HUBS Q4 2022 Earnings

Call Details

• Call Title: HubSpot Q4 2022 Earnings Call
• Date: February 16, 2023 at 9:30 PM UTC
• Management Team:
  • Yamini Rangan (Chief Executive Officer)
  • Dharmesh Shah (Co-founder and Chief Technology Officer)
  • Kate Bueker (Chief Financial Officer)
  • Chuck MacGlashing (Head of Investor Relations)
  • Andy Petrie (EVP of Product and User Experience)

Call Summary

Financial Performance

• Q4 revenue grew 35% year over year in constant currency and 27% as-reported.
• Full-year 2022 revenue grew 39% year over year in constant currency and 33% as-reported.
• Q4 subscription revenue grew 28% year over year while services and other revenue increased 8% as-reported in Q4.
• Total customers reached 167,000, up 24% year over year, with over 8,400 net new customers added in Q4.
• Average subscription revenue per customer was $11,200, up 9% year over year in constant currency and 3% as-reported.
• Deferred revenue was $546 million at the end of December, a 25% increase year over year, and calculated billings were $542 million in Q4.
• Q4 gross margin was 84% with subscription gross margin at 86% and services and other gross margin at negative 14%.
• Q4 operating margin was 14% with net income of $57 million, and cash and marketable securities totaled $1.5 billion at year end.

Guidance

• Q1 2023 revenue is guided to $473 to $475 million, which is 20% year over year at the midpoint and assumes a 4-point FX headwind to as-reported revenue growth.
• Q1 2023 non-GAAP operating profit is guided to $45 to $47 million and non-GAAP diluted EPS is guided to $0.82 to $0.84, assuming 51.5 million diluted shares.
• Full-year 2023 revenue is guided to $2.05 to $2.06 billion, up 19% year over year at the midpoint or 20% in constant currency with a 1-point FX headwind.
• Full-year 2023 non-GAAP operating profit is guided to $248 to $252 million and non-GAAP diluted EPS is guided to $4.24 to $4.32, assuming 52.2 million diluted shares.
• CapEx is expected to be roughly 5% of revenue in 2023 and free cash flow is expected to be about $225 million for the full year with seasonality to Q1 and Q4.
• Guidance assumes the macro and demand environment remains challenging and roughly consistent with Q3/Q4 2022 conditions.