HubSpot (HUBS) 6 Nov 242024 Q3 Earnings call transcript

Good afternoon, and welcome to HubSpot's Third Quarter 2024 Earnings Call. My name is Liz, and I will be your operator today. [Operator Instructions] I would now like to hand the conference over to Senior Director of Investor Relations, Ryan Burkhart. Please go ahead.

Thanks, operator. to Quarter welcome Call. Earnings and afternoon, HubSpot's XXXX Third Conference Good we'll announced after was results discussing the the closed. 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 operational within statements expectations of quarter XXA and FX movement expenditures, those our During other the historical our forward-looking are this and business to the regarding call, meaning business of XXXX, outlook, of statements. considered be Section Exchange related Act guidance of we'll Exchange fiscal and management's financial fourth of that including for forward-looking of the including XXXX. and amended, Securities expected amended. All of the make may than future financial as and statements as Act growth, statements XXXX, fact Securities performance year full operational XXE

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

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

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

inbound our trends and and the our Ryan, momentum. Thank I'll call. welcome, results key ourselves uptimes. a customer for by companies. product, XXXX start from on how highlighting which leading an the give by you, the update Then scaling [indiscernible] are feedback QX driving we the discussing as and an to platform setting wrap apart I'll everyone, I'll is

continuing QX the in was growing to points year-over-year, of currency. another HubSpot quarter We dive for basis significant expansion globally, with margin driven growth, in XXX customers additions in. by revenue strong quarter. grew our XX% another with XX,XXX quarter driving customers to XX%. Total net constant Let's of operating operating margin year-over-year over margin XXX,XXX upmarket large delivered customer in driven to this throughout our as thrilled product we larger main consolidate am focus deals wins, to driving of consistent innovation. In that on deals. multi-hub and customer HubSpot have segment, customers to remained their on trends platform see Two factors strong continue and see I by are the year. our pace customers momentum

Plus and our easy new wins of hubs. of X customers more HubSpot looking market ease high hubs in using quick level innovation product has cost, our great our tiers their on in these, matter want buyers weeks. in adoption upmarket resonate and or them. Multi-hub significantly a improved by an results QX, in second, with companies. Discerning consolidate from tech Content We and fit like stack lower of and of XX% driven to deliver of choice more upmarket came than customers for deliver all value First, to at scaling use a Hub our making ability and Hub. are business Service Pro platform's In

service, driven HubSpot's XX% our remix and content marketing, for with these Hub a over content poles, AI pages, of growth and quickly videos agent and has innovation. landing features great content. customers helps of value. AI customers We hubs, create platform. It base that adopting our and create launched in feature added block customer personalize value are to year highlighting to they're find popular and X video rapid now Additionally, installed our Customers immediate been capabilities all Content core unified use the by sales seeing

introduced help Brokers The great Franchise customer better and content to example, Hub, Association, is accelerated new answer larger to has improve workspace, features For customer desk. higher and customer, and having workspace organic attach agent our strong like Content the XXX% Hub customer features and tools innovation nearly writer conversations them generation Marketing attach Service to rate using leaders which franchise Hub of upgrade with and helped the at rates. questions blog with XXX% new improved connects making by driving retention tickets These Customers we X help content to is productive. production in who teams success XX%. In a a increased innovations opportunities that appreciate support in AI lead and customers, enhancements by including more are growth our remix. level

progress and go-to-market we of strong execution of growth with our recent level improving targeted to at larger innovation the thrilled XX% the are Overall, end continued making hub by XXX-plus segment, service and our across year-over-year. am customers I the upmarket seats with customers seen pricing. customer momentum. In have lower we grew With teams, drive service launches product to product drive we've with innovation and

and customers the seed to HubSpot. We customers working. increase more customers rates. with seat throughout prompts pricing starter which of progress is it upgrade upgrade and get prices make to We to volumes and in starter journey easy rates. conversion decline. drive make we now to is minimums easy for for made significant We We've personalized added customer to customers, expected and grow to higher encourage lowered to the started our to driving ASP free move from it offsetting conversion Our improved also tiers free removed strategy

relaunched the July, tier we has which customer experience. addition, in improved In starter

these of growth net customer helped have All changes segment. the drive us in

very of conference, creating generated a a we in-person INBOUND The success well closed billion event by set and partners. our of received attracting nearly course, and X QX. XX,XXX annual was our over have launched over campaigns customers were we conference Now huge of where attendees impressions, significant tremendous highlight out the that innovations and QX The was, momentum online. as following XX,XXX the AI

the were While new inbound of and innovations, the launches standout showcased breath over moments breeze X XXX intelligence.

features Here platform, is marketplace. a entire quick and far. launched an the of CoPilot, recap Brief, [indiscernible], so what powers agents, AI launched feedback that is customer agent we we HubSpot the At new and including which

embed AI awareness, scaling AI adoption we half awareness seen of from data. within and resonated in it have enterprise usage. strategy the is in users, across into and customers democratize repeat entire and notable with well, a our every features. CoPilot, generate grew their and increase start. to and with Since XX% HubSpot AI XX% CoPilot quarter-over-quarter are data and is the CRM and strong Pro customers is has engaging Our particularly startup now public AI who customer which companies. for text with summarize insights launch, to objects, hub AI seeing of by assistant, AI we of platform use beta, X/X with rewrite a usage

at in prospecting beta agents X are launched and value. are who Those also seeing already customers content, customer. social, INBOUND, We

provides Intelligence only to is that the resulted the and using which it, as why to using more the marketers intent Intelligence page our of in to has when practices, with College their create spent their XXX good best we is those increase our company site, response out signals in launched provide time the to to XX% results, are customers with AI million XX% with visit XX% kind data HubSpot. enriches all with AI on blogs recap, is data contact increase content today. And prioritize looking Breeze website, prospects views as in And exactly best drive about possible learning by know agent buyer average customers. shortens ticket which customer XX%. [ data Moorehouse reducing customers also of content It to enable self-serve, is and our conversion, of early box data Screening. time Kaplan Brief their example, powers forms points, agent For does to XX% ] company we over To their to prospects.

enthusiasm. acquisition ensure While their if the customer this ideal the beta, customer let's in scoring finally, been to all lead Everything in trends but there clear still vision. leads our reps, for are right and of the X is now and talk and service the we in HubSpot to are we repeat how rates. And do recent lead goal, customer. send of cash it at for is days, gets is strong has XXXX, advancing is data, segmentation cohort our about solving commerce company our usage see Customers they ungated they messaging In flow to right also long until to on for based early businesses that they profile, clear to they transaction September grow, not to need how it the CommerceHub data. personalization customers launched bought, for the from we only renewal. are routing person. need using belief when paid have activation What It's right and but high the with

flow, provide cash while when transaction X CommerceHub, made and acquiring having in we're by place. Sarica to billing Brian, right will more means down close quoting the and have be founders the increase to subscription team progress growth and of removing We of on and in billion and and high-performing cash strong decides pricing GMV HubSpot. tools in have flow, customers a focused built doubling than in our By purchase. a prospect offering decades That and able to configuration simple enrollment. have processing revenue the in robust deals management experience with payment space $X faster their with data CPQ year-over-year customer friction

competitive focus wrap detail. choice. With on you takes exactly to we our HubSpot Kate HubSpot's huge in every over the you on growth. platform and all crafted help I'm through customers are product results that platform with relentless on fast day. With why intend and world and to focused HubSpotters for data. promise staying innovation, and momentum is having take we is to are our easy, keep more leading around And the in of to product. call QX more SMBs to thank innovation a grow confident We with HubSpot's doubled ever durable it I'll unified, solid consolidating their understand we what and Kate? as turn A that a of a our that, in QX acquisitions. To than One single advantages customers AI on is that up, down is

Yamini. Thanks,

year-over-year quarter low-end the grew saw per X% domestic ending was to XXXX XX% a change. QX, healthy XX% total increased and XX% and in an year-over-year. total while in on XX% as-reported currency customer customers $XX,XXX, services revenue and Subscription representing XXX,XXX basis. XX% XX,XXX was turn with other revenue over XX% tiers constant added results. both year-over-year. Average now currency customer constant QX reported, as-reported basis. QX this on a as-reported constant grew XX% growth our growing both XX% balance as revenue by We of currency in financial basis. pricing revenue revenue revenue across of an year-over-year, Let's subscription quarter seats grew third International in an and and We starter professional additions the driven revenue. customers on model down quarter, year-over-year of

see are continue is headwind As and starter offsetting digits. at more customers excluding tier initial deals multi-hub these to larger in our ASRPC growth, a ASPs. a lower lower from started And getting ASRPC mid-single price result, points. More to the we

XX% $XXX were sequentially, in its in at the We the seed continued in the billings headwinds on our an end period. a offset improvements related or X-point million million to compared driven XX% measures. per flat billings as high to well of to on customer and in year reported and by basis. progress FX of of in up rates deferred cash our motions. Calculated refer XX% resulted points and overall as comments was revenue. catch-up to growth. The my ago R&D in infrastructure reflects credits. Net U.S. XXs retention healthy see momentum to revenue, constant This driving quarter million dollar in QX QX $X product an of in our the XX%, million $XXX growing held tailwind year-over-year non-GAAP flow continued $XXX income and share. in by as-reported the QX. X in early diluted retention The was dollar benefit as or across efficiencies and continued QX positive significant upgrade weakening go-to-market other currency in operating impact upgrades, QX downgrades will Free Net fully revenue remainder was $X.XX continue margin

Finally, totaled and our securities the $X.X September. at cash end marketable billion of

environment. macro wanted on the Before I to dive into touch guidance, quickly I

what with seen buying we've We a XXXX. operate continue environment, to value-conscious in consistent throughout

and Our guidance let's the the quarter QX of persist full guidance assumes through XXXX. the for our year fourth of this that, end will review year. With

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

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

million profit $XXX is now million roughly and $X. reported $X.XX million. be neutral expected This between We to growth per as diluted share shares Non-GAAP the outstanding. be operating net full diluted for $XXX to continue and XX.X exchange to to between year. Non-GAAP income now assumes to is expected revenue expect fully foreign be

about your keep million company. we adjust a mind and And to subscription and cash roughly on the year November X, full you we X% models, following: be acquisition our the flow for BXB $XXX successfully Cash free now finally, please billing in CPQ be of CapEx XXXX. of leading flow, revenue a of As percentage closed to as expect

them We CommerceHub quotes, it expect Yamini, for let's slight call With to please QX impact in the a I'm headwind deals open making to easy operator, de will for to create send value excited the our flow for paid. and render by acquisition, about the get up close from a cash customers that, and questions. minimis expenses. Like

Mark [Operator at question today Instructions] First is Murphy from JPMorgan.

to phenomenal how results. Congratulations is the might to I ask Kate, making all wanted the on describe AI. HubSpotters into you HubSpot the you investment

are through line? the as training feathering of you upticking cost that seems the like of might a sold goods flowing some R&D That Just or you have percentage you have do revenue. And expenses commercialize initiatives? beta just anything models the any Yamini, model as are it's of into develop R&D that right And usage then that going would the or that amount help up pick in AI faster products your engagement now? Breeze the or us with understand for you seeing into daily are inference

for the to although and you back top our Mark, time Maybe part some growth for flywheel try I recognize long investments, Thanks, question. AI think question. over and for time, cost our is a in in that you of a from would for start then I'll impact continue an investment for been hand on still usage fuel priority sold to the see of goods to Yamini so long-term the if organization I'll us, the area it modest AI can that the R&D in to we you way our innovation us. drive has looked invest philosophy outsized will do

certainly over And so And do is areas the have investment big AI. of years. that last the of to one continued we few

again in you to on our that Innovation priority the forward. top said. particular, company will double and be innovation, Kate what priority AI thank Mark, and down for for will first the And continue Yes. top question. I going

our progress We platform will every company, working. I'm that are the entire pleased embed and our across I'm and very making. And be platform X hub our to at with we are overall the app innovate AI looking agent a look help and is into the platform strategy grow. customers I AI and indicators. at really to and we strategy,

our we pleased X. we're see Second, first awareness that And are And third is making base The value. beginning consistent base to AI if repeat and on prospect progress that customer all is, I'm within driving usage. increasing

Breeze launched be It can we consistent. I just shared, can it inbound, at so be it did we easy. As when

can and by recognize up Our begin just XX% we it. customers AI X in to features adopt saw awareness go quarter.

direction. customers enterprise brief day, repeat branding And how within product well at working. And aware of use in in so really use the of guided and look cases, I to couple if then to repeat would selling sales think and use highlight customers the of beginning continue the every our features that usage see are consistent week, cases value. that I Pro I add are beginning cases service overall I'm every right weeks, terms pleased as and the we're the with as particular, content to And trend usage is every in getting and value, even

inbound. So overall, terms momentum, really really we are pleased with AI with and value the pleased post in what usage of seeing

RBC Markets. question at comes Jaluria next Our Capital from Rishi

seen the continued AI, exciting that. When maybe interact some of the Breeze, clearly how how we help in of really to traction with future in about around how customers pricing to if your model Maybe look think power is business. and and impacts anagenic continue maybe of both pricing seeing customers meaningfully do by many some can copilot has I more And you genetic HubSpot a agent in and the think work consider more us about that those productive AI with with those some you with going talking want you investments a AI, can momentum own offerings successful maybe see early customers? that and that, or become help at like? And ultimately, to your world

that right, agent in and to just share agents customers. do We which Dharmesh, a multiple force work an is service then that's who them, our transformative brief office, happening. better living helps his a get CoPilots. in work. There front any started is whether questions for I'm content there. person lives And CoPilot, can I'd world. Yes, and launched exciting marketeer, sales it going technology just also say thoughts.

language early to use level, summarize agents very summarize launched kind moving ask see to launched at object it we into our is just of we customers be seeing easy, HubSpot a into insights, it's to allows and really gaining with they're social now and launched So broad them content beginning tap at able INBOUND, prospecting, natural and that CRM that's very very of all questions, because just and we to and all X customer CoPilot traction Bolt. consistent good traction. And results. beta,

So value platform. I'll we about you future data pricing asked. the and say that the question driving unstructured quick X think CoPilots and within about the is with thing customer structured agents all

history. for value really will our pricing philosophy. value Add that We throughout us very, our stay consistent think worked about we very monetizing with before has

We are to very, very focused do that. continue on value, we'll that and driving

when we'll likely deliver whether agents, agents value. have to for credit But consistent of axes or Dharmesh? we're or tokens different is consumption begin now, that value, terms on based. right agents, delivering really focused it In is something

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capitalize the those evolving, of language a approaching are this through tools. approach differentiated kind what X and others to and approach the cohesive model We tool in on The of models, have allows to terms innovations kind case, do agent now saw just to which to AI the in it. And have an singular the OpenAI result in XX on no language can to models other a a industry lots is thing found kind terms in our possible. tool given open the is use of We of makes has which all we're of best they of all. large kinds happening what happening is of use. And reasoning them there open model of we that models agent which move what based sets better of large as on is we is is as AI ecosystem say, terms us are for across kind able access part of we the and very much how is information recently, that's in the break moment that launched from model. data large the this language rule case is that, use as place. that interesting we And that models of AI like

comes question next Our from Samana Samad Jefferies. with

you into the revenue. revenue the suspect payments item which to and echo how product peers. gross from fitting a you're -- model small I congrats that services maybe it's the case? is you're professional inflection, Could see for I we want I'll that's line I And and about do a curious business. I'm you dollars company? Kate, because what's you inflect, is if talk flow it's high-margin smallest the know think there maybe today, guys how that the driving that seeing report, the And about on double-click that? cash how strategically but

of Yes. the right with question. -- start primarily as other small in of that services Thanks, I'll we is which very asked be a exactly revenue how you our line our right to actually is Samad, for services part you're you're business. that of reminder an Maybe software services. in and continues And the item overall number revenue question, enabler large as just think percentage a at X%. The about that

know, and in we customer increasingly partners customer services. with ongoing onboarding been you have provide As to leaning

services headwind years. last the the so revenue line a item that couple portion been And of has of over

that the that growth the customers direction. is business, right? we and positive that transacting the seen in year-over-year at And what's So driving in is positive about monthly are we're On we momentum by largely that we the GMV driven seeing seeing being talked side, have Commerce the on growth INBOUND.

Now is of in things. a it of terms margin, combination

primary we We efficiencies have a the to organizations, drive the is that mover that for done and and margins within work services support line of of our needle have item. -- lot

is is also platform, have and that, as unified acquisition what sellers our strong data our pretty for about just we in and sell, Flow. And this. customer the Cash that X for not Samad, we And making easy vision buyers I'm you've because both then for Flow. CommerceHub. it easy of got does, which you really recent customer to but we've I exactly of about transaction platform asked do accelerates think it making it that excited Kate with mentioned, Cash order a system, to And in with buy. also our had what just to have can data year do to core momentum

for customers of see their asked the product they ask innovation management can sophisticated providing of And we like where that see billing. But most You capabilities, when say customers more is for subscription to they own have same CPQ functionality. sophisticated exactly and doing, bring flexibility we I'd our invoicing us cash processors us asked frequently that what terms request payment more that. be those can our we because customers X in helping at are driven, the time, have our the more go. want from doing and flow

we the Sika Brian, flow, founders as They when us. make easy. and want are are started They've problem. just who have cash talking the ] to Now same thinking to DNA of it about there [ this been

customers the customers. currently are of half have fact, In HubSpot they

need this the but for our understand customers. customers, been normally about they our have So problem thinking of they

our so same And will product. product of accelerate we're will we a we a with We'll experience it really very having the and going natively the take whole to so bring board, take new true build team vision. keep and approach on like functionality, in all terms to crafted acquisitions. seamless we're deliver excited

next ISI. Kirk comes Our Materne from with question Evercore

you quarter, hubs? can this my you out were there motions. or curious it that realize more you I macro add talked Is on I anything of hub guys sort But there? upgrade NRR with spoke Kate, what either Or some consistent congrats. the specific you if add that? is that there's just as have remaining? geographic was anything it's there about. was call just mentioned could I'll Is the other wondering, headwinds on it trends you specific really I about

same the Thanks few would retention. question, quarters Kirk. it relates to much last Yes. the it's I as revenue net as the say for

the XXs. the aspects that positive revenue well see holding or high now remain strong customer think We very retention Downgrades really dollar have of of in a quarters. been foundation stabilized a retention. of for I net number stable

on as as those some pressure. we of model board largely the of That's a shoots the it's result upgrades. upgrades, there. other contact, change. positive. And in and green pricing have upgrades, to -- it's prepared motions remarks, are both so I discount And addition things are the upgrade also It's seat seeing mentioned All across it's continue cross-sell, really the the

So nothing call to out. specific

question, will same largely would ask expect but I didn't in You the that the we QX. see

Our comes next Zukin question Alex Research. from Wolfe with

I it the a The going seeing solid you're kind to Maybe best of to echo here. another characterize I on of would quarter. anticipating at what characterize congratulations about impact you you from very as question I'm it try that multipart more ask the change kind my year, most we inbound. Is to clear would this driving them? doing we big big is about that talked not Is sales But that -- -- beyond? quarter, last and making realize of AI for it longer, guys, of propositions them I that is in was almost that How a what it you a of about Is into kind do time. selling it a how and at the cycles? think as for are that QX making quarter. think in much them but macro X quarter quarter? that QX do thinking flush about And this how the into bigger? budget point I

it There's from that us on This the our for of to going question. adopted. that there tell inbound, is AI real was AI thanks real. they was a growth how was say AI anything needs get cases, year, real value. they got year, it. that a took there's level There's use hesitancy Alex, customers real on away I opportunities. last if buzzword and that get to And if would

Breeze been QX that inbound has just And every been taken and Breeze following in embed approach through lot the to hub. momentum Intelligence QX. into launches. so AI There's the conversations into a that driven And have and of specifically, late our we is

sitting Well, content year's next a want you're better as a you customer thinking marketing if about growth, here So platform.

solutions. better guided want selling You

AI. leverage that capabilities service better want You

our of And to And X of is see it's year embraced so consistently it's to happening use in attach and Content our content things. those attach multi-hub within and seen this all Service One, increasing core cases. Service Hub Hub. really has have rate marketing hubs. the terms now. Tangibly, Hub the similar the doing it customers of through Content a can conversations momentum Hub are you rate as significant XX% hub, pretty growth

all going a big of of QX all positive into December we pipeline. big month. are a So And those QX. quarter. have is is the

are Now it really we and on executing. comes execution, laser-focused down to

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

kind to I you're a ask out wins. a really that called would love seeing in little more a that Hub, in traction. I is area that uptick kind be this see multi-hub question cross-sell maybe -- activity in sounds it the you're more but the would I the footprint? with And you a of strong multi-hub seeing of is the of to recently? these it's question? landing are you're it's Service or of what bit Are occurring starting momentum? strength products color it wanted and where environment quarter. that's real standout around been like customers seems content particular, guess, you It seeing that why past, seeing an about like some I it's And even now, more know Why is the

that the are new are both X above. And is of in That are driven is and is as we answer multi-hub what more. the by the we base all in seeing that go far that of I we and seeing customers adopt multi-hub installed winning, terms mean great and customers question, a is

Sales Marketing driven just Sales combinations land seen multi-hub consistent think lands the here Hubg Hub, I And prevalent the a Service and Hub, Marketing that most and themes or couple of And are we Hub. prevalent Hub, Sales Hub have things. We second most Hub. Marketing the with by are

one their The first is platform That right? They're throughout this seen and and insights a we've customers that what continue consolidating consolidating. spend as is looking is exactly provides that year. at entire happening, HubSpot office, our front they're the are across

The the innovation. of is level second

to just like every app of had hub platform. of picked the the the strategy great and it's sales, alignment level Content innovation end Service to across we And to across about but multi-hub. as from that. the strategy, of drives sometimes, of Hub, it suite pace strategy, and part examples not have not up is really the the strategy. We've and about hubs that executing marketing just of front Hub, innovation single And a strategy going

So the makes us and driving is answer for is multi-hub the environment momentum. choice is consolidation level that driving that of and more are innovation conducive we the

from comes question Wells Michael next Securities. Fargo with Our Turrin

Great.

into return to whenever broader net helping what upgrade portfolio. prepared motion, of us retention currently. But a Some color that product environment new catalyze layering just in the team useful services, innovation throughout characteristics the think that of a remarks, the on just has appreciate kind lot through could the the been

wondering interest been eventually, post if So you're of hearing just to upsell customer whenever around specific inbound there and get are functionality, point new that some that for features, adding. advanced you've to that could functionality hubs appreciation we catalyze the return

do, foundation you I've is customer into product see in and would of I back net I strong one. some firm that that And what usage just to strong retention stronger already and Day. some had talked really retention. the of platform Maybe multi-hub translates Yes. Analyst that higher on retention. guess about we talked and XXs. The this We is we call revenue conversation take and the call higher customer -- dollar customer adoption would the that in Michael, at we that There's the talking about high as the I'll it really Yamini

Downgrades tailwind us. said. continues So that's a to as I nice for stabilize,

that's the customer and of the nice pricing new the also model installed existing more base more base gets a or should seat-based change so be and started as as model. And new the a tailwind the move then pricing on we transition our also to tailwind. And to seat-based

On not we the the We've other call example. buying another while. today hand, see out a you unpredictable operating been motion. we as for is pressure on in what some headwinds would continue value know, environment there and conscious a is It if upgrade to

-- that revenue to us ingredient change. going it's hard expand say here. is so going is that to And is really But -- required to when see for really, from retention that an to net

Elizabeth Porter next comes with Stanley. from Our question Morgan

new rate the could double the wanted click from if early up pricing you upgrade starters. hoping follow to reads potentially just comment I benefiting from I'm the around Understanding on pace. it's on model that the think should volume part been high opportunity added just how small years? today, in few of over future, have we that given just a the last but about really customers probably the Star the

model of started, to Yes. does stable of shift also Thanks, has here barrier for starting only long X but it things. pricing lowers time. The stayed on professional One, relatively the on from seat-based entry Elizabeth. into not The starter a to the professional. upgrade rate period get really pretty

of what quarter new we in rate, more time, we for early in increase but a professional across And was this as that net bit an upgrade see lots believe of adds to then well concrete saw data will as there. give little still points customer customer a you so do starter. And over adds us it's balance the or our

question next Tyler Our comes Citi. from with Radke

the see seemed it you'd full be. raised that like if was of drivers increased view? considerations be last FX stable just into visibility X the rollout, the We stronger this there? And pricing in Was macro of add to unpack more I the in you'd terms we've any year last we raise more taking in what confidence? there quarter, guess, quarters? driving not, the of didn't just maybe better This of Anything by terms you revenue account X just should relative what's the it kind seen first, quarters. than guidance

Yes.

through remarks been in benefits by if we're assumption see just a that to on year. We're the an the a environment but deals raising reflection decision-makers flowing really we Before our specific in that you the it's here, environment that's full I much pieces assumptions action. we've around we be we the through here, moving going going QX. operating an and and the to the math, into million, Tyler, FX the I that's expect my to bar prepared environment comment is tried same the bit of higher a evolve color walk and moving seen where in through into year share just QX. We've the in more year also think and very that QX. guidance to $XX beat in guidance embedded incremental walk by additional you. that I full to continue, But shared $X with of million, a that's midpoint of through QX our guidance We

prior So the and basis, big you for we our call, on feel, a outlook pipeline, earlier our laser-focused growth good just our unchanged about as we of in the QX. QX in on feel told currency guidance XX%. And we're a is quarter with Yamini constant to executing

Our next with question Sachs. comes Borges from Goldman Gabriela

what navigate on or sales give focus you suite your to much of framework the given perhaps you more large Yamini, some I mid-market put and of do you do at approach you What the kind folks the success customers ask that have to see adds? specifically, when in of the what want to engagement you of the with pricing they about competitive that who value concessions when And new run? the your conversation, product customer you're dynamic respond the aggressive having. help competitors how HubSpot

great Gabriela, And to good from hear it's question. a you.

answered which I question, is think value. the on we you focus

is don't compete competitive. price. competitive it's always on on environment the we think And compete been and value. We I

have all the ownership. playbooks, of advantage. And we our a customers conversations with And cost so that on distinct total have the we the there, focus

You developers You [ inside. need big a don't don't large need XX ] consulting size project with

huge army of admins You don't inside. a that need are

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can answer And the and adoption we what simple value year. the a weeks. And CRM when have XXs is XX%, to they which if talk use is anything get because consistently we so value talk question. how that drive in which of and high be we I they CRM, customers, the to getting ask typical, is the adoption is matter like can And I previous them salespeople a times a about of the drive we how many we that have in do. tangible proof their that in in ultimate can XX%, XXs,

And crafted so customers grow. environment We win experience time a having on the to on fast we unified while competitive, very easy delivering win that value, to helps and value is being time fast being use. our

with Reilly Joshua from comes question Needham. next Our

kind it characterize, subscription the somewhat cash but and kind for you flow this, acquisition, for solutions. competitors have you that to platform the to primarily seems do an going I versus edge SMB competitive you're into Commerce of edge With your hub strategy Hub. that space gets point within there think that of with that are would that leverage I billing broader How invoicing, what grow

set us exactly enable pretty manner, and data, next and the customer seamless way really getting the flow commerce proposal down how buyers information a changes can all in platform that. will about a do cash what platform to completing telling payment of and you're transaction a at and enable accelerate of is those and to that's products flow are a we it's to with that seamless advantage, comes doing our it's it we armed so conversations going ultimately, from individual the And and proposal, to look for It's allows want insights. That single buy, about sellers solutions. proposal, in cash vision. the love that you getting and that that. And us unified just to for with us a I that help customers our easy us super vision sell It creating making if excited an customer we're question, signed, platform easy is having Almost and right. right? to keep everything and about point not

question next comes with Wong from Our Ken Oppenheimer.

into X wanted customer Kate, I maybe the adds. to dive

year, on starter the what to touched X,XXX up in relaunching pacing as we like also well past, think you tailwinds but guys forward? you talked strong XX,XXX as conversions July. [indiscernible] really in did this going could look about of kind How that I the think should XX,XXX, and

that the last additions Ken, in we Yes. customer XX,XXX. in delivered with to was right of the for one. our range We shared QX. were line on X,XXX with that call very thanks It actually happy we XX,XXX

customer that enabled seats largely adds the in the additions As I fact prepared of mix in by the starter a quarter. the talked there about minimums. pricing across elimination seat mentioned balanced was our new that, was my professional We've remarks, and and those model in

continue a the quarter talked starter of thing cohorts continue I starting see the other in rate, least the X,XXX we believe to half at nominal really right that starter those lap should look last were about leaving renewing that some that number growth higher. And platform said, that were QX additions very to of said, of similar the were to near we term, customers in And all the that cohorts strong at large was the So at this back were for That to although that XXXX. were quarter. as The adds. we we from range net XX,XXX

question next from Our comes with Parker Lane Stifel.

business-specific programs, will the to going at those that Yamini, in hear in just AI forward? you agents more when the the role solutions the new is overall your partners place we play vision love about agency have, look partner there, have especially I'd and for enablement what that developing campaigns

question. love I that Parker,

is of partners to we first the to for very us launched I into across a are top strategy, AI and platform I huge they be as are it well. to is well. And to have entire developing market vision bringing every provide a if as that on the to set every And allow able we partners top to to able that I for our is X think inbound. role vision. you the step into embedded to build able platform ones like to mean be embed build the It agents But at at on think AI look partners back about be hub. play. the it excited agents and and -- our obviously, to are

to able executive are like motivated has At partners of them, services and partner and and is got excited. strong. them our to offering hopefully on is a our perspective AI where going have now our road AI going, The to certainly sessions inspire offer been map a we enablement inbound, from had incentivized in we to that customers. set where briefing And product be we our going, them what bring

AI And both our so from as are terms really feedback partners the inbound overall well executing as feel strategy. in we of good I in how

Bracelin question Brent Piper with from next Our comes Sandler.

with Kate, If growth I comp I wide of about wanted of year, to QX. XX% year. should that next reiterating as for we and I takes growth. kind includes back the algorithm of but think partial variance puts to kind But clear, rate normalized you're growth the at growth a only look Street what's expectations XX% here. XX.X% the right of to this next pretty right go growth for profile get rate kind for

for And financial guidance Yes. it's will always, of Thanks We're for when XXXX. with internally. results February. we you XXXX in early start the process question. in report Look, the obviously middle we provide talking planning to about our really our us for as

that talk this to think some number have And of time, are at bit little of talk time we over I the But we specifically a algorithm, to time, but there sort Analyst going drive which levers look. not longer-term a over I'm that on a that spent is about can about Day. growth we XXXX, So growth.

The still we're first is that early.

share market. have We big low very a market in really

to continue so to customer our acquisition drive new ability And over strong. is time

just we for choice more are deals is deals, that expect towards multi-hub the platform scaling second of is bigger we we're to The the that going seeing continue. that And towards trend customer companies.

us things all spent AI over innovation, onto third should time growth before, long-term In innovation, multiyear model. we that be net fuel we are and continue we us should lot our particular, innovate And are to That we've commerce pricing revenue of aggressively. base a a transitioning time. And these talking data about can higher drive customer innovation. thing tailwind to over finally, time. about retention our The of elements new help seat-based is, and talked this

over back in we in long our a of of the is to will here. All well have very in And ability clear that we there uncertainty confident still and a more execute said, a to and period of February. growth out durable time with drive XXXX come like there I'm lot so view market, in QX

question Our James. comes from Brian Raymond Peterson with next

wanted I your on hit to M&A. appetite for

You've balance a clear more And . adjacencies interesting been look How so there a with there or about the investments? flow. you of are thinking the you? inorganic last hub versus particularly are cash active organic year that bit over to some

great disrupt that take do That's consistent. to We we for to M&A we a a approach platform great customer want a that technology, experience our our is question. And where great Apple-eque accelerate great remained way approach to very approach to that customer think the talent I M&A. in look vision. the not And can do And has offer. we

an of platform. We And accelerate in so talent for of comfortable our M&A look specific very playbook. executing gotten very that innovation we've this can parts great with type

with mid- accelerates same the Pricing to us the we as cash flow. You the [indiscernible] term. thing want have platform with execute these continue doing a ads is Flow. great in natively crafted for we so we -- mentioned Clear seen HubSpot, of and and that And that. We acquisitions intend that incredible. want Clearbit. to look we'll playbook results the drives are Cash it that it to you These culture our types financial with all And something examples build That everything into vision. to do offer playbook can long We come build ensure of

Nick with Scotiabank. from comes question next Our Altmann

Awesome.

XXX-plus said larger that of of quick you Service how Hub unpack think perhaps bit cross-selling for customers, one, little you lands larger a maybe was Just better Service in in is seat customers much Hub or of expansion . But some but versus pretty deals just driven interesting. stabilization there is XX% can I which guys by growth those or a

And X fact -- big that have there was year, we in say excellent there about the progress Yes, last this launched question. the happening It's Hub, I'm that the we the XX year, market Look, very Service great unlocks. thing. made It's product lot I'd consistently Hub. Last teams Pro have within the Service gold the X were I over of innovated not innovation market. think a that's and and in a excited that's features team months.

agents importantly, knowledge leveraging also is and is to with better portion do typically been AI that bit customer customer talked faster agent. our ticket, XX% with I has more great. support seeing then some are and The bases first within a our helping customers the that about the we of little XX%, self-serve helps between handle that success

this of part for can I think we customers of and it spotlight, a to permission from place. as them both talk steady second is SLA we the management. better drumbeat part the support, offering routing, for as as customer And lot a granular earlier drive well prospects, heard therefore, that we and of in retention the success success our having for better then launched so a support management, customer X improvement. And need workspace more as year, there's both and

asking All hub. in have of these are us the service customers that ones upmarket for been

set We it Hub. Service started doing with good a expansion well door, of Hub. And with we a consistently think We new Service the about I where of to in therefore, it be front features. of we back, Sales look, step terms see And with both thing base. if did lands same you really going as are I our feel with improving Hub. had within drumbeat And the customer this as got till we product we're a

with We comes This more time from question. for BMO. Adam question X have Holets

second or I'll that a Keith customer about lower-end growth we growth versus customer think as or how talked And also on seats. growth us our And of we about seat any impacted into here. can customer of on growth. growth a part models tune break or about is is I'm of growth? And than the that customer was get is Bachman minimum it, different 'XX? by what seat being parts. secret as what we should ASRPC there faster growth the ask into metric sort is, thinking you of you to It's for I Is question couple slower it wanted One, growth was was a XX%. give

will anniversary perhaps and anniversary that continue pricing next we negative on that rate? ASRPC can beginning ASRPC it that think model a grow you all do And year? as grow does will the growth Or flow you changes, could about the to have through so innovation

a the equation the see and that out. we change I back higher the and ways entry of of model Yes. a upfront from and truly in And they one the And I need we time. HubSpot. is they little just change purchase of assumption so step seeds bit and has then to that barrier on to would Keith, lot would customers. And there's of sort has grow the we had get been that, the then a that was lower played what revenue that that equation. highlight over they started for to growth know the made. And pricing of I retention with ASRPC grow net change the sort think those far moving model assumption we the to customers pieces upgrade reflect take made seed and

are retention. the and that. higher have revenue upgrade that around on the and By growth our than seen those but shared overall who Seats have net specific in cohorts of growing seats that point sort And that definition, so have early have the joined we it's data higher we a upgrading adding means and customers not model faster rates

who today. Thank everyone you you. Third Thank This Earnings able to XXXX Quarter us the was concludes Call. to join HubSpot

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