HUBS Q4 2020 Earnings

Call Details

• Call Title: HubSpot Q4 2020 Earnings Call
• Date: February 11, 2021 at 9:30 PM UTC
• Management Team:
  • Brian Halligan (Chief Executive Officer and Chairman)
  • Kate Bueker (Chief Financial Officer)
  • Chuck MacGlashing (Head of Investor Relations)

Call Summary

Financial Performance

• Q4 2020 revenue grew 35% year-over-year as reported and 32% year-over-year in constant currency.
• Q4 subscription revenue grew 36% year-over-year while services revenue grew 9% as reported.
• Full year 2020 revenue grew 31% as reported and 30% in constant currency, with full year subscription revenue up 32%.
• Q4 net income was $20M or $0.40 per diluted share, and full year net income was $64M or $1.32 per diluted share.
• Reported fourth quarter and full year gross margins were 82% (non-GAAP) and subscription gross margin was 85%, while services gross margin was negative 20%.
• Calculated billings were $309M in Q4, and deferred revenue was $317M at year-end, up 35% year-over-year, indicating recurring backlog strength.
• Cash and marketable securities totaled $1.3B at December 31, 2020, and headcount was 4,225, up 25% year-over-year.

Guidance

• Q1 2021 revenue is guided to $260M to $265M, which implies 32% year-over-year growth at the midpoint.
• Full year 2021 revenue is guided to $1.16B to $1.17B, implying 32% year-over-year growth at the midpoint.
• Q1 2021 non-GAAP operating income is guided to $17M to $19M and non-GAAP diluted EPS to $0.28 to $0.30 assuming 50.3M fully diluted shares.
• FY2021 non-GAAP operating income is guided to $98M to $102M and non-GAAP diluted EPS to $1.51 to $1.59 assuming 50.7M fully diluted shares.
• The guidance assumes an FX tailwind of four points to as-reported revenue in Q1 and three points for the full year at current spot rates.
• Company expects revenue growth cadence of 35% in H1 2021 and 30% in H2 2021 due to tougher year-over-year comparisons.
• Guidance assumes flat operating margins year-over-year with continued investments in R&D and go-to-market, and CapEx around 5% of revenue with FCF about $130M.