CAMBRIDGE, Mass.–(BUSINESS WIRE)–HubSpot, Inc. (NYSE: HUBS), the customer relationship management (CRM) platform for scaling companies, today announced financial results for the third quarter ended September 30, 2022.
Financial Highlights:
Revenue
-
Total revenue was $444.0 million, up 31% compared to Q3’21.
- Subscription revenue was $435.0 million, up 32% compared to Q3’21.
- Professional services and other revenue was $8.9 million, down 13% compared to Q3’21.
Operating Income (Loss)
- GAAP operating margin was (7.3%), compared to (4.4%) in Q3’21.
- Non-GAAP operating margin was 9.2%, compared to 9.7% in Q3’21.
- GAAP operating loss was ($32.2) million, compared to ($14.9) million in Q3’21.
- Non-GAAP operating income was $40.7 million, compared to $32.9 million in Q3’21.
Net Income (Loss)
- GAAP net loss was ($31.4) million, or ($0.65) per basic and diluted share, compared to ($13.7) million, or ($0.29) per basic and diluted share in Q3’21.
- Non-GAAP net income was $35.1 million, or $0.73 per basic and $0.69 per diluted share, compared to $25.6 million, or $0.54 per basic and $0.50 per diluted share in Q3’21.
- Weighted average basic and diluted shares outstanding for GAAP net loss per share was 48.1 million, compared to 47.0 million basic and diluted shares in Q3’21.
- Weighted average basic and diluted shares outstanding for non-GAAP net income per share was 48.1 million and 51.0 million respectively, compared to 47.0 million and 50.8 million, respectively in Q3’21.
Balance Sheet and Cash Flow
- The company’s cash, cash equivalents, and short-term and long-term investments balance was $1.4 billion as of September 30, 2022.
- During the third quarter, the company generated $60.1 million of cash from operating activities and operating cash flow, compared to $42.7 million of cash from operating activities and $54.1 million of operating cash flow, which excluded the $11.4 million used for the repayment of our convertible notes, during Q3’21.
- During the third quarter, the company generated $35.5 million of free cash flow, compared to $38.2 million during Q3’21.
Additional Recent Business Highlights
- Grew Customers to 158,905 at September 30, 2022, up 24% from September 30, 2021.
- Average Subscription Revenue Per Customer was $11,233 during the third quarter of 2022, up 7% compared to the third quarter of 2021.
“Q3 was another strong quarter for HubSpot, reflecting our continued focus on innovation and execution,” said Yamini Rangan, Chief Executive Officer at HubSpot. “Our platform is driving value for customers and continues to be mission-critical as they look to connect with their customers and increase efficiencies during this period of uncertainty. We are operating from a position of strength with a solid balance sheet, an incredible team, and a company culture that allows us to attract and retain top talent. Looking ahead, we will continue to adapt to the realities of the environment without losing sight of our mission to become the #1 CRM platform for scaling companies.”
Business Outlook
Based on information available as of November 2, 2022, HubSpot is issuing guidance for the fourth quarter of 2022 and full year 2022 as indicated below.
Fourth Quarter 2022:
-
Total revenue is expected to be in the range of $444 million to $446 million.
- Unfavorable foreign exchange rates are expected to be a 9 point headwind to fourth quarter 2022 revenue growth.(1)
- Non-GAAP operating income is expected to be in the range of $47 million to $49 million.
- Non-GAAP net income per common share is expected to be in the range of $0.82 to $0.84. This assumes approximately 51.2 million weighted average diluted shares outstanding.
Full Year 2022:
-
Total revenue is expected to be in the range of $1.705 billion to $1.707 billion.
- Unfavorable foreign exchange rates are expected to be a 6 point headwind to full year 2022 revenue growth(1)
- Non-GAAP operating income is expected to be in the range of $152 million to $154 million.
- Non-GAAP net income per common share is expected to be in the range of $2.48 to $2.50. This assumes approximately 51.1 million weighted average diluted shares outstanding.
(1) Foreign exchange rates impact on revenue is calculated by comparing current period rates with prior period average rates.
Use of Non-GAAP Financial Measures
In our earnings press releases, conference calls, slide presentations, and webcasts, we may use or discuss non-GAAP financial measures, as defined by Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investors section of our website ir.hubspot.com.
Conference Call Information
HubSpot will host a conference call on Wednesday, November 2, 2022, at 4:30 p.m. Eastern Time (ET) to discuss the company’s third quarter 2022 financial results and its business outlook. To register for this conference call, please use this dial in registration link or visit HubSpot’s Investor Relations website at ir.hubspot.com. Participants who wish to register for the conference call webcast please use this link.
Following the conference call, a replay will be available at (866) 813-9403 (domestic) or +44 (204) 525-0658 (international). The replay passcode is 848471. An archived webcast of this conference call will also be available on HubSpot’s Investor Relations website at ir.hubspot.com.
The company has used, and intends to continue to use, the investor relations portion of its website as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD.
About HubSpot
HubSpot is a leading CRM platform that provides software and support to help companies grow better. The platform includes marketing, sales, service, operations, and website management products that start free and scale to meet our customers’ needs at any stage of growth. Today, over 158,000 customers across more than 120 countries use HubSpot’s powerful and easy-to-use tools and integrations to attract, engage, and delight customers. Learn more at www.hubspot.com.
Cautionary Language Concerning Forward-Looking Statements
This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management’s expectations of future financial and operational performance and operational expenditures, expected growth, foreign currency movement, and business outlook, including our financial guidance for the fourth fiscal quarter of and full year 2022 and 2023; statements regarding our positioning for future growth and market leadership; statements regarding the economic environment; and statements regarding expected market trends, future priorities and related investments, and market opportunities. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, risks associated with our history of losses; our ability to retain existing customers and add new customers; the continued growth of the market for a CRM platform; our ability to differentiate our platform from competing products and technologies; our ability to manage our growth effectively to maintain our high level of service; our ability to maintain and expand relationships with our solutions partners; our ability to successfully recruit and retain highly-qualified personnel; the price volatility of our common stock; the impact of geopolitical conflicts, inflation, foreign currency movement, macroeconomic instability, and the COVID-19 pandemic on our business, the broader economy, our workforce and operations, the markets in which we and our partners and customers operate, and our ability to forecast our future financial performance; and other risks set forth under the caption “Risk Factors” in our SEC filings. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
|
Consolidated Balance Sheets (in thousands) |
||||||||
|
|
|
September 30, |
|
|
December 31, |
|
||
|
|
|
2022 |
|
|
2021 |
|
||
|
Assets |
|
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
331,659 |
|
|
$ |
377,013 |
|
|
Short-term investments |
|
|
952,697 |
|
|
|
820,962 |
|
|
Accounts receivable |
|
|
166,667 |
|
|
|
157,362 |
|
|
Deferred commission expense |
|
|
65,010 |
|
|
|
59,849 |
|
|
Prepaid expenses and other current assets |
|
|
45,060 |
|
|
|
38,388 |
|
|
Total current assets |
|
|
1,561,093 |
|
|
|
1,453,574 |
|
|
Long-term investments |
|
|
152,725 |
|
|
|
174,895 |
|
|
Property and equipment, net |
|
|
102,628 |
|
|
|
96,134 |
|
|
Capitalized software development costs, net |
|
|
56,803 |
|
|
|
39,858 |
|
|
Right-of-use assets |
|
|
251,422 |
|
|
|
280,828 |
|
|
Deferred commission expense, net of current portion |
|
|
53,240 |
|
|
|
42,681 |
|
|
Other assets |
|
|
56,402 |
|
|
|
29,244 |
|
|
Intangible assets, net |
|
|
17,592 |
|
|
|
10,565 |
|
|
Goodwill |
|
|
45,014 |
|
|
|
47,075 |
|
|
Total assets |
|
$ |
2,296,919 |
|
|
$ |
2,174,854 |
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
|
|
||
|
Accounts payable |
|
$ |
13,318 |
|
|
$ |
2,773 |
|
|
Accrued compensation costs |
|
|
63,373 |
|
|
|
63,836 |
|
|
Accrued expenses and other current liabilities |
|
|
90,827 |
|
|
|
74,457 |
|
|
Convertible senior notes |
|
|
– |
|
|
|
19,630 |
|
|
Operating lease liabilities |
|
|
32,155 |
|
|
|
26,364 |
|
|
Deferred revenue |
|
|
468,536 |
|
|
|
430,414 |
|
|
Total current liabilities |
|
|
668,209 |
|
|
|
617,474 |
|
|
Operating lease liabilities, net of current portion |
|
|
250,678 |
|
|
|
283,873 |
|
|
Deferred revenue, net of current portion |
|
|
5,188 |
|
|
|
4,473 |
|
|
Other long-term liabilities |
|
|
12,424 |
|
|
|
12,134 |
|
|
Convertible senior notes, net of current portion |
|
|
453,723 |
|
|
|
383,101 |
|
|
Total liabilities |
|
|
1,390,222 |
|
|
|
1,301,055 |
|
|
Stockholders’ equity: |
|
|
|
|
|
|
||
|
Common stock |
|
|
48 |
|
|
|
47 |
|
|
Additional paid-in capital |
|
|
1,550,905 |
|
|
|
1,436,089 |
|
|
Accumulated other comprehensive loss |
|
|
(17,511 |
) |
|
|
(1,339 |
) |
|
Accumulated deficit |
|
|
(626,745 |
) |
|
|
(560,998 |
) |
|
Total stockholders’ equity |
|
|
906,697 |
|
|
|
873,799 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
2,296,919 |
|
|
$ |
2,174,854 |
|
|
Consolidated Statements of Operations (in thousands, except per share data) |
|||||||||||||||
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Subscription |
$ |
435,030 |
|
|
$ |
328,975 |
|
|
$ |
1,232,387 |
|
|
$ |
899,661 |
|
|
Professional services and other |
|
8,928 |
|
|
|
10,220 |
|
|
|
28,926 |
|
|
|
31,688 |
|
|
Total revenue |
|
443,958 |
|
|
|
339,195 |
|
|
|
1,261,313 |
|
|
|
931,349 |
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Subscription |
|
67,648 |
|
|
|
57,547 |
|
|
|
191,466 |
|
|
|
152,533 |
|
|
Professional services and other |
|
14,479 |
|
|
|
12,059 |
|
|
|
42,532 |
|
|
|
34,685 |
|
|
Total cost of revenues |
|
82,127 |
|
|
|
69,606 |
|
|
|
233,998 |
|
|
|
187,218 |
|
|
Gross profit |
|
361,831 |
|
|
|
269,589 |
|
|
|
1,027,315 |
|
|
|
744,131 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Research and development |
|
114,038 |
|
|
|
78,473 |
|
|
|
325,687 |
|
|
|
218,973 |
|
|
Sales and marketing |
|
229,541 |
|
|
|
170,016 |
|
|
|
650,936 |
|
|
|
468,836 |
|
|
General and administrative |
|
50,465 |
|
|
|
36,027 |
|
|
|
146,309 |
|
|
|
102,883 |
|
|
Total operating expenses |
|
394,044 |
|
|
|
284,516 |
|
|
|
1,122,932 |
|
|
|
790,692 |
|
|
Loss from operations |
|
(32,213 |
) |
|
|
(14,927 |
) |
|
|
(95,617 |
) |
|
|
(46,561 |
) |
|
Other expense: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Interest income |
|
4,658 |
|
|
|
230 |
|
|
|
7,222 |
|
|
|
1,046 |
|
|
Interest expense |
|
(923 |
) |
|
|
(7,798 |
) |
|
|
(2,822 |
) |
|
|
(24,376 |
) |
|
Other (expense) income |
|
(1,185 |
) |
|
|
9,877 |
|
|
|
(583 |
) |
|
|
11,064 |
|
|
Total other income (expense) |
|
2,550 |
|
|
|
2,309 |
|
|
|
3,817 |
|
|
|
(12,266 |
) |
|
Loss before income tax expense |
|
(29,663 |
) |
|
|
(12,618 |
) |
|
|
(91,800 |
) |
|
|
(58,827 |
) |
|
Income tax expense |
|
(1,748 |
) |
|
|
(1,117 |
) |
|
|
(5,313 |
) |
|
|
(2,639 |
) |
|
Net loss |
$ |
(31,411 |
) |
|
$ |
(13,735 |
) |
|
$ |
(97,113 |
) |
|
$ |
(61,466 |
) |
|
Net loss per share, basic and diluted |
$ |
(0.65 |
) |
|
$ |
(0.29 |
) |
|
$ |
(2.03 |
) |
|
$ |
(1.31 |
) |
|
Weighted average common shares used in computing basic and diluted net loss per share: |
|
48,067 |
|
|
|
47,044 |
|
|
|
47,821 |
|
|
|
46,752 |
|
|
Consolidated Statements of Cash Flows (in thousands) |
|||||||||||||||
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net loss |
$ |
(31,411 |
) |
|
$ |
(13,735 |
) |
|
$ |
(97,113 |
) |
|
$ |
(61,466 |
) |
|
Adjustments to reconcile net loss to net cash and cash equivalents provided by operating activities |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Depreciation and amortization |
|
15,562 |
|
|
|
11,452 |
|
|
|
42,625 |
|
|
|
33,188 |
|
|
Stock-based compensation |
|
72,213 |
|
|
|
44,987 |
|
|
|
199,081 |
|
|
|
120,847 |
|
|
Loss on early extinguishment of 2022 Convertible Notes |
— |
|
|
|
1,736 |
|
|
— |
|
|
|
4,824 |
|
||
|
Repayment of 2022 Convertible Notes attributable to the debt discount |
— |
|
|
|
(11,429 |
) |
|
— |
|
|
|
(24,457 |
) |
||
|
Gain on strategic investments |
— |
|
|
|
(10,717 |
) |
|
|
(4,200 |
) |
|
|
(11,739 |
) |
|
|
Gain on termination of operating leases |
— |
|
|
|
(4,276 |
) |
|
— |
|
|
|
(4,276 |
) |
||
|
Loss on disposal of fixed assets |
— |
|
|
|
6,468 |
|
|
— |
|
|
|
6,468 |
|
||
|
Benefit from deferred income taxes |
|
(191 |
) |
|
|
(201 |
) |
|
|
(589 |
) |
|
|
(1,321 |
) |
|
Amortization of debt discount and issuance costs |
|
492 |
|
|
|
5,603 |
|
|
|
1,509 |
|
|
|
18,115 |
|
|
(Accretion) amortization of bond discount |
|
(3,117 |
) |
|
|
1,273 |
|
|
|
(3,267 |
) |
|
|
2,943 |
|
|
Unrealized currency translation |
|
(1,500 |
) |
|
|
323 |
|
|
|
480 |
|
|
|
603 |
|
|
Changes in assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Accounts receivable |
|
(5,785 |
) |
|
|
(11,189 |
) |
|
|
(20,135 |
) |
|
|
(2,249 |
) |
|
Prepaid expenses and other assets |
|
13,048 |
|
|
|
545 |
|
|
|
(8,863 |
) |
|
|
(7,149 |
) |
|
Deferred commission expense |
|
(8,466 |
) |
|
|
(7,969 |
) |
|
|
(22,210 |
) |
|
|
(24,371 |
) |
|
Right-of-use assets |
|
6,175 |
|
|
|
8,401 |
|
|
|
19,622 |
|
|
|
26,948 |
|
|
Accounts payable |
|
1,700 |
|
|
|
(10,682 |
) |
|
|
10,660 |
|
|
|
(11,951 |
) |
|
Accrued expenses and other liabilities |
|
(6,634 |
) |
|
|
22,651 |
|
|
|
16,455 |
|
|
|
38,184 |
|
|
Operating lease liabilities |
|
(3,259 |
) |
|
|
(8,048 |
) |
|
|
(14,589 |
) |
|
|
(26,422 |
) |
|
Deferred revenue |
|
11,237 |
|
|
|
17,460 |
|
|
|
63,743 |
|
|
|
66,825 |
|
|
Net cash and cash equivalents provided by operating activities |
|
60,064 |
|
|
|
42,653 |
|
|
|
183,209 |
|
|
|
143,544 |
|
|
Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Purchases of investments |
|
(394,856 |
) |
|
|
(383,268 |
) |
|
|
(1,258,919 |
) |
|
|
(1,037,331 |
) |
|
Maturities of investments |
|
391,928 |
|
|
|
344,174 |
|
|
|
1,017,306 |
|
|
|
940,776 |
|
|
Sale of investments |
— |
|
|
— |
|
|
|
124,998 |
|
|
— |
|
|||
|
Purchases of property and equipment |
|
(13,112 |
) |
|
|
(6,653 |
) |
|
|
(31,384 |
) |
|
|
(17,399 |
) |
|
Purchases of intangible assets |
— |
|
|
— |
|
|
|
(10,000 |
) |
|
— |
|
|||
|
Acquisition of a business, net of cash acquired |
— |
|
|
— |
|
|
— |
|
|
|
(16,810 |
) |
|||
|
Purchases of strategic investments |
|
(5,999 |
) |
|
|
(4,000 |
) |
|
|
(19,872 |
) |
|
|
(10,202 |
) |
|
Equity method investment |
|
(1,650 |
) |
|
— |
|
|
|
(1,900 |
) |
|
|
(3,100 |
) |
|
|
Capitalization of software development costs |
|
(11,419 |
) |
|
|
(9,217 |
) |
|
|
(31,350 |
) |
|
|
(25,638 |
) |
|
Net cash and cash equivalents used in investing activities |
|
(35,108 |
) |
|
|
(58,964 |
) |
|
|
(211,121 |
) |
|
|
(169,704 |
) |
|
Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Proceeds from settlement of Convertible Note Hedges related to the 2022 Convertible Notes |
— |
|
|
|
4 |
|
|
|
60,483 |
|
|
|
729 |
|
|
|
Payment for settlement of 2022 Convertible Notes |
— |
|
|
— |
|
|
|
(79,807 |
) |
|
— |
|
|||
|
Repayment of 2022 Convertible Notes attributable to the principal |
— |
|
|
|
(35,019 |
) |
|
— |
|
|
|
(80,428 |
) |
||
|
Repayment of 2025 Convertible Notes attributable to the principal |
— |
|
|
— |
|
|
|
(1,619 |
) |
|
— |
|
|||
|
Employee taxes paid related to the net share settlement of stock-based awards |
|
(2,190 |
) |
|
|
(4,815 |
) |
|
|
(9,954 |
) |
|
|
(11,728 |
) |
|
Proceeds related to the issuance of common stock under stock plans |
|
10,019 |
|
|
|
9,256 |
|
|
|
29,718 |
|
|
|
34,124 |
|
|
Net cash and cash equivalents provided by (used in) financing activities |
|
7,829 |
|
|
|
(30,574 |
) |
|
|
(1,179 |
) |
|
|
(57,303 |
) |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(6,790 |
) |
|
|
(3,117 |
) |
|
|
(16,263 |
) |
|
|
(6,326 |
) |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
25,995 |
|
|
|
(50,002 |
) |
|
|
(45,354 |
) |
|
|
(89,789 |
) |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
308,693 |
|
|
|
341,365 |
|
|
|
380,042 |
|
|
|
381,152 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ |
334,688 |
|
|
$ |
291,363 |
|
|
$ |
334,688 |
|
|
$ |
291,363 |
|
|
Reconciliation of non-GAAP operating income and operating margin (in thousands, except percentages) |
|||||||||||||||
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
GAAP operating loss |
$ |
(32,213 |
) |
$ |
(14,927 |
) |
|
$ |
(95,617 |
) |
$ |
(46,561 |
) |
||
|
Stock-based compensation |
|
72,213 |
|
|
44,987 |
|
|
|
199,081 |
|
|
120,847 |
|
||
|
Amortization of acquired intangible assets |
|
738 |
|
|
326 |
|
|
|
1,901 |
|
|
1,008 |
|
||
|
Acquisition/disposition related expenses (income) |
|
— |
|
|
350 |
|
|
|
(306 |
) |
|
1,917 |
|
||
|
Gain on termination of operating leases |
|
— |
|
|
(4,276 |
) |
|
|
— |
|
|
(4,276 |
) |
||
|
Loss on disposal of fixed assets |
|
— |
|
|
6,468 |
|
|
|
— |
|
|
6,468 |
|
||
|
Non-GAAP operating income |
$ |
40,738 |
|
$ |
32,928 |
|
|
$ |
105,059 |
|
$ |
79,403 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
GAAP operating margin |
|
(7.3 |
%) |
|
(4.4 |
%) |
|
|
(7.6 |
%) |
|
(5.0 |
%) |
||
|
Non-GAAP operating margin |
|
9.2 |
% |
|
9.7 |
% |
|
|
8.3 |
% |
|
8.5 |
% |
||
|
Reconciliation of non-GAAP net income (in thousands, except per share amounts) |
|||||||||||||||
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
GAAP net loss |
$ |
(31,411 |
) |
|
(13,735 |
) |
|
$ |
(97,113 |
) |
$ |
(61,466 |
) |
||
|
Stock-based compensation |
|
72,213 |
|
|
44,987 |
|
|
|
199,081 |
|
|
120,847 |
|
||
|
Amortization of acquired intangibles assets |
|
738 |
|
|
326 |
|
|
|
1,901 |
|
|
1,008 |
|
||
|
Acquisition/disposition related expenses (income) |
|
— |
|
|
350 |
|
|
|
(306 |
) |
|
1,917 |
|
||
|
Gain on termination of operating leases |
|
— |
|
|
(4,276 |
) |
|
|
— |
|
|
(4,276 |
) |
||
|
Loss on disposal of fixed assets |
|
— |
|
|
6,468 |
|
|
|
— |
|
|
6,468 |
|
||
|
Non-cash interest expense for amortization of debt discount and debt issuance costs |
|
492 |
|
|
5,603 |
|
|
|
1,509 |
|
|
18,115 |
|
||
|
Gain on strategic investments |
— |
|
|
(10,717 |
) |
|
|
(4,200 |
) |
|
(11,739 |
) |
|||
|
Loss on early extinguishment of 2022 Convertible Notes |
|
— |
|
|
1,736 |
|
|
|
— |
|
|
4,824 |
|
||
|
Loss on equity method investment |
|
39 |
|
|
137 |
|
|
|
38 |
|
|
221 |
|
||
|
Income tax effects of non-GAAP items |
|
(7,016 |
) |
|
(5,282 |
) |
|
|
(15,932 |
) |
|
(13,073 |
) |
||
|
Non-GAAP net income |
$ |
35,055 |
|
|
25,597 |
|
|
$ |
84,978 |
|
$ |
62,846 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Non-GAAP net income per share: |
|
|
|
|
|
|
|
|
|
||||||
|
Basic |
$ |
0.73 |
|
$ |
0.54 |
|
|
$ |
1.78 |
|
$ |
1.34 |
|
||
|
Diluted |
$ |
0.69 |
|
$ |
0.50 |
|
|
$ |
1.66 |
|
$ |
1.24 |
|
||
|
Shares used in non-GAAP per share calculations |
|
|
|
|
|
|
|
|
|
||||||
|
Basic |
|
48,067 |
|
|
47,044 |
|
|
|
47,821 |
|
|
46,752 |
|
||
|
Diluted |
51,022 |
|
50,804 |
|
|
|
51,098 |
|
|
50,628 |
|
||||
|
Reconciliation of non-GAAP expense and expense as a percentage of revenue (in thousands, except percentages) |
|||||||||||||||||||||||||||||||
|
|
Three Months Ended September 30, |
|
|||||||||||||||||||||||||||||
|
|
2022 |
|
|
2021 |
|
||||||||||||||||||||||||||
|
|
COS, Subs- |
|
COS, Prof. services & other |
|
R&D |
|
S&M |
|
G&A |
|
|
COS, Subs- |
|
COS, Prof. services & other |
|
R&D |
|
S&M |
|
G&A |
|
||||||||||
|
GAAP expense |
$ |
67,648 |
|
$ |
14,479 |
|
$ |
114,038 |
|
$ |
229,541 |
|
$ |
50,465 |
|
|
$ |
57,547 |
|
$ |
12,059 |
|
$ |
78,473 |
|
$ |
170,016 |
|
$ |
36,027 |
|
|
Stock -based compensation |
|
(2,311 |
) |
|
(1,168 |
) |
|
(28,585 |
) |
|
(28,060 |
) |
|
(12,089 |
) |
|
|
(1,660 |
) |
|
(748 |
) |
|
(18,449 |
) |
|
(17,302 |
) |
|
(6,828 |
) |
|
Amortization of acquired intangible assets |
|
(292 |
) |
|
— |
|
|
— |
|
|
(446 |
) |
|
— |
|
|
|
(234 |
) |
|
— |
|
|
— |
|
|
(92 |
) |
|
— |
|
|
Acquisition/disposition related income (expenses) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
(337 |
) |
|
— |
|
|
(13 |
) |
|
Gain on termination of operating leases |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
395 |
|
|
275 |
|
|
1,346 |
|
|
1,839 |
|
|
421 |
|
|
Loss on disposal of fixed assets |
|
|
|
|
|
|
|
|
|
|
|
|
(600 |
) |
|
(415 |
) |
|
(2,036 |
) |
|
(2,781 |
) |
|
(636 |
) |
|||||
|
Non-GAAP expense |
$ |
65,045 |
|
$ |
13,311 |
|
$ |
85,453 |
|
$ |
201,035 |
|
$ |
38,376 |
|
|
$ |
55,448 |
|
$ |
11,171 |
|
$ |
58,997 |
|
$ |
151,680 |
|
$ |
28,971 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP expense as a percentage of revenue |
|
15.2 |
% |
|
3.3 |
% |
|
25.7 |
% |
|
51.7 |
% |
|
11.4 |
% |
|
|
17.0 |
% |
|
3.6 |
% |
|
23.1 |
% |
|
50.1 |
% |
|
10.6 |
% |
|
Non-GAAP expense as a percentage of revenue |
|
14.7 |
% |
|
3.0 |
% |
|
19.2 |
% |
|
45.3 |
% |
|
8.6 |
% |
|
|
16.3 |
% |
|
3.3 |
% |
|
17.4 |
% |
|
44.7 |
% |
|
8.5 |
% |
|
|
Nine Months Ended September 30, |
|
|||||||||||||||||||||||||||||
|
|
2022 |
|
|
2021 |
|
||||||||||||||||||||||||||
|
|
COS, Subs- |
|
COS, Prof. services & other |
|
R&D |
|
S&M |
|
G&A |
|
|
COS, Subs- |
|
COS, Prof. services & other |
|
R&D |
|
S&M |
|
G&A |
|
||||||||||
|
GAAP expense |
$ |
191,466 |
|
$ |
42,532 |
|
$ |
325,687 |
|
$ |
650,936 |
|
$ |
146,309 |
|
|
$ |
152,533 |
|
$ |
34,685 |
|
$ |
218,973 |
|
$ |
468,836 |
|
$ |
102,883 |
|
|
Stock -based compensation |
|
(6,516 |
) |
|
(3,251 |
) |
|
(77,269 |
) |
|
(77,113 |
) |
|
(34,932 |
) |
|
|
(4,556 |
) |
|
(2,270 |
) |
|
(45,014 |
) |
|
(49,902 |
) |
|
(19,105 |
) |
|
Amortization of acquired intangible assets |
|
(920 |
) |
|
— |
|
|
— |
|
|
(981 |
) |
|
— |
|
|
|
(709 |
) |
|
— |
|
|
— |
|
|
(299 |
) |
|
— |
|
|
Acquisition/disposition related income (expenses) |
|
— |
|
|
— |
|
|
300 |
|
|
— |
|
|
6 |
|
|
|
— |
|
|
— |
|
|
(1,021 |
) |
|
(367 |
) |
|
(529 |
) |
|
Gain on termination of operating leases |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
395 |
|
|
275 |
|
|
1,346 |
|
|
1,839 |
|
|
421 |
|
|
Loss on disposal of fixed assets |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
(600 |
) |
|
(415 |
) |
|
(2,036 |
) |
|
(2,781 |
) |
|
(636 |
) |
|
Non-GAAP expense |
$ |
184,030 |
|
$ |
39,281 |
|
$ |
248,718 |
|
$ |
572,842 |
|
$ |
111,383 |
|
|
$ |
147,063 |
|
$ |
32,275 |
|
$ |
172,248 |
|
$ |
417,326 |
|
$ |
83,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
GAAP expense as a percentage of revenue |
|
15.2 |
% |
|
3.4 |
% |
|
25.8 |
% |
|
51.6 |
% |
|
11.6 |
% |
|
|
16.4 |
% |
|
3.7 |
% |
|
23.5 |
% |
|
50.3 |
% |
|
11.0 |
% |
|
Non-GAAP expense as a percentage of revenue |
|
14.6 |
% |
|
3.1 |
% |
|
19.7 |
% |
|
45.4 |
% |
|
8.8 |
% |
|
|
15.8 |
% |
|
3.5 |
% |
|
18.5 |
% |
|
44.8 |
% |
|
8.9 |
% |
|
Reconciliation of non-GAAP subscription margin (in thousands, except percentages) |
||||||||||||||||
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
GAAP subscription margin |
|
$ |
367,382 |
|
$ |
271,428 |
|
|
$ |
1,040,921 |
|
$ |
747,128 |
|
||
|
Stock -based compensation |
|
|
2,311 |
|
|
1,660 |
|
|
|
6,516 |
|
|
4,556 |
|
||
|
Amortization of acquired intangible assets |
|
|
292 |
|
|
234 |
|
|
|
920 |
|
|
709 |
|
||
|
Gain on termination of operating leases |
|
— |
|
|
(395 |
) |
|
— |
|
|
(395 |
) |
||||
|
Loss on disposal of fixed assets |
|
— |
|
|
600 |
|
|
— |
|
|
600 |
|
||||
|
Non-GAAP subscription margin |
|
$ |
369,985 |
|
$ |
273,527 |
|
|
$ |
1,048,357 |
|
$ |
752,598 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
GAAP subscription margin percentage |
|
|
84.4 |
% |
|
82.5 |
% |
|
|
84.5 |
% |
|
83.0 |
% |
||
|
Non-GAAP subscription margin percentage |
|
|
85.0 |
% |
|
83.1 |
% |
|
|
85.1 |
% |
|
83.7 |
% |
||
|
Reconciliation of free cash flow |
|
|
|
|
|
|
|
|
|
|||||||
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
GAAP net cash and cash equivalents provided by operating activities |
|
$ |
60,064 |
|
$ |
42,653 |
|
|
$ |
183,209 |
|
$ |
143,544 |
|
||
|
Purchases of property and equipment |
|
|
(13,112 |
) |
|
(6,653 |
) |
|
|
(31,384 |
) |
|
(17,399 |
) |
||
|
Capitalization of software development costs |
|
|
(11,419 |
) |
|
(9,217 |
) |
|
|
(31,350 |
) |
|
(25,638 |
) |
||
|
Repayment of 2022 Convertible Notes attributable to the debt discount |
|
— |
|
|
11,429 |
|
|
— |
|
|
24,457 |
|
||||
|
Free cash flow |
|
$ |
35,533 |
|
$ |
38,212 |
|
|
$ |
120,475 |
|
$ |
124,964 |
|
||
|
Reconciliation of operating cash flow (in thousands) |
||||||||||||
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
|
GAAP net cash and cash equivalents provided by operating activities |
|
$ |
60,064 |
|
$ |
42,653 |
|
$ |
183,209 |
|
$ |
143,544 |
|
Repayment of 2022 Convertible Notes attributable to the debt discount |
|
— |
|
|
11,429 |
|
— |
|
|
24,457 |
||
|
Operating cash flow, excluding repayment of convertible debt |
|
$ |
60,064 |
|
$ |
54,082 |
|
$ |
183,209 |
|
$ |
168,001 |
|
Reconciliation of forecasted non-GAAP operating income |
|
|
|||
|
|
Three Months Ended |
Year Ended |
|||
|
GAAP operating income range |
($36,974)-($34,974 |
) |
($129,363)-($127,363 |
) |
|
|
Stock-based compensation |
83,231 |
|
279,029 |
|
|
|
Amortization of acquired intangible assets |
743 |
|
2,640 |
|
|
|
Acquisition/disposition related (income) expenses |
— |
|
(306 |
) |
|
|
Non-GAAP operating income range |
$47,000-$49,000 |
$152,000-$154,000 |
|||
Contacts
Investor Relations Contact:
Charles MacGlashing
investors@hubspot.com
Media Contact:
Ellie Flanagan
eflanagan@hubspot.com
