HubSpot(US:HUBS)2025-08-06 20:20Revenue and Customer Metrics - Subscription revenue accounted for 98% of total revenue for the three and six months ended June 30, 2025 and 2024 [110]. - As of June 30, 2025, the company had 267,982 customers across more than 135 countries [109]. - The average subscription revenue per customer is a key metric for assessing long-term customer relationship value [117]. - Total revenue for the three months ended June 30, 2025, was $760,866,000, representing a 19% increase from $637,230,000 in the same period of 2024 [136]. - Subscription revenue for the six months ended June 30, 2025, was $1,443,260,000, an 18% increase from $1,227,559,000 in 2024 [137]. - The number of customers grew from 228,054 as of June 30, 2024, to 267,982 as of June 30, 2025, contributing to the increase in subscription revenue [138]. - Average Subscription Revenue per Customer for the three months ended June 30, 2025, increased to $11,310 from $11,215 in 2024 [138]. - Net Revenue Retention is a measure of recurring revenue stability, calculated from retained subscription revenue [118]. Expenses and Profitability - The company plans to continue investing in sales and marketing to support growth, expecting sales and marketing expenses to increase in absolute dollars [130]. - Research and development expenses are expected to increase in absolute dollars as the company enhances its customer platform functionality [128]. - The company aims to break-even from a profitability perspective in the next 12 months [114]. - Total cost of revenue for the three months ended June 30, 2025, was $122,161,000, a 28% increase from $95,517,000 in 2024 [142]. - Gross profit for the six months ended June 30, 2025, was $1,237,735,000, up 16% from $1,064,040,000 in 2024 [142]. - Subscription cost of revenue for the three months ended June 30, 2025, was $106,670,000, representing 14% of subscription revenue, compared to 13% in 2024 [143]. - Research and development expenses for the three months ended June 30, 2025, were $237,340,000, an increase from $198,180,000 in 2024 [136]. - Net loss for the three months ended June 30, 2025, was $3,258,000, compared to a net loss of $14,435,000 in the same period of 2024 [136]. - The company reported a net loss of $25.1 million for the six months ended June 30, 2025, compared to a net loss of $8.5 million for the same period in 2024 [177][178]. Cost Increases - Professional services and other revenue accounted for 2% of total revenue for the three and six months ended June 30, 2025 and 2024 [112]. - Professional services and other cost of revenue increased by $1,592 (11%) for the three months ended June 30, 2025, and by $2,106 (7%) for the six months ended June 30, 2025, compared to the same periods in 2024 [147]. - Research and development expenses rose by $39,160 (20%) for the three months and $83,621 (22%) for the six months ended June 30, 2025, compared to the same periods in 2024, primarily due to increased employee-related costs [150]. - Sales and marketing expenses increased by $46,085 (16%) for the three months and $72,497 (12%) for the six months ended June 30, 2025, compared to the same periods in 2024, driven by higher employee-related costs and marketing programs [153]. - General and administrative expenses grew by $12,398 (17%) for the three months and $22,177 (16%) for the six months ended June 30, 2025, compared to the same periods in 2024, mainly due to increased employee-related costs and professional fees [156]. Cash Flow and Investments - Cash and cash equivalents decreased to $601.2 million as of June 30, 2025, down from $797.9 million in 2024, reflecting a decrease of approximately 24.6% [174]. - Net cash provided by operating activities increased to $325.9 million for the six months ended June 30, 2025, compared to $244.9 million in 2024, representing a growth of 33% [174]. - The company experienced a significant decrease in gains on strategic investments, reporting $1.9 million for the six months ended June 30, 2025, down from $18.5 million in 2024, a decline of approximately 89.7% [170]. - The effective tax rate for the six months ended June 30, 2025, was 63%, compared to (269)% in 2024, indicating a substantial change in tax expense dynamics [171]. - Cash used in financing activities for the six months ended June 30, 2025, included $125.0 million for stock repurchases and $459.8 million for repayments of the 2025 Notes [184]. - The company held $331.5 million of cash and cash equivalents in accounts outside the United States as of June 30, 2025 [174]. - The total obligation for operating leases was $340.2 million as of June 30, 2025, with $56.7 million expected in the next twelve months [186]. - The company’s investing activities for the six months ended June 30, 2025, included $1.3 billion received from the maturity of investments, offset by $830.2 million in purchases of investments [181]. Workforce and Restructuring - The restructuring plan included a workforce reduction of approximately 7% to reduce operating costs [132]. - Employee-related costs in research and development increased by $32,946 for the three months and $73,086 for the six months ended June 30, 2025, reflecting growth in the engineering organization [151]. - The company continued to leverage Solutions Partners for onboarding and professional services, resulting in decreased employee-related costs in certain areas [148]. Interest and Other Income - Interest income decreased by $2,080 (10%) for the three months and $243 (1%) for the six months ended June 30, 2025, primarily due to lower average investment balances [163]. - Interest expense decreased by $674 (75%) for the three months and $964 (53%) for the six months ended June 30, 2025, due to the early conversion of a portion of the 2025 Notes [165]. - Other income decreased by $690 (39%) for the three months and $16,159 (108%) for the six months ended June 30, 2025, primarily due to foreign currency losses and impairment of strategic investments [167]. Payment Processing Fees - The increase in commerce payment processing fees was attributed to higher payment volume and merchant activity during the periods [149].