HubSpot, Inc. (NYSE: HUBS), the customer relationship management (CRM) platform for scaling companies, today announced financial results for the second quarter ended June 30, 2022.
Financial Highlights:
Revenue
- Total revenue was $421.8 million, up 36% compared to Q2’21.
- Subscription revenue was $412.4 million, up 37% compared to Q2’21.
- Professional services and other revenue was $9.4 million, down 10% compared to Q2’21.
Operating Income (Loss)HubSpot Reports Q2 2022 Results
- GAAP operating margin was (12.4%), compared to (5.3%) in Q2’21.
- Non-GAAP operating margin was 7%, compared to 9% in Q2’21.
- GAAP operating loss was ($52.3) million, compared to ($16.6) million in Q2’21.
- Non-GAAP operating income was $29.4 million, compared to $27.5 million in Q2’21.
Net Income (Loss)
- GAAP net loss was ($56.4) million, or ($1.18) per basic and diluted share, compared to ($24.6) million, or ($0.53) per basic and diluted share in Q2’21.
- Non-GAAP net income was $22.4 million, or $0.47 per basic and $0.44 per diluted share, compared to $21.6 million, or $0.46 per basic and $0.43 per diluted share in Q2’21.
- Weighted average basic and diluted shares outstanding for GAAP net loss per share was 47.8 million, compared to 46.8 million basic and diluted shares in Q2’21.
- Weighted average basic and diluted shares outstanding for non-GAAP net income per share was 47.8 million and 51.1 million respectively, compared to 46.8 million and 50.6 million, respectively in Q2’21.
Balance Sheet and Cash Flow
- The company’s cash, cash equivalents, and short-term and long-term investments balance was $1.4 billion as of June 30, 2022.
- During the second quarter, the company generated $40.9 million of operating cash flow, compared to $41.4 million during Q2’21, which excluded the $3.2 million used for the repayment of our convertible notes.
- During the second quarter, the company generated $22.4 million of free cash flow, compared to $25.6 million during Q2’21.
Additional Recent Business Highlights
- Grew Customers to 150,865 at June 30, 2022, up 25% from June 30, 2021.
- Average Subscription Revenue Per Customer was $11,198 during the second quarter of 2022, up 10% compared to the second quarter of 2021.
“Our solid results in the second quarter were driven by strong product innovation and a deep understanding of what our customers need to adapt to this macroeconomic climate,” said Yamini Rangan, Chief Executive Officer at HubSpot. “Small and medium businesses are looking to consolidate their technology and boost efficiencies in today’s environment and HubSpot’s connected CRM platform can help them do both. In Q2, we continued to invest in the tools and functionality customers need to grow better. We enabled more customization of our platform and announced CMS Hub Free, and simple Automation in Marketing Hub Starter. In the second half of the year, we will focus on driving durable, profitable growth, with an eye toward focused execution, product innovation, and solving for our customers.”
Business Outlook
Based on information available as of August 4, 2022, HubSpot is issuing guidance for the third quarter of 2022 and full year 2022 as indicated below.
Third Quarter 2022:
- Total revenue is expected to be in the range of $425 million to $426 million.
- Unfavorable foreign exchange rates are expected to be an 8 point headwind to third quarter 2022 revenue growth.(1)
- Non-GAAP operating income is expected to be in the range of $31 million to $32 million.
- Non-GAAP net income per common share is expected to be in the range of $0.50 to $0.52. This assumes approximately 51.0 million weighted average diluted shares outstanding.
Full Year 2022:
- Total revenue is expected to be in the range of $1.690 billion to $1.695 billion.
- Unfavorable foreign exchange rates are now expected to be a 6 point headwind to full year 2022 revenue growth, up from prior quarter expectation of a 5 point headwind.(1)
- Non-GAAP operating income is expected to be in the range of $143 million to $144 million.
- Non-GAAP net income per common share is expected to be in the range of $2.28 to $2.30. This assumes approximately 51.1 million weighted average diluted shares outstanding.
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(1) Foreign exchange rates impact on revenue is calculated by comparing current period rates with prior period average rates. |
Use of Non-GAAP Financial Measures
In our earnings press releases, conference calls, slide presentations, and webcasts, we may use or discuss non-GAAP financial measures, as defined by Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investors section of our website ir.hubspot.com.
Conference Call Information
HubSpot will host a conference call on Thursday, August 4, 2022 at 4:30 p.m. Eastern Time (ET) to discuss the company’s second quarter 2022 financial results and its business outlook. To register for this conference call, please use this dial in registration link or visit HubSpot’s Investor Relations website at ir.hubspot.com. Participants who wish to register for the conference call webcast please use this link.
Following the conference call, a replay will be available at (866) 813-9403 (domestic) or +44 (204) 525-0658 (international). The replay passcode is 070988. An archived webcast of this conference call will also be available on HubSpot’s Investor Relations website at ir.hubspot.com.
The company has used, and intends to continue to use, the investor relations portion of its website as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD.
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