Financial Data and Key Metrics Changes - Q4 revenue grew 20% year-over-year in constant currency, while full year 2024 revenue grew 21% in constant currency [21][47] - Operating margin was 19% in Q4 and 17.5% for the full year, both up 200 basis points year-over-year [21][52] - Net income for Q4 was $125 million, or $2.32 per fully diluted share [52] - Free cash flow was $163 million in Q4, representing 23% of revenue, and $488 million for the full year, or 19% of revenue [52][66] Business Line Data and Key Metrics Changes - Subscription revenue grew 21% year-over-year, while services and other revenue increased 36% in Q4 [47][49] - Multi-hub adoption reached new heights, with over 35% of pro plus customers using four or more hubs, up 7% year-over-year [24] - AI-powered features contributed significantly to growth, with the Content Hub's attach rate to the Marketing Hub increasing from 13% to 54% [29][30] Market Data and Key Metrics Changes - Domestic revenue grew 19% year-over-year, while international revenue growth was 20% in constant currency [48][49] - The company added over 9,800 net new customers in Q4, ending the year with nearly 248,000 customers, a 21% year-over-year increase [49][50] - Net revenue retention increased 2 points sequentially to 104%, reflecting continued momentum from the new seat-based pricing model [50][90] Company Strategy and Development Direction - The company aims to become an AI-first customer platform by embedding AI across all hubs and the entire platform [28][43] - Focus on four key growth levers: rep-driven growth, improved retention, migration to new pricing, and ongoing product innovation with AI [44][45] - The strategy includes enhancing customer focus and making products easy, fast, unified, and AI-first [43][44] Management's Comments on Operating Environment and Future Outlook - Management noted improvements in the demand environment, with customers more open to discussing growth initiatives [131] - The company expects a seasonal downtick in net revenue retention in Q1 but anticipates overall improvement for the full year of 2025 [50][54] - The management emphasized the importance of delivering consistent value before monetizing AI features [76][128] Other Important Information - The company experienced a significant increase in the user base of Agent.AI, growing from 50,000 to over 900,000 users [42][109] - The company expects foreign exchange to be a 200 basis point headwind to 2025 revenue growth [54][66] - The company plans to unveil new capabilities at their spring spotlight in April and later at Inbound in September [43][44] Q&A Session Summary Question: Discussion on AI monetization and customer conversations - Management stated that their strategy is to embed AI across every hub, focusing on driving customer acquisition and expansion [72][76] - They plan to introduce a hybrid pricing model combining seat-based and usage-based pricing as customers see consistent value from AI [75][76] Question: Insights on cost efficiency with AI models - Management noted a significant reduction in cost of goods sold (COGS) due to increased competition and advancements in AI models [83][85] Question: Upselling activity and customer sentiment - Management indicated that net revenue retention improved due to the new seat-based pricing model, but overall upgrades remain a challenge [90][92] Question: Partner behavior changes and revenue acceleration - Management explained changes to partner commissions aimed at increasing customer value and engagement, resulting in a 68% year-over-year increase in co-selling [100][101] Question: New customer acquisitions and ARPC growth - Management expects net customer additions to remain in the 9,000 to 10,000 range, with a balanced mix across different customer tiers [105][106] Question: Control tower for AI agents - Management discussed the importance of composability among agents and the strategy to build a network of AI agents within HubSpot [108][109] Question: Internal AI adoption and expense growth - Management highlighted that internal AI adoption is expected to drive efficiency and allow for reinvestment in R&D and go-to-market capacity [114][115]

Core Insights - HubSpot, Inc. is conducting its Q4 2024 earnings conference call to discuss financial results and business performance [2][3] Company Overview - The call features key company executives including CEO Yamini Rangan, Co-Founder and CTO Dharmesh Shah, and CFO Kate Bueker [3] Financial Performance - The earnings call will cover results announced in a press release issued after market close, indicating a structured approach to financial reporting [3]

Investor Presentation Q4 2024 Safe Harbor Statement 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 of future financial and operational performance and operational expenditures, expected growth, foreign currency movement, and business outlook, including our financial guidance for the first fiscal quarter of and full year 2025 and our long-term financial framewo ...

Core Insights - HubSpot reported revenue of $703.17 million for the quarter ended December 2024, reflecting a year-over-year increase of 20.8% and surpassing the Zacks Consensus Estimate by 4.38% [1] - The company's EPS for the quarter was $2.32, up from $1.76 in the same quarter last year, exceeding the consensus estimate of $2.19 by 5.94% [1] Financial Performance Metrics - Total customers reached 247,939, exceeding the five-analyst average estimate of 247,373 [4] - Average subscription revenue per customer was $11,312, compared to the average estimate of $10,845.89 [4] - Subscription revenues amounted to $687.32 million, surpassing the average estimate of $659.33 million, marking a 20.5% year-over-year increase [4] - Professional services and other revenues were reported at $15.86 million, exceeding the estimated $14.42 million and reflecting a 35.7% year-over-year increase [4] - Non-GAAP gross margin for subscription was $606.50 million, compared to the average estimate of $578.40 million [4] Stock Performance - HubSpot's shares have returned +11.5% over the past month, outperforming the Zacks S&P 500 composite's +4.3% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

HubSpot (HUBS) came out with quarterly earnings of $2.32 per share, beating the Zacks Consensus Estimate of $2.19 per share. This compares to earnings of $1.76 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 5.94%. A quarter ago, it was expected that this cloud-based marketing and sales software platform would post earnings of $1.89 per share when it actually produced earnings of $2.18, delivering a surprise of 15.34%.Over the ...

HubSpot reported strong quarterly earnings, outpacing both management's guidance and analyst estimates. It was driven by impressive revenue growth and enhanced platform capabilities.Customer relationship management software provider HubSpot (HUBS 0.13%) reported fourth-quarter earnings on Wednesday, Feb. 12 that topped analysts' consensus expectations. Adjusted EPS (diluted) came in at $2.32, outperforming the expected $2.19. Revenue of $703.2 million surpassed estimates of $673 million as well as managemen ...

Here's our initial take on HubSpot's (HUBS 0.13%) fourth-quarter financial report.Key MetricsMetricQ4 2023Q4 2024Changevs. ExpectationsRevenue$581.9 million$703.1 million+21%BeatAdjusted earnings per share$1.83$2.42+32%BeatCustomers205,091247,939+21%n/aSubscription revenue per customer$11,365$11,312-1%n/aSolid Growth, But a Slowdown Is ComingHubSpot easily beat analyst expectations for both revenue and adjusted earnings per share in the fourth quarter. Both revenue and the total customer count jumped by 21% ...

Employee Growth and Management - The company had 8,246 full-time employees as of December 31, 2024, up from 7,663 as of December 31, 2023, indicating significant growth in headcount[100]. - The company relies heavily on its management team and key employees, and the loss of any could adversely affect its business[128]. - The company competes for skilled personnel in a highly competitive market, which may hinder its ability to execute its business strategy[129]. - The company faces challenges in maintaining its corporate culture with a hybrid workforce model, which could impact innovation and employee retention[127]. Revenue and Financial Performance - The company generated a net income of $4.6 million in 2024, compared to net losses of $164.5 million in 2023 and $107.3 million in 2022, resulting in an accumulated deficit of $799.8 million as of December 31, 2024[202]. - The company has $640.0 million of U.S. federal and $723.7 million of state net operating loss carryforwards, with state losses beginning to expire in 2027[201]. - The company has a history of fluctuating quarterly operating results, making future performance difficult to predict[205]. - The company’s efforts to grow its business may incur significant costs that could exceed revenue increases, impacting profitability[202]. Market Competition and Strategy - The company faces intense competition in the software market, which could impact its ability to add new customers and retain existing ones[94]. - The company’s growth strategy includes a scalable pricing model, but if cross-selling efforts are unsuccessful, revenue and operating results may suffer[91]. - The company’s ability to maintain its thought leadership position is crucial for attracting new customers and retaining existing ones[104]. - The company’s brand development is critical for achieving widespread awareness and attracting new customers, with significant past investments yielding strong brand recognition[105]. Subscription and Revenue Risks - The company relies heavily on subscription renewals, with most agreements being one year or less, which poses a risk to future revenue if renewal rates decline[92]. - The company’s subscription-based revenue recognition may not immediately reflect declines in new or renewed subscriptions, potentially impacting future financial results[93]. Investment and Development - The company must continue to invest in research and development to remain competitive, particularly in AI and machine learning, or risk losing market opportunities[111]. - The company has made significant investments in developing next-generation solutions, including AI and machine learning technologies, but market acceptance remains uncertain[112]. - The company is investing in AI technologies, but ethical concerns and potential regulatory scrutiny could lead to reputational harm and increased R&D costs[126]. International Operations and Risks - The company is expanding its international operations, which involves risks such as regulatory compliance, cultural differences, and currency fluctuations[123]. - The company has increased exposure to currency exchange rate fluctuations due to international operations, which may adversely affect revenue and operating results[132]. - In Q1 2024, the company implemented a hedging program to mitigate foreign exchange impacts, but there is no guarantee of its effectiveness[132]. Cybersecurity and Data Protection - The company faces significant risks related to cybersecurity, including potential unauthorized access to customer data, which could harm its reputation and lead to substantial liabilities[152]. - Cyber incidents have been increasing in sophistication and frequency, with various types of attacks such as ransomware and phishing posing ongoing threats to the company's operations[154]. - The company has experienced past security incidents, indicating a persistent risk of data breaches that could disrupt business operations and lead to financial losses[156]. - The company may incur significant costs associated with remediation and implementing additional security measures in the event of a data breach[157]. Regulatory Compliance and Legal Risks - The company is subject to various governmental regulations regarding data protection and privacy, and failure to comply could adversely affect its business[167]. - The evolving regulatory landscape for privacy and data protection may increase compliance costs and risks for the company, particularly with laws like the California Consumer Privacy Act (CCPA) and the EU General Data Protection Regulation (GDPR) imposing significant obligations[171][176]. - Non-compliance with GDPR could result in monetary penalties of up to €20 million or 4% of worldwide annual revenue, whichever is higher[176]. - The company may face legal challenges related to intellectual property rights, which could divert resources and negatively impact its business[160]. Financial Liabilities and Debt - The company incurred indebtedness of $460.0 million from the issuance of 0.375% convertible senior notes due June 1, 2025[210]. - The company’s ability to service its debt will depend on its future cash flow generation, which is subject to various external factors[210]. - The company may face increased vulnerability to adverse changes in economic conditions due to its existing indebtedness[212]. Economic and Market Conditions - Global inflation rates have risen to levels not seen in decades, potentially decreasing demand for products and increasing operating costs[135]. - Economic uncertainty may lead to reduced customer spending on the company's products, affecting growth and operating results[138]. - Catastrophic events could disrupt business operations and negatively impact financial results[231]. - The company is vulnerable to regional epidemics or global pandemics, which may adversely affect operations and financial results[232]. - Climate change poses long-term risks that could disrupt business and increase operational costs[233].

Exhibit 99.1 Full Year 2024: Net Income (Loss) HubSpot Reports Q4 and Full Year 2024 Results CAMBRIDGE, MA (February 12, 2025) — HubSpot, Inc. (NYSE: HUBS), the customer platform for scaling companies, today announced financial results for the fourth quarter and full year ended December 31, 2024. Financial Highlights: Revenue Fourth Quarter 2024: Full Year 2024: Operating Income (Loss) Fourth Quarter 2024: Fourth Quarter 2024: Full Year 2024: Page | 1 ● Total revenue was $703.2 million, up 21% on an as-repo ...

HubSpot, Inc. (HUBS) is scheduled to report fourth-quarter 2024 results on Feb. 12, after the closing bell. In the last reported quarter, the company reported an earnings surprise of 15.34%. It pulled off a trailing four-quarter earnings surprise of 15.35%, on average.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The company is expected to report higher revenues year over year, backed by growing customer proliferation for its Service Hub, Marketing Hub and Sales Hub applications and ...