HubSpot (HUBS) 2 Aug 232023 Q2 Earnings call transcript

Hello, and welcome to the HubSpot Q2 2023 Earnings Call. My name is Alex, I’ll be coordinating the call today. [Operator Instructions]

I’ll now hand over to your host, Chuck MacGlashing, Head of Investor Relations. Please go ahead.

operator. Thanks, welcome quarter and call. earnings HubSpot’s to afternoon, XXXX second conference Good we’ll announced after was results discussing the the close. Today, the that in be press release market issued

our call and Co-Founder and Kate Financial is on Shah, Chief CTO; this our me Officer; Dharmesh the Yamini With Rangan, Officer. Chief Bueker, Executive our afternoon

statement start, press release. today’s I’d your Before in to we attention to included draw like the Safe Harbor

Section and expected within of XXA and our During our the this business financial including and regarding forward-looking to other quarter statements the call, of including of are meaning XXXX growth, considered be Section Exchange than business historical year related impact Act of we’ll outlook, Exchange statements the of for that forward-looking management’s of amended those Securities and fact amended. of of the expenditures, the make full FX operational may XXXX. the as operational All movement as Act restructuring, statements XXXX future fiscal Securities third statements, performance guidance expectations financial and XXE

as reflect and to which as statements. update revise materially refer release in forward-looking of afternoon our results with for could from press the only cautionary that will a expectations. required risks our today’s differ undertake the as obligation Form language the of to views or and actual these law, today to XX-Q, Please cause statements no by Forward-looking we discussion filed be SEC this and uncertainties accepted

financial within comparable the such we’ll The non-GAAP measure quarter section financial Investor and release can measures differences defined G. website. in as earnings press today’s second each GAAP or of the of be Relations financial measures reconciliation discussed call, directly by most course refer found XXXX between to our used of the non-GAAP our certain a During measure Regulation to

over Rangan. Yamini? to Executive the Now, to HubSpot’s it’s call Chief my turn pleasure Officer, Yamini

I Today, the as macro and generative our on momentum everyone customer environment, based welcome playbook want in joining close continued us our on so well QX, this call. you to updates much, Chuck, in and as reiterate insights our to map with Thank on highlight winning usage. road AI for

into jump delivered for with solid margin basis XX% expansion points year-over-year HubSpot currency. growing revenue was QX constant quarter QX a in Let's XXX margin XX%. operating year-over-year, results. our We of to driving

growth We are and balancing purposefully about strategy against strategy. for and this have we talked our executing profitability,

really in becoming the additions with very performance platform over strong happy quarter. over by by driving I'm customers in we the the customer scaling for grew pleased growth to with the quarter. companies. team X,XXX results while XX% the net delivered choice I'm have by fueled momentum globally, the in demonstrated QX. leverage Total our of The and consistent operating we in XXX,XXX

product driven themes; execute were go-market by consistently QX deliver results to our strategy. for two our bimodal our ability our innovation customers and key to ability

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was suite customers QX points which X/ deals. hubs, fueling continued multi-hub of as growth saw X well as is momentum Pro adoption. X about in the That X our hubs, larger full more now customers up market new story said, and multiple with more Enterprise or year-over-year. on with starting We in are by

customers. Hub with addition, up pick see larger steam Sales to In continue we

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for driving We execution. a growth playbook with proven our product innovation focused have and

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how the is On side, a been. product-driven, we why partner-driven, sales-driven. direct we've three go-to-market motions, sell with go-to-market We've moat built and competitive

deliver difference platform benefits, them us and to team's us teams tell and the customers sets move our lineup a Our clear HubSpot, ability to quickly the best in success value sales to that consolidation way They customer the our apart. notable articulate see demo serve services. of partners

of and existing is just partners, expansion newcomer stuff. ARR customer by influenced co-sold awesome and XX% Today, all over our

While drive continue the sell and macro profitable differentiators how unique HubSpot environment to we remains sell be growth. for durable challenging, what we to

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are platform, assistance layer to responding, building what AI are provide an an entire of I Today, of unique how our and with how customers differentiators our our overview across we're AI. want

total with grown it to We prompts quickly launched XX,XXX ingested ChatSpot XX,XXX this earlier has users year, weekly. and

breadth ChatSpot and how Our we quickly helping customers actions they're new They they from our them capabilities, the value are us that AI innovating getting of take. tell like updates. love is with weekly

power all Customers generation, are research, based have news, from generation, location, recent image more. ChatSpot interface title of and within entire prospects campaigns on good SEO eager to The platform what's ChatSpot. companies They're chat using our for customers next for HubSpot's with block industry, ChatSpot. easy the fit with creating and combined with

content, they helping all and right it based can XX% e-mails, game-changer public copy, work to having and June, Gen We of them faster Content social adoption are. as has in embeds block without by launched XXx, describing using natural AI today. beta also Content our Customers customers' since Assistant grown this Assistant Content earlier our on insights a with workflow, where leave customers because enterprise quickly HubSpot. are into Assistant to smarter, generate it moving year, they prospecting

I value with get CRM better customers the help them As three entire at We leverage to their want AI into platforms our our entire can AI believe we AI more platform. so than AI, power can we and customer journey for look our are companies building ambitiously from help scaling even other roadmap, platform, we reasons.

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human needs product for Finally, and work a scaling AI gen human to the moving to very committed leader and feedback to implementing We're become centric AI had intervention strong loop companies, approach always feedback having and the to innovation. quickly. customer responsibly well-positioned we're fast. We're we've

September. AI our learn our our major conference at our a giving you going conference. theme lot to roadmap excited I'm strategy a without in cases much at be about upcoming prioritizing in too are use We and INBOUND away, AI to is and roadmap AI really more for

while product full the our on Reflecting pleased innovation, focus with on fast teams to iterating AI, to apart bimodal alignment us pace the how continue growth. executing on what set will and our profitable of quarter, is I'm very This strategy. and driving with focusing are drive

to With to Kate? that, financial I'll over Kate call results. you our the turn through take QX

Thanks, Yamini.

XXXX in revenue Domestic as basis. XX% in and second as-reported Let's was in of basis. revenue while grew and grew International XX% XX% on increased and constant quarter an reported. on revenue other XX% constant currency growth year-over-year, XX% XX% total currency QX. XX% an services as-reported our grew revenue year-over-year, while revenue XX% turn revenue financial international to represented Revenue Subscription results. year-over-year

year-over-year. the $XX,XXX. customer currency X,XXX X% to to revenue constant bringing XX% added in on quarter, over over count as-reported We basis new total XXX,XXX, year-over-year up per customers subscription an X% our in net grew and Average customer

our Our continued last starter our by driven by few enterprise volume end quarters. the of ASRPC over customers of professional customers, added adoption and the strategy bimodal multi-hub by large growth the at offset low we was

point by sequentially, XXX%, Net spend portals. one by in retention Gross the customers driven and continued retention remained contact additions, optimization tiers the high was across our XXs healthy seats, quarter. down for revenue

retention as net and in reported. to to in near-term growing Calculated currency we constant gross billings the $XXX in retention can see strong continue XXX%. were persist, maintain million expect year-over-year While we on XX% XX% pressure above retention and revenue believe we revenue the quarter, net

from benefited margin to period. we hiring Operating margin of On into compared XX%, remainder the as the up in year of year-over-year took actions QX the non-GAAP January The seven as restructuring ago and was my end at shift will a points measures. QX. basis, a comments refer well to operating seasonal

step factors continued margin as internal operating in such innovation, invest to have a building scale. we AI foundation margin, and data in to for these While continue as drive change the we're and critical product ensure helped areas expansion we systems

Net marketable at securities totaled share. million XX% cash income was $XX June. or per or of our of fully revenue, $X.X million billion Free end diluted and $X.XX $XX the and was flow cash

full And with the third and guidance review year that, for of let's XXXX. our quarter

by difficult operate budgets look we to tight macro for decisions or highlighted, ways optimize Yamini As the continue to customers norm and environment. continue remain a in existing to Customer spend. committee

second weak these half the macroeconomic assumes throughout Our of that XXXX. conditions guidance persist

For revenue to XX% quarter, $XXX to of reported the million, as at million the year-over-year range $XXX third up midpoint. in is the expected be total

This million Non-GAAP be as to profit revenue X- to exchange tailwind foreign $XX operating per outstanding. X-point fully shares in to million. diluted be between diluted expect expected quarter. growth XX.X the to and net between reported $X.XX. $X.XX $XX income share and is million is be We a to Non-GAAP assumes

million We And for profit be XX% income the Non-GAAP share operating total shares be between Non-GAAP fully the diluted XXXX, to year be revenue growth. $X.XX diluted $X.XXX foreign to up the now expected $XXX year-over-year revenue as is midpoint. be million expect $X.XX. This net now a range tailwind is to reported full now in point and between at million. outstanding. and billion, of expected now X.X exchange $XXX to XX.X as of expected reported to assumes to billion is $X.XXX per

X% $XX of keep in about revenue adjust CapEx to seasonally We following: be a X as for models, year with roughly percentage stronger you your cash QX. expect million mind flow XXXX. of cash As in free The the free the to and flow full be

remarks. things for hand her to will I closing back that, with Yamini And over

much, so I want a commitment you sustainable to Kate. equitable our to Thank building and close company. with

of goals on environmental, to company build social proud developments. as I report is making organization QX, efforts in journey. highlight progress key part a and One is a We an of. generation future governance to sustainability be annual our and a that our will of our critical released want few

and side, female reached our We our submitted environmental targets X,XXX launched validation we learn effort diverse more to more our the trust science-based the company, nearing we a action. customers In climate center practices. security, inclusive XX% company-wide, targets governance for initiative, committed so and ambitious gender companies parity. privacy, can a over our joining representation On by compliance for to customer build about they

employees continued customers, the every our day. to support and part build HubSpot. proud our and a company. you I'm our Analyst event And and want look diverse shareholders INBOUND to of big all you our to are our many a with of to our I executing really forward of September of are for customers thank partners thank our X. progress solving Day sustainable XXXX we I seeing who the focus making at as on

open let's up questions. for operator, that, call With the

question from Samana comes Instructions] Jefferies. Samad [Operator from first for Our today

line go now is ahead. open, Your please

my question question. to a Hi, you. good evening taking and thanks I for Yamini, wanted for ask

that more than MRR, lot mentioned the are traction, you've deals much a average. X, talked in about XXX-plus You've which overall and upmarket is bigger X,XXX

the mentioned of can changing? factors both was -- the HubSpot having So, versus the it the seek about causing it's And just to benefiting AI has and versus you single a it much there increased has, stumbles product the if like it wondering traction that conversations recent side? enhancements today does around just and in if months is of causal you how platform what's it maybe think momentum competitors on I if maybe the enterprise momentum

our for with the know, we X,XXX as you employee you, question. X,XXX upmarket to continued look the Definitely target Thank Samad, that momentum being of pleased at Yes. as And XXX the market. And reasons, you segment. that a with segment of gaining just we've ones lot to look, segments, and variety a going employee traction including investments we're mentioned. upmarket X,XXX all for had of the into so focus of market

But couple maybe we with to a are start of customer seeing of give trends that customers. just bit with up color, there what see I'll a upmarket market. little we're And

on upmarket off, First platforms. consolidating customers are

bought a driving of entire clear time last the and that costs, customer journey is Over disparate the couple they're of systems, years, that so eliminating they've also on number focused this but getting interest. the visibility and across

their is think I in second Headcount targets. productivity. constrained to is year this customers hit environment, has still the for but upmarket customers sales thing this growth need on focus been

reps customer successful, So, they're sales see that certainly be technology leaning to with their equipping Hub-driven the into larger right within we and our patterns. sales solution deals needs buying

strategic Now, having both been go-to-market priority that, and side. company, a across product a has from upmarket said the

and quarters. meeting the and much gotten constant better, a few needs this it's the of drumbeat been across product past has has Our upmarket customers

but a use easy the a hood, ultimately, under is product very very, And that's powerful differentiator. and to

scaling momentum as exact understand I improved with has we've of perception and great COOs, now had CFO, think well. CMOs and upmarket. the gaining companies also the value like and there with know marketing We're CEO, a but HubSpot organization, the always relationship and

are -- why sell product value as I both how able win. well think and as cost we communicate direct clearly the And well both of the customers then really savings teams as is the our HubSpot finally, also the for teams we drive as partner to

think play those the really factors progress into market, So, and with of we're all it. I of pleased

in September. Thanks Very you See Yamini. at INBOUND helpful.

there. you See

Thank you.

Elizabeth from comes Stanley. question of next Porter Morgan Our

go now Your line open, Please ahead. is

you work impacting for you was there demand could have little waning to more could very Thank Was or Thank to and you customers? provide dynamics you funnel, do Great. I you. the launch that still converting of user when paid around question. much a be new how hoping the the those free up, any on products. the a beginning in bit sign color through sign-ups big pent-up free

others in I starter, about that, we happening much think will will did This very Kate. they Look that with the start asking and you Elizabeth. a because sequential join our net customer a is if I free starter. Thanks, you're drop I confirm additions. want. quarter-over-quarter sign-ups then saw see a is in dynamic can decline

strategy, demand launching We free products and on consistently one into use our pricing to end of We're free The drive bimodal basis. regular you things of a at and products. that to our of highlight functionality free consistently starter packaging. are move we a that look experiment number we in low tools down

is user next. additions the net ebb and there base normal to quarter the you'll starter and that see free so a one the flow And to from ultimately,

you. Thank

JPMorgan. question Mark comes Our next Murphy from of

Your ahead. now go Please line is open.

companies rapidly? we a think it arc size? normalcy, have you what what that out act realizing was Thank and you last results. Day, cross explain And Hub to a kind interestingly, I Analyst very stronger can Sales done was time. do I continue never third with it believe mid-XXs saw and that back to Kate that it had can and was act; $XXX whenever had is looked that ARR, propelling Yamini, in a economy is much, to of the marketing through second that million Sales the that, Hubs that faster that you and you with historically Hub that so mentioned went does than growing when congrats And at had most than at on Marketing at And return cloud? it this; growth the carve

question. insightful great a that's Mark,

for we middle one this this a we've think of at like that about on in big fairly years. transformation We've fact HubSpot, the goes been the been talking I many back that are from And suite app within and installed go we to front to the from base. then legitimate actually app faster it drives go to becomes Hub suite to a to adoption journey when Sales platform. door

and the what the install product of third So product. the to they have first And of that's product, base the you're new benefit having second see. product, ports the beginning

think now what the integrate to results. but I last and are the customer they struggling of looking talked to couple solutions, cost-effective powerful, leader are of as helps we side, they're And that it a cost better with seen or dissecting years, customer, if prohibitive. from a every being Sales From makes Hub Marketing momentum the and are you Hub that, within ton the over a lot platform environment, then customer of a this either more multiple they're savings at that better get internally. ways drive And solutions these again, I kind hubs eliminate while ways insights we see eliminating buying bought to, cost looking of or those trends if point solutions Hub cost sense getting maybe customer Sales working. at costs, than is to you're drive to and because

is drumbeat more driving that we've our was Hub focus exactly that's play aimed serve the other sophisticated Service double use our that's legitimate it's Sales now product Hub talked seeing are expanding the front one door Hub, releases in to within cases. this out that a our Having and and part strategic and teams you're ability also on what Sales what because down and year of and it on of to steady to focused opportunity are HubSpot marketing, really leadership Sales driving innovating, we're and market at of priorities our product product about

embedded more past mobile, efficiency metrics. reporting, we with driving pipeline better quarter sequences prospecting And QX, just released on this in

asking hub our things of All drive and have for. momentum functionality customers examples up just that of our within market are these sales been that

benefit customer innovation the hubs So, back execution, third see of meet the of I'd when the to results product seeing begin are with And go the needs we always first meet with consistency we now. go-to-market then that to one. have second,

you. Thank

RBC. Jaluria comes next from question Our Rishi from

ahead. Your open, go line is now please

much you and so Thank Yamini Kate. Wonderful.

there momentum one have they are certain competitors, from the is about continued available enterprise-grade think and of we don't HubSpot. quite that larger and some natively the your with customers feedback upmarket we pieces yet going that as features So, functionality of head-to-head of in hear

think more market, How about against those the be up AI some even you up legacy of enterprise-grade generative do and to competitors? using but also speed competitive more features traditionally lot kind Thanks. around of maybe of development the a

free customer is Yes. as right. Look, just side to Great the to and and really and X,XXX development our base absolutely chime on question. you're I'll there focus in I start, XXX then Dharmesh, think well. XXX that feel XX to

of that within that why list of a continue to share number there, our the this the do that's and market exactly things to is and expand think we I priority innovation of company. list is our one can

that increase product within to market. want depth leadership that and We

and product list been know long a there's customers. are we few that our over needs has we pace reason, exactly high the can within past product so of of so that working we pretty And the of innovation the innovation quarters and -- we're on for meet

that I us time, which visibility are platform choice the eliminating while products get they enterprise the a is of of companies. us same built look do way see why at for cost, as you the at organically across these as all think a to

at, AI Dharmesh, and we but days the of productivity, looking certainly that Gen free also just it's but are add front in for in office early pace innovation driving to the certainly terms engineering further. pretty even not to accelerate there. something Now, feel functions, potential has of

generative in Yeah. XX CRM since One generational is software a been think like now I I've opens entire I'll it AI, years opportunity. add thing that an up for pre-cloud.

the team around new saw entire once we we cloud-based Internet So CRM. industry advance of kind

generative going something similar AI. I with think we're to see

been democratize has HubSpot's as approach technology SMB. on it's focus up And and coming always our

a to We to SMB, every said, say, same want from do want to to we're when did we the thing is think we launched CRM. we having we for able be opens I hey, this So up opportunity HubSpot benefit company tackling good really our CRM.

CRM. an down coming to we Now the AI see our that from company generative AI-powered is road, benefit want features every we philosophy

are but we do -- how and do and that disuse right market available. how them democratize now all them we leading, make take features them So now these

to mind share market focused an So opportunity. I SMB, think more us and once-in-a-generation and the it's in, it market for creates we're within opportunity capture a share

you. Thank

Our comes Peterson James. Brian your line ahead. from Please open. next Brian, question go is Raymond of

the Thanks taking for question.

a maybe So And I there up understand rationalization focus to pivot the narrative that vendor is market I'd Is wanted get second. spend for the Thank consolidation there. is to off as love your would in you. and mid-market understand be here? you're on well, and I more may mid-market happening a of seeing. trend that or love to maybe perspective

think XXX absolutely There Brian, doubt I Yeah, we And what happening XX as us, person we to that that in company. to is That's it's well. mid-market is it. no mid-market for see mid-market. years we call look segments of customers that have last are across what all as the if consolidation the in, grown. at And vendor how is driving of of couple it's you

some a into stack, point solutions. of SMBs and bought proven terms -- number and went the brittle and solutions of in enterprise-class getting in they the pandemic, And maintaining digital the or both customer and insights. were those in terms be thrown of tech they during also got have to pretty the but costly pandemic environment pretty post went of

more multi-hub and segment. we a customer deals within suite driving same look trend eliminating also And of and at even better the while to full see enterprise play the And mid-market we begin mid-market so and insights place mid-market. within company, in pro if same looking out are they you at the see again, costs

you. Thank

of Alex from comes Research. question next Wolfe Zukin Our

Your now line Please is open. ahead. go

on Ryan is for Alex. the this question. for guys Thanks taking Hey,

the a So just one slowing. quick It seems NRR deceleration in retention. like on is

of June? And the in at it improve Thanks. in of when So how thinking to be going could then did forward? metric month-over-month if back NRR, you look about half like, of the basis, kind kind at all a we start trough quarter, should that some

the Yeah. retention, math. right question. for Net Thanks, on the quarterly revenue you're Ryan,

a comments XXX%, retention will monthly I net X%. on which but was down to revenue of quarter, comment couple going we're make the For trends I net revenue think retention. don't was here, on

guess, which I which to which good retention steady customer foundation refer really high gross a just externally, revenue first, start with nice us The maybe XXs, retention I'll the overall. is for retention, news, the remains dollar our we in as around net provides

The about been challenge rate. continue area net a one on is of for that see same to which talking is the quarters, where we we've number upgrade

was of, half going us and pressured. addition. the volume We're consumption-driven of and side, both the seeing motions kind continue also contacts back contacts XXXX, more So, seeing but adding to for to seats like in lower there seats back we're of be that customers on downgrade

our HubSpot then prepared consolidating are for heard this their single portals about I talked finally, onto sort you from platform. of to board and -- both adjusting Yamini looking And customers, the our remarks, by across in and really really a optimize instance, spend ROI to their additions looking ways maximize the

is customer to difficult feel ability our to that to hard about say will it good about ability on turn? like I a decent above Now, net will in really that retention which question, it's the I and feel dependent our is revenue XXX. Obviously, XXs level, at what high And predict. amount dollar like we going admit is you What is really macro pressure. asked retention retain good at retain we to least

you. Thank

comes question Brad next from of Our Sills America. of Bank

ahead. Your line is please now open, go

here? sounds Wonderful. monetization a lot ChatSpot these AI? cases. already any you Assistant. -- to like ask in for opportunity -- around monetization are this on that SKUs? AI thank the Content might functionality Are for drive Thank base to of you put use separate customer a thinking question some Do maybe you. the about on, How on how and color wanted you the It I just this you're functionality exciting of moat? baseline AI, is thinking needs additions, think Just into you. about premium your

about clearly look that AI. excited Yes. the big well-positioned bringing transformative This technology think SMB SMB for market. is We're very done pretty bear lot shift. job of And you've is a as really Thanks powerful And looked we I at a historically, generative Brad. within Yamini. taking HubSpot, we've it market. good question, It and at it to if serve sophisticated a the being to

other quite resources. And don't experts ML kinds typically market because is this and of they AI, from segments different have

seriously And democratize take powerful and so our to we take job technology pretty there.

your going customer is will on very there, And when specifically, first comes value to question principle it apply principle Now, on that our to that on have focus monetization same monetization, delivering follow. we we're And clear AI. and first, a from principle monetization. we to first

adding both And clearly strategy we'll of this bimodal far. that we to customers, we about see and stages beta of know have we Once we're that market, early in ChatSpot when cases with the all value fast and value in to adding we monetization. so Content Assistant are think iterating for a to what use in We're follow then beginning the customers.

And as peers. high-value our that also likely helped what it AI that drive but one to on-ramp and hand, that and play available democratize with an we'll taken that and adoption, in adoption, you've features to I helps to is, seen make starter freemium our features on mean it and starter other by really out. We've and tiers free added

of And more come higher to is this also ASP additions And adding what more into drive pro value AI second features. It with we'll in can features and higher of specialized can packaging come enterprise. add-ons. certainly part the like then form the likely do features from specialized certain

of is segment leaders the specifically segment. add priority fast to be certainly for value within We want all that. about our ton thinking we're But a AI iterate us and for fast, SMB companies. the within of for scaling move So and SMB the first the customers

you. Thank

from Our next question Borges Gabriela of Goldman comes Sachs.

open. now Please go Your line is ahead.

you deceleration the Kate, on how that the quarter. billings is of saw about difficult for I you. I'm this currency afternoon. to Thank it constant And looking a talked little just bit realize you that Good color macro. predict

I'm hiring little on you start ahead to, share potentially the and that try So some could you. again? leading macro turn hoping a ramping underwriting bit and team look you of at in to get the the a to indicators of Thank

I scratcher to I'll admit color a bit quarter. the for Thanks more of Yeah. a head question. little because the a on billings this little try bit will give it's

ourselves and is grow that currency ground revenue will on constant currency constant together. to -- revenue growth constant we a currency As we as what billings baseline try assumption

you saw quarter, as you unusual a currency dipping growth currency headwind billings at growth would constant there and gap. billings FX this just if the three-point components to deferred a it. I was was billings why in to was currency is constant just two saw and while that's gap And It billings change growth look And this actually is reported revenue a this constant of and And a note, revenue revenue, tailwind bit has like a has in little below growth. where between that more to you revenue. revenue, you really impact, half it it what which to billings thing had tailwind quarter. deferred currency has growth And

that, are than not as largely the there's we've Other trends that -- about. the the been ones same talking

from little service, normal we new and marketing rates continue FX duration growth see a bit more mix shift call away two come back it comparison. as in expect installed in into have QX from away as sales But of a and a into we decline to together those to We base. our shift

Thank you.

Our next Riley of question & Needham from comes Josh Company.

Your go line ahead. Please is open. now

question. for my there. Hi, Thanks taking

bundle, there customer cadence change the the contributing the trajectory the in the Thank If Can you. starter that additions of sequentially? an just the the the market? demand at you clearly, of strong these adds it and help down number in was was price or at what's months a being net pop us changes? that initial why following impacts over to then they're in reverts price the Is factor how And a very the change again. X,XXX after you understand few quarter, look on

down very Net shared were to start. QX ads from we aligned quarter. a bit that last were expectations expectations the the QX, we they but much call had I'll on internally and the Yeah, with that

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but around our it and frankly stay in line a with over and So, it would quarters. would did couple decline next expectations, these the of expect sort bit, yes, levels is Starter little we in of that

Thank you.

of Terry from comes Truist. question next Our Tillman

now is Your go please ahead. open, line

taking question. Hey guys Appreciate on is this the you for Terry. Joe Meares

year-over-year Just half? and about guide, far acknowledging first growth and decline ex-FX being on as that the that XXXX XXXX your I'm from tough more looking XQ that is Is like curious, the NRR individual is seeing affected? it's XQ XX% implied the just macro. as revenue curious, or driven, macro that something you're

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Thank you.

Our of Wells Turrin next question from Fargo. is Michael

please ahead. Your is open, now go line

and Berg Michael on for Turrin Michael I on Hi, here. to pricing you wanted ask packaging. got

you we had features added notably to incorporate Thank times the of customers? us your you've increasing taking AI, help And about deliver more you. just you you think a generative Hub. could number or either like might You've pricing Sales which of a you've maybe added mentioned how quite you hubs, value discussion, understand all few but a across prices as

I you. Michael, appreciate that Yes, question. Thank

think about And Our we well been, next. value and then not first back you as as pricing philosophy pricing what we has packaging our philosophy pricing changes and changed. has add if step about think

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it we Sales comes to exactly Hub. AI And follow so comes same philosophy, or it to that whether pricing

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Thank you.

Our of next question comes from Michael Turits KeyCorp.

go ahead. open. Please now is line Your

Hey discussion guys, NRR. around interesting

reinflect same guess you being being question as commented -- starter. when A, to to think start ASRPC on the I were question, So stronger opposed up? that associated upper could seeing you ASRPC; around down tiers in dragged by you And

breakout that was and what not between or this So forward quarter? So tiers acceleration going like?

Yeah. The other customer net of the ASRPC is side obviously to the coin additions.

the lagging more over is there's I revenue activity metric little seen is bit four quarters. the a of metrics reflects difference last as numerator, a we've the because the think that a in a ASRPC the of it reflects two across it little that sense bit

multi-hub the the net that at with to to quarters with four that are quarter, like significant more we and see in the enterprise the the an same continued ASRPC professional bit was adds course we big over and And anything an that expansion. little there we have of the driver muted. you seen was you're low But ones the So the about digits, on progress talked adoption of again, single drivers expanded in based what What offset last last terms starter tier. expected did we with movement in going going what is in up is shared a see be quarter. that last you is which

Now far in that starter, a would around you these we an next think quarters. to the hang higher see the for out single at it's of is as like ASRPC stripped digits if But expanding we low rate. and outlook, as going are we ASRPC couple right,

Thank you.

comes next Lane from question Parker of Our Stifel.

is line Please go ahead. Your open. now

use about partner as there? those shift, always this support like the you you're case to making opportunity, tools, particular, for that enough of very features this see up-market necessary and you healthy Thanks is question more any Yamini, integrations for team. taking in or the been hi here. it horizontal Yeah, specific has you do the future platform. as there's appetite community work have done the in do And feel type of penetration And tools. category, enterprise think can being HubSpot industry and in a a

Yeah. Great question, Parker.

of the more I it's think latter.

going transformations SMB smaller those from of about of we're If customers. this that you from both We're innings. early suite still the to fairly And the up-market platform. think on, end we're are app big going to

share think of And of well if it's we innovation at execution. as focused both product the penetration with look market these, digits. we across our single that level And as the happening, that's

digit it terms of share. to strong market opportunity to the have in take double We

of innovation and those really to opportunity going opportunities. So on customers and a of bring to very we're robust value is to add left all and that our or there's is remains So, things long, we that list much horizontal focus a can still of lot list that of

well continue us as more opportunity gains think drive I than market as tremendous with our said, are more feel a as And to runway stages like a to still that AI they're welcome markets. certainly within strategy ahead core we that, and And opportunity verticals, you partners like also for is of our certain do share to gives tremendous now. but leaning adoption the into early

Thank you.

Our BMO. next of Bachman question Keith comes from

now ahead. line Your go please open, is

incremental starter the and And [ph] Keith. the any be on effect have for then would is on on on question. -- decrease I Hi, any the have part there? reactions changes might to second for you add? does wanted and Thank commission this feedback Adam to that you touch

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about to back consistent drive want if able our value-added within to base. our and multi-hub customers customer to drive we adoption and And with you partners step engagement think be

a so company. where to And aligned were are as going very the changes much commission we

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you. Thank

Our Materne next Evercore. of Kirk from comes question

please go Your now ahead. open, line is

of say, difference you're you Thanks of Thanks. what in very seeing about could from geographic just meaning Yamini, bit if the a ahead I of wondering Is just any, talk I much. Hub coming there's you're US? Difficulty] just that EMEA And a out was outside bit geographies, -- terms in [Technical in perspective, US US a little sales? the doing upmarket. any real versus, guess, the on commentary the if the little

got XX, you didn't XX the first of maybe get the geo repeat I the seconds Can differences. the first please? I Kirk, part, question,

Sorry.

any seeing [Technical dynamics dynamics -- Difficulty] market You're

Okay.

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other are think differences. adoption about sales again, And or any no was multi-hub adoption? notable you And question really, the differences there and maybe up-market multiple as

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executing bar that bar. high meet but to all very across regions, for we So continue to action high focused on be

Thank you.

today Our McGinnis comes from final for Taylor UBS. of question

Your ahead. is go now line Please open.

Yeah, much questions. Maybe margin. on for my so taking hi. Thanks

and you called it guide good high-teens. print So like little for looks out-performance the outlook mid-teens the outlook know had looks the bit XQ like higher. I previously implies it the XQ some a in is

shifting of the growth just flag? investment, expenses some change maybe XQ anything you view quarters, prudence or of level between it OpEx is new would forecast, or guess, So in the on is your is the that I there

the Thanks question. Yeah. for

with progress this We the on we're are pleased very making year margins. expanding our

X% We on took QX. year-over-year just and significantly. in did think take You And January, really margins in step what's and up we a increase And leverage. in about hiring saw of last restructuring that pull to then driving a year a half the pretty of through back year-over-year really back that. showing is back in record bunch actions the

very seeing about result, in first points a guiding over we guide. you're we heads. hiring is the the at we prudent were we've our year, is the for that adding we hiring and operating our in margin which wanted been year in full see place QX -- is is original I XX%, the of increase and out the year-over-year think as than QX of our year. where strategic of tell -- take in end versus a January, you be seasonal bit risk guidance profit in came we've what very more XXXX. we're that plan. to And four What you are the would half this where margin we made of We about more the our of will And have If

Thank you.

no We for questions further have today.

joining. today's Thank for that all call. concludes So you conference

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