HubSpot, Inc. (NYSE: HUBS), the customer platform for scaling
companies, today announced financial results for the third quarter
ended September 30, 2024.
Financial Highlights:
Revenue
- Total revenue was $669.7 million, up 20% compared to Q3'23.
- Subscription revenue was $654.7 million, up 20% compared to
Q3'23.
- Professional services and other revenue was $15.0 million, up
28% compared to Q3'23.
Operating Income (Loss)
- GAAP operating margin was (1.4%), compared to (3.3%) in
Q3'23.
- Non-GAAP operating margin was 18.7%, compared to 16.5% in
Q3'23.
- GAAP operating loss was ($9.6) million, compared to ($18.6)
million in Q3'23.
- Non-GAAP operating income was $125.2 million, compared to $92.1
million in Q3'23.
Net Income (Loss)
- GAAP net income was $8.1 million, or $0.16 per basic and
diluted share, compared to net loss of ($3.6) million, or ($0.07)
per basic and diluted share in Q3'23.
- Non-GAAP net income was $116.6 million, or $2.27 per basic and
$2.18 per diluted share, compared to $84.9 million, or $1.70 per
basic and $1.62 per diluted share in Q3'23.
- Weighted average basic and diluted shares outstanding for GAAP
net loss per share was 51.4 million, compared to 50.1 million basic
and diluted shares in Q3'23.
- Weighted average basic and diluted shares outstanding for
non-GAAP net income per share was 51.4 million and 53.4 million,
respectively, compared to 50.1 million and 52.5 million,
respectively, in Q3'23.
Balance Sheet and Cash Flow
- The company’s cash, cash equivalents, and short-term and
long-term investments balance was $2.1 billion as of September 30,
2024.
- During the third quarter, the company generated $159.5 million
of cash from operating cash flow, compared to $89.0 million during
Q3'23.
- During the third quarter, the company generated $164.0 million
of cash from non-GAAP operating cash flow and $129.2 million of
non-GAAP free cash flow, compared to $93.3 million of cash from
non-GAAP operating cash flow and $64.7 million of non-GAAP free
cash flow during Q3'23.
Additional Recent Business Highlights
- Grew Customers to 238,128 at September 30, 2024, up 23% from
September 30, 2023.
- Average Subscription Revenue Per Customer was $11,235 during
the third quarter of 2024, down 2% compared to the third quarter of
2023.
“Q3 was another strong quarter of revenue growth, operating
profit growth and customer growth,” said Yamini Rangan, Chief
Executive Officer at HubSpot. “We hosted our annual INBOUND
conference which was a huge success, showcasing over 200 new
innovations, including the standout launches of Breeze and Breeze
Intelligence. We are embedding AI across all our hubs and our
entire platform to help SMBs grow. With our relentless focus on
innovation with AI and solid momentum in Q3, I’m more confident
than ever in HubSpot’s durable growth.”
Business Outlook Based on information available as of
November 6, 2024, HubSpot is issuing guidance for the fourth
quarter of 2024 and full year 2024 as indicated below.
Fourth Quarter 2024:
- Total revenue is expected to be in the range of $672.0 million
to $674.0 million.
- Foreign exchange rates are expected to have a 1 point tailwind
to fourth quarter 2024 revenue growth(1).
- Non-GAAP operating income is expected to be in the range of
$128.0 million to $129.0 million.
- Non-GAAP net income per common share is expected to be in the
range of $2.18 to $2.20. This assumes approximately 53.8 million
weighted average diluted shares outstanding.
Full Year 2024:
- Total revenue is expected to be in the range of $2.597 billion
to $2.599 billion.
- Foreign exchange rates are expected to have a neutral impact to
full year 2024 revenue growth(1).
- Non-GAAP operating income is expected to be in the range of
$455.0 million to $456.0 million.
- Non-GAAP net income per common share is expected to be in the
range of $7.98 to $8.00. This assumes approximately 53.4 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 6, 2024 at 4:30 p.m. Eastern
Time (ET) to discuss the company’s third quarter 2024 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. After registering, a
confirmation email will be sent, including dial-in details and a
unique code for entry. Participants who wish to register for the
conference call webcast please use this link.
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 the customer platform that helps
businesses connect and grow better. HubSpot delivers seamless
connection for customer-facing teams with a unified platform that
includes AI-powered engagement hubs, a Smart CRM, and a connected
ecosystem with over 1,500 App Marketplace integrations, a community
network, and educational content. 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 2024 and our long-term financial
framework; 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 customer platform; our ability to develop new products and
technologies and differentiate our platform from competing products
and technologies, including artificial intelligence and machine
learning technologies; our ability to manage our growth effectively
over the long-term to maintain our high level of service; our
ability to maintain and expand relationships with our solutions
partners; the price volatility of our common stock; the impact of
geopolitical conflicts, inflation, foreign currency movement, and
macroeconomic instability 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; regulatory and legislative developments on
the use of artificial intelligence and machine learning; 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,
2024
2023(1)
Assets
Current assets:
Cash and cash equivalents
$
410,060
$
387,987
Short-term investments
1,527,928
1,000,245
Accounts receivable
278,893
295,303
Deferred commission expense
135,116
99,326
Prepaid expenses and other current
assets
86,704
88,679
Total current assets
2,438,701
1,871,540
Long-term investments
165,623
325,703
Property and equipment, net
110,950
103,331
Capitalized software development costs,
net
144,829
106,229
Right-of-use assets
225,922
251,071
Deferred commission expense, net of
current portion
149,619
122,194
Other assets
112,045
75,247
Intangible assets, net
35,211
42,316
Goodwill
174,158
173,761
Total assets
$
3,557,058
$
3,071,392
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
5,267
$
9,106
Accrued compensation costs
83,602
53,462
Accrued commissions
88,418
78,169
Accrued expenses and other current
liabilities
99,358
94,074
Operating lease liabilities
34,630
35,047
Convertible senior notes
457,674
—
Deferred revenue
719,595
672,150
Total current liabilities
1,488,544
942,008
Operating lease liabilities, net of
current portion
265,706
296,561
Deferred revenue, net of current
portion
4,232
5,810
Other long-term liabilities
46,694
36,459
Convertible senior notes, net of current
portion
—
456,206
Total liabilities
1,805,176
1,737,044
Stockholders’ equity:
Common stock
51
50
Additional paid-in capital
2,550,974
2,136,908
Accumulated other comprehensive income
5,649
1,827
Accumulated deficit
(804,792
)
(804,437
)
Total stockholders’ equity
1,751,882
1,334,348
Total liabilities and stockholders’
equity
$
3,557,058
$
3,071,392
(1) In the three months ended March 31,
2024, we discovered an immaterial error in our calculation of Cost
of Revenues—Subscription related to how we calculate contractual
credits in one of our third-party vendor agreements. As a result,
we have revised the Consolidated Statement of Operations by
reducing Cost of Revenues- Subscription by $1.9 million for the
three months ended September 30, 2023 and $5.9 million for the nine
months ended September 30, 2023 to reflect the revised impact of
the credits on that period. We have also revised the balance sheet
as of December 31, 2023 to reflect the cumulative impact of the
error on prior periods, resulting in a decrease to accrued expenses
and other current liabilities and a decrease to accumulated deficit
totaling $14.2 million. Lastly, we have updated certain line items
within the operating section of the statement of cash flows for the
three and nine months ended September 30, 2023 but note no net
impact to cash flows provided by operating activities. Refer to our
Form 10-Q for additional information.
Consolidated Statements of
Operations
(in thousands, except per share data)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023(1)
2024
2023(1)
Revenues:
Subscription
$
654,738
$
545,832
$
1,882,241
$
1,553,253
Professional services and other
14,983
11,725
42,124
35,062
Total revenue
669,721
557,557
1,924,365
1,588,315
Cost of revenues:
Subscription
85,066
71,895
247,408
210,011
Professional services and other
14,258
13,745
42,520
40,910
Total cost of revenues
99,324
85,640
289,928
250,921
Gross profit
570,397
471,917
1,634,437
1,337,394
Operating expenses:
Research and development
191,185
156,871
565,001
454,511
Sales and marketing
309,928
271,448
904,010
787,423
General and administrative
77,928
61,308
219,380
179,939
Restructuring
987
846
2,847
93,296
Total operating expenses
580,028
490,473
1,691,238
1,515,169
Loss from operations
(9,631
)
(18,556
)
(56,801
)
(177,775
)
Other income (expense):
Interest income
21,780
16,181
60,877
40,195
Interest expense
(936
)
(950
)
(2,772
)
(2,817
)
Other (expense) income
(565
)
(1,664
)
14,381
(2,128
)
Total other income
20,279
13,567
72,486
35,250
Income (loss) before income tax
expense
10,648
(4,989
)
15,685
(142,525
)
Income tax (expense) benefit
(2,502
)
1,412
(16,040
)
(9,575
)
Net income (loss)
$
8,146
$
(3,577
)
$
(355
)
$
(152,100
)
Net income (loss) per share, basic
$
0.16
$
(0.07
)
$
(0.01
)
$
(3.06
)
Net income (loss) per share, diluted
$
0.16
$
(0.07
)
$
(0.01
)
$
(3.06
)
Weighted average common shares used in
computing basic net income (loss) per share:
51,354
50,051
51,017
49,719
Weighted average common shares used in
computing diluted net income (loss) per share:
51,778
50,051
51,017
49,719
(1) In the three months ended March 31,
2024, we discovered an immaterial error in our calculation of Cost
of Revenues—Subscription related to how we calculate contractual
credits in one of our third-party vendor agreements. As a result,
we have revised the Consolidated Statement of Operations by
reducing Cost of Revenues- Subscription by $1.9 million for the
three months ended September 30, 2023 and $5.9 million for the nine
months ended September 30, 2023 to reflect the revised impact of
the credits on that period. We have also revised the balance sheet
as of December 31, 2023 to reflect the cumulative impact of the
error on prior periods, resulting in a decrease to accrued expenses
and other current liabilities and a decrease to accumulated deficit
totaling $14.2 million. Lastly, we have updated certain line items
within the operating section of the statement of cash flows for the
three and nine months ended September 30, 2023 but note no net
impact to cash flows provided by operating activities. Refer to our
Form 10-Q for additional information.
Consolidated Statements of Cash
Flows
(in thousands)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023(1)
2024
2023(1)
Operating Activities:
Net income (loss)
$
8,146
$
(3,577
)
$
(355
)
$
(152,100
)
Adjustments to reconcile net loss to net
cash and cash equivalents provided by operating activities
Depreciation and amortization
25,009
20,509
68,447
53,508
Stock-based compensation
130,266
107,506
370,382
318,545
Restructuring charges
—
—
—
64,938
Gain on strategic investments
(99
)
—
(18,555
)
—
Impairment of strategic investments
—
—
4,094
—
(Benefit from) provision for deferred
income taxes
(399
)
141
(611
)
4,943
Amortization of debt discount and issuance
costs
499
497
1,501
1,477
Accretion of bond discount
(13,614
)
(11,436
)
(36,694
)
(30,213
)
Unrealized currency translation
(2,429
)
(1,259
)
(3,377
)
(1,380
)
Changes in assets and liabilities
Accounts receivable
(4,561
)
(8,448
)
13,861
13,178
Prepaid expenses and other assets
18,622
11,423
(8,606
)
(36,023
)
Deferred commission expense
(21,341
)
(17,301
)
(61,425
)
(54,335
)
Right-of-use assets
6,077
2,272
26,461
23,244
Accounts payable
1,667
12,649
1,449
(5,165
)
Accrued expenses and other liabilities
24,273
(12,250
)
39,322
34,276
Operating lease liabilities
(9,402
)
(10,948
)
(32,555
)
(28,933
)
Deferred revenue
(3,172
)
(732
)
41,119
40,699
Net cash and cash equivalents provided by
operating activities
159,542
89,046
404,458
246,659
Investing Activities:
Purchases of investments
(834,621
)
(405,920
)
(1,486,338
)
(1,137,283
)
Maturities of investments
305,960
424,950
1,155,555
1,154,784
Sale of investments
1,997
—
1,997
—
Purchases of property and equipment
(11,131
)
(10,842
)
(25,213
)
(25,031
)
Equity method investment
(3,943
)
(2,250
)
(3,943
)
(2,250
)
Purchases of strategic investments
(3,996
)
(3,250
)
(7,623
)
(9,250
)
Capitalization of software development
costs
(23,646
)
(17,693
)
(66,721
)
(49,288
)
Proceeds from net working capital
settlement
—
—
1,933
—
Net cash and cash equivalents used in
investing activities
(569,380
)
(15,005
)
(430,353
)
(68,318
)
Financing Activities:
Employee taxes paid related to the net
share settlement of stock-based awards
(4,293
)
(3,469
)
(17,777
)
(7,571
)
Proceeds related to the issuance of common
stock under stock plans
15,967
13,384
61,211
37,934
Net cash and cash equivalents provided by
financing activities
11,674
9,915
43,434
30,363
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
10,349
(5,629
)
4,534
(4,181
)
Net increase in cash, cash equivalents and
restricted cash
(387,815
)
78,327
22,073
204,523
Cash, cash equivalents and restricted
cash, beginning of period
801,928
460,371
392,040
334,175
Cash, cash equivalents and restricted
cash, end of period
$
414,113
$
538,698
$
414,113
$
538,698
(1) In the three months ended March 31,
2024, we discovered an immaterial error in our calculation of Cost
of Revenues—Subscription related to how we calculate contractual
credits in one of our third-party vendor agreements. As a result,
we have revised the Consolidated Statement of Operations by
reducing Cost of Revenues- Subscription by $1.9 million for the
three months ended September 30, 2023 and $5.9 million for the nine
months ended September 30, 2023 to reflect the revised impact of
the credits on that period. We have also revised the balance sheet
as of December 31, 2023 to reflect the cumulative impact of the
error on prior periods, resulting in a decrease to accrued expenses
and other current liabilities and a decrease to accumulated deficit
totaling $14.2 million. Lastly, we have updated certain line items
within the operating section of the statement of cash flows for the
three and nine months ended September 30, 2023 but note no net
impact to cash flows provided by operating activities. Refer to our
Form 10-Q for additional information.
Reconciliation of non-GAAP operating
income and operating margin
(in thousands, except percentages)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
GAAP operating loss
$
(9,631
)
$
(18,556
)
$
(56,801
)
$
(177,775
)
Stock-based compensation
130,266
107,506
370,382
318,545
Amortization of acquired intangible
assets
2,344
2,311
7,029
4,007
Acquisition related expense
1,243
—
3,634
—
Restructuring charges
987
846
2,847
93,296
Non-GAAP operating income
$
125,209
$
92,107
$
327,091
$
238,073
GAAP operating margin
(1.4
%)
(3.3
%)
(3.0
%)
(11.2
%)
Non-GAAP operating margin
18.7
%
16.5
%
17.0
%
15.0
%
Reconciliation of non-GAAP net
income
(in thousands, except per share
amounts)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
GAAP net income (loss)
$
8,146
$
(3,577
)
$
(355
)
$
(152,100
)
Stock-based compensation
130,266
107,506
370,382
318,545
Acquisition related expense
1,243
—
3,634
—
Amortization of acquired intangibles
assets
2,344
2,311
7,029
4,007
Restructuring charges
987
846
2,847
93,296
Non-cash interest expense for amortization
of debt issuance costs
499
497
1,501
1,477
Gain on strategic investments
(99
)
—
(14,461
)
—
Gain on equity method investment
(140
)
(30
)
(86
)
(96
)
Income tax effects of non-GAAP items
(26,648
)
(22,640
)
(61,266
)
(45,366
)
Non-GAAP net income
$
116,598
$
84,913
$
309,225
$
219,763
Non-GAAP net income per share:
Basic
$
2.27
$
1.70
$
6.06
$
4.42
Diluted
$
2.18
$
1.62
$
5.80
$
4.22
Shares used in non-GAAP per share
calculations
Basic
51,354
50,051
51,017
49,719
Diluted (1)
53,402
52,521
53,300
52,039
(1) The non-GAAP diluted share count
includes shares related to our 2025 notes using the if converted
method. The GAAP diluted share count excludes shares related to our
2025 notes using the if converted method because inclusion of those
shares would be anti-dilutive.
Reconciliation of non-GAAP expense and
expense as a percentage of revenue
(in thousands, except percentages)
For the Three Months Ended
September 30,
2024
2023
COS, Subs- cription
COS, Prof. services &
other
R&D
S&M
G&A
COS, Subs- cription
COS, Prof. services &
other
R&D
S&M
G&A
GAAP expense
$
85,066
$
14,258
$
191,185
$
309,928
$
77,928
$
71,895
$
13,745
$
156,871
$
271,448
$
61,308
Stock -based compensation
(6,408
)
(1,113
)
(62,595
)
(36,218
)
(23,932
)
(3,157
)
(1,201
)
(49,460
)
(34,439
)
(19,249
)
Amortization of acquired intangible
assets
(1,882
)
—
—
(357
)
(105
)
(408
)
—
—
(1,903
)
—
Acquisition related expense
—
—
(764
)
—
(479
)
—
—
—
—
—
Non-GAAP expense
$
76,776
$
13,145
$
127,826
$
273,353
$
53,412
$
68,330
$
12,544
$
107,411
$
235,106
$
42,059
GAAP expense as a percentage of
revenue
12.7
%
2.1
%
28.5
%
46.3
%
11.6
%
12.9
%
2.5
%
28.1
%
48.7
%
11.0
%
Non-GAAP expense as a percentage of
revenue
11.5
%
2.0
%
19.1
%
40.8
%
8.0
%
12.3
%
2.2
%
19.3
%
42.2
%
7.5
%
For the Nine Months Ended
September 30,
2024
2023
COS, Subs- cription
COS, Prof. services &
other
R&D
S&M
G&A
COS, Subs- cription
COS, Prof. services &
other
R&D
S&M
G&A
GAAP expense
$
247,408
$
42,520
$
565,001
$
904,010
$
219,380
$
210,011
$
40,910
$
454,511
$
787,423
$
179,939
Stock -based compensation
(16,811
)
(3,328
)
(177,914
)
(107,543
)
(64,786
)
(9,110
)
(3,748
)
(146,845
)
(103,233
)
(55,609
Amortization of acquired intangible
assets
(5,643
)
—
—
(1,071
)
(315
)
(1,212
)
—
—
(2,795
)
—
Acquisition related expense
—
—
(2,520
)
—
(1,114
)
—
—
—
—
—
Non-GAAP expense
$
224,954
$
39,192
$
384,567
$
795,396
$
153,165
$
199,689
$
37,162
$
307,666
$
681,395
$
124,330
GAAP expense as a percentage of
revenue
12.9
%
2.2
%
29.4
%
47.0
%
11.4
%
13.2
%
2.6
%
28.6
%
49.6
%
11.3
Non-GAAP expense as a percentage of
revenue
11.7
%
2.0
%
20.0
%
41.3
%
8.0
%
12.6
%
2.3
%
19.4
%
42.9
%
7.8
Reconciliation of non-GAAP subscription
margin
(in thousands, except percentages)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
GAAP subscription margin
$
569,672
$
473,937
$
1,634,833
$
1,343,242
Stock-based compensation
6,408
3,157
16,811
9,110
Amortization of acquired intangible
assets
1,882
408
5,643
1,212
Non-GAAP subscription margin
$
577,962
$
477,502
$
1,657,287
$
1,353,564
GAAP subscription margin percentage
87.0
%
86.8
%
86.9
%
86.5
%
Non-GAAP subscription margin
percentage
88.3
%
87.5
%
88.0
%
87.1
%
Reconciliation of free cash
flow
(in thousands)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
GAAP net cash and cash equivalents
provided by operating activities
$
159,542
$
89,046
$
404,458
$
246,659
Purchases of property and equipment
(11,131
)
(10,842
)
(25,213
)
(25,031
)
Capitalization of software development
costs
(23,646
)
(17,693
)
(66,721
)
(49,288
)
Payment of restructuring charges
4,466
4,225
12,537
37,164
Non-GAAP free cash flow
$
129,231
$
64,736
$
325,061
$
209,504
Reconciliation of operating cash
flow
(in thousands)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
GAAP net cash and cash equivalents
provided by operating activities
$
159,542
$
89,046
$
404,458
$
246,659
Payment of restructuring charges
4,466
4,225
12,537
37,164
Non-GAAP operating cash flow
$
164,008
$
93,271
$
416,995
$
283,823
Reconciliation of forecasted non-GAAP
operating income
(in thousands, except percentages)
Three Months Ended December
31, 2024
Year Ended December 31,
2024
GAAP operating income range
($13,347)-($12,497)
($73,090)-($72,240)
Stock-based compensation
134,538
507,747
Amortization of acquired intangible
assets
2,350
9,403
Acquisition related expense
3,659
7,293
Restructuring charges
800-950
3,647-3,797
Non-GAAP operating income range
$128,000-$129,000
$455,000-$456,000
Reconciliation of forecasted non-GAAP
net income and non-GAAP net income per share
(in thousands, except per share
amounts)
Three Months Ended December
31, 2024
Year Ended December 31,
2024
GAAP net loss range
($519)-$582
($3,635)-($2,535)
Stock-based compensation
134,538
507,747
Amortization of acquired intangible
assets
2,350
9,403
Acquisition related expense
3,659
7,293
Non-cash interest expense for amortization
of debt issuance costs
514
2,019
Gain on strategic investments
—
(14,461
)
Loss on equity method investment
—
(86
)
Restructuring charges
800-950
3,647-3,797
Income tax effects of non-GAAP items
(24,142)-(24,392)
(85,427)-(85,677)
Non-GAAP net income range
$117,200-$118,201
$426,500-$427,500
GAAP net income per basic and diluted
share
($0.01)-$0.01
($0.07)-($0.05)
Non-GAAP net income per diluted share
$2.18-$2.20
$7.98-$8.00
Weighted average common shares used in
computing GAAP basic and diluted net loss per share:
51,669
51,181
Weighted average common shares used in
computing non-GAAP diluted net loss per share:
53,762
53,425
HubSpot’s estimates of stock-based compensation, amortization of
acquired intangible assets, non-cash interest expense for
amortization of debt issuance costs, gain on or impairment of
strategic investments, loss of equity method investment,
restructuring charges, and income tax effects of non-GAAP items
assume, among other things, the occurrence of no additional
acquisitions, and no further revisions to stock-based compensation
and related expenses.
Non-GAAP Financial Measures We report our financial
results in accordance with accounting principles generally accepted
in the United States of America, or GAAP. However, management
believes that, in order to properly understand our short-term and
long-term financial and operational trends, investors may wish to
consider the impact of certain non-cash or non-recurring items when
used as a supplement to financial performance measures in
accordance with GAAP. These items result from facts and
circumstances that vary in frequency and impact on continuing
operations. In this release, HubSpot’s non-GAAP operating income,
operating margin, subscription margin, expense, expense as a
percentage of revenue, net income, operating and free cash flow are
not presented in accordance with GAAP and are not intended to be
used in lieu of GAAP presentations of results of operations.
Non-GAAP operating cash flow is defined as cash and cash
equivalents provided by or used in operating activities plus
payment of restructuring charges. Non-GAAP free cash flow is
defined as cash and cash equivalents provided by or used in
operating activities less purchases of property and equipment and
capitalization of software development costs, plus payment of
restructuring charges. Although non-GAAP operating cash flow and
non-GAAP free cash flow are not residual cash flow available for
our discretionary expenditures, we believe information regarding
non-GAAP operating cash flow and non-GAAP free cash flow provide
useful information to investors in understanding and evaluating the
strength of our liquidity and provides a comparable framework for
assessing how our business performed when compared to prior periods
which were not impacted by restructuring charges paid from
operating cash flow.
Management believes that these non-GAAP financial measures
provide additional means of evaluating period-over-period operating
performance. Specifically, these non-GAAP financial measures
provide management with additional means to understand and evaluate
the operating results and trends in our ongoing business by
eliminating certain non-cash expenses and other items that
management believes might otherwise make comparisons of our ongoing
business with prior periods more difficult, obscure trends in
ongoing operations, or reduce management’s ability to make useful
forecasts. In addition, management understands that some investors
and financial analysts find this information helpful in analyzing
our financial and operational performance and comparing this
performance to our peers and competitors. However, these non-GAAP
financial measures have limitations as an analytical tool and are
not intended to be an alternative to financial measures prepared in
accordance with GAAP. In addition, it should be noted that these
non-GAAP financial measures may be different from non-GAAP measures
used by other companies. We intend to provide these non-GAAP
financial measures as part of our future earnings discussions and,
therefore, the inclusion of these non-GAAP financial measures will
provide consistency in our financial reporting. Management may,
however, utilize other measures to illustrate performance in the
future. Investors are encouraged to review the reconciliation of
these non-GAAP measures to their most directly comparable GAAP
financial measures. A reconciliation of our non-GAAP financial
measures to their most directly comparable GAAP measures has been
provided in the financial statement tables included above in this
press release.
These non-GAAP measures exclude stock-based compensation,
amortization of acquired intangible assets, acquisition related
expenses, disposition related income, non-cash interest expense for
the amortization of debt issuance costs, gain or impairment losses
on strategic investments, gain or loss on equity method investment,
restructuring charges and account for the income tax effects of the
exclusion of these non-GAAP items. We believe investors may want to
incorporate the effects of these items in order to compare our
financial performance with that of other companies and between time
periods:
A.
Stock-based compensation is a non-cash
expense accounted for in accordance with FASB ASC Topic 718. We
believe that the exclusion of stock-based compensation expense
allows for financial results that are more indicative of our
operational performance and provide for a useful comparison of our
operating results to prior periods and to our peer companies
because stock-based compensation expense varies from period to
period and company to company due to such things as differing
valuation methodologies and changes in stock price.
B.
Expense for the amortization of acquired
intangible assets is excluded from non-GAAP expense and income
measures as HubSpot views amortization of these assets as arising
from pre-acquisition activities determined at the time of an
acquisition. While these intangible assets are evaluated for
impairment regularly, amortization of the cost of purchased
intangibles is a non-cash expense that is not typically affected by
operations during any particular period. Valuation and subsequent
amortization of intangible assets can also be inconsistent in
amount and frequency because they can significantly vary based on
the timing and size of acquisitions and the inherently subjective
nature of the degree to which a purchase price is allocated to
intangible assets. We believe that the exclusion of this
amortization expense provides for a useful comparison of our
operating results to prior periods, for which we have historically
excluded amortization expense, and to our peer companies, which
commonly exclude acquired intangible asset amortization. It is
important to note that although we exclude amortization of acquired
intangible assets from our non-GAAP expense and income measures,
revenue generated from such intangibles is included within our
non-GAAP income measures. The use of these intangible assets
contributed to our revenues earned during the periods presented and
will contribute to future periods as well.
C.
Acquisition related expenses, such as
transaction costs, retention payments, and holdback payments, and
disposition related income, such as proceeds from sale of assets,
are transactions that are not necessarily reflective of our
operational performance during a period. We believe that the
exclusion of these expenses and income provides for a useful
comparison of our operating results to prior periods and to our
peer companies, which commonly exclude these expenses and
income.
D.
In June 2020, we issued $460 million of
convertible notes due in 2025 with a coupon interest rate of
0.375%. The issuance cost of the debt is amortized as interest
expense over the remaining term of the debt. We believe the
exclusion of this non-cash interest expense provides for a useful
comparison of our operating results to prior periods and to our
peer companies.
E.
Strategic investments consist of
non-controlling equity investments in privately held companies. The
recognition of gains or impairment losses can vary significantly
across periods and we do not view them to be indicative of our
fundamental operating activities and believe the exclusion of gains
or impairment losses provides for a useful comparison of our
operating results to prior periods and to our peer companies.
F.
We made a contribution to the Black
Economic Development Fund (the “investee”) managed by the Local
Initiatives Support Corporation and have committed to make
additional capital contributions. We account for this investment
under the equity method of accounting. The proportionate share of
our equity method investee's net earnings have been excluded in
order to provide a comparable view of our operating results to
prior periods and to our peer companies. We believe this activity
is not reflective of our recurring core business operating
results.
G.
Restructuring charges are related to
severance, employee related benefits, facilities and other costs
associated with the restructuring plan implemented on January 25,
2023. Restructuring charges fluctuate in amount and frequency and
are not reflective of our core business operating results. Over the
remaining lease term (into 2027), we expect to both incur
incremental restructuring charges and make cash payments related to
the facilities that we abandoned in 2023. The abandonment of
facilities is part of the restructuring plan we authorized in
January 2023 and is intended to consolidate our lease space and
create higher density across our workspaces. The incremental
charges we expect to incur relate to continuing costs for the
abandoned facilities and are expected to be in the range of $12-14
million and will be paid in cash over the remaining lease term. We
also expect to make cash payments of approximately $47.0 million in
fixed rent payments for the abandoned facilities that will be made
in monthly installments over the remaining lease term for which we
have taken the full P&L restructuring charge during the year
ended 2023. We plan on excluding both the incremental charges and
cash payments and the related restructuring cash rent payments from
our non-GAAP earnings, operating cash flow, and free cash flow
metrics. We believe exclusion of these charges and cash payments
provides useful information to investors in understanding and
evaluating the strength of earnings and liquidity and provides a
comparable framework for assessing how our business performed when
compared to prior periods which were not impacted by excluded
restructuring charges paid from operating cash flow.
H.
The effects of income taxes on non-GAAP
items reflect a fixed long-term projected tax rate of 20% to
provide better consistency across reporting periods. To determine
this long-term non-GAAP tax rate, we exclude the impact of other
non-GAAP adjustments and take into account other factors such as
our current operating structure and existing tax positions in
various jurisdictions. We will periodically reevaluate this tax
rate, as necessary, for significant events such as relevant tax law
changes and material changes in our forecasted geographic earnings
mix.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106827708/en/
Investor Relations Contact: investors@hubspot.com
Media Contact: media@hubspot.com
HubSpot (NYSE:HUBS)
過去 株価チャート
から 10 2024 まで 11 2024
HubSpot (NYSE:HUBS)
過去 株価チャート
から 11 2023 まで 11 2024
