HUBS - Earnings call transcript Q2 2022

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Operator

Hello and welcome to today’s HubSpot Q2 2022 Earnings Call. My name is Elliot and I will be coordinating your call today. [Operator Instructions] I would now like to hand over to our host Chuck MacGlashing, Head of Investor Relations at HubSpot. The floor is yours. Please go ahead.

Chuck MacGlashing

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

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

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

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

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

streamed to event I announce on be hosting excited live will there. will many forward that on The X. to make look annual website it who for September analyst of those at you person. be day we can’t INBOUND our Finally, IR seeing our I’m in

questions, to please any If reach you ir.inbound@hubspot.com. out have

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

Yamini Rangan

welcome everyone call. Today, to driving playbook the QX driving the Thank results, performance I durable joining to us HubSpot’s and long-term. what’s Chuck, the on growth for you and focus over want on

customers First, our let’s constant off kick growing was XX% deep using HubSpot by HubSpot XXX,XXX what with in of than revenue a globally our this results quarter more execution. were it order with currency QX to grow growing and customers results quarter. and today with understanding solid than total These more need products. year-over-year to year-over-year innovation, product XX% multiple XX% in a for driven strong focussed

need macroeconomic talked their looking SMBs As consolidate and improve it to They're get efficiencies, better they do tech fragmented navigate more as environment. our I less is to into with the journey. to customers, current their of customers ways for stack that clear solutions, visibility point

As a platform for to is critical easy our customers. use HubSpot mission result, connected,

This in convert up that the unlocks for faster engage revenue. without so Teams draining and up value In in on We're I strides innovation news, our had QX, with routine billion by marketing class the automation here, marketers platform segmenting unlocked personalized a tremendous now surpassed dollars in QX. hub the service both and anchor hubs. recurring a world features personal time can can Office product customers start in automating Let's investing touch areas we Last deliver the a here. of important start with Front made start that and personalizing quarter. just exciting and by newer focused we in sales and We hubs marketing by time. marketing in talked, marketing, efforts annual second tasks. our delivering innovating shared

years upper the we've we're over in sophisticated been last of marketing to delivering September, additional few like the end more customers market, value the enterprise increasing to hub the with match pricing pricing revenue functionality, value attribution These to reporting, while AI features powered of our consistent and with the changes fueling down tiers. high driving strategy packaging and testing, AB starter, higher more. innovation are at On

customers During our hub, and In like had re-launched phone. service usage we last real past and by inbound the service also and the QX, can service launching tools quarter, hub customer of enhance pleased to time features so increase. further just we've been calling, we over call, engagement tickets, over see that provide inbox

exceptional customers developments, these experience our With making deliver at hub an customer empower to to meaningful we're scale. service progress with

Why it's milestone connect that of with to That with that forced the in across big powerful every CRM their this a they're Well, now? attract product often, nurture front office, QX Free launch can build solutions with differentiates building business robust unique. are was management Free combination too cost choose beautiful entire But a between customers. limited website to Hub companies other on their systems content website means That and powered environment. a Free. website Another CMS starts CMS especially and What customization to all CMS business free platform. Hub in to that visitors tools easily or CRM by is is leverage today from HubSpot. prohibitive,

and online. we to also the Business As themes our in introduced to give assets CMS marketplace the launch June, of get part the tools Builders in website started

result, innovation making in progress the of choice quarter XXX% the since pace platform As become really opportunity second increase HubSpot and I'm to meaningful signups to in the for drive scaling businesses. premium of we've CMS transactions. is This growth large XXXX first that demonstrates launch, these that space free a CMS the excited and with results green product nearly Free. month marketplace in seen

saw involved more that in I gears, getting cycles, lengthening shifting makers we number companies like deals of Okay, want deal of and to decision in acknowledge June. a

in share while towards to the profitability grow we long HubSpot playbook business the to environment over uncertainty growth want the the the in macroeconomic will demand how While navigate a cannot will the term in strong how we I software evolve second for short few to in predict the Kate durable how minutes, through continue term. the Then environment. will we're talk about half, driving planning

One driving clear trends we on that HubSpot’s while long strategy. is execution a term of term focus near

During drive this times growth taking we've sustained with in the past, pandemic and following principles; in focus. of customers uncertainty help a core now. strategic product for continued throughout three play stronger. will customer, our investments did durable execute the to approach solving to by the and us same that We We're bets emerge successfully

core of each unpack me Let these principles.

helping digitally was enabled. customer businesses During become the pandemic, solving about for the all

customers them helping efficiencies. a on helping platform about is digitally become single it by powered, Now, consolidate drive to

a For [ph] take example, design, Sando design branding agency. digital

point are HubSpot cobbled solutions their together departments. consisted front different multiple by Before office that of

team all platform. Our HubSpot consolidate the point’s them their solutions of and helped onto office their moved front entire

HubSpot, email to pages and landing months implementing took them create Before campaigns. it

it Now days. few just a takes

Additionally, costs, saved by by exactly efficiency on Sando is getting increasing are and how solutions. customers dollars growing design thousands has better point reducing of our rid of This consolidating HubSpot.

new in and investments for investment maintain we principle our our our is and the that crafted we long CRM second now us innovation. sales product. for payments. more features create In the enabled product management. quarter, our we're platform customization Throughout with to enable term pandemic, continuing levers foundation. hub enhanced data in second The platform build by with in growth to to This sophisticated customers And sustain playbook on that releasing means

to also with app We year-over-year. ecosystem, nearly continue expand XX% catalog growing HubSpot integration our

HubSpot to the customization platform. Moving developer’s forward, and extensibility our we of strategy will continue drive to invest in

made also by We new meaningful paid in and including progress features forms payments links. launching meetings,

the association an These customer payment object. customers payments trade with decided fulfillment they adopting revenue our already and carwash when and They're sell journey. unlock disconnected a ACH This powerful using nearly and CRM. commerce businesses a XXX% implement Since hub features international recurring e-commerce to fulfillment paths increased the to non-profit enabled are online were example buyer’s power BXB addition the example. connect and were of streams service They twofold. up and creating of is manual by lots can sales and processing. the new In HubSpot. by of create helping friction payments they've sales set how Take payments, group, as process to HubSpot marketing,

to plan emerge choice. platform we so of that stronger a can sustain in investments we ahead, Looking products as key

The third every with to in Like to due control macro business, our final of outside execute focus. principle uncertainty environment. and factors there is are the many

foundation one will for number principles drivers to the strength TCO customers. our excellent we to to So over on making a long These our our partner both becoming continuing business with are strategy the customers driving The today. direct talk that, Kate and be control controllables. the our of remained towards about driving our for execution. We're companies. guide enablement, for of are build position hand to platform as we in term mission playbooks HubSpot helped I'll solid, With have and focused meaningful continues relevant to HubSpot and we for growth. scaling progress profitable And critical CRM financial results it reaching

Kate Bueker

Yamini. Thanks

XXXX second financial turn results. quarter our to Let's

constant customer Calculated $XXX XX% in reported basis. We was activity. a on customers foundation grew revenue We and as was June net of reported. QX, in retention International in the by QX remainder added nice XX% revenue services upsell as on XX% end reported sell constant quarter, customer year-over-year in growth as per and on as while cross were quarter The total my Domestic revenue Deferred year-over-year million QX. of our healthy constant of grew and increase refer reported. and XXX,XXX while currency Second revenue QX customer decreased total growing rates XX% in XX% currency, year-over-year. XX% in year-over-year. measures. net revenue XX% count revenue revenue an was an XX% billings reported continued subscription to strength XXXX basis in as QX, adoption. up This Average hub over of and other or revenue comments year-over-year as multi to currency grew strong XX% year-over-year continued will currency, in in XX% non-GAAP and represented XX% to an and XX% constant on XX% revenue bringing revenue $XX,XXX. $XXX million XX% and and basis. saw the grew new retention international year-over-year, approximately driven subscription

XX% was was other margin gross Subscription in quarter one margin year-over-year. negative QX XX%, gross margin gross XX%. was and Second services while point up

margin per X%, point operating a FX in from the X% or quarter profit diluted There fully including share. $XX was of or X% down in quarter. revenue million income XX% or Net operating revenue. the headwind $XX the in $X.XX had margin XXXX in capitalized was was to quarter year-over-year. the of million, two approximately At one and was $XX quarter point’s Second software the we development million cash year-over-year. CapEx up over just QX, second of flow end employees cost was free quarter, second

Finally, our the totaled cash at of and million end $X.X marketable securities June.

June, highlighted had macroeconomic softening decision We continued Yamini slow in our talented deals. second of more profitability. in balance deal As to hiring this in a hiring and are we between which the and of saw taking strategic actions and a in our to the against a goals, have marked cycles, first lengthening In several by growth demand place increased year. half half light to makers a we drive gives and team pressure, us execute the strong of opportunity

other product to in the areas half, second generating headcount investments but the in and we business. will in grow continue sales maintain engineering of will headcount moderate and revenue growth We

we addition, of XXXX. steps in and to second half the other T&E taking expenses In discretionary facilities pullback are

to operating we FX the our now from growth prior spot and by XXXX our U.S. I six creating profit results. impact financial turn headwind. on At non-GAAP July, as a expectation the revenue earnings to we want full our revenue provided meaningful and call. negatively our into Dollar point headwind on strengthened currency of outlook, up impact as year our rates, current Before to to of sharply a to translation QX highlight points throughout relative reported XXXX reported I incremental guidance foreign May expect five

the And quarter for full throughout with headwinds the Finally, the that, of assumes let's third our guidance guidance macroeconomic of XXXX. review our year. remainder continued year and

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

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

million, to as of now be we operating the mentioned, is for XX.X full forecast. share million $X.XX. I which outstanding. prior includes be million As our to fully Non-GAAP diluted between $XXX to is $X.XX now revenue expect an year expected to incremental expected point per headwind $X This headwind growth assumes versus net FX a reported FX and income now and be between Non-GAAP $XXX shares diluted six million income XXXX.

you to And over with as to from and Yamini the $XXX XXXX, to her the be your I'll strengthening year a dollar full we $XX closing to keep cash million models, roughly of things forecast. following; for our As remarks. for hand adjust free relative including the an approximately back mind prior that, CapEx incremental the X% U.S. percentage headwind of million of revenue in be of flow expect about

Yamini Rangan

Thank HubSpot’s are by headwinds from are despite Kate. want the much, the saying in so seeing we confident you close to I macro future environment. we

team We for a profitable our to and day. adaptability our and employees single long customers for to an culture to commitment I incredible clear solving mission. their thank have globally strategy our award want growth and term durable winning and every drive

Lastly, our X. INBOUND of XXXX part the at open questions. seeing forward analysts for as I of September call to day on our With event please you operator, that up look many

Operator

Jefferies. today you. Samad Thank question from Instructions]Our first Samana [Operator comes from

ahead. go line Your Please is open.

Samad Samana

Hey, good afternoon.

extremely performance deliver the currency awesome constant step with Let mean, just I you the are everything with XX% and back, growth on an for XX% by it's saying, going is that's growth that impressive. macro if billings, to backdrop. for me we start revenue

what that So your just environment. of on wanted but with commentary the demand in way you've what's Yamini, happening around out seen double get maybe to click I to wanted

guidance. you a walk of more companies business quarter the across maybe linearity today? for and of just updated the through time that other HubSpot So it's you're Can the what you shifted you that, number on broadly seeing for real your and and in for guidance since gave maybe XQ trends your demand you saw

Yamini Rangan

a lot that for Yes, Samad question. thanks

seeing are trends. We two

CEOs and are are into these all, pulled of specifically more lengthening First makers, getting cycles deals decision approval. and for CFOs

in deals And segments were become [ph] of May, more across we that taking longer June, first to that we in saw based Europe. we Now, our saw GEOs and the early companies trends we serve. one in transparently share the these broad

within Now, long for term, HubSpot’s the reasons. while trends will we our these in of have impact a in guidance, confident short growth opportunity and it term couple is reflected are

First longer? to and at looking off, out platform platform hub down decisions. figuring are effectively, to their are run taking They why spend how office. as to coming these SMBs they're and HubSpot are front the deals multi

second, see taking solutions. a a we close longer. we're bit So deals discretionary point favorably, but And little not

to sell, for for medium to these they small backbone to is data. need engagement All need customers. need And record HubSpot they customer a We’re of the as and and serve system businesses market, businesses. still their

and So they're sticky. critical, we're mission

we're while term and trend are a demand softened the the growth. question, Samad. short for our very we that So confident term, in seeing strategy Thanks in long bit

Samad Samana

helpful. And Very quick ask I maybe Kate, could you follow if then up. a

in the or you're trends around retention? calling the some seeing get I help maybe what install of think what existing as Yamani been you're But seeing you're seeing could your within you any talked about of what And etcetera. retention maybe there's color me with the change the customers? guidance terms terms Just deals, in you're -- in if worth out anything base? what about And on assuming

Kate Bueker

Yes, sure thing.

we that Net quarter quarter. that was we despite saw difficult then of retention net target environment above our of really retention growth have about is upsell. base That we been the retention. have about, the the comfortably which in in what the two XXX that we a ways, revenue more you towards retention, talking we've end ultimately net the As as happens think know, after

selling, the a talking that of been in we we've of way that strong I retention it side, led good in sell in is remained two cross and which, the half QX. net in QX, is the And range us for growth quarter there the really the expect that really call I then about retention which year, XXs, QX. now. around will and had the the underneath for news really edition question. that here XXX base would a on retention particular, net revenue high upgrades back good or year for there, In install it's hang the another I solid think would

Samad Samana

impressive very backdrop. really it. again, And Great, in tough results appreciate a

Operator

comes question next Our Bhatia William Blair. from Arjun from

open. is line Your

Arjun Bhatia

as Perfect. of onto you're you that. added? so that much you terms a my a Can Maybe talk the little for questions. velocity longer Understandably, just at the at in pipeline deals the what Thank but are looking bit to taking additions customers more, and being follow products taking into seeing, on it's about pipeline coming be bit on give of of super a are changing? companies scrutinizing what's color or that? can any That'd you the that shape is all changing if spend little And helpful. are

Yamini Rangan

lot, Arjun the Yes, thanks question. a for

assess the I terms way elongating cycles, through is kind specific, not assets segments of top not happening across one all the to kind in happening pipeline, more the and and down. funnel close geo the in industries the there's of of from is just makers discreet anything and are think they more part, it's way and BC So involved do scrutinize a think their more changes this And click decision look, to their getting of deal double budget the as about they investments. as I best

looking that, closer the the there are couple the a so solution to clear decision. revenue as customers feeds, impact, are quarter, to hear talked the impact, the Now, from customers is right. of driving the Customers having for I faster customer said around

we service So together. leading having from our sales with from tied perspective, clear impact marketing are a

changing more customers part platform to level do more that's giving point with that for less, solutions that be looking solutions. up on very are other is able okay means that effective. The they want to are cost They're

CRM with savings for proposition we're as multi So customers. help to very as leading our clear our have TCO well platform value decision

would And so color. that's about how the think I

Arjun Bhatia

helpful. very you much. that's Alright, Thank very

Chuck MacGlashing

us? question. hang hear we'll Operator, Hey, looks it think is difficulties here, open. [ph], you having line Appears some the Can take next with Gabriela us? that I technical we're like your just

Unidentified Analyst

can Yeah, Good Oh, great. hear you. Hi. I afternoon.

Chuck MacGlashing

Like, I'm to your monitoring for here, be from going the question. call though

Unidentified Analyst

one I have and Yamini one for Kate.

So Are were for that there you Yamini, product company's the for cycles? perhaps your than a any you question categories? of to the then on could some of nuances just office the making more ripe follow you And if driving us revenue for share comments impact. with is within I'm consolidation you're some feel seeing clear context that Kate. front areas specific others in the up curious

guidance? that mentioned being So the color at headwinds about you be that extrapolating worse? bit assuming things same you you're earlier about assuming the and share you're macro that you're June and trend the what So a levels June at looking continued a and incorporated little get that at stay would helpful? Could squishy June into things looking

Yamini Rangan

is to continues of that adds one, And as how closer on it's [Indiscernible] tied and not Gabriela. be we sales of could help I'll say clearly broadly, Yes, drive specifically revenue, prioritizing, are revenue. like deprioritizing. to pipelines, there they're -- that that them with closely they and that thanks the to is, lot, then examples those marketing around customers products areas events, they're And look or are which at I segments? are, and are that that examples brands grow. them, color will deprioritizing a focused not, If start any first

And they it's really a so, question I are where of prioritizing. think

some we're is solutions consolidate all second is think I'll at, And opportunity platform more entire as Kate points half. a proposition that and these we for HubSpot? as on how do solutions into, I look to leaning to a sales. broadly these? pass like sales, hub it Do of speaking, monitoring suite points we certainly there need many that's eliminate there an our value both have? the of for And well

Kate Bueker

Yes, sure.

continues weakness In a the and year. my that remarks terms assuming we're of the factoring in saw through environment. like of weaker guidance, continuation I through we're current rest a we the means That prepared that really of July, June mentioned and in that

to current deliver rates one than our that our rates, we're And today feel the So little XXXX. around for environment guidance. to about we really foreign ability good something also see assuming against weaker point a in which, you spot a or bit we that. is continued headwind in stay worse that currency even know, as and And growth incremental

Unidentified Analyst

makes Congrats the quarter. on sense. That

Operator

Alex from is question Research. next Wolfe Our Zukin from

ahead. line go is Your open. Please

Alex Zukin

Hey, guys, can okay? you hear me

Yamini Rangan

We can.

Alex Zukin

for ask want or, I deterioration year? of about half? payment you're that seasonality And in kind subscription seeing, billings that the guide, there the Perfect. just subscription is then I this lengthening, the year. to Or, anything flow maybe and assumed in magnitude currency second linearity in incremental that's the or terms constant of that's guess of cash impacting revenue for any,

Kate Bueker

then Yes, One includes our for May, basis. business point from six of and slowdown. FX. up we macro is of remind points as guidance for and guide a And associated you on there. decided are on point FX Alex XX.X% year midpoint the full the which And maybe as XX% revenue, is to and an update I for full What reported that from that performance. dive of our reported X.X% other half an is with midpoint I'll impact year a in the of is the like growth five. our was basis, in would

we've XXXX. more of talking growth is are the in is a was getting exactly decision thing sales sort really before I signed. lengthening of terms, that in note, deals things anything. cycle, new which and Of XX% bit what involved So makers for Yamini And seen most of about, a terms in the revenue really has from seen haven't XX.X% we payment moved our currency then, constant to growth think

Operator

comes question Brent Piper Our Bracelin from Sandler. from next

Your go open. ahead. Please line is

Brent Bracelin

the strong last ads growth you ASRPC for here equation benefited customer is Yamini years. strong you, from Thank that of new and couple growth both over the

you think you can growth are a entering period just slow in to on because about here continue As customer we drive I here hear we're more larger to play through starting which around net slowing a offset period think to as where to consolidation, in asked deal narrative length sales growth trying vendor a the might to cycles, ads. to where equation higher? ASRPC new starts just that that potential bundles, customer

Kate Bueker

Yes, on Kate; will maybe maybe KPIs. is this I dive in around

you've and ability basis over KPIs in into we similar That talked bit period and income reported I macro little balance I really in both our think said, our on to of say, seeing look a opportunity, in saw being ASRPC. a us base. we've our an and we customers, currency I a a to And, acquisition, drive of digit, a XXXX think, HubSpot long lot see lot new KPIs. the as were the in nicely. revenue sell we we'll both across moderation, as double We added, what forward, moderating think pretty environment, probably new to see able grow we're to install to that you our about more and of time that also heard that QX of demonstrated continuing customer plus

ASRPC currency. or customers and the year double QX QX And in looks like there. think do back and XXXX we of so in really new the to something growth added XXXX that guidance and of would give that But constant digit anticipate the of XX% we we looks to closer half kind don't

Operator

next comes Keith Our Capital BMO from from question Bachman Markets.

line Your is open.

Keith Bachman

on don't would Could share into to would about us flow on What revenues bit talk little that that. you I that Where the price more there be? that you. ASRPC could percent. And mentioned you increases? the how is a I thank both and/or that Yes, range are want then that a segway you broadly? more with increasing? where how prices would think

Yamini Rangan

build and with Kate which very Well and on pricing and our take first comment pour of talked impact. question, to pricing stay then tier will I'll premium powerful features time consistent. at will have added you while. the have and within then We we that philosophy Keith, that's philosophy When the professional And part, pricing we about. been high very have I'll perspective, That's value, innovation part changes. to those starter the and for and pricing second we the packaging features down end we tremendous from editions. all been look over bring we packaging Enterprise Sure, a consistent is a our

in the what incremental of So few that hub And mentioned innovated, enterprise I we've value marketing remarks today was we've com, XXXX. tons with added prepared is marketing price last last over increased the we for years. inbound the time

lot So years value. added a ago. that certainly And was like four they're of

customers, that so that is So did one what has fine we effective, And gone in of pricing it XX% feedback terms of in an new July and out, we from announcement kind are that been for nine it's we that customers, will the announced be has upcoming modest increase range. tracking in far.

value stay and when to to lot changes. to pricing products. customers, you. at of Kate, pass packaging look I deliver focused So broadly, we'll driving continue value we And and with will we our it decisions on a

Kate Bueker

Yes, sure.

time terms impacts In impact, for guidance And process. hub will us I as as on full any customers, XXXX incremental customers impact of think incorporated renewal it marketing earlier. the for to the in of shared add go we through we the take is the new enterprise price recognize

Operator

KeyBanc. Michael Turits to turn now We from

Please go ahead. Your open. is line

Michael Turits

and with we’ll start then Yamini. to going see I'm Hey, Kate

cash EBIT down the just guide Kate, more came the guide So than flow came down.

sort level And be back. working Oh, in capital? no, Oh, least it So high core, terms I And of then is decision question. lengthening this doing have Great. there over really then front impact [Indiscernible] you're office's the no, and agonized to well. pull all in forward? Oh, some of from cycles there seems But Yamini no, we've at

I'm really last how demand it two the customer thinking your evolved? for office quarters. wondering you're for call has set So Let's over how about a front

Kate Bueker

Michael, I’ll Yes, start.

incorporates the year is environment cash reduction cash The the the from things. the demand $XX in headwind right. flow, guidance. on exchange free full revenue two our and an flow incremental foreign in You're of other for One million is estimate reflected

Yamini Rangan

And, so terms question or some evolve. get pandemic, the small support. business part medium of of straight front just the the to pick to that the out needed Yes. or I'll was coming second of digital Look, sales and it their mean, demand marketing office Michael, massive customers tailwind. I needed Every in connected of kind we for how see

just acceleration about so it say much it's for driving very impact, that making to effective. sure new cost very more think And very, now was that I'd it productivity adopting is revenue and I is and also And close solutions.

So nature the purchase and are with to a therefore customers, they I digital conversations of the changed. continuing decision and on nature which our rigor SMB of shifted, they the path the certainly but transformation, think the the look has has broadly, conversations their demand at

Operator

comes next Our question RBC Rishi from Capital Markets. from Jaluria

open. is Your line

Rishi Jaluria

so Oh, wonderful. taking much for Thanks questions. my

just I price I've price upcoming forward feedback pull expectation expect price Kate? guidance, there customers the to talked has Number And I First, one, upcoming wanted increases. back general on to what increases? about you've potential of just business from for to been start the going a the should increase? to into then it's got of follow be but we up And any with an the baked know

Yamini Rangan

a a the that. we've gone innovation. just start has number attribution there. a I'll terms in marketing marketing that's but very I of with channel of mentioned revenue Yes, solution. look, I reporting, the features of marketing lot first added of terms as very, many club world omni in of class building We've and done the a price I feedback, tremendous think through fast increase I mentioned pace enterprise in mean,

innovations use have we and And years. So gone in which are the it increased they our customers for it. there, leveraging understand means have they last not prices four

feedback how keep that's then the level our from to you want think I And got And the Kate, So from well if in our customers know given of as flowing add more about we partners as this. innovation. terms of to get we tracking, customers. it feedback going the it, don't [Indiscernible] we'll

Kate Bueker

impact it, positive carry huge all there that think and the not needle momentum, the mover it's announcements not if I I guidance. with And all given some externally, mean, in product for said, internally Yes, I and us, timeline. a as it already it's but look,

Rishi Jaluria

Thank Historically, helpful. of revenue. has Kate, and that's at SPC great. back. there, stock pretty lead maybe up And know for a big of moving through walk to any the, think profile, I That's, line. balance time a comp XX% you versus maybe been like the that it's of but looks your I step you comp, a lot and that Okay, quarter to at think then low obviously responsible cash? wanted spiked taking look lot how it one stock pieces and you. a relatively spike philosophically about kind Can us growth company just And of impacts stock there's this to I HubSpot their of

Kate Bueker

you're Yes, right.

for stock QX So us for high a a a and revenue, up we two comp as of percentage every quarters. expense watermark expense catch because do year is

executive RFQ QX it last The in all shift attractiveness increase One, three notable an from in the a we our the for driven the impact. XX% retentive XXXX. is to of that for a RFQ. made is and change the us over our of for years a of employees. increase years We things. that RFQ make be of the the it will change few four six had that hires impact, increase there's an value and was to other the investing high think important by that big is we months, And bunch then so And watermark

And SPC lot changes; we of really are of percentage revenue. attention those pay the drivers That's so stock big a a to with even those comp as increase. two of the

attention peer pay dilution. we general. of look management And of well our And lot software to at still compare against our those to in the relative We companies. companies also a we very

Operator

question Keith Stanley. Our from Morgan next Wise comes from

Your open. line is

Elizabeth Porter

thank is Elizabeth on Porter much. this Great, Keith, so you for

strategy, that to volatile given just if to incremental durability more on the and go-to-market times, uncertain macro you. might are segments, the Just anything doing you any more I for a guys customer focus environment, more wanted have example? see different GEO as spend, department adapt Thank there was

Yamini Rangan

so a the for thanks question. Yes, Elizabeth lot

I that shifts not earlier, of very terms broad are base but it's there. takes, with time We really In terms much seeing, what we consistent the of in saw said very, more. it what

team, though as value we very to customer TCO the strategy with as conversations terms our are And which and this question perspective, organization how we're adapting, customer cost both on partner our organization that sales focused in customer of well all an from earlier Now, the savings. and go-to-market the success That's direct go-to-market on. are place those revenue was has how if strategy, the and what messages. changed clearly focused start, think focused arming our the nature conversations are campaigns specific or means, impact, on

direct right messages would execution. of time of enablement, Now Kate know shift down customers, and this to at where else and additional the value doubling sales That's overall it. you I sales like rigor anything process doubling more can if don't within how broadly, our down look on we kinds deliver and is to I of add? kind partner the have on

Kate Bueker

it. got you think I

Operator

Bank We to now Sills from Securities. Brad of turn America

Your line go is open. Please ahead.

Brad Sills

Oh, echo I'll real it's get congratulations feedback new as I from into here. larger, solid tough a deals higher And then perspective those the with strategic we're great. see if execution on first close? please cycle, to I so Hub much. more means deals of could, for the we And also challengers ask move environment. that wanted perhaps And levels organization that Service that very hearing major a to could in revamp please. positive that on about the approvals Thanks your

Yamini Rangan

helpdesk as that been reminder, Hub Hey, both more desk, powered long that project the customers QX, focus of inbound list well are needed we great providing was of help support for of Are SLAs, has And that the features in like very is products? number just the with the mobile, the after that and start asked traction automation. channel as features. a of buying us I'll provides Brad, for a major modern beginning including Service following is, that happy We're And there product very customers name to a a see relaunch AI omni relaunch. happy more -- one. moving And the and the a in products? general product? the with customers three a really usage all those launched as a like past we QX of to quarter, more like it, positively And customer in seen part And with thanks we're you lot are both questions. and ticket a calling, are And the trending inbox right we've features using direction. increase. question

so Service feedback the Hub And been overall, has from very positive.

are conversations to partners beginning Our they're having. terms traction this as in see the of

our so And direct is sales team.

more And multi means question, of So deals. second I is need and in more it which conversations. think that's the exactly decision seeing more strategic certainly what they're deals; your hub one, makers the part that's platform

involved a a get us, to the you can can as cohesive, which question value easy or As leaning asking as is, be what for connected, we use therefore, be they're our a and very deliver platform platform. consolidated been CEO, proposition the has it the field, in what CFO getting eliminated well message, into is

I gave was the you nature Now an Sando in that the prepared [ph] example of of the exactly conversation. remarks,

revenue have conversations hubs from HubSpot the couple drive it the What And having. platform direct how it as you're impact, does well to mean nature cost a that's already as savings? of both does and the of HubSpot. You're on as

Brad Sills

That's hear. Yamini. great Thanks to

Operator

Co. We now turn to Ken Wong from Oppenheimer &

Your line is open.

Ken Wong

I my to guys macro. dive of cycles growth headwinds. tossed headwind quick the terms that saw Think and some in for tossed one longer out here. taking wanted you out question. couple just into half softness to we of due thank a maybe A Great, point some ones of sales

away a are double to the check softness? of customers the see What's way to just purely it are lengthening? cycles as walking trimming you reflection wanted Is Just Or seeing? to right sales that deal second back more term near and moving about piece tactical Is growth to And or algorithm? then shift the movement? a profitability a spend? just macro response broader to that around the think of in sizes

Yamini Rangan

thanks a for Ken, lot question. the Hey,

the said, and is executives you I remarks, time, most elongation first of on we about clarity making prepared really and of in, actually think that the actually sales involved, of the see weeks, it, way solution cycle. time have And like the my back and of those it's can terms get then additional close. sure When deals our how the this, we're In to spending revenue. in next couple there comes impacts it conversations in or and more

that decision terms continue scrutiny of and we’ll think execute forward the the to and is way from I that And terms closing making, favorable it more in the HubSpot, in it in way about budget think for and results so but it elongation goes of in to a more scrutiny there.

our But there in we'll that a practical need our I consistent. at changed think how really more terms response or remain secular we're had question the for term, long is, customers HubSpot of is term you've trends this reflect near certainly longer perspective, the responding. in second more the changes we customers term. From near will have moment some what and term

company automation We a to from middle marketing the of are CRM in going a platform.

continue about We customers. longer SMBs, of continue levers both going And for to provide remain both us. And are term up they of those those of conversations end but in the serving of And really smaller kinds just have market. to the middle durable, not strong. we'll growth

Operator

Our next question comes from….

Dharmesh Shah

is, coming customers demand, One And, down. still and we've that of demand and has just here, as are seeing do terms years is front we is in well, static a not partners, things of which list it's we're from done long ever just of the office, innovation our as of we're as so we of slowed industry, across everyone's innovation kind as want have over been. where and years, past, the to left in not said, the okay, much the kind And that talking we asking had developments, They're trend new continuing features. for asking what asking what like kind not for I'm into to you of years for. new ideas. have customers there's okay, still on customers thing crawled here. add asking hours is sorry. spent seen hole so It's done that as product we're partners like, quick our they've eight about strategy just for, we which one know, meeting, are a They're

Operator

Our comes Fargo Michael from Turrin Wells next question Securities. from

open. is go ahead. line Please Your

Michael Turrin

to you're Appreciate mindful here But impact. us impact characterizations remind the takes in just for on group seeing Thank puts And is of model, it they're cycle of more later thanks. it's focus I moving but what taking there, we've software not to the across isn't seeing any some you on currently best And dynamics question. that for why in be tough assumptions. then maybe companies. currency given Kate, of And some given helpful. it mean, us pieces I some your billings showing in heard and the you. constant is compare, metric. Hey, necessarily a metric XX% that the know

Kate Bueker

particularly I you're currency, and and I that, I that revenue say and currency mean, speaking, the large. is difference The track we there billing guess is growth a QX. up generally a is that put half, seeing constant another. would one not in And point in going growth Yes, are what and really results which constant to just

back the the to remain we think would as of it I relative kind year over expect the trend of is. half

Operator

from Our next question from comes Mizuho. Panigrahi Siti

Your line ahead. Please is go open.

Siti Panigrahi

acquiring When you saw we playbook post to on click versus different thanks post is COVID returning it going that what downgrades, on double last, downgrades, XXXX? trying saw how now? for you be say more a more you're contrast take XXXX, this how to promotion. slowdown, you're digitally pandemic? strategy doesn't. question. this to click we time Is your navigate your be mean you and strategy enabled I XXXX, how double last Yamini, double subscription what's compare versus Could wanting now? in powered in to to digital now taking versus know focused setting I customers It uncertainty. for with my Thanks more in Could

Yamini Rangan

pandemic, question. would buying the and multiple three with I things what the customers the Now, shifted. the two And focus as Yes, for there conversations into was, getting and was, towards digitally say, right? customers, a almost conversations have digitally going points, that have thanks would I lot powered, just was getting with Siti our say solutions enabled. I

I more is can of impact and of get center about much cost efficiency that and what the level in is First revenue lot of off, the conversation. the what a is conversation level the is, front

turned pandemic, organization, had Customer playbook our small medium we So, businesses get focused on going from organization, the online. literally our perspective, into sales helping and all around, Success

Now, for most well get of are around, last turning had a focused as revenue years. they've the and our out the impact, as saving over driving our playbooks ensuring they spend couple on the cost it's really customers of that and that

we priority? challenges. and customers, And so helpful of is centers around talk And helping really when be in top them meet what about everything their terms their our can playbook current for solving the how very we

Operator

turn from now Terry Securities. to We Tillman Truist

Your line is open. Please go ahead.

Unidentified Analyst

Appreciate This other Great. Robert payments. from into the to get customers embedding [ph] Carwash on taking Terry. feature question. CRM? for Thanks quantifiable case Dion for Thanks. it are the where is and International study customers impacts using from on some But seeing group you've here's feedback what heard

Yamini Rangan

worth big trading said, is opportunity us us a solid on question, the strategic great mean, into based growth are payments very hypothesis. think think two going I future. and that's a is very And that's nurturing. a it it's look, for that patiently a we're actually Yes, commerce for a And we path, and this we Robert. we've perspective, payments is from I

terms of is it but slower businesses businesses selling what BXB more kind one of can first by that. The seems with BXB, doing that online. very we And BXB have obvious kind grow of revenue are seen in in

And so one that number hypothesis. is,

grow. in is conversation, terms of businesses because will really helps from a hypothesis of The it's bring Why, has us, second grounded and objects help what context campaign, into you purchased they and when you support that in a part data customer or grow. CRM them paid, marketing payments, have commerce conversation, what within sales have and the the then it our or

before And past we're the found online. sell This the two have with hypothesis. the now we from hypothesis become year, with customers payments they those in that customer that, but more terms to us. and they has example is So and customer, become two CRM just into provides our feedback after the main dashboard not I the and customer to new bringing grown. of remarks in us those guess are ways And working prepared over gave with a was they visibility yes, a our a conviction that only grow connecting continue it

payments share driving future. with focus they hypothesis have certainly the the as fit we'll But time experience go broadly continue validated we within we those we're in grow from We found experience. so, to both of the the speaking, discover transaction us. And drive great more to are cases customer time HubSpot and they to to and and the use great close examples continuing customer that on now

we're customers So there. we're hearing happy from what with

Operator

from ISI. Our comes next question Materne Kirk Evercore from

Your line is open.

Kirk Materne

is Yamini, much. you either thanks that Yes, to touched there was a just any, from new. sounds new net that if deals product customers? that very the be like nature you clear multi towards or just more wasn't I guess It with it's this, expansion are are customers but if spend impacting elongated, split or deals existing upon getting I bigger sorry are in perhaps perspective sure on getting expansion pushed, that

that'd there, can you color be If any add helpful.

Yamini Rangan

term, new terms mix we well as install Kirk, And good people, of see of Yes, install Having between it's in as in I think we'll are both the a around. base and elongation across said it's more I base shorter look, think both seeing kind that, what it's move new. question. a

on of couple platforms. a here, I consolidating, fewer we're as mentioned, consolidation off, times First seeing

looking if part so installed to the in our in further as And they HubSpot consolidate, couple And already marketing well base have as has they that is they're of second significantly has portfolio of club, product grown drives it in at years. mix. install more the already breadth our that failed an of base terms last of have both and or pretty And expanded pub, depth.

our have of install well kind been, more base. into proposition broader partner So our teams as value direct and as

product this we innovation install based to and base move look as us telling there. we as our new month, future, a cycle see And the our so a are little well what we bit why mix as month balance on very into between see around both customers healthy

Operator

from McGinnis comes question from final Taylor Our UBS.

open. is go Please line Your ahead.

Taylor McGinnis

you the quarter going for thanks question to on and Yes, earlier. much duration has believe, squeezing my and off question one hi, from maybe know, I next. billing so Michael's co-terming impacted

a more in thoughts pipeline conservatism, I that you is maybe, quarter? seeing guide wanting reflective that as impact embedded to today, metric, you're given the on provide have that the rep, any guess any that post the just lower that? basis. of what mean, this Thanks. And the to on the guide can had maybe is the of there that year-over-year worsen? the could strength constant in slowdown currency just be mindful So rep And of does might And

Yamini Rangan

a would I Yes, side. that there's not add the around ton billing

We continued QX. of years. bit that And duration have the a little seeing over of of last consistently shortening a just been into couple

continuation just So I was of a not seeing. They're trends the been news. new we've that

macro softness the guidance assumed that we see sort tried through in half year. the question. the we back of guidance and and environment saw going to terms to through July, the I Gabrielle's In the and of would this continue sustain that cover We the of that to in June in were

see environment, like We last to nor another we that a overall step saw we're over from we're see recovery what down to are couple really not going in here. assuming we are assuming going that just the status change a It's months. of the quo

Operator

hand back I remarks. CEO of HubSpot to Rangan, Q&A. for our final will now Yamini concludes This

Yamini Rangan

customers, as thanking And well work. in Well, I as day for seeing all to of everyone. I to mission at thank you a employees look couple commitment analyst I of just investors of the to forward our also their want a INBOUND to our partners end support. and lot incredible at want by many our months. Thanks for their

Operator

participation. you your is now concluded. to We call for Today’s thank like

You lines. may your now disconnect

HubSpot (HUBS) 5 Aug 222022 Q2 Earnings call transcript