HUBS - Earnings call transcript Q4 2024

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Yamini Rangan

[Audio Gap]

or 50% in 2025. This has enabled us to grow our customer base without adding more support staff, freeing our team to focus on solving more complex issues. Similarly, our AI sales bot is resolving over 80% of website chat inquiries, making our chat teams more efficient while delivering great customer experiences. And we're transforming sales prospecting. generated alone. meetings communications team our automated QX in and over for XX,XXX sales AI-powered helping work is example. AI us lead better by and smarter, serve customers this exciting of AI. And the transformation of with an just is journey beginning

Okay.

AI how HubSpot future? is, The Our bigger is clear. an win will are But lead gaining the efforts question in answer and AI-first momentum.

We will win for X key reasons.

data. structured unify we and unstructured First,

ecosystem And connecting provide Second, builders active across three, journey. we context customer most have complete we AI users. entire agent AI and industry's the the

The need First, for succeed agents contact rely and unstructured and on HubSpot calls, on meeting the data for away. in which great and access data is customer to of transcripts, uniquely structured data positioned data, not need already the that where company, customer, does go data, also reporting This XX% records e-mails deeper is and needs. agents insights reveals here. into HubSpot excels. But

sales a So for using example, of That competitor. a unstructured imagine made creating data. is an list to specific reference calls agent that

deals can the and filter list won. data. were only that using include you That's Now structured that

time. competitor. most Now key points be new by acquisition our summarize this you a and winning takes and to effective real data of combination doing the whole in level game use against to seem can changer and structured that the this that unstructured The a transcripts is of in frame.ai

need task applications just agents point more data. like need solve short specific AI Second, fall that just did. Siloed will They context. than problems agents siloed

system that have journey. need the engagement system record of AI-powered the context with execution with customer ensures a a agents HubSpot's Now unifying with all-in-one entire hubs, a and action approach of they across of system data,

months, XXx a a working network think the vision, create is We've over complete agents. agent.ai, and we've create from been and the agents the Finally, grown an the vibrant incubating in with are investing By hybrid to to about and at ecosystem. ecosystem-centric of of consisting X people providing creating user data, XXX,XXX the over a to tool. AI. about our builders combining customer AI helping project and low-code customers To empowered future both users following unstructured agents over realize context INBOUND best approach, together. seamlessly team, in age base We XX,XXX of users, our agent to we of structured X,XXX AI agent.ai shift we've been this

Okay.

growth success. wrap highlighting me for Let drive will and levers by long-term up the that our strategy

entering are more alignment than with on clarity before. year execution more more We this strategy, on urgency and ever outcomes, in

and double products our down on fast, first. focus unified our and will We make AI customer easy,

you and platform product with that AI expect power AI can all offerings. meaningful side, will On Copilots, the to us the make progress agents brief see layer

to and boarding will within functionality We easier continue deeper build our ever upmarket while making onboarding product.

of We capabilities and INBOUND are April a in our spotlight spring to September. in unveil excited at at host later new

match key the on of on usage, Improved and more product with we count that opportunity. Rep-driven growth, head we terms in XXXX. Now targeted in by focus X progress retention investments driven made growth, downgrades, will the levers. building

Operator

Instructions] [Operator you. Thank

Ryan Burkart

on technical guess at and didn't the operator. webcast the difficulties Hold some on start, start had We I time.

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Yamini Rangan

Okay. Thank you, Ryan.

to We'll technical now. about start call. welcome, And and sorry the Thanks, the the call difficulties. everyone,

and in AI success. we growth positioned and to themes multiple and XXXX QX win and activating levers to AI, we're our and our Then long-term with highlight driving those gears results with lead begin drive the want to I'll momentum are I results. consistent switch strong how the

Let's dive in.

leadership our in as growth, another had of XX% We highlighting we balancing currency. up XXXX constant a grew in company. and year quarter year-over-year. currency We a to operating of QX basis full revenue profit revenue year-over-year XX% scale. and and We're grew XX.X% platform operating the finish delivered XXX constant solid as for growth standout margin points profitability QX, with consistently XX% full year, in XXXX,

scale to environment. Our in HubSpot customer These base our trust net consolidate on globally as innovation customer X,XXX underscore expanded customers the and XXX,XXX on with customers our in platform have the results they quarter. in over to any additions rely our

the our truly results, themes me excites the what beyond driving are consistent Now performance.

success, companies in that momentum and defining upmarket cemented platform. an platform and in innovation. leap position scaling marks customer improvements our a by for product XXXX and strong Our XXXX was as transformative was as growing a evolution AI-first our multi-hub retention in down a one adoption, driven market leading year,

X% of We value with made our more customer of customer year-over-year, platform. use of proof Over XX% by platform Pro+ now with new significant heights. adoption up our strides X or the the unified clear multi-hub reaching ARR unified hubs, customers

a In innovation, by capabilities ecosystem as in tools our of execution the XX% partners and points our year-over-year, X Awareness product enterprise-grade advancements larger platform support, resonate with development key segment, like HubSpot was increasing UI upmarket driven product with partner XX% cold awareness a by Large customization, HubSpot CRM with ecosystem. success that of by platform deeper hub strong extensions driven and as driving sensitive for momentum grew customer year-over-year. data and growing selling And deals improved by is globally. service teams.

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better a And consistent also We overall improved experience startup was boarding. ever customers in with the for finally, retention theme XXXX. onboarding and

with driving platform. demonstrate finding momentum and efforts usage, churn. fewer results see led value HubSpot as It's increased consistent and to across customer a lasting downgrades themes and success Our focused exciting our teams product to reduced the really customers our

Okay.

Let's and with company about talk XXXX and AI. we products, year transformative AI. for entire was as a HubSpot our switch our reimagined our gears platform

the are AI-first assistant to vision, by within and out tasks customer-facing platform. the and embedding a this across with. work launched gives features on box, handle digital AI our every hub the AI employee We into a entire agents embedded every becoming platform sensitive hubs. we contact Copilot To committed deliver to customer that AI that of XX-plus

remix, early Hub Marketing Its in XX% the Hub First start the feature. the with innovate AI like new in case customers We've XXXX, continued podcast content hub study year than and fastest-growing impactful of XX% rate from to enabling multi-input success year. of create most Hub content of to popular and the attach ever. to faster at to capabilities Content was by the AI launched December, remix, our remix, driven increased

features. Service AI-powered Hub is driven seeing strong enterprise by upmarket growth

enterprise XXX-plus quarter-over-quarter customers and with in increased New grew Service XXX% year-over-year. QX, XX% Hub seats portals

New and customer AI reply value help and features delivering strong to recommendations ticket seeing with larger desk success and teams. summaries, adoption workspaces are like call summaries

on Breeze Copilot XX,XXX crack. over is users beginning to We Copilot. have weekly now active

agent. is achieve for customers over unique customers to it an Agent of agents in easy beginning use deliver X,XXX Breeze customers content to customers, and value average XX%. customer with rate especially adopting resolution work, now and advantages to Our with Service Copilot available all of Customer are agent using it's HubSpot. their Hub the to flow are because Pro+

process in to shared, it now efficient. publish days, Content of less value, more some their to still is leveraging streamlined of blogs. over beginning with users is be workflows What XX% of We're Agent Transkribus This has are time-intensive early but helping gaining one optimize is and see most produce and the customer effort. also manual, active our to businesses used agent customers content as with traction customers transformative. effective and implementing our been

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is how our with work AI, By showing exciting we What are at way possible HubSpot. with experimenting internally AI we're what's transform customers using boldly to we equally the AI. is

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Okay.

and lead But Our the AI is, AI-first clear. is question win The an how HubSpot efforts answer future? gaining bigger in momentum. will are

for X We will win key reasons.

data. unstructured and structure unify we First,

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that did. AI approach, need Siloed short need engagement point unifying data, and journey. of action problems a all with just agents system record ensures agents across just a data. specific system HubSpot's solve execution that a context. the more like task have with they of siloed entire customer They of applications system than agents AI-powered fall hubs, context the will in need with Second, one

a INBOUND unstructured both vision, X,XXX low-code at in agents. about over project realize about users the have AI context our and data, We and from of incubating create combining the XXX,XXX helping to people age to users, we future following our a AI to consisting We've XXx best vibrant in agent.ai, structured we empowered providing Finally, XX,XXX agent.ai seamlessly a approach, and tool. the builders with By over is to the shift create together. AI. ecosystem-centric customers ecosystem. grown customer teams months, of been this of agents complete are an user of been To hybrid agents X network investing base the creating agent over working think we've and

Okay.

success. Let by and highlighting the our strategy me long-term growth for that levers drive wrap will

with alignment year this entering clarity more than are before. more ever on more execution and outcomes urgency We in strategy, on

on will We make AI double and products unified down our our first. easy, customer and fast, focus

expect Breeze the see power On meaningful to make all and agents can will Copilots, the layer us progress you that with AI product offerings. platform AI side,

easier to boarding We while making build will within functionality deeper ever our onboarding product. continue and upmarket

excited are capabilities We in new April at a September. spotlight to and host in spring our at unveil INBOUND of later

acquisition of seat with price terms investments growth levers customer with Rep-driven and AI, focus we clear to more sustainable product post Improved driven these tailwind downgrades and from XXXX. growth. path in long-term growth, Now will on the migration. we count tailwinds targeted made creating will a Migration be on building another pricing, levers. key for product And usage, that the innovation retention provide and Together, opportunity. expansion. renewal which progress ongoing for lift new and upgrades match head by in X

Bueker, financial our hand to With walk over Kate? you results. that, CFO, and through I'll Kate to it operating our

Kathryn Bueker

Thanks, Yamini.

and to our full financial fourth turn XXXX results. Let's quarter year

services year in while International other XX% currency as representing XX% revenue Subscription on revenue XX% subscription an revenue growth XX%, as-reported XX% XXXX other XX% constant XX% Full on Full year-over-year both as grew total on revenue both revenue XX% reported. reported, in as-reported and revenue. was while domestic and grew and QX increased revenue increased year grew XX% XX% in basis. basis. constant basis. currency revenue and year-over-year year-over-year, and QX year-over-year, year-over-year. constant XX% of grew an an grew services revenue currency as-reported

and with XXX,XXX growing added in revenue based of customer net per We total year-over-year. X,XXX down currency subscription year roughly XX% QX, in customers QX, X% over $XX,XXX the was ending nearly in customers, flat Average from pricing as-reported year-over-year remained customer constant customers new a an X the retention seats on in basis. healthy expansion on points to the continued momentum model. new XXs the XXX%, high QX net dollar increased seed sequentially and reflecting retention in revenue

to net the by encouraged a we're QX, retention While in downtick QX. expect seasonal saw revenue in improvements in see we we

from we as-reported expect in constant model billings year the on growing pricing couple full an $XXX The points dollar revenue a QX, change U.S. of at made up of of and retention XXXX. an to as-reported For on Calculated in XXXX, million net its in largely to basis. early the X-point XX% XX% were year-over-year, be year-over-year resulted and billings the headwind FX significant in currency of revenue, deferred the strengthening impact quarter, growth. end the overall we

the focused measures. reflects X the of to XX% comments margin to structure. points our and compared continued our and changes both commission QX period. operating my year remainder was from was non-GAAP operating full The in progress product partner margin impact refer infrastructure, up will to ago optimizing hiring This our the XX.X%, year

$XXX Free cash or QX, diluted and the per was revenue million, XX% income revenue in of XX% or Net QX, $XXX year. of share. was fully $XXX for flow or million $X.XX in million, full

Finally, our marketable and December. securities totaled the end billion of at $X.X cash

XXXX key Before to inputs to our I highlight guidance, dive growth I into profile. wanted several

foundation expect retention. usage customer of we and continued a First, strong product

based their invest to we pricing customers and benefit will continue go-to-market as model renewal capacity. migration, for seats post up XXXX revenue Our come will in first

have assume continue seen case be this we we and while the business throughout Second, behavior, value-driven sentiment to will purchase small improve, the year. see that we

in meaningfully U.S. the reported November. results since Finally, strengthened has we QX dollar

rates, for exchange year point to to headwind margin. that, let's foreign basis we the point XXXX headwind a quarter an and and first spot As growth, the expect profit guidance be revenue at XXX current result, approximately XX a full of to basis dive With XXXX. into operating

XX% full expected margin. range the on income to XXXX, operating net the revenue XX% in to Non-GAAP and between be $X.XX. XX.X to expected expected $X.XX outstanding. quarter, $XXX $XXX revenue constant profit be total be $X.XXX year-over-year million, diluted per as-reported as-reported up XX% million constant is million between and billion is and share in to basis. total year an For Non-GAAP up XX% year-over-year an of first on And This $XXX and fully profit basis. be representing shares of million the $XXX is as-reported is diluted of $X.XXX expected to XX% range as-reported for million, currency in the assumes billion, to operating currency in an

Non-GAAP representing to operating profit $XX between is operating expected XX% be margin. a million million, and profit $XX

over in X $X.XX between Non-GAAP We headwind XXX(k) is to fully outstanding. our million share little income per in and profit diluted diluted to net expect expected operating the company shares assumes of match rate a XX.X due point QX $X.XX. margin increase contributions. be to This an

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

our excited launch opportunity of are Breeze growth We Intelligence with the multiyear and product. recent

XXXX We little point than growth... expect of a to headwind less X revenue

Difficulty] [Technical

Ryan Burkart

your on again, lines. please gentlemen, Once remain lines. ladies and Please on remain remain gentlemen, please and your line. your Ladies on

momentarily. resume Operator? will conference Your

Operator

hear can we you. Yes,

Ryan Burkart

having We pick section. more here. get difficulties Okay. she Kate's up to for to difficulties through everybody or the be to technical off, here. it. telephone technical left Apologies the seem guidance where We'll on going

Kathryn Bueker

I'm you just in adjust Again, Okay. into your the going keep mind as please key models, to modeling the following. dive points.

Breeze our expect headwind Intelligence the of bit from the revenue the recent Clearbit opportunity than XXXX of a a less point wind business. launch product, with of growth down legacy of excited growth multiyear We're we to

$XXX for free QX X% for with capitalization XXXX, to of we by And software year to million expect be year full driven XXXX, as in about of free lastly, CapEx revenue flow percentage development. of the the cash seasonally of cash be flow expect stronger We a roughly and full primarily QX.

and all out want operator, to customers customers, to to better helping questions. close up let's call recognize our a ongoing the XXXX, thank partners for for investors our we that, our I open for a contributions mission you take As support. to the moment With grow of and their HubSpotters big

Operator

question And technical our [Operator of from the the with difficulties, be Samad Samana session. the Q&A first extending to Due Instructions] comes Certainly. Jefferies. will we line

Samad Samana

what strong and had another are difficulties, I there loud guys Yamini but quarter, know I is clear, very on congrats heard technical that. you

about Maybe given and AI in further, companies bit want you're the a of dig I AI. takes little to talk in some puts especially on let's other around software all said, there. the context what doing have what

AI market. the discussed plans companies of last have more Some monetization other couple for in time in the the months have software their leading change as products in spent a

know now pricing monetization I'm if related that see customer had customers on hands. the and are the their ROI the Breeze Kate, have maybe comment your you a And curious if AI that shifting? impact evolved headwind? I to And XXXX measuring and how how your any, bit conversations path forecast, down the to you wind have in thinking of And on about all? at fair in modernization revenue

Yamini Rangan

with Thanks AI hanging heard momentum thanks we so us. And gaining I'm and a are Samad, from it and that perspective. in that lot, for you glad clear an loud

So take question me monetization. let that on

Look, AI-first be is we there about AI one the an way should product. that think product,

separate to we with beginning. that and across monetization acquisition hub and AI our customer across from is the So expansion And platform AI with entire how be we strategy the and embed for separate win been drive and vision believe we strategy across that platform. or lead That's about has really AI platform. Therefore, the how entire don't our our the every why add-on AI. a across has been hub should there a

the continue We by That as working the Xx. and are of in we're in to more Hub upmarket, is even who drive year success we're rate in AI to remarks, for driven, type and traction are doing going we last our who mentioned in that. us, we driven. base, And that going especially as Hub, The attached talk to strategy is Content AI Hub I and pipeline Service improved in prepared my Marketing innovation. the of customers and installed conviction to to have keep our was

have AI, that now, on AI and that, is pricing. agents. That with our pricing more focused hybrid. will future said value consistent I pricing. introduce for value do get having seat-based with be we'll usage-based delivering Right of we're Now customers will we think the as And both usage-based

our pricing. seat combination of be pricing space a will usage So and model

really But for seat-based on we to that approach. our adding focus on will first what approach is consistently important monetizing value and and work That us in that before is will based to continue usage. delivering on for then us worked has model

focus clear. impact remains the pipeline repeat terms is So for innovation, the very delivering and in conversations. platform, across really having customer us consistently AI that and entire good of driving Embedding conversations value our

Kathryn Bueker

on guidance. question is AI just Samad, assumed for what answer specific to And the and

are We share but provide things. going I a to there, assumptions will specific few

assumed The first are you is that said, monetization That heard XXXX AI. in on guidance. focused we have glad we're that direct we any agent our not

that are AI Yamini customers is value growing from heard seeing adoption that You from quickly.

are You in see momentum is Service momentum Hub directly to the functionality about we that Hub, Content and and the features Sales strong related the hear AI strong and that adding. Hub in

consider that baked their is to and decision-making. We guidance. XXXX, AI customers continue is through into are seeing what going is assumption the And is that, that in all increasingly

Operator

comes the And our from JPMorgan. of line with Mark question next Murphy

Mark Murphy

a down? you Kate, run the provide, the DeepSeek to -- think whether perspective very or unleash ability Dharmesh for on you great. these Breeze volume you be the customers? can you goes LLMs -- efficient is use Could curious what think minds? cost crossed inference or your would cost volume you models? Yamini And you and agents on profile drive one side you more the side. would the I'm of of Any lower breakthrough run for power it's perspective alter there appreciate and your up on something or can it does if can cost Do what goes efficiency a AI, maybe these I with hearing

Dharmesh Shah

This the Dharmesh. thanks question. Mark, Sure. for is

So a couple of things.

costs reduction, of COGS And even showed source it's kind There competition, a that open and because on already like was dramatic of open simply DeepSeek fact in a reduction model, the increased DeepSeek kind down on further. been even side. weave is before an spectacular One, the scene. up that of has COGS the now driven

cost a on going lowering So positive yes, because there already across started their inference are board really everyone, the will inference. seeing absolutely, for be as costs impact we've to reduce

they even of can can OpenAI is not Because to cases models, to the is we actually both and language although They of on What's take the can me, large very exciting different much thought, models, they're types we the terms terms take reasoning these of of have use more about than really and because similar that do. should of were model, DeepSeek goals excited able of expand oX in what What kinds what do they that they model, be they're COGS, can we solve. before. actually on. reduction in nuanced more agents reasoning customer a the and kind sophisticated things problems in sound chain goals

you. So that's Thank exciting. super

Operator

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

Bradley Sills

to the quarter. here upselling to motion I with and see the around Copilots ask wanted Really and Agents. question all during a the exciting progress activity

current that's haven't in been the seen really yet. environment, the one think I you that unlock where area

you and any kind improvement was You've Are been stabilized is kind But value-oriented you your the mode that of SMBs? has churn described clear in seeing through pretty quarter? of this there here. tone amongst downgrades observation curious in what still

Kathryn Bueker

retention in shared prepared launched for the thank retention, so pricing driver the new improvement with question. you you model from the much in X the revenue points Net was biggest as largely But of the as know, the revenue earlier to that Brad, net impact upgrades, -- we in that up seat-based seat year. sequentially was of associated in XXX. remarks, Yes, I

us revenue model, heard that retention the motion, pricing downgrade What is net last and net is seen you was downgrades. into Other we you're consistent over the of what from we quarters right, very upgrades with fourth the flows easing what quarter. stabilization the that had in and saw a seats couple of than based and

we externally, still The that the move. but I again are And upgrades. really driven. is really big in motion environment headwind we in take have upgrades upgrade some remaining change value people seen -- for saw other improvements external think And sentiment other going the to a in QX, that to it's

Operator

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

Arjun Bhatia

seeing Yes. Perfect. Congrats on is a you just change how Can strong QX here. Kate, mentioned changed Is a one helpful. bit thing marketing that margins on your partner now. and behavior the years on the couple of of partner sales was here. after elaborate better revenue compensation what model? you side? would That the I impact little back margin have acceleration side, behavior a you are cost But you on very it be adjusted might think there? structure

Yamini Rangan

and question I'm the are you through partner the take process. where we this going in Yamini. is to walk Arjun,

commissions changes new retire made deals the value working of we're announced we commissions, we partners. partner look, have that And made changes lifetime deals very commissions those the that customers increase mentioned, So will as and specifically, our in XXXX, will with you commissions, multiyear a And XXXX. we some to will in X-year confident XXXX. starting get existing from in

customers, with the to effect deals. And the lose if not the engaged commissions. customers, if And the changes, gist you with commission. you are engaged the you existing preserve in April actively continue you're that you're in existing for so deal But into comes of an and

communicating will we ecosystem of the effect in April, the that up Now ecosystem. really been with our with ecosystem. of that in and come all changes, the numbers. terms and the and shows held prepared We've changes We've hands to

can marketing the been growth. funds, Now who we that level funds, our thing driving enablement are is parallel, been pretty and heavily And and sales see partners. mention partners in fold. investing of resulted development better increasing partners in that teams. have all in has engagement a our the providing you And We've co-selling in that between would I much of efforts couple growth with

mentioned, I grew just As XX% year-over-year. co-selling

really that beginning work. is So to

Operator

next of the ISI. question from line comes And with Evercore our Materne Kirk

S. Kirk Materne

you of Kate, just we guide year the how the on quarter. relative could customer about thinking it new be maybe the on should relates provide to to Congrats little sort as a acquisitions Just any over be the momentum, I'm commentary potentially growth? ARPC Hub change Service some upmarket around way of if thinking just in should there's metrics? the those the and about given wondering we some of color

Kathryn Bueker

Yes, thanks X,XXX. the with the we of the really coming in Kirk, at question. that XX,XXX the range were to for upper X,XXX Overall, we really we are quarter-over-quarter think least additions, There this zone right quarters happy net is your discussed. -- for next some of at expectations. end It's at variability have seen in net adds but the the I for couple

on we new that a customer is have of this the something we say eliminated one last couple seats of balanced enterprise. And professional the more seen minimum the that and we the post professional tier. starter across what tier quarters, profile because is introduction is that would of enterprise the and the I thing The model over seats expected and mix

we're balance of the so primarily seeing result that. a And is that

So the stabilize half near more as net X,XXX adds, move like growth back that the in and And range something in as is to XX,XXX we a year. then adds right, professional ASRPC that will enterprise. that XXXX, the we ASRPC in would that into we keeps that, term look of net should looks expect a then result assume is at I higher of what probably happening. mix low single-digit would

Operator

with Genuity. Our Canaccord of DJ next comes question line the Hynes from

David Hynes

Dharmesh. for Maybe one

for becomes is one but the every enterprise world Dharmesh, app still issue, is of maybe we've Agentic the been SMB, who assume version, in in an the more owns need even of questions app that's So And if their of bringing in more these an own HubSpot control majority all agents that exists getting right? estate. the tower I stack a if

you tower? that positioned is how So do to think need? that be control And HubSpot how about

Dharmesh Shah

Yes. Thanks for that question.

Agent each and the higher other as composability factor with becomes discover each platforms to order So agents of goals. see kind we super that order need a collaborate, work these happening to accomplish other important evolve, is what in

what we've doing agent.ai build agent.ai mind we with have HubSpot kind is been to that's on want network. so share builders And capture and the of that

And kind Yamini I'm night, crossed some had comments of of way, last to shared gotten share -- by and we we as XX,XXX the XXX,XXX. users. to the said just that excited XXX,XXX number opening

some So we're seeing uptake. really great

the to X,XXX build We people have on their platform. own agents enabled

how original be So there the kind way want the to where want to the some cloud where the going evolving they're and are, dominant the similar aggregate with saw are. is users computing where platforms will to we builders aggregate customers to we see of that all this

existing thousands agent take can data customer we we code and that unified that distribution people. kind mechanism of all hundreds available data, tool and of have low to make the contextual with builders these base, So the of our to reach along a

So we We're think super for that's a question. winning the strategy. Thanks excited.

Operator

comes of Markets. Our line next with Ader from Jackson KeyBanc Capital question the

Jackson Ader

marketing are lot it through you If like I guys internally of different went cases, AI. adopting of sales. bunch a and a sounds you think, -- Yamini use

then where obviously, you And do you does or money, expense HubSpot savings? some redeploy we to for that allow to And better? if so you growth, it meaningfully would impact save expect expect those might the

Kathryn Bueker

question. the for thanks Yes,

go-to-market. I think envisioning that about transformation of bit how Yamini we're the can talk a our

very areas reinvestment years. with investment we consistent AI terms internally. in outsized X last is are for have over the see the adopting broadly you'll areas driven What We where of

go in obviously that into term. innovation our and opportunity is is to the well. off first see, this invest to and the against and adding capacity we really the we force market. And R&D to fuel like to where engine feel year the growth The for drive second to We a pay long want is continue will capacity sales

Yamini Rangan

Yes. about I'll talk reimagining And how are own internally. go-to-market our we

And -- we've As soon support for complex clear. heard agents this able we the thing been of about of years. we very moment case and and very, And rate we've in our part more generative internally. improved the take leverage couple as last better that really not support, me the you we them been product, with saw And talk AI, AI big is we've resolution pivoted to our issues. also go-to-market only use reimagining the same did

that so on And continue path. I we'll think

even strategy are Marketing, up meetings We're huge at talked I it by very early about stages, setting entire that. reimagining early of with are the XX,XXX we with up AI. marketing meetings. stages set AI, benefits, the we new for our leveraging at

that, think the AI scale use marketing through content just not but and prospecting entire I case, can but for process. in leveraging continue we really personalization to the

value not CMO, at reimagine the own our just of the educate but also apply this right AI. If and Kipp, you our base to doing and AI he's get is marketing, to customer doing AI look from he to this he's at our forefront ways on to

do. sales. same stages thing the with we're can of what And I mean we the early in

We leveraging research, for chat follow-throughs, are better goes already it list discovery, follow-ups and on. the or

own our to So impacts long-term level as to much our for as it we reimagining product, midterm also are our but efficiency. innovating is and on innovation, have with we go-to-market, that of going are

Operator

next of Goldman Our Borges the Sachs. comes line from Gabriela question with

Gabriela Borges

this date, for then pricing idea productivity of for concept Yamini, not realizing at later that's customers, and for a customers value a and increases HubSpot. driving new

just and think of things some mapping do framework, be to of these what So pricing on you about you to And increases are for the looking line? of could further some that consumption maybe piece model the for productivity down on statistics turn the AI? pricing remind of us your how agents

Yamini Rangan

you're our then and like make should to introduce value to been our be we Consistently, drive approach Gabriela, innovate monetization. the customers, getting they're that sure has question, philosophy one no that's about right, extensively, a to great think And innovation pricing consistent surprise anybody. all that time. pricing

pushback have when Hub increased Marketing years never we've Hub, prices for we Service we the by Sales that, gotten Hub, significant delivered time we because have Over the value. do

our twofold. terms So AI, been of in has approach

First off, to platform AI our want have entire we features.

first creating purchase actually kind to at AI been the step. like product not easy, AI, embedding super adopt friction it point the making of of So within has and the visible

the So awareness AI within year, end significantly beginning of talked the of to to I And the the HubSpot say was have higher last year. awareness. I year, lot that of about towards compared a the

feel We of a one. lot number like made that's progress. So we've

is second adoption. The

two, did But the Breeze and within that things we we we to is, launched reason the of be it with want Breeze to product. easy. we it one, One want be recognizable

just buttons, within get use I the AI kind it see sparkle like that And it, are begin going you click of and you're can to HubSpot, those which examples if features on now customers it. shared. So from and value all are the

monetizing to add stages. when focus then It's and add repeat our our with be that's see We're good much component a launched model. feel with early begin see think we we value, repeat We'll repeat monetization. momentum. of ease able a But from agents, seeing usage usage XXXX. we'll very and very for to We're current we agents, value I to of agents, at set when Agents already at INBOUND. AI for specifically

Operator

next question Wolfe of from with And comes Zukin our Alex the line Research.

Aleksandr Zukin

kind whether comments change SMB thereof for lack as new of -- either you, or a look at kind driving headwinds two post-election, was demand ones. or you of on I've signs Maybe, there first environment of tailwinds just of got year? quarter different optimism the just the creating exiting a Yamini, kind the of

then for Dharmesh. follow-up got a I've quick And

Yamini Rangan

much Alex. started and of I in probably customers around improvements more some Sure, seen changes. September Look, some environment think I demand And the open Yes. it growth about to we've with are talking now rate interest initiatives. the think,

similar going It's And lot last we're trends value-driven. to are just these the to remain that, decisions assume decisions decisions Now having Kate we to are exist. customer and of of most what like a and Board saw part committee-based The that the buying year. emphasized, buying continue level. by made patterns of C-suite said and

environment the a and trends at when encouraging. Now look very when our demand I are look pipeline, at few I

customers First service, or consideration. at or are company, sales off, looking are in marketing we when in mid-market the

table. proposition within We a have our of choice. segment. first, value, emerged platform at to easy-to-use, We've fast And as really resonates the a value AI seat time the

to customers and And that HubSpot, about optimize visibility their continue the second, And they multi-hub. drive now having our they more within innovation. to to with The starting now are conversations and start we're innovation AI customers when consolidate to on increase HubSpot, costs use out AI. a it's friction it, the begin There no And of it. SKU for to as seeing value buy we're separate embedded fact all them those love trends. of they encouraging to road and within get And map. is they both

of in our pace environment. to focus So grow of our customers this drive value the to AI help First platform is AI any and to innovation, communicate

Aleksandr Zukin

look packaged then that if you. at there's to and continue the do for foundation And possible how question the companies I'd longer-form versus edge view maybe consistent, recently. software just investor of in what and of model software evolution a Basically, OpenAI development, the say, anxiety demo Dharmesh, DIY this you the Agentic specifically, guess, Perfect. agent And I agents what's agents you one, to referring I'm of at around with level kind AI do like from and community the software? sales

that of where what stems Like intelligence companies the how where presence a future about do maybe more foundation from world HubSpot what workflow doing? you embodies model think having are record system versus holistic plus of plus the this in gravity the center a kind that's of Agentic

Dharmesh Shah

question. for Thanks the Sure.

have thought computing, kind high-level DIY own build approach. always saw that We agents. becomes. a we I of will software. build happening SMBs said and and opposite quick off and We exact corporations just to cloud in a it how with do there appetite own build want like Just these SMB. regardless to build to all the not mega want easy of pieces our to our assemble together We take go our be own we try that want is see the everything.

playing and SMB at time is generation platform an ecosystem always I'd it and a and of answer. can of is we for we together, all they software platform me. the of together. love all what And is see for value my going something envision personal a company, is entire one provide, want unified of important core ease that building used kind That's to and belief be I that we that we are how super is fast that all of possible an to companies put say, for business agencies been see top to my sort my we think and to world, be one up. the what's So out important in that's what's new will when like level, done platform. going core I common SMBs development of What of thousands agents tailored HubSpot on on adoption, actual platform. to shaping everything piece it that's want see industry want

Operator

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

Brian Peterson

commonality double course on co-selling impressive Did that mix stat. That's the drove a to share you click pretty I can the Is any XXXX? of business channel strength of growth XX% wanted touch partners? of change channel in mentioned. there that you guys the and that over what

Yamini Rangan

multiple partners really focused Brian. selling we back results as of we're will with them want this And are and field. has and experts our years you, Yes, service Thank been And to see went there. that, very We partner the very I appreciate agencies happy you go sell cold to that take did we've cold kind we've and upmarket. CRM we said, off, thrilled marketing say the our question. we the ecosystem, the in to to I making. as source, way implementers. helped on really partners we within those from the

lot been we a of seeing multiyear the that is now are our So benefit like a we that arc partner with ecosystem. working have

And at partner our XXXX, much look at better upmarket, with customer if we we specifically got joint pursuits working ecosystem.

multi-hub the are as product enabling adoption. benefit our partner we understand and ecosystem well to sales Our better, teams as both of the full got

implementing those selling more multi-hub multi-hub they're and with deals customers. deals so upmarket And

a And an they of it. ecosystem are and we opportunity being in the the not benefit about AI-first -- see associated being us in AI-first they into huge and being us ecosystem, customer and an they like but are with talking platform, in with leaning them center now a an and just front see to it ecosystem

So it's even the multiyear ecosystem an is in and been opportunity ahead. bigger an making, AI-first there as

Operator

Barclays. next Ryan Your question MacWilliams from of with comes the line

Ryan MacWilliams

that and you can us pricing receive the in to your base how increase through Can how installed expect layer remind XXXX? just you

Kathryn Bueker

question. appreciate I Sure. the

we customer Analyst customers back the pricing for model. Day, new the the XXXX. from seat-based think started customers continue to the have of on legacy will model happened to I migration covered the pricing our the drive and of base simplest half through has as migrate at XXXX existing That through to the we we

migrated of customer to All by we pricing year. this base, to the have of our model intend end the new

they said, that migrated. renewal price up they the Now existing come when after customers happens for increase for are

then upon can And their So X% are at migrated up increase ARR. receive first renewal. a pricing neutral a they they in over to

customers are the can ARR on in and XX% is expectation will -- end the for we're And this still. you earlier renewal motion as by pretty that early renewal between of XX% there migration, first of sort post then, the gone We imagine our have year. through that of

Operator

of next question Rishi comes Markets. with Capital our the line from Jaluria RBC And

Rishi Jaluria

wanted a something to ask longer-term I little maybe bit more focus.

or productivity. it's But AI, talking unlock, technological with Internet, on think waves great we cloud. A a momentum is the this times when waves gets really whether about So the these focus efficiency, AI. see we're of prior really to lot technological exciting greater what greater mobile if

generative couldn't your we you line, the these early with the ability of kind ability work this, to that think think unlock to of seeing net you're this can as new be your cases how down about the we some in you architecturally where are does new about use those what a about to doing we And HubSpot AI thinking things mean before? if as for you -- do So do pivot should architectures result? that

Yamini Rangan

questions possible structured first data. get data. if it is contact, is can answers the That it. our unstructured about status from you kinds ask step allow we that Rishi, a language. like talked Things and of acquisition, insights we're back of I now was a customers you and made exactly and better back about breakthrough. Frame. of But that natural deal it, AI emblematic things and will about to Look, think that recent I question lot, the to Frame much company, in how get this generative like thinking unlock. It's really

breakthrough to transcripts. company data. that bigger unstructured another They But through there They're XX% are calls. it are of single into in unstructured. get flows And is to in action. to conversations every insights with in of in the convert They natural time are possible and day, and language e-mails. ask those customer all better data that questions in insights now evergreen and is real

together, So doing. which I that's structured unstructured a what and think unlock huge we data are bringing exactly is by, one,

The second have not pieces. part of these the shift two is it's important just to

of think company. this a employee think on an way layer to the easiest within of is as about And And on need it context of that knowledge a You it. top a the top layer new data. -- become

tone value proposition. the ideal the the the voice You of know the profile, company, company, the of customer

have this structured that we All and top And unstructured top of knowledge that gives million perspective. that collaborating, that huge that us of vast that benefit data bringing architecture data. fact X.X an are data. And is fabric context layer active a on right of on weekly the we're data that. building users that from of building We're and

what get of of do that an change. orchestration. see customers you haven't future, sits And UI we top all to one daily? that a of third the do already Agentic in from we're on And all then things layer building how about more is talked feedback terms using. We're the I We're do you that. to reimagining How lot is the going that in are is of learn And going just UI on and that of composable the top data that. feedback think of

of structured go customer we combination a which going going. the innovating like the broad in the of like that have run to at data, think startup. across ability are deep the kind function, ability pace a start-ups and to the I We're while so unstructured journey And and

there right what And with so customers. about so the architecture is changing. excited I'm for this We're unlocks it, our and

Operator

last Fargo. Michael comes That line one Turrin for time from have the Wells with We of question.

Michael Turrin

last contrast hear what just year And was of to saw versus decision-making. both Commentary last we a I if this there guidance QX, and surprise. compare year bit think is in that saw us in maybe HubSpot QX then year by extra that there given, was change encouraging. a could terms QX, embedding any wanted you're QX especially see I to you all took year of many conservatism end for

some guide and those year wondering how just the incorporating upcoming the of you're into year? learned there the applying last for lessons So

Kathryn Bueker

Why Yes. a take shot I this. at don't

I think year. is we behavior. was significant what There change typically that of we we a saw We in was of different saw the a what QX of business QX. buying in year. than That what the continuation really flush in this not year in and QX a trajectory is see end something saw But did new of at more of XXXX. the last

like when you XXXX, guidance a at in important That HubSpot, that when said, thing is is most to growth -- I the metric, the lagging a the business for revenue right. think SaaS look remember

the And so of as flow through seeing buying a change the revenue. half a what it's to for trajectory in we behavior going year, are throughout to but back to take while it

so our step the quarter. yes, a first expecting we growth rate are down currency in And in constant

point QX for that also the expect We will growth year a our XXXX. the accelerate rate throughout will currency and that low our be revenue constant bit revenue growth

Operator

was This XXXX to HubSpot you. able who today. you us join everyone the concludes to call. Thank earnings Thank QX

may You your disconnect now lines.

HubSpot (HUBS) 12 Feb 252024 Q4 Earnings call transcript