Financial Data and Key Metrics Changes - Revenue grew 21% year-over-year in constant currency and 20% on an as-reported basis [6][17] - Operating margin increased by 270 basis points year-over-year, reaching 17% [6][19] - Total customers reached 228,000, with over 11,200 net customer additions in the quarter, representing a 23% year-over-year growth [6][18] - Average subscription revenue per customer decreased by 2% year-over-year to $11,200 [18] Business Line Data and Key Metrics Changes - Subscription revenue increased by 20% year-over-year, while services and other revenue rose by 18% [17] - The number of customers adopting multiple hubs contributed significantly to revenue growth, with over 45% of new business coming from customers using three or more hubs [7][9] - The Service Hub saw a 55% year-over-year increase in the number of wins with 100-plus service seats [10] Market Data and Key Metrics Changes - Domestic revenue grew 20% year-over-year, while international revenue increased by 22% in constant currency [17] - Net revenue retention remained stable at 102%, with gross retention in the high 80s [19] Company Strategy and Development Direction - The company aims to become the number one customer platform for scaling companies, focusing on AI-powered solutions and a unified customer platform [22] - The strategy includes embedding AI across all hubs and enhancing customer experience without charging separately for AI features [40] - The company is committed to organic growth and improving customer experience rather than pursuing aggressive acquisitions [36] Management's Comments on Operating Environment and Future Outlook - The management noted a challenging macro environment with slower decision-making and increased scrutiny on spending [12][72] - Despite the challenges, the company remains confident in its growth strategy and customer acquisition momentum [14][22] - The guidance for Q3 and full year 2024 reflects expectations of continued demand challenges but does not anticipate a material worsening of conditions [20][21] Other Important Information - The company achieved HIPAA compliance, expanding its addressable market in healthcare and financial services [45][46] - The integration of AI into the platform has shown promising results, particularly in marketing and service applications [40][76] Q&A Session Summary Question: Changes in growth rates across main hubs - Management highlighted the momentum in multi-hub wins, particularly in marketing and sales hubs [24][25] Question: Update on payments product traction - The payments product is seeing increased customer activity and higher transaction volumes, with a focus on product-led growth [27][28] Question: Challenges in the upgrade environment - The management acknowledged that macro factors are causing delays in larger deals, but consolidation on fewer platforms is also driving value [31][33] Question: Margin improvement drivers - The improvement in operating margins was attributed to better gross margins and go-to-market efficiency [35] Question: AI integration impact on margins - The integration of AI has not negatively impacted margins, with decreasing costs for AI features observed [42] Question: Significance of HIPAA compliance - Achieving HIPAA compliance opens up new opportunities in regulated industries, enhancing the company's value proposition [45][46] Question: Net new customer additions - The company expects net customer additions to be around 9,000 to 10,000 per quarter in the back half of the year [52] Question: Foreign exchange outlook - The company is neutral on foreign exchange impacts for the year and has started cash flow hedging [54] Question: Features appealing to larger customers in Service Hub - Key features include a unified help desk interface and tools for customer success management [57][59]

Revenue Performance - Total revenue for Q2 2024 was $637.2 million, representing a 20% increase compared to Q2 2023[2] - Subscription revenue reached $623.8 million, also up 20% year-over-year[2] - Total revenue for the three months ended June 30, 2024, was $637,230,000, a 20.5% increase from $529,138,000 in the same period of 2023[17] - Subscription revenue reached $623,763,000 for the three months ended June 30, 2024, compared to $517,678,000 for the same period in 2023, reflecting a 20.4% growth[17] - For Q3 2024, total revenue is expected to be between $646.0 million and $647.0 million[7] - Full year 2024 revenue guidance is set between $2.567 billion and $2.573 billion[8] Profitability and Loss - Non-GAAP operating income was $109.3 million, compared to $76.6 million in Q2 2023, reflecting a significant improvement[2] - GAAP net loss narrowed to $14.4 million, or $0.28 per share, compared to a loss of $111.8 million, or $2.25 per share in Q2 2023[3] - The net loss for the three months ended June 30, 2024, was $14,435,000, a significant improvement from a net loss of $111,803,000 in the same period of 2023[17] - Non-GAAP net income for Q2 2024 rose to $103,548 thousand, compared to $71,846 thousand in Q2 2023, with diluted non-GAAP net income per share increasing to $1.94[21] - GAAP operating loss for Q2 2024 was $23,935 thousand, compared to a loss of $116,169 thousand in Q2 2023[20] - Non-GAAP operating income for Q2 2024 increased to $109,315 thousand, up from $76,565 thousand in Q2 2023, resulting in a non-GAAP operating margin of 17.2%[20] Cash Flow and Liquidity - The company generated $117.8 million in cash from operating activities, up from $76.5 million in Q2 2023[4] - Cash and cash equivalents at the end of the period were $801,928,000, compared to $460,371,000 at the end of June 30, 2023, showing strong liquidity[18] - Net cash provided by operating activities for the three months ended June 30, 2024, was $117,828,000, an increase from $76,543,000 in the same period of 2023[18] - Free cash flow for Q2 2024 was $92,068 thousand, an increase from $59,616 thousand in Q2 2023[25] Customer Metrics - Customer count grew to 228,054, marking a 23% increase from the previous year[5] - Average Subscription Revenue Per Customer decreased by 2% to $11,215 in Q2 2024[5] Expenses and Investments - Operating expenses totaled $565,648,000 for the three months ended June 30, 2024, slightly higher than $560,351,000 in the same period of 2023[17] - The company reported a significant increase in research and development expenses, totaling $198,180,000 for the three months ended June 30, 2024, compared to $169,955,000 in the same period of 2023[17] - The company made strategic investments totaling $3,600,000 during the three months ended June 30, 2024[18] - The company experienced a gain on strategic investments of $2,103,000 for the three months ended June 30, 2024, compared to no gains in the same period of 2023[18] Future Projections - GAAP operating income for the three months ended September 30, 2024, is forecasted to be in the range of ($31,149) to ($30,299) thousand[27] - Non-GAAP operating income for the same period is projected to be between $107,000 and $108,000 thousand[27] - GAAP net loss for the three months ended September 30, 2024, is expected to range from ($15,057) to ($13,894) thousand[28] - Non-GAAP net income for the same period is estimated to be between $100,800 and $101,850 thousand[28] - Non-GAAP net income per diluted share is projected to be between $1.89 and $1.91 for the three months ended September 30, 2024[28] Restructuring and Charges - Restructuring charges are anticipated to be between $950 and $1,100 thousand for the three months ended September 30, 2024[28] - The company expects to incur incremental restructuring charges of approximately $13 to $16 million over the remaining lease term due to facility abandonments[37] - The company plans to exclude both incremental restructuring charges and cash payments related to abandoned facilities from non-GAAP earnings metrics[37] Stock-Based Compensation - The company reported a significant increase in stock-based compensation, totaling $128,994 thousand for Q2 2024, compared to $128,003 thousand in Q2 2023[21] - Stock-based compensation for the year ended December 31, 2024, is estimated at $516,149 thousand[28] Tax Rate - The long-term projected tax rate for non-GAAP items is set at 20% to ensure consistency across reporting periods[38]

The software stock just got much cheaper, relative to revenue and cash flow. Hubspot (HUBS -2.19%) shares are below $500 after falling from their 2024 high of $682, achieved in April. The stock is down 16% year to date and 30% from its 2024 high. Big changes to valuation can be important signals for investors to take action. Either the stock is available at a newly discounted price or there's a fundamental issue that's likely to create more problems. The latest financial results were generally positive Hubs ...

Wall Street analysts forecast that HubSpot (HUBS) will report quarterly earnings of $1.63 per share in its upcoming release, pointing to a year-over-year increase of 21.6%. It is anticipated that revenues will amount to $618.81 million, exhibiting an increase of 17% compared to the year-ago quarter. The consensus EPS estimate for the quarter has undergone an upward revision of 23.4% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed ...

The Bottom Line Paying 38x forward operating profits for HubSpot offers investors a poor risk-reward profile due to several factors. Despite its fair growth rates, HubSpot faces near-term challenges, including increased budget scrutiny among buyers. Even with optimistic projections, the company's valuation remains excessively high. Investors are likely to find that paying such a hefty premium leaves them with too little upside potential and a lot of downside risk. Dec '23 Mar '24 Jun '24 Author's work on HU ...

pagadesign This time we're looking at ideas published July 12th - 18th. α HUBS Hold Amrita Roy The 'Undercovered' Dozen series highlights undercovered stocks on our platform for you to have another source for idea generation. Ticker Rating Analyst RBRK Buy Gary Alexander Oftentimes the phrases "great value" and "recent IPO" are not two terms that can describe the same company, least of all in the stock market of 2024. But that's the conclusion I've come to with Rubrik, Inc. (RBRK), the data cybersecurity co ...

Shares of digital-marketing software company HubSpot (HUBS -3.55%) fell 19.1% this week as of 12:30 p.m. EDT Friday, according to data from S&P Global Market Intelligence. Reports: Alphabet backs away However, according to a Bloomberg report on Wednesday of this week, that deal now appears to be off, with Bloomberg saying that the deal didn't even make it to the substantial due-diligence phase. Therefore, HubSpot's weekly decline is likely due to it losing that acquisition premium that may have been built i ...

HubSpot, headquartered in Cambridge, MA, specializes in providing sales and marketing software to small and midsize businesses, leveraging digital channels such as blogs, search engines and social media. Its diversified offerings include CRM and payment services, making it an attractive asset for Alphabet. The potential deal, reported earlier in April, would have been GOOGL's largest-ever acquisition, with HubSpot reportedly valuing about $35 billion at that time. For HubSpot, an acquisition by Alphabet cou ...

HubSpot (HUBS) shares tumbled after reports that Google parent Alphabet (GOOGL) is no longer pursuing an acquisition of the customer relationship management (CRM) company. HubSpot Would Have Been Alphabet's Largest-Ever Acquisition HubSpot and Alphabet did not immediately respond to Investopedia's request for comment. HubSpot shares fell Wednesday after reports that Google parent company Alphabet is no longer interested in buying the customer relationship management company. Google stopped its efforts to bu ...

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