IR deck 062617 q1 final
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- 2. Important Information 2 This presentation includes certain “forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning our cash flow and margin improvement expectations, our position to execute on our growth strategy in the mid-market, and our ability to expand our leadership position and market opportunity for our inbound platform. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward- looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, our history of losses, our ability to retain existing customers and add new customers, the continued growth of the market for an inbound platform; our ability to differentiate our platform from competing products and technologies; our ability to manage our growth effectively to maintain our high level of service; our ability to maintain and expand relationships with our marketing agency partners; our ability to successfully recruit and retain highly-qualified personnel; the price volatility of our common stock, and other risks set forth under the caption "Risk Factors" in our Quarterly Report on Form 10-Q fort he quarter ended March 31, 2017 and our other SEC filings. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
- 3. Sales and Marketing Customers A Global Inbound Sales & Marketing SaaS Company Cambridge, MA | Portsmouth, NH | Dublin, Ireland Sydney, Australia | Singapore | Tokyo, Japan | Berlin, Germany (Q3 2017) 31,000+ Countries 90+ 6 Office Locations Worldwide 3
- 5. 2006 Humans are changing. 94% skip TV ads 94% unsubscribe from email 27% direct mail isn’t opened 50% are on do not call lists 5 Base: Varied bases, minimum 598 global digital consumers Source: HubSpot Global Interruptive Ads Survey, Q4 2015 – Q1 2016.
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- 8. How Does Inbound Work? Aggressively pushes content at innocent bystanders, interrupting their life Pulls in prospects by offering helpful content and experience when they need it VS. Outbound Inbound SEO | Blogs | SocialCold Calling | Spam | Interruptive Ads 8
- 9. Inbound is about the size of your brain, not the width of your wallet Helpful | Human | Personal | Transformational | Empowering | Educational 9
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- 12. 2017 Mid-market companies are asking for 12
- 13. Content Creation, SEO, Social Media, Marketing Automation Email Templates, Meetings, Notifications, Sequences Contact Timeline, Lead Enrichment, Prospects, Analytics 13
- 14. Front Office Platform $45bn TAM}10 – 2k Employees } 14-AMI Partners data, 2014 and HubSpot Estimates
- 15. 150,000+ Marketers Where the inbound movement grows the other 360 days of the year 19,000+ Registered Attendees Where the inbound movement grows every year ● 37% more registered attendees in 2016. ● 250+ speakers; hundreds of hours of content Thousands of Partners HubSpot provides training and support to our marketing agency partners, working together to sell our products. 60,000+ Certifications HubSpot’s one-stop-shop for free education on all things inbound 49,000+ Linking Domains The number of websites linking back to HubSpot, providing us with both authority in search engines and recognition among industry professionals 15
- 16. Marketing Pricing Upgrade based on database size Cross-sell Sales product Sales Pricing Cross-sell Marketing product Upgrade based on number of seats 16
- 18. F I N A N C I A L R E V I E W | F I R S T Q U A R T E R - 2 0 1 7 18
- 19. Summary Fast-growing SaaS platform with positive mix-shift towards multi-product offering Largely untapped global opportunity for growth Margin improvement allows for incremental improvements in cash flow Commitment to balancing top and bottom line growth allows for continued operating leverage 19
- 20. $30.4 M $34.2 M $38.2 M $42.9 M $47.7 M $53.1 M $59.0 M $65.0 M $70.6 M $76.4 M $82.3 M Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 51% Y/Y 53% Y/Y 58% Y/Y 58% Y/Y 57% Y/Y 56% Y/Y 54% Y/Y 51% Y/Y 48% Y/Y 44% Y/Y 40% Y/Y Revenue A Global Inbound Marketing & Sales SaaS Company 20
- 22. Steady progress in Gross & Operating Margin Trajectory 22 All percentages for historical period are non-GAAP (other than CFFO) and exclude expenses associated with stock based compensation and amortization of acquired intangibles. Please refer to the end of this presentation for a reconciliation of GAAP to non-GAAP figures.
- 23. Framework for Growth & Profitability Revenue Growth Operating Margin % Operating Cash Flow Growth <30% 3-4% increase per year Moderate Growth >30% 1-2% increase per year ≈ Revenue Growth High Growth ~30% 2-3% increase per year Growth 23
- 24. 24 Long-term Model 2014 2015 2016 Q1‘17 GROSS MARGIN 70% 75% 78% 80% R&D as % of Revenue 17% 14% 14% 13% S&M as % of Revenue 63% 58% 55% 52% G&A as % of Revenue 18% 16% 14% 13% OPERATING MARGIN (28%) (14%) (4%) 2% Target Model 80% 15% 30 - 35% 10% 20 - 25% All percentages for historical period are non-GAAP (other than CFFO) and exclude expenses associated with stock based compensation and amortization of acquired intangibles. Please refer to the end of this presentation for a reconciliation of GAAP to non-GAAP figures.
- 25. 25 Growth Strategy New Products Large Domestic Opportunity Expanding International Opportunity Upsell Customers 1 2 3 4
- 26. Our mission is to help businesses get growing. Our vision is a world where business is inbound. 26
- 27. GAAP to Non-GAAP Reconciliation $ '000s % of Revenues $ '000s % of Revenues $ '000s % of Revenues $ '000s % of Revenues Cost of Revenue Subscription 23,655 20% 32,271 18% 41,182 15% 11,409 14% Stock-based compensation (128) 0% (341) 0% (512) 0% (115) 0% Amortization of acquired intangibles (118) 0% (70) 0% (57) 0% (9) 0% Non-GAAP subscription 23,409 20% 31,860 18% 40,613 15% 11,285 14% Professional services and other 11,425 10% 15,652 9% 20,683 8% 5,663 7% Stock-based compensation (498) 0% (1,216) -1% (1,640) -1% (449) -1% Amortization of acquired intangibles - 0% - 0% - 0% - 0% Non-GAAP professional services and other 10,927 9% 14,436 8% 19,043 7% 5,214 6% Gross Margin Gross margin 80,796 70% 134,020 74% 209,102 77% 65,180 79% Stock-based compensation 626 1% 1,557 1% 2,152 1% 564 1% Amortization of acquired intangibles 118 0% 70 0% 57 0% 9 0% Non-GAAP gross margin 81,540 70% 135,647 75% 211,311 78% 65,753 80% Operating Expenses Research and development 25,638 22% 32,457 18% 45,997 17% 13,370 16% Stock-based compensation (6,190) -5% (6,327) -3% (8,828) -3% (2,442) -3% Amortization of acquired intangibles - 0% - 0% - 0% - 0% Non-GAAP research and development 19,448 17% 26,130 14% 37,169 14% 10,928 13% Sales and marketing 78,809 68% 112,629 62% 162,647 60% 46,672 57% Stock-based compensation (5,596) -5% (7,658) -4% (13,352) -5% (3,770) -5% Amortization of acquired intangibles (20) 0% (26) 0% (27) 0% (7) 0% Non-GAAP sales and marketing 73,193 63% 104,945 58% 149,268 55% 42,895 52% General and administrative 24,958 22% 35,408 19% 45,120 17% 13,138 16% Stock-based compensation (3,946) -3% (5,766) -3% (8,343) -3% (2,527) -3% Amortization of acquired intangibles - 0% - 0% - 0% - 0% Non-GAAP general and administrative 21,012 18% 29,642 16% 36,777 14% 10,611 13% Loss from Operations Loss from operations (48,609) -42% (46,474) -26% (44,662) -16% (8,000) -10% Stock-based compensation 16,358 14% 21,308 12% 32,675 12% 9,303 11% Amortization of acquired intangibles 138 0% 96 0% 84 0% 16 0% Non-GAAP loss from operations (32,113) -28% (25,070) -14% (11,903) -4% 1,319 2% Three Months Ended March 31, 20172015 2016 Year Ended 2014 27
- 28. Thank you. Subhead goes here or maybe a clever and witty statement. 28