as U.S. We've The that kind focus is happening, transfer this

use called which And But year allows haven't us choose impact of last able we launched our headlines EU if the they business offer business. to no feature where change the to everyone option impact host feature host HubSpot We to new like Hubli, our customers be Operationally, a the from else, the in and we're meaningful that overall, a do real we different watching but make yet. to did any all to on we geographies. take seen it in so.

Operator

And next, Borges be now Gabriela to Sachs. we'll with Goldman

Gabriela Borges

a to could or is, compelled depth a And customers want of for how little question, those with describe and adds digitally new the runway I little depth you? XXXX, bit are bit adds potential stable. on follow comfortable up us were XXXX, of not that the customers? the the a transform the get as XXXX, And you customers customer do joining you commentary you today platform upgrade Yamini, TAM customer how in of to ahead of which HubSpot that the you're that being targeting on as as would describe TAM

Yamini Rangan

in you thinking much, about of for to It's we be that XXXX, Thank to customers -- and journey. on their connect with being thinking digital all We the saw first a wave about and and needed parts were is what customers that Gabriela, able we different saw certainly the wave. of digital-ready, customers, so question. see they XXXX, whole

beautiful, just productivity really at have if look how can like, office. continue tech And what at to they disparate have don't look front-office the they this still the very systems. we able across to visibility that we're experience something drive think and digitization tech to drive is need these seamless And sales, as be okay, the kind whole of you the that these get look we is this it's that the customer at of marketing, the of just growth. and specifically, tools growth priority, to seeing a trying I service. stack, they need Their front-office they We're deliver they're and that all customers, have fragmented. customers is stitch seeing stack together pieces to customers to now visibility like continued need. they front And

to And invested last shift. cases, But what easy a of I tax that's from to think XX adopt perspective so of easy the works. And in proposition and a seeing And drive maybe that's quick both the just product XX time that our to have the we months. consolidation value act, to over innovation value, overall. slight we're

Operator

Next, MacDonald Needham to we & go now Ryan with Company.

Unidentified Analyst

This Or is there. cases to Ryan. Josh more resonating payments motion or -- the be some the get like quarter more on customers? sales the strong on BXB year. process? Would get optimization around maybe what materially with some for quote-to-cash and details the I what seem it Congrats be color to on touchless use wanted

Yamini Rangan

lot for thanks a Josh, question. yes, the

excited and market early new we to very, BXB payments they of that's if what a early of online experience, validation what product things. deliver step sell our exactly I'm stage want very And are a are to want we customers consumer-grade want focused on. but introduction great customer going or about looking for for to were we feedback. the product looking First from rep. early early our whether very GA, days. off, hypothesis. via And hearing couple sell And we buying help back, of a they we and That's bit it's fit

to gave, the of customer of tracking couple e-commerce, A in went embedding hypotheses. we but number cases. those, will this One use We're and was we're that in big spur And of is offices invoices, have into entire BXB connecting payments that's invoices, CRM that. that seeing examples management consulting it finance the family with tracking check. businesses. news They So we [Indiscernible]. team sending that had a a outsourced seeing will creating

just are into like are they these selling any HubSpot are their Payments, without of manual. getting All they touch customers service. seamlessly their just online. And With

the use the case. And of example so that's

is that so resonating. case selling use online definitely And

also use The going our second ton that seeing. big in we that's CRM customers. context cases is And a hypothesis for value a set that's commerce of add have of resonating, is and we're to

an very transaction, like. early making target an starting really the pitch all application, market feedback to focused that discovery that the sure to the way from completing on and as just of good. process is experience, been continue And well customer be consumer so the payment finishing has application, entire as beautiful We'll

that's going feedback the happy We're getting that on. on. with what early to we're be So focused we're

Operator

Capital go We RBC now Rishi with Jaluria Markets. to next

Rishi Jaluria

the business. see just wanted the continued to in I margin guidance. operating double-click on to strength Nice

margins how in You're for half guidance? to get conferences, effectively back of some wanted do about about operating to the on return start we sense year, even out in-person road guiding and which as get those in a you maybe And hopefully, meetings, costs think just to up you are. get the maybe doing back investment back see. salespeople start reopen put that alongside in priorities person offices, of you're to XXXX, of where flat to your kind thinking of to how is maybe as great the that, But the

Kate Bueker

Yes. Sure. that take Why don't one. I

a this in in strategic good pretty sitting the focused us. closely prepared remarks. that And there up areas to Yamini talked investing that making those durable long-term really investments. opportunity from Yamini focused her in growth, on long-term priorities few about I call that are making right? on drive of XXXX that you've front We're we're going throughout with line They're feel to heard think that's we about we sure the are that

portfolio. both and organization and our invest one there. new across would of to really we're So We to good products getting continued a saw in it's We're innovation think engineering. the the the our R&D innovation. continue first return important lot features going drive We in We feel and about product to be to XXXX. plant seeds

in and we're along the least I more we we And workforce. the start On leaning open we're with flexible are of over to and we at as assuming what laying question investing will were that specific sort we scale systems is to all local sort in foundation to happens definitely sure It's back time. are low around that mobile, our a segmentation, regulation become around up, automation the really or in finally, regulation of to answer of guess upmarket. go-to-market -- some side, that investing highly process sort business then investing at in your office value end. components into make and across this the that of

than companies. T&E-dependent other many less enterprise-oriented are We

see so a not But you result other places. would a it's our And as in there same bit the that. is of that headwind margin at a of to XXXX many

Operator

Next, Parker with we go to Lane Stifel.

Parker Lane

making released we've be the few of management, And last use type of these tools, How these be lot them of service-focused tools? new bit little successful around whether ecosystem the worked partners the the are and with release sales-focused operations-focused, the change that ramped you what's with has acquiring use you're years, partners, going cases. past? the it a to content In company's in a partner attracting that getting new to different strategy sure and they're given up cases than marketing- the

Yamini Rangan

ago, question. and ecosystem is that And ecosystem the partners strategy good of with we we partner Thanks like really partner almost have XX a you I -- the -- lot went "We I'll us. clear said, a to months partner A love come lot. servicing with a They tell along partner ecosystem, for they value, and a it's HubSpot. customers, Why? It's lot stay get get way. partners selling scale the involved, for good is onboarded therefore, we and for and our which want right good with more the get us. longer Because our partners." customers to therefore, the

last years, marketing And lot done we had that to -- a breadth basis. so And have what were a not and invested retainer only back, so on we've of of meet and you the the of working there. agencies product we needs the these that step couple if the selling are enablement, entire in they joint that training, portfolio do able but service over

who set development just go we And services. and In in have And there's complex that co-selling. upmarket. integrations, with partners more XXXX, momentum partners of are investing much use so nice more can complex of we now a implementations, that the deal do full as we cases provide CRM

talking having so where a continuing that investments also is enablement, we're we have going And ecosystem kind to we on made. direct common of We exactly partner getting we a the lot invest with more. lot I'm know terms sales partner partners the the conversations teams jointly interface are with our of have but really customers. the of with happy based a in

Operator

go to we Mizuho. Panigrahi Siti with Next,

Matt Diamond

embedded Matt guidance. the is your about on payments XXXX for very Yamini, business, This Siti. I'm assumptions around that into curious

upgrade. your digital very could how transformation be Payments around generate customers It -- for your could a year. in this there's for driver of guidance spoken to hear I'd lot about thinking like You've emphasis sounds XXXX. eloquently your a love to

Kate Bueker

for It's Kate. question. Thanks the

I think that I'll one. on jump in

not COGS QX. I any are beta an we associated gone 'XX guidance. That long-term you which want a said, excited sure material But for milestone our It's we we think are was about with the incredible very future offering in payments make is for we that -- It I not revenue do the in payments. was that early. Payments do QX. embed GA, heard did or -- to Yamini

So it's a didn't -- XXXX. we we revenue in expect results, it meaningful neither and driver meaningful to be see don't

Operator

next, with we'll to Sandler. Piper go Bracelin And Brent

Brent Bracelin

I back revenue subscription per go customer. to wanted to average

that, you're double-digit seen now next for that haven't growth sustainable We X, could into here X suggesting be and year. years

understand the and multi-product maturing to does now here, question a is Just material. like the there this strategy So sound just it's because change resonating? it why trying it's now? Is

the in You're cross-sell. that increasingly confident

why Just now on would of and more little it's you gives color confidence the a love what kind sustainable.

Kate Bueker

I'll Thank miss Maybe add can and anything, then I if start some Yes. perspective. you. Yamini

that a bunch of end, going HubSpot. ebb to tier. have Both -- X -- will I think they innovation and been growth a from of that flow to product heard driving have the things of overall balance. more quarter help also of there and quarter, They been be have the that those next drive some are from you will we low driving set upmarket at is at us We've innovation. automated where innovation that the and

seen right? is some XXXX. of starter of expecting throughout we're You to what upmarket, of real that benefit XXXX that a lot been a saw doing tier over strength continue What innovation into we've the over that you've in And the in the and combination customers at selling along XXXX at quarters so and with pro that that getting it's base last the and the enterprise seat being cetera. a cross-sell et installed motion of mix expansion, with of level, success we're

Operator

go Fargo. Michael And next, to we with Turrin Wells

Michael Turrin

around growth partner your there? some the scenes tied what's you've than efforts I that echoing some comprehensive And processes. just what saying your formal of efforts, much the with better spend obviously, happening with sweet in to internal good and some to drivers hubs alignment, upmarket. behind up We've signs just helps, from that hoping happening also move too. just this, of more more Yamini to having perspective, for that segmentation from the to XXXX time encouraging that was is context to the explore How lot job historical And a here a heard the partners customers asking embarked more results. but there, just want showing start on? larger would things currently. is of spot One products but But great on given just love of there's just explore Obviously,

Yamini Rangan

lot Yes. And you the exactly for Thanks question, it Michael. right. a made

So go-to-market perspective if partner for a our past year, perspective, the focus about X,XXX well product all our of alignment. which really step the you a really terms we as from we're as well definitely focusing in see perspective. And talking as a from product back been call from segment, And both to especially go-to-market as the upmarket XXX of we segment, segments. the we've

are we you last saw investments the that that we The did On of best are making off. side, product paying lot year. a the

add ton of the innovation, all the amount Intelligence that Hub enterprise all tier. to forecasting, Conversation On side, Sales of advanced those power a way tremendous from of to more CPQ, at

thing same You saw Marketing with the Hub.

And every innovation have and so is the showing hub, we pace pace really of invested the up. almost acceleration of -- actually

reps sales value to our that and powerful, that. So to drive continue very the we coordinated a that that the that that it's again And customers on over upmarket say we alignment. products, strategy, is have talking with I of good things is alignment have getting, alignment we focused like at right? products on where is that that is And an to the even invest say momentum, one going we but the On enterprise we're motion tier, important XX last with are the can a go-to-market then strategy. when just partners side, HubSpot our market, to than about go-to-market are partner innovation when we across it's more there ecosystem which aligned internally and think great the pour and effort sales go-to-market you across months,

Operator

Brian Peterson Raymond go at And next, to we'll James.

Brian Peterson

on really quarter. strong Congrats a

strength. international the for on constant currency me for one a row in That's in XX% been quarters above growth Just three now.

domestic level may that different And internationally? should how results? think curious, we just the driving be than that's So anything that, of investment about

Yamini Rangan

about front-office Look, see, as have lot that North segments. the QX, both lot common terms is they Thanks, for constant well We've what that platform. back, need you product is say, fact, the in a needs the the side terms both on think in it's North in I'd the beautiful side. just in talked That question. we I consistent accelerated And and America all had right go-to-market growth. currency a we're kind demand across we as in across America talked well innovation. international cylinders and international. just meet improvements of And we And the if is North as pillars. both the for Brian, of terms and step the a international on just about we now, the both as of product of firing America

say In couple things. international, I'd terms of of a

of little it second therefore, low. bit penetration invest terms product of the is our First return LTV-to-CAC some an market of operate customer-facing there's in is see is in. therefore, have to earlier in resources. we on say And the And countries localization, a that we in Customers a that momentum LTV-to-CAC that international markets. continued transformation. off, really we earlier And that stage good digital and then And are bit there. thing there's in I'd

balance North terms performance the And so as as internationally in we're both in the the like of continue in both we invest overall, markets well and we of to America. --

Operator

next, we'll And hear with Wolfe from Krieger Ryan Research.

Unidentified Analyst

QX? a And Alex. retention unpack How that pathway should that it is compare This we previous about the rate please Is number here? directly on dollar the subscription that Alan there to in can for grow? Kate, a that think you for going How forward? settles does to quarter? is

Kate Bueker

answer time Yes. that And is XX And QX, stayed about things. the a couple is about provides. is front-office with at in and to has, talked about dollar internally talking healthy. And what We generally that pretty sort bunch One retention relative at meaningfully. look moved look is look just spent are Day step-up, our revenue. product months, net up right? that of retention, our has Yamini last over customers gross ways. that what more. the of driving that call ballpark, We on When the Analyst we a right? same at in retention. you going customer a very at saw our retention. talked XX it it We've X of HubSpot We different it's using We the our to

We different more of the our product. customers are just and parts seeing use

is helps our of The benefiting other customers all signing we our customers. And we're overall that contracts that are attention retention. with is sort our with the thing longer -- that just

that is is net also then retention. retention a And over our for upgrade what That last said and In XX-plus in gross drivers an the XX net X I've it's diverse. is the a to -- foreseeable right thinking edition this talked and about hubs. for months. XX-plus bit retention. between target cross-selling has expansions And we multiple revenue XX little future. we've terms X And as It's of there's them target of mind be upgrades, the it's think seats, pretty to you on are call. upgrade the about already improved for our adopting

Operator

with we go And next, Holt BMO. to Adam

Keith Bachman

Bachman Keith BMO. from It's

If my you just can me, this question to hear launch going The question. I'm is

Yamini Rangan

Keith?

Keith Bachman

sorry. Yes,

the that Operations to about that, thinking just richer at customers? data you're it attracting me for you've consistent, a of that within we're Again, a just that could mix growth basis, larger enterprise, be with but wondering getting different richer larger adds should Or as about is a a is that it mix if you're the -- customer we just of on a of is confused me thinking that customers? quarterly customers. and the What comment Because same Along about by how clarification context XXXX. BMO. to mix. of during you're you XXXX. the with seemed a the mean larger share Kate, it you, to adds as seems Hub that mix us the but on hear talked is rates Adam adds with being it's if I You the customer customers, of in attach of getting it rates backdrop, customer like

would hear your of And like so to Operations do color just Hub context the I may guidance. of how within XXXX

Kate Bueker

the Operations an Hub And interesting question. Yamini, with Why start don't for I you the It's hand to customer question. I context. it might Yes. add

now saw the just answer beginning $XX, that back Having of the was customer at I starter clock of of and the of quarters, we're the across we what a a couple us. new a what balance, a that was and of Suite year a of at in where the one is function And pandemic. that increase adds lapped increase think in we adds by was right, Growth terms more starter I we're to ASRPC the bit the that is our the seeing it mix enterprise. drivers step a with turning the of tier. that of for big tier XXXX for kind launched change seeing. would the actually composition Starter And in and professional And

composition than I do will in that we like will XXXX. that the it XXXX adds in so saw And look really start the XXXX and that expect pandemic, starter more of concentrated

Yamini Rangan

Hub about bit a value think and of Hub, the Operations really Operations it's -- think would little that the I I talked supercharging Operations that's the hubs. I -- other Hub

of mix being broader the point our see it XX% the multi-hub. in think we customer the -- is We of prepared in more multi-hub. about terms I that that just remarks base talked

hub our Hub that CMS introduced and pairs, to more see also having the HubSpot. and and a just value Sales, overall products customers Operations or of from Now like show getting we that like our more are hubs to and X adding goes lot anchor hubs X value Marketing

about would year well think last for I into as how that's so going And as XXXX. it

Operator

Terry go at Securities. we'll And Truist next, to Tillman

Unidentified Analyst

is This Connor on for Terry.

connectedness this some conversations of a of leaning And portfolio ways how terms come you seen up the the shifting hubs? your before, set as you've on really a product adopting to seeing what and products multiple that the start ramps your value customers bit on more So online, vision you just little but to into touched the in of are and bigger-picture customer view, forward? platform

Yamini Rangan

and I teams if small/medium There's customers of systems around are and and budget. businesses right huge Yes. a big some like They well pace talking a that don't to the the unlike That's also in question. great a sitting I have say to technical couple get. as the as now. don't are challenges would value businesses We've huge -- They about a back of just for Small/medium the lot QX companies, of that don't challenge well. the switch that's larger been of talking of don't been I've really step overall customers disparate just time. a innovation work There January. have that have trying maybe challenge. the

The customer that is marketing the don't journey, still want in part visibility of sales they drive that visibility to and the challenge get entire get to are silos, but growth second the and need. of payer that across they they type

customers, we for lot need We scaling platform is that want. number added look, so platform And that's adopting hubs want think more HubSpot businesses. have I value getting customers what of segment. X,XXX challenges, both become our these why for our easy we the we the more within ecosystem, solves platform And average to CRM on X this and And choice. an to we easier makes meets And other which and an is a per to all and stops and clear it really are Plus customers it customer even look, the be beautiful like, integrations starts. small/medium exactly overall a us talked choice just one your talk and seamless I the experience. when know we And the of It's one when don't hub. about. businesses, and hubs it's they're

very feel it. good we So about

Operator

today. ladies you turn the comments. for And Rangan, to closing I'd conference like any our will session question-and-answer back conclude additional Ms. to that and gentlemen, for or

Yamini Rangan

and to to look in Thanks lot. you, talking forward quarter. Great a everyone. you, connecting back Thank the

Operator

for ladies joining gentlemen, us all Goodbye you to QX great earnings you and call. will like wish And you. conference that Thank and thank XXXX evening. HubSpot today's all conclude I'd a

HubSpot (HUBS) 11 Feb 222021 Q4 Earnings call transcript