HubSpot(HUBS) - 2024 Q2 - Quarterly Report

Forward-Looking Statements and Risk Factor Summary This section outlines forward-looking statements and summarizes key risks impacting the company's business and financial outlook Special Note Regarding Forward-Looking Statements Outlines forward-looking statements on future financial and operational performance, customer growth, competitive impacts, and investments, subject to inherent risks - Forward-looking statements cover future financial and operational performance, including revenue, cost of revenue, gross margin, and operating expenses[4] - Key areas of forward-looking statements include maintaining and expanding the customer base, increasing average subscription revenue per customer, and the impact of competition and innovation, particularly from evolving artificial intelligence technologies[4] - The company anticipates investments in sales and marketing, research and development (including AI and machine learning), customer service, and data center infrastructure[4] Risk Factor Summary Summarizes key risks including customer dependence, intense competition, technological adaptation, currency fluctuations, and operational vulnerabilities - The company's business is dependent on customer renewals, adding new customers, increasing revenue from existing customers, and the continued growth of the customer platform market[8] - Significant competition from established and new companies offering marketing, sales, customer service, operations, and content management software, including those utilizing artificial intelligence, poses a risk to customer acquisition and business growth[8][9] - Key operational risks include failure to adapt to rapidly changing technology, interruptions or delays from third-party data center providers, and potential security compromises[9][10][11] Part I — Financial Information Presents HubSpot's unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Financial Statements Presents HubSpot's unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, with detailed accounting notes Unaudited Consolidated Balance Sheets Presents the company's financial position at specific dates, detailing assets, liabilities, and stockholders' equity | Metric | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----- | :--------------------------- | :------------------------------- | | Assets | | | | Cash and cash equivalents | $797,875 | $387,987 | | Short-term investments | $937,830 | $1,000,245 | | Total current assets | $2,236,204 | $1,871,540 | | Total assets | $3,356,002 | $3,071,392 | | Liabilities & Equity | | | | Convertible senior notes (current) | $457,196 | — | | Deferred revenue (current) | $708,113 | $672,150 | | Total current liabilities | $1,437,251 | $942,008 | | Total liabilities | $1,755,103 | $1,737,044 | | Total stockholders' equity | $1,600,899 | $1,334,348 | - Total assets increased by approximately $284.6 million from December 31, 2023, to June 30, 2024, driven by a significant increase in cash and cash equivalents[13] - Current liabilities saw a substantial increase, primarily due to the reclassification of convertible senior notes to current portion[13] Unaudited Consolidated Statements of Operations Details the company's revenues, expenses, and net loss over specific reporting periods | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :----- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Total revenue | $637,230 | $529,138 | $1,254,644 | $1,030,758 | | Gross profit | $541,713 | $444,182 | $1,064,040 | $865,473 | | Loss from operations | $(23,935) | $(116,169) | $(47,169) | $(159,217) | | Total other income | $21,253 | $12,935 | $52,206 | $21,681 | | Net loss | $(14,435) | $(111,803) | $(8,501) | $(148,523) | | Net loss per share, basic and diluted | $(0.28) | $(2.25) | $(0.17) | $(3.00) | - Total revenue increased by 20% for the three months and 22% for the six months ended June 30, 2024, compared to the same periods in 2023[15] - Net loss significantly decreased for both the three-month period (from $(111,803)K to $(14,435)K) and the six-month period (from $(148,523)K to $(8,501)K) year-over-year[15] Unaudited Consolidated Statements of Comprehensive Loss Reports the total comprehensive loss, including net loss and other comprehensive income/loss items | Metric | Three Months Ended June 30, 2024 (in thousands) | Three Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :----- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net loss | $(14,435) | $(111,803) | $(8,501) | $(148,523) | | Foreign currency translation adjustment | $(757) | $399 | $(2,801) | $1,026 | | Changes in unrealized loss on investments, net of income taxes | $(640) | $(1,028) | $(3,403) | $3,479 | | Changes in unrealized loss on cash flow hedges, net of income taxes | $(445) | — | $(445) | — | | Comprehensive loss | $(16,277) | $(112,432) | $(15,150) | $(144,018) | - Comprehensive loss significantly decreased year-over-year, primarily driven by the reduction in net loss[16] - Foreign currency translation adjustments and unrealized losses on investments contributed to other comprehensive loss in 2024, contrasting with a gain on investments in 2023[16] Unaudited Consolidated Statements of Stockholders' Equity Outlines changes in stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit | Metric | Balances at December 31, 2023 (in thousands) | Balances at June 30, 2024 (in thousands) | | :----- | :----------------------------------------- | :--------------------------------------- | | Common Stock | $50 | $51 | | Additional Paid-In Capital | $2,136,908 | $2,418,608 | | Accumulated Other Comprehensive (Loss) Income | $1,827 | $(4,822) | | Accumulated Deficit | $(804,437) | $(812,938) | | Total Stockholders' Equity | $1,334,348 | $1,600,899 | - Total stockholders' equity increased by approximately $266.5 million from December 31, 2023, to June 30, 2024, primarily due to an increase in additional paid-in capital[17] - Additional paid-in capital increased significantly due to stock-based compensation and issuance of common stock under stock plans[17] Unaudited Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities | Metric | Six Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2023 (in thousands) | | :----- | :------------------------------------------ | :------------------------------------------ | | Net cash and cash equivalents provided by operating activities | $244,916 | $157,613 | | Net cash and cash equivalents provided by (used) in investing activities | $139,027 | $(53,313) | |