HUBS HubSpot Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 2, 2023

HUBSPOT, INC.

(Exact name of Registrant as Specified in Its Charter)

Delaware	001-36680	20-2632791
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
	Two Canal Park Cambridge, Massachusetts 02141 (Address of Principal Executive Offices)

Registrant’s Telephone Number, Including Area Code: (888) 482-7768

25 First Street
Cambridge, Massachusetts 02141

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, Par Value $0.001 per share		HUBS		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

On August 2, 2023, HubSpot, Inc. (the “Company”) issued a press release announcing its financial results and other information for the quarter ended June 30, 2023. The full text of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.

The information under this Item 2.02, including Exhibit 99.1 attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)	Exhibits

Exhibit No.		Description
99.1		Press Release of HubSpot, Inc. dated August 2, 2023 furnished herewith
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		HubSpot, Inc.
August 2, 2023		By:	/s/ Kate Bueker
			Name: Kate Bueker
			Title: Chief Financial Officer

 

 

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Exhibit 99.1

 

HubSpot Reports Q2 2023 Results

 

CAMBRIDGE, MA (August 2, 2023) — HubSpot, Inc. (NYSE: HUBS), the customer relationship management (CRM) platform for scaling companies, today announced financial results for the second quarter ended June 30, 2023.

Financial Highlights:

 

Revenue

Operating Income (Loss)

 

Net Income (Loss)

 

Balance Sheet and Cash Flow

 

Additional Recent Business Highlights

 

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“We had another solid quarter and I’m pleased with the continued momentum we have in becoming the platform of choice for scaling companies,” said Yamini Rangan, Chief Executive Officer at HubSpot. “Our teams are driving the pace of product innovation, iterating fast with AI while executing on our bi-modal strategy, despite a still challenging macroeconomic environment. This focus and alignment is what will continue to set us apart to drive durable and profitable growth over the long term.”

 

Business Outlook
Based on information available as of August 2, 2023, HubSpot is issuing guidance for the third quarter of 2023 and full year 2023 as indicated below.

Third Quarter 2023:

 

Full Year 2023:

 

(1) Foreign exchange rates impact on revenue is calculated by comparing current period average rates with prior period average rates.

(2) The impact of restructuring charges, which include employee severance and lease consolidation costs, are excluded from our non-GAAP operating income and non-GAAP net income per common share business outlook.

 

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, August 2, 2023, at 4:30 p.m. Eastern Time (ET) to discuss the company’s second quarter 2023 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 067108. An archived webcast of this conference call will also be available on HubSpot's Investor Relations website at ir.hubspot.com.

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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 184,000 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 third fiscal quarter of and full year 2023 and out 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 CRM 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.

 

 

 

 

 

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Consolidated Balance Sheets

(in thousands)

		June 30,				December 31,
		2023				2022
Assets
Current assets:
Cash and cash equivalents		$	457,218			$	331,022
Short-term investments			1,071,927				1,081,662
Accounts receivable			206,697				226,849
Deferred commission expense			82,158				70,992
Prepaid expenses and other current assets			89,845				44,074
Total current assets			1,907,845				1,754,599
Long-term investments			146,245				112,791
Property and equipment, net			104,227				105,227
Capitalized software development costs, net			86,548				63,790
Right-of-use assets			262,759				319,304
Deferred commission expense, net of current portion			93,277				66,559
Other assets			65,876				58,795
Intangible assets, net			15,854				17,446
Goodwill			46,464				46,227
Total assets		$	2,729,095			$	2,544,738
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	3,133			$	20,883
Accrued compensation costs			69,758				62,846
Accrued expenses and other current liabilities			157,485				102,122
Operating lease liabilities			31,145				35,928
Deferred revenue			585,934				539,874
Total current liabilities			847,455				761,653
Operating lease liabilities, net of current portion			313,632				316,184
Deferred revenue, net of current portion			4,568				5,904
Other long-term liabilities			25,768				14,546
Convertible senior notes			455,207				454,227
Total liabilities			1,646,630				1,552,514
Stockholders’ equity:
Common stock			50				49
Additional paid-in capital			1,890,409				1,647,446
Accumulated other comprehensive loss			(8,385	)			(12,890	)
Accumulated deficit			(799,609	)			(642,381	)
Total stockholders’ equity			1,082,465				992,224
Total liabilities and stockholders’ equity		$	2,729,095			$	2,544,738

 

 

 

 

 

 

 

 

 

 

 

 

 

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Consolidated Statements of Operations

(in thousands, except per share data)

 

	For the Three Months Ended June 30,								For the Six Months Ended June 30,
	2023				2022				2023				2022
Revenues:
Subscription	$	517,678			$	412,401			$	1,007,421			$	797,356
Professional services and other		11,460				9,354				23,337				19,998
Total revenue		529,138				421,755				1,030,758				817,354
Cost of revenues:
Subscription		73,824				64,431				142,163				123,816
Professional services and other		13,462				14,500				27,169				28,053
Total cost of revenues		87,286				78,931				169,332				151,869
Gross profit		441,852				342,824				861,426				665,485
Operating expenses:
Research and development		169,955				118,914				297,639				211,650
Sales and marketing		265,294				224,262				515,971				421,396
General and administrative		61,222				51,898				118,630				95,844
Restructuring		63,880			—					92,450			—
Total operating expenses		560,351				395,074				1,024,690				728,890
Loss from operations		(118,499	)			(52,250	)			(163,264	)			(63,405	)
Other expense:
Interest income		13,542				2,050				24,013				2,564
Interest expense		(937	)			(949	)			(1,867	)			(1,898	)
Other income (expense)		330				(3,091	)			(465	)			602
Total other expense		12,935				(1,990	)			21,681				1,268
Loss before income tax expense		(105,564	)			(54,240	)			(141,583	)			(62,137	)
Income tax expense		(13,382	)			(2,121	)			(15,645	)			(3,565	)
Net loss	$	(118,946	)		$	(56,361	)		$	(157,228	)		$	(65,702	)
Net loss per share, basic and diluted	$	(2.39	)		$	(1.18	)		$	(3.17	)		$	(1.38	)
Weighted average common shares used in computing    basic and diluted net loss per share:		49,703				47,815				49,550				47,697

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Consolidated Statements of Cash Flows

(in thousands)

 

	For the Three Months Ended June 30,								For the Six Months Ended June 30,
	2023				2022				2023				2022
Operating Activities:
Net loss		(118,946	)		$	(56,361	)		$	(157,228	)		$	(65,702	)
Adjustments to reconcile net loss to net cash and cash equivalents provided    by operating activities
Depreciation and amortization		16,429				14,265				32,999				27,063
Stock-based compensation		128,003				81,165				211,038				126,868
Restructuring charges		62,657			—					64,938			—
Loss (gain) on strategic investments	—					21			—					(4,200	)
Provision for (benefit from) deferred income taxes		4,755				(152	)			4,802				(398	)
Amortization of debt discount and issuance costs		496				510				980				1,017
Accretion of bond discount		(10,769	)			(735	)			(18,777	)			(150	)
Unrealized currency translation		236				1,277				(122	)			1,980
Changes in assets and liabilities
Accounts receivable		(8,991	)			(17,901	)			21,626				(14,349	)
Prepaid expenses and other assets		(27,028	)			(17,984	)			(47,445	)			(21,911	)
Deferred commission expense		(18,495	)			(5,390	)			(37,034	)			(13,744	)
Right-of-use assets		12,489				6,919				20,972				13,447
Accounts payable		59				5,335				(17,814	)			8,960
Accrued expenses and other liabilities		31,011				15,954				55,232				23,089
Operating lease liabilities		(8,156	)			(9,012	)			(17,985	)			(11,330	)
Deferred revenue		12,793				23,010				41,431				52,506
Net cash and cash equivalents provided by operating activities		76,543				40,921				157,613				123,146
Investing Activities:
Purchases of investments		(369,117	)			(428,516	)			(731,363	)			(864,063	)
Maturities of investments		441,867				220,159				729,834				625,378
Sale of investments	—					124,998			—					124,998
Purchases of property and equipment		(10,879	)			(8,332	)			(14,189	)			(18,272	)
Purchases of strategic investments	—					(8,827	)			(6,000	)			(13,873	)
Purchases of intangible assets	—					(10,000	)		—					(10,000	)
Equity method investment	—					(250	)		—					(250	)
Capitalization of software development costs		(16,473	)			(10,209	)			(31,595	)			(19,931	)
Net cash and cash equivalents provided by (used in) investing activities		45,398				(120,977	)			(53,313	)			(176,013	)
Financing Activities:
Proceeds from settlement of Convertible Note Hedges related to the 2022   Convertible Notes	—					60,483			—					60,483
Payment for settlement of 2022 Convertible Notes	—					(79,807	)		—					(79,807	)
Repayment of 2025 Convertible Notes attributable to the principal	—				—				—					(1,619	)
Employee taxes paid related to the net share settlement of stock-based awards		(2,904	)			(3,410	)			(4,102	)			(7,764	)
Proceeds related to the issuance of common stock under stock plans		13,296				7,847				24,550				19,699
Net cash and cash equivalents provided by (used in) financing activities		10,392				(14,887	)			20,448				(9,008	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(274	)			(7,826	)			1,448				(9,474	)
Net (decrease) increase in cash, cash equivalents and restricted cash		132,059				(102,769	)			126,196				(71,349	)
Cash, cash equivalents and restricted cash, beginning of period		328,312				411,462				334,175				380,042
Cash, cash equivalents and restricted cash, end of period	$	460,371			$	308,693			$	460,371			$	308,693

 

 

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Reconciliation of non-GAAP operating income and operating margin

(in thousands, except percentages)

 

	Three Months Ended June 30,							Six Months Ended June 30,
	2023			2022				2023			2022
GAAP operating loss	$	(118,499	)	$	(52,250	)		$	(163,264	)	$	(63,405	)
Stock-based compensation		128,003			81,165				211,038			126,868
Amortization of acquired intangible assets		851			752				1,696			1,163
Acquisition related expenses		—			(281	)			—			(288	)
Restructuring charges		63,880			—				92,450			—
Non-GAAP operating income	$	74,235		$	29,386			$	141,920		$	64,338
GAAP operating margin		(22.4	%)		(12.4	%)			(15.8	%)		(7.8	%)
Non-GAAP operating margin		14.0	%		7.0	%			13.8	%		7.9	%

 

Reconciliation of non-GAAP net income

(in thousands, except per share amounts)

 

	Three Months Ended June 30,							Six Months Ended June 30,
	2023			2022				2023			2022
GAAP net loss	$	(118,946	)		(56,361	)		$	(157,228	)	$	(65,702	)
Stock-based compensation		128,003			81,165				211,038			126,868
Amortization of acquired intangibles assets		851			752				1,696			1,163
Acquisition related expenses		—			(281	)			—			(288	)
Restructuring charges		63,880			—				92,450			—
Non-cash interest expense for amortization of debt issuance costs		496			510				980			1,017
Loss (gain) on strategic investments		—			21				—			(4,200	)
(Gain) loss on equity method investment		(188	)		103				(66	)		—
Income tax effects of non-GAAP items		(4,114	)		(3,485	)			(17,258	)		(8,920	)
Non-GAAP net income	$	69,982			22,424			$	131,612		$	49,938
Non-GAAP net income per share:
Basic	$	1.41		$	0.47			$	2.66		$	1.05
Diluted	$	1.34		$	0.44			$	2.54		$	0.98
Shares used in non-GAAP per share calculations
Basic		49,703			47,815				49,550			47,697
Diluted		52,100			51,066				51,798			51,082

 

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Reconciliation of non-GAAP expense and expense as a percentage of revenue

(in thousands, except percentages)

 

	Three Months Ended June 30,
	2023																2022
	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	$	73,824		$	13,462		$	169,955		$	265,294		$	61,222			$	64,431		$	14,500		$	118,914		$	224,262		$	51,898
Stock -based compensation		(3,516	)		(1,459	)		(64,060	)		(38,625	)		(20,343	)			(2,383	)		(1,248	)		(31,698	)		(32,183	)		(13,653	)
Amortization of acquired   intangible assets		(405	)		—			—			(446	)		—				(306	)		—			—			(446	)		—
Acquisition/disposition related   income (expenses)		—			—			—			—			—				—			—			300			—			(19	)
Non-GAAP expense	$	69,903		$	12,003		$	105,895		$	226,223		$	40,879			$	61,742		$	13,252		$	87,516		$	191,633		$	38,226
GAAP expense as a   percentage of revenue		<