UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO
There were
HUBSPOT, INC.
Table of Contents
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Item 1. |
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Unaudited Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 |
6 |
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Unaudited Consolidated Statements of Stockholders' Equity for the Three and Nine Months ended September 30, 2023 and 2022 |
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10 |
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11 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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34 |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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60 |
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Item 4. |
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Item 5. |
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Item 6. |
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61 |
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62 |
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EX-31.1 |
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CERTIFICATION OF THE CEO PURSUANT TO SECTION 302 |
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EX-31.2 |
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CERTIFICATION OF THE CFO PURSUANT TO SECTION 302 |
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EX-32.1 |
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CERTIFICATION OF THE CEO AND CFO PURSUANT TO SECTION 906 |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and these statements involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q are forward-looking statements. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have
3
an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
In this Quarterly Report on Form 10-Q, the terms “HubSpot,” “we,” “us,” and “our” refer to HubSpot, Inc. and its subsidiaries, unless the context indicates otherwise.
Risk Factor Summary
The risk factors detailed in Item 1A entitled “Risk Factors” in this Quarterly Report on Form 10-Q are the risks that we believe are material to our investors and a reader should carefully consider them. Those risks are not all of the risks we face and other factors not presently known to us or that we currently believe are immaterial may also affect our business if they occur. The following is a summary of the risk factors detailed in Item 1A:
4
5
PART I — Financial Information
Item 1. Financial Statements
HubSpot, Inc.
Unaudited Consolidated Balance Sheets
(in thousands)
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September 30, |
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December 31, |
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2023 |
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2022 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term investments |
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Accounts receivable — net of allowance for doubtful accounts of $ |
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Deferred commission expense |
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Prepaid expenses and other current assets |
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Total current assets |
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Long-term investments |
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Property and equipment, net |
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Capitalized software development costs, net |
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Right-of-use assets |
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Deferred commission expense, net of current portion |
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Other assets |
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Intangible assets, net |
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Goodwill |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued compensation costs |
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Accrued expenses and other current liabilities |
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Operating lease liabilities |
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Deferred revenue |
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Total current liabilities |
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Operating lease liabilities, net of current portion |
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Deferred revenue, net of current portion |
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Other long-term liabilities |
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Convertible senior notes |
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Total liabilities |
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Stockholders’ equity: |
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Common stock |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
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( |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of the consolidated financial statements.
6
HubSpot, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)
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For the Three Months Ended September 30, |
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For the Nine Months Ended September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenues: |
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Subscription |
$ |
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$ |
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$ |
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$ |
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Professional services and other |
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Total revenue |
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Cost of revenues: |
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Subscription |
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Professional services and other |
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Total cost of revenues |
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Gross profit |
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Operating expenses: |
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Research and development |
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Sales and marketing |
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General and administrative |
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Restructuring (Note 15) |
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— |
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— |
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Total operating expenses |
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Loss from operations |
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( |
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( |
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( |
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( |
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Other expense: |
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Interest income |
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Interest expense |
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( |
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( |
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( |
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( |
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Other expense |
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( |
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( |
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( |
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( |
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Total other income |
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Loss before income tax expense |
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( |
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( |
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( |
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( |
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Income tax benefit (expense) |
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( |
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( |
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( |
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Net loss |
$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Net loss per share, basic and diluted |
$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Weighted average common shares used in |
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The accompanying notes are an integral part of the consolidated financial statements.
7
HubSpot, Inc.
Unaudited Consolidated Statements of Comprehensive Loss
(in thousands)
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For the Three Months Ended September 30, |
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For the Nine Months Ended September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Net loss |
$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Other comprehensive loss: |
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Foreign currency translation adjustment |
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( |
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( |
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( |
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( |
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Changes in unrealized gain (loss) on investments, net of |
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( |
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( |
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Comprehensive loss |
$ |
( |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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The accompanying notes are an integral part of the consolidated financial statements.
8
HubSpot, Inc.
Unaudited Consolidated Statements of Stockholders' Equity
(in thousands, except per share amounts)
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Common |
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Treasury Stock, $0.001 |
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Additional |
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Accumulated |
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Accumulated |
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Shares |
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$ |
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Shares |
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$ |
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Capital |
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(Loss) |
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Deficit |
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Total |
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Balances at December 31, 2022 |
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$ |
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$ |
— |
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$ |
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$ |
( |
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$ |
( |
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Issuance of common stock under stock |
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— |
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— |
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— |
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— |
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Restricted stock units taxes paid in cash |
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( |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Cumulative translation adjustment |
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— |
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— |
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— |
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— |
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— |
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— |
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Unrealized gain on investments, net of |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Balances at June 30, 2023 |
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$ |
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$ |
— |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Issuance of common stock under stock |
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— |
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— |
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— |
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— |
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— |
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Restricted stock units taxes paid in cash |
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( |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Cumulative translation adjustment |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Unrealized gain on investments, net of |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balances at September 30, 2023 |
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$ |
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$ |
- |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Common |
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Treasury Stock, $0.001 |
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Additional |
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Accumulated |
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Accumulated |
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Shares |
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$ |
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Shares |
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$ |
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Capital |
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(Loss) |
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Deficit |
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Total |
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||||||||
Balances at December 31, 2021 |
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$ |
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$ |
— |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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|||||
Issuance of common stock under stock |
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— |
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— |
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— |
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— |
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||||
Restricted stock units taxes paid in cash |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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||
Conversion of the 2025 Notes |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
Conversion of the 2022 Notes |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
Settlement of Convertible Note Hedges |
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— |
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— |
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— |
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— |
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— |
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— |
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Cumulative adjustment from adoption |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
|
Cumulative translation adjustment |
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— |
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— |
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— |
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— |
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— |
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( |
) |
|
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— |
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( |
) |
Unrealized loss on investments, net of |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balances at June 30, 2022 |
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|
|
$ |
|
|
|
|
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Issuance of common stock under stock |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Restricted stock units taxes paid in cash |
|
— |
|
|
|
— |
|
|
|
— |
|
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