HubSpot, Inc. · NYSE:HUBS
HubSpot — Q3 2020 Earnings Presentation
30 slides from HubSpot's earnings presentation, November 2020
Slide 1: Investor Presentation Q3 2020
Investor Presentation Q3 2020
Slide 2: Important Information
Important Information This presentation includes certain “forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management’s expectations for future financial and operational performance and operating expenditures, expec
Slide 3: Overview
Overview We provide a growth platform with award-winning software, services, and support to transform the way organizations attract, engage, and delight customers. 95,000+ 120+ 11 Total Customers Countries Office Locations Worldwide 3
Slide 4: Snapshot
Snapshot ● Recurring SaaS revenue model ● Growth platform for SMBs ● Large, growing TAM ● Balancing fast growth with profitability ● Strong underlying unit economics ● Experienced team 4
Slide 5: HubSpot's Journey
HubSpot’s Journey
Slide 6: HubSpot's mission is to help millions of organizations grow better
HubSpot’s mission is to help millions of organizations grow better. 6
Slide 7: What does it mean to grow better?
What does it mean to grow better? Where others annoy, Where others harass, Where others ignore, you attract. you help. you enable. Where others may sacrifice the customer experience to grow, you find ways to grow better. 7
Slide 8: More than a kind sentiment, it's a key strategy
More than a kind sentiment, it’s a key strategy Word of Mouth 33% Google 26% HubSpot Blog 13% Review Sites 3% Industry Publications 3% Social Media 3% How did you first learn about HubSpot? Source: HubSpot Customer Research June - 2018 8
Slide 9: Customers Accelerate Growth
Customers Accelerate Growth But many companies view them as an afterthought. 9
Slide 10: We've transformed our business around a new model of growth
We’ve transformed our business around a new model of growth Promoters Traffic Added & Lost Added & Lost Customers Customers Free Users Added & Lost Added & Lost The Flywheel 10
Slide 11: Each time we reduce friction for our customers, we fuel our own flywheel
Each time we reduce friction for our customers, we fuel our own flywheel. And we’re working to enable millions of organizations to do the same. 11
Slide 12: To do so, we evolved from an app to a suite
To do so, we evolved from an app to a suite... Marketing App ...because the customer experience should be seamless. 12
Slide 13: We dramatically expanded our offering and TAM through product development
We dramatically expanded our offering, and in turn, our TAM, through product development HubSpot at IPO HubSpot today MARKETING SALES SERVICE CMS MARKETING SALES SERVICE CMS 2000 2000 Employee Size Employee Size 200 200 20 20 2 2 because every company should be able to grow better, and no company sh
Slide 14: Our Product Pricing
Our Product Pricing Marketing Hub Sales Hub Service Hub CMS Hub Enterprise $3,200 + $1,200 + $1,200 + $900 Professional $800 + $500 + $400 + $300 Starter* $50 + $50 + $50 + CRM Free Growth Suite Bundle: 25% Off When Purchasing Marketing, Sales & Service Hubs At Any Pricing Tier *Our Starter Growth S
Slide 15: All of that is just the beginning...
All of that is just the beginning... Becoming a Platform Became a Suite Began as an App Marketing We’re focused on helping companies grow better in ever expanding ways. 15
Slide 16: The HubSpot Journey
CMS Hub Launch The HubSpot Journey Surpassed 3,000 Employees Service Hub Launch CRM Launch PieSync Crossed $250M Acquisition Sales Hub* Launch Marketing Hub revenue Launch Crossed $100M Crossed $50M revenue Crossed $500M HubSpot revenue Performable revenue founded Acquisition Surpassed 2,000 Employe
Slide 17: HubSpot Grow Better
HubSpxt Grow Better
Slide 18: Financial Review Q3 2020
Financial Review Q3 2020
Slide 19: Revenue growth is strong
Revenue growth is strong $240 $180 G R CA 40% $120 Marketing $60 $0 Q3’14* Q3’20 Revenue ($m) *IPO CAGR: compound annual growth rate 19
Slide 20: International growth is strong
International growth is strong Growing Fast Increasing % of Revenue $100 $75 GR CA Q3 2014* Q3 2020 % 57 $50 22% 44% $25 $0 Q3’14* Q3’20 International Revenue ($m) *IPO CAGR: compound annual growth rate 20
Slide 21: Realizing Leverage in Profitability
Realizing Leverage in Profitability 82% 70% 7.2% -32% Q3’14* Gross Margin (Non-GAAP) Operating Margin (Non-GAAP) Q3’20 All percentages for historical periods are non-GAAP and exclude expenses associated with stock based compensation, amortization of acquired intangible assets and acquisition related
Slide 22: Generating Positive Free Cash Flow
Generating Positive Free Cash Flow $75 $50 $25 $0 $-25 $-50 Q3’14* Trailing Twelve Months Free Cash Flow ($m) Q3’20 All amounts are non-GAAP. Free cash flow is defined as cash and cash equivalents provided by (used in) operating activities less purchases of property and equipment and capitalization of
Slide 23: Financial framework focused on profitable growth
Financial framework focused on profitable growth High Growth Growth Moderate Growth Revenue Growth >30% ≈30% <30% Operating 1% - 2% 2% - 3% 3% - 4% Margin %* increase per year increase per year increase per year Operating Cash ≈Revenue Growth Flow *Theoretical operating margin % is non-GAAP and exclu
Slide 24: Long Term Financial Target
Long Term Financial Target Long Term 2016 2017 2018 2019 Q1’20 Q2’20 Q3’20 Target Gross Margin 78% 81% 82% 82% 82% 82% 82% 81% - 83% R&D % of revenue 14% 15% 18% 18% 19% 19% 19% 18% - 20% S&M % of revenue 55% 52% 46% 45% 46% 44% 46% 30% - 35% G&A % of revenue 14% 12% 11% 11% 10% 10% 9% 8% - 9% Opera
Slide 25: Appendix
Appendix HubSppt
Slide 26: The HubSpot CRM Platform
The HubSpot CRM Platform MARKETING HUB SALES HUB SERVICE HUB CMS HUB Matching how you service Matching enterprise-grade Matching the way you market Matching the way you sell with the way people expect to web power with with the way people shop with the way people buy be treated consumer-grade ease o
Slide 27: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 27
Slide 28: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 28
Slide 29: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 29
Slide 30: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation 30