Company Quick10K Filing
Hubspot
Price154.21 EPS-1
Shares43 P/E-119
MCap6,559 P/FCF92
Net Debt-233 EBIT-36
TEV6,325 TEV/EBIT-176
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-05
10-Q 2020-03-31 Filed 2020-05-06
10-K 2019-12-31 Filed 2020-02-12
10-Q 2019-09-30 Filed 2019-11-05
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-07
10-K 2018-12-31 Filed 2019-02-12
10-Q 2018-09-30 Filed 2018-11-07
10-Q 2018-06-30 Filed 2018-08-01
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-02-13
10-Q 2017-09-30 Filed 2017-11-01
10-Q 2017-06-30 Filed 2017-08-02
10-Q 2017-03-31 Filed 2017-05-02
10-K 2016-12-31 Filed 2017-02-16
10-Q 2016-09-30 Filed 2016-11-02
10-Q 2016-06-30 Filed 2016-08-03
10-Q 2016-03-31 Filed 2016-05-04
10-K 2015-12-31 Filed 2016-02-24
10-Q 2015-09-30 Filed 2015-11-04
10-Q 2015-06-30 Filed 2015-08-06
10-Q 2015-03-31 Filed 2015-05-07
10-K 2014-12-31 Filed 2015-03-05
10-Q 2014-09-30 Filed 2014-11-13
8-K 2020-08-05
8-K 2020-06-17
8-K 2020-06-04
8-K 2020-06-01
8-K 2020-05-01
8-K 2020-02-12
8-K 2019-11-05
8-K 2019-08-06
8-K 2019-06-05
8-K 2019-05-31
8-K 2019-05-07
8-K 2019-02-13
8-K 2019-02-12
8-K 2018-11-12
8-K 2018-11-07
8-K 2018-08-20
8-K 2018-08-01
8-K 2018-06-13
8-K 2018-06-06
8-K 2018-05-10
8-K 2018-04-23
8-K 2018-02-09

HUBS 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults on Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 hubs-ex311_6.htm
EX-31.2 hubs-ex312_7.htm
EX-32.1 hubs-ex321_8.htm

Hubspot Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
1.51.20.80.50.1-0.22014201620182020
Assets, Equity
0.20.10.10.0-0.0-0.12014201620182020
Rev, G Profit, Net Income
0.40.30.1-0.0-0.2-0.32014201620182020
Ops, Inv, Fin

hubs-10q_20200630.htm
false Q2 0001404655 Yes Yes --12-31 Large Accelerated Filer P3D true us-gaap:PrepaidExpenseAndOtherAssetsCurrent us-gaap:PrepaidExpenseAndOtherAssetsCurrent us-gaap:PrepaidExpenseAndOtherAssetsCurrent us-gaap:OtherAssets us-gaap:OtherAssets us-gaap:OtherAssets 0001404655 2020-01-01 2020-06-30 xbrli:shares 0001404655 2020-07-31 iso4217:USD 0001404655 2020-06-30 0001404655 2019-12-31 0001404655 us-gaap:SubscriptionAndCirculationMember 2020-04-01 2020-06-30 0001404655 us-gaap:SubscriptionAndCirculationMember 2019-04-01 2019-06-30 0001404655 us-gaap:SubscriptionAndCirculationMember 2020-01-01 2020-06-30 0001404655 us-gaap:SubscriptionAndCirculationMember 2019-01-01 2019-06-30 0001404655 us-gaap:ServiceMember 2020-04-01 2020-06-30 0001404655 us-gaap:ServiceMember 2019-04-01 2019-06-30 0001404655 us-gaap:ServiceMember 2020-01-01 2020-06-30 0001404655 us-gaap:ServiceMember 2019-01-01 2019-06-30 0001404655 2020-04-01 2020-06-30 0001404655 2019-04-01 2019-06-30 0001404655 2019-01-01 2019-06-30 iso4217:USD xbrli:shares 0001404655 2018-12-31 0001404655 2019-06-30 0001404655 hubs:ConvertibleSeniorNotesRelatedToHedgesDueTwoThousandTwentyTwoMember 2020-01-01 2020-06-30 0001404655 hubs:ConvertibleSeniorNotesDueTwoThousandTwentyFiveMember 2020-01-01 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveAsLiabilityComponentMember 2020-01-01 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveAsEquityComponentMember 2020-01-01 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember 2020-01-01 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoAsLiabilityComponentMember 2020-01-01 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoAsEquityComponentMember 2020-01-01 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember 2020-01-01 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoAsNetEquityImpactMember 2020-01-01 2020-06-30 xbrli:pure 0001404655 2020-07-01 2020-06-30 0001404655 hubs:AccruedExpensesAndOtherCurrentLiabilitiesMember 2020-06-30 0001404655 hubs:AccruedExpensesAndOtherCurrentLiabilitiesMember 2019-12-31 0001404655 srt:MinimumMember 2020-01-01 2020-06-30 0001404655 srt:MaximumMember 2020-01-01 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoAsLiabilityComponentMember 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember 2020-06-30 utr:D 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember srt:MaximumMember 2020-01-01 2020-06-30 0001404655 us-gaap:CommonStockMember 2020-06-30 0001404655 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0001404655 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001404655 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-06-30 0001404655 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-06-30 0001404655 us-gaap:ConvertibleDebtSecuritiesMember 2020-01-01 2020-06-30 0001404655 us-gaap:ConvertibleDebtSecuritiesMember 2019-01-01 2019-06-30 0001404655 us-gaap:EmployeeStockMember 2019-01-01 2019-06-30 0001404655 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member 2020-06-30 0001404655 us-gaap:MoneyMarketFundsMember 2020-06-30 0001404655 us-gaap:CommercialPaperMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001404655 us-gaap:CommercialPaperMember 2020-06-30 0001404655 us-gaap:CorporateBondSecuritiesMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001404655 us-gaap:CorporateBondSecuritiesMember 2020-06-30 0001404655 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001404655 us-gaap:USTreasurySecuritiesMember 2020-06-30 0001404655 us-gaap:CertificatesOfDepositMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001404655 us-gaap:CertificatesOfDepositMember 2020-06-30 0001404655 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001404655 us-gaap:FairValueInputsLevel1Member 2020-06-30 0001404655 us-gaap:FairValueInputsLevel2Member 2020-06-30 0001404655 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001404655 us-gaap:MoneyMarketFundsMember 2019-12-31 0001404655 us-gaap:CommercialPaperMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001404655 us-gaap:CommercialPaperMember 2019-12-31 0001404655 us-gaap:CorporateBondSecuritiesMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001404655 us-gaap:CorporateBondSecuritiesMember 2019-12-31 0001404655 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001404655 us-gaap:USTreasurySecuritiesMember 2019-12-31 0001404655 us-gaap:CertificatesOfDepositMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001404655 us-gaap:CertificatesOfDepositMember 2019-12-31 0001404655 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member 2019-12-31 0001404655 us-gaap:FairValueInputsLevel1Member 2019-12-31 0001404655 us-gaap:FairValueInputsLevel2Member 2019-12-31 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember us-gaap:FairValueInputsLevel2Member 2020-06-30 0001404655 hubs:StrategicInvestmentsMember 2020-06-30 0001404655 hubs:StrategicInvestmentsMember 2019-12-31 0001404655 hubs:StrategicInvestmentsMember 2020-01-01 2020-06-30 0001404655 us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2020-06-30 0001404655 hubs:USTreasurySecuritiesExcludingCashAndCashEquivalentsMember 2020-06-30 0001404655 us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-12-31 0001404655 hubs:USTreasurySecuritiesExcludingCashAndCashEquivalentsMember 2019-12-31 0001404655 hubs:ComputerEquipmentAndPurchasedSoftwareMember 2020-06-30 0001404655 hubs:ComputerEquipmentAndPurchasedSoftwareMember 2019-12-31 0001404655 hubs:EmployeeRelatedComputerEquipmentMember 2020-06-30 0001404655 hubs:EmployeeRelatedComputerEquipmentMember 2019-12-31 0001404655 us-gaap:FurnitureAndFixturesMember 2020-06-30 0001404655 us-gaap:FurnitureAndFixturesMember 2019-12-31 0001404655 us-gaap:LeaseholdImprovementsMember 2020-06-30 0001404655 us-gaap:LeaseholdImprovementsMember 2019-12-31 0001404655 us-gaap:AssetsHeldUnderCapitalLeasesMember 2020-06-30 0001404655 us-gaap:AssetsHeldUnderCapitalLeasesMember 2019-12-31 0001404655 us-gaap:SoftwareDevelopmentMember 2020-06-30 0001404655 us-gaap:SoftwareDevelopmentMember 2019-12-31 0001404655 us-gaap:ConstructionInProgressMember 2020-06-30 0001404655 us-gaap:ConstructionInProgressMember 2019-12-31 0001404655 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2020-01-01 2020-06-30 0001404655 us-gaap:SoftwareDevelopmentMember 2020-04-01 2020-06-30 0001404655 us-gaap:SoftwareDevelopmentMember 2019-04-01 2019-06-30 0001404655 us-gaap:SoftwareDevelopmentMember 2020-01-01 2020-06-30 0001404655 us-gaap:SoftwareDevelopmentMember 2019-01-01 2019-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember us-gaap:PrivatePlacementMember 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember us-gaap:OverAllotmentOptionMember 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember 2020-06-01 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember hubs:LiabilityComponentMember 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember hubs:EquityComponentMember 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveAsLiabilityComponentMember 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveAsEquityComponentMember 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember 2020-04-01 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember hubs:CappedCallOptionsMember 2020-06-01 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember hubs:CappedCallOptionsMember srt:MaximumMember 2020-06-01 2020-06-30 0001404655 hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveMember hubs:CappedCallOptionsMember 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember us-gaap:PrivatePlacementMember 2017-05-31 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember 2017-05-31 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember us-gaap:OverAllotmentOptionMember 2017-05-31 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember 2017-05-01 2017-05-31 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember srt:MaximumMember 2020-01-01 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember us-gaap:CommonStockMember 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember srt:MinimumMember 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember srt:MaximumMember 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember us-gaap:CommonStockMember 2020-06-01 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember 2020-06-01 2020-06-30 0001404655 hubs:TwoThousandAndTwentyTwoNotesPartialRepurchaseMember 2020-06-30 0001404655 hubs:TwoThousandAndTwentyTwoNotesPartialRepurchaseMember 2020-06-01 2020-06-30 0001404655 hubs:TwoThousandAndTwentyTwoNotesConvertibleNoteHedgesMember us-gaap:CommonStockMember 2020-06-01 2020-06-30 0001404655 hubs:TwoThousandAndTwentyTwoNotesConvertibleNoteHedgesMember us-gaap:WarrantMember 2020-06-01 2020-06-30 0001404655 hubs:TwoThousandAndTwentyTwoNotesConvertibleNoteHedgesMember 2020-06-01 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoAsLiabilityComponentMember 2019-12-31 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoAsEquityComponentMember 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoAsEquityComponentMember 2019-12-31 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember 2020-04-01 2020-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember 2019-04-01 2019-06-30 0001404655 hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoMember 2019-01-01 2019-06-30 utr:sqft 0001404655 country:DE 2020-06-30 0001404655 country:DE 2020-04-01 2020-06-30 0001404655 country:US 2020-06-30 0001404655 country:US srt:MaximumMember 2020-06-30 0001404655 hubs:AmendedAgreementMember hubs:WebHostingVendorMember 2020-01-01 2020-06-30 0001404655 hubs:AmendedAgreementMember hubs:WebHostingVendorMember 2020-05-01 2020-05-31 0001404655 hubs:AmendedAgreementMember hubs:WebHostingVendorMember 2020-05-31 0001404655 us-gaap:CommonStockMember 2019-12-31 0001404655 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001404655 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001404655 us-gaap:RetainedEarningsMember 2019-12-31 0001404655 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001404655 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001404655 2020-01-01 2020-03-31 0001404655 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001404655 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001404655 us-gaap:CommonStockMember 2020-03-31 0001404655 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001404655 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001404655 us-gaap:RetainedEarningsMember 2020-03-31 0001404655 2020-03-31 0001404655 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001404655 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001404655 us-gaap:AdditionalPaidInCapitalMember hubs:ZeroPointThreeSevenFivePercentConvertibleSeniorNotesDueTwoThousandTwentyFiveAsLiabilityComponentMember 2020-06-30 0001404655 us-gaap:CommonStockMember hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoAsLiabilityComponentMember 2020-06-30 0001404655 us-gaap:AdditionalPaidInCapitalMember hubs:ZeroPointTwoFivePercentConvertibleSeniorNotesDueTwoThousandTwentyTwoAsLiabilityComponentMember 2020-06-30 0001404655 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001404655 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001404655 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001404655 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001404655 us-gaap:RetainedEarningsMember 2020-06-30 0001404655 2019-01-01 2019-03-31 0001404655 us-gaap:CommonStockMember 2018-12-31 0001404655 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001404655 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001404655 us-gaap:RetainedEarningsMember 2018-12-31 0001404655 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001404655 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001404655 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001404655 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001404655 us-gaap:CommonStockMember 2019-03-31 0001404655 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001404655 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001404655 us-gaap:RetainedEarningsMember 2019-03-31 0001404655 2019-03-31 0001404655 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001404655 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001404655 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001404655 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001404655 us-gaap:CommonStockMember 2019-06-30 0001404655 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001404655 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001404655 us-gaap:RetainedEarningsMember 2019-06-30 0001404655 us-gaap:AccumulatedTranslationAdjustmentMember 2019-12-31 0001404655 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-12-31 0001404655 us-gaap:AccumulatedTranslationAdjustmentMember 2020-01-01 2020-06-30 0001404655 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-01-01 2020-06-30 0001404655 us-gaap:AccumulatedTranslationAdjustmentMember 2020-06-30 0001404655 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-06-30 0001404655 us-gaap:EmployeeStockOptionMember 2020-04-01 2020-06-30 0001404655 us-gaap:EmployeeStockOptionMember 2019-04-01 2019-06-30 0001404655 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0001404655 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001404655 us-gaap:RestrictedStockUnitsRSUMember 2020-04-01 2020-06-30 0001404655 us-gaap:RestrictedStockUnitsRSUMember 2019-04-01 2019-06-30 0001404655 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-06-30 0001404655 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-06-30 0001404655 us-gaap:EmployeeStockMember 2020-04-01 2020-06-30 0001404655 us-gaap:EmployeeStockMember 2019-04-01 2019-06-30 0001404655 us-gaap:EmployeeStockMember 2020-01-01 2020-06-30 0001404655 hubs:CostOfSubscriptionRevenuesMember 2020-04-01 2020-06-30 0001404655 hubs:CostOfSubscriptionRevenuesMember 2019-04-01 2019-06-30 0001404655 hubs:CostOfSubscriptionRevenuesMember 2020-01-01 2020-06-30 0001404655 hubs:CostOfSubscriptionRevenuesMember 2019-01-01 2019-06-30 0001404655 hubs:CostOfRevenueProfessionalServicesAndOtherMember 2020-04-01 2020-06-30 0001404655 hubs:CostOfRevenueProfessionalServicesAndOtherMember 2019-04-01 2019-06-30 0001404655 hubs:CostOfRevenueProfessionalServicesAndOtherMember 2020-01-01 2020-06-30 0001404655 hubs:CostOfRevenueProfessionalServicesAndOtherMember 2019-01-01 2019-06-30 0001404655 us-gaap:ResearchAndDevelopmentExpenseMember 2020-04-01 2020-06-30 0001404655 us-gaap:ResearchAndDevelopmentExpenseMember 2019-04-01 2019-06-30 0001404655 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-06-30 0001404655 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-06-30 0001404655 us-gaap:SellingAndMarketingExpenseMember 2020-04-01 2020-06-30 0001404655 us-gaap:SellingAndMarketingExpenseMember 2019-04-01 2019-06-30 0001404655 us-gaap:SellingAndMarketingExpenseMember 2020-01-01 2020-06-30 0001404655 us-gaap:SellingAndMarketingExpenseMember 2019-01-01 2019-06-30 0001404655 us-gaap:GeneralAndAdministrativeExpenseMember 2020-04-01 2020-06-30 0001404655 us-gaap:GeneralAndAdministrativeExpenseMember 2019-04-01 2019-06-30 0001404655 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-06-30 0001404655 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-06-30 0001404655 hubs:CapitalizedSoftwareAndPropertyPlantAndEquipmentMember 2020-04-01 2020-06-30 0001404655 hubs:CapitalizedSoftwareAndPropertyPlantAndEquipmentMember 2020-01-01 2020-06-30 0001404655 hubs:CapitalizedSoftwareAndPropertyPlantAndEquipmentMember 2019-04-01 2019-06-30 0001404655 hubs:CapitalizedSoftwareAndPropertyPlantAndEquipmentMember 2019-01-01 2019-06-30 hubs:Segment 0001404655 srt:AmericasMember 2020-04-01 2020-06-30 0001404655 srt:AmericasMember 2019-04-01 2019-06-30 0001404655 srt:AmericasMember 2020-01-01 2020-06-30 0001404655 srt:AmericasMember 2019-01-01 2019-06-30 0001404655 srt:EuropeMember 2020-04-01 2020-06-30 0001404655 srt:EuropeMember 2019-04-01 2019-06-30 0001404655 srt:EuropeMember 2020-01-01 2020-06-30 0001404655 srt:EuropeMember 2019-01-01 2019-06-30 0001404655 srt:AsiaPacificMember 2020-04-01 2020-06-30 0001404655 srt:AsiaPacificMember 2019-04-01 2019-06-30 0001404655 srt:AsiaPacificMember 2020-01-01 2020-06-30 0001404655 srt:AsiaPacificMember 2019-01-01 2019-06-30 0001404655 hubs:OutsideOfAmericasMember us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember 2020-04-01 2020-06-30 0001404655 hubs:OutsideOfAmericasMember us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember 2019-04-01 2019-06-30 0001404655 hubs:OutsideOfAmericasMember us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember 2020-01-01 2020-06-30 0001404655 hubs:OutsideOfAmericasMember us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember 2019-01-01 2019-06-30 0001404655 us-gaap:SalesRevenueNetMember hubs:RestOfTheWorldMember us-gaap:GeographicConcentrationRiskMember 2020-04-01 2020-06-30 0001404655 us-gaap:SalesRevenueNetMember hubs:RestOfTheWorldMember us-gaap:GeographicConcentrationRiskMember 2020-01-01 2020-06-30 0001404655 us-gaap:SalesRevenueNetMember hubs:RestOfTheWorldMember us-gaap:GeographicConcentrationRiskMember 2019-04-01 2019-06-30 0001404655 us-gaap:SalesRevenueNetMember hubs:RestOfTheWorldMember us-gaap:GeographicConcentrationRiskMember 2019-01-01 2019-06-30 0001404655 srt:AmericasMember 2020-06-30 0001404655 srt:AmericasMember 2019-12-31 0001404655 srt:EuropeMember 2020-06-30 0001404655 srt:EuropeMember 2019-12-31 0001404655 srt:AsiaPacificMember 2020-06-30 0001404655 srt:AsiaPacificMember 2019-12-31 0001404655 hubs:OutsideOfAmericasMember us-gaap:GeographicConcentrationRiskMember us-gaap:AssetsTotalMember 2020-01-01 2020-06-30 0001404655 hubs:OutsideOfAmericasMember us-gaap:GeographicConcentrationRiskMember us-gaap:AssetsTotalMember 2019-01-01 2019-12-31

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(MARK ONE)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED June 30, 2020

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 001-36680

 

HubSpot, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

20-2632791

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

25 First Street

       Cambridge, Massachusetts02141

              (Address of principal executive offices)            (Zip Code)

(888) 482-7768

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.001 per share

 

HUBS

 

New York Stock Exchange

 

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.    YES      NO  

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).    YES      NO  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. 

 

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

  

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

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.    YES      NO  

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 45,564,119 shares of the registrant’s Common Stock issued and outstanding as of July 31, 2020.

 

 

 


 

HUBSPOT, INC.

Table of Contents

 

Part I — Financial Information

 

 

 

 

Item 1.

 

Unaudited Consolidated Financial Statements:

 

 

 

Unaudited Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019

5

 

 

Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019

6

 

 

Unaudited Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2020 and 2019

7

 

 

Unaudited Consolidated Statements of Cash Flows for the Three and Six Months Ended June 30, 2020 and 2019

8

 

 

Notes to Unaudited Consolidated Financial Statements

10

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

33

Item 4.

 

Controls and Procedures

34

 

Part II — Other Information

 

 

 

 

Item 1.

 

Legal Proceedings

36

Item 1A.

 

Risk Factors

37

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

57

Item 3.

 

Default Upon Senior Securities

57

Item 4.

 

Mine Safety Disclosures

57

Item 5.

 

Other Information

57

Item 6.

 

Exhibits

58

Signatures

 

 

 

EX-31.1

 

CERTIFICATION OF THE CEO PURSUANT TO SECTION 302

 

EX-31.2

 

CERTIFICATION OF THE CFO PURSUANT TO SECTION 302

 

EX-32.1

 

CERTIFICATION OF THE CEO AND CFO PURSUANT TO SECTION 906

 

 

 

 

 


 

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:

 

our future financial performance, including our expectations regarding our revenue, cost of revenue, gross margin and operating expenses;

 

maintaining and expanding our customer base and increasing our average subscription revenue per customer;

 

the impact of competition in our industry and innovation by our competitors;

 

our anticipated growth and expectations regarding our ability to manage our future growth;

 

our expectations regarding the potential impact of the COVID-19 pandemic on our business, operations, and the markets in which we and our partners and customers operate;

 

our anticipated areas of investments, including sales and marketing, research and development, customer service and support, data center infrastructure and service capabilities, and expectations relating to such investments;

 

our anticipated use of cash flow from operations and the proceeds from our convertible debt and stock offerings to fund certain growth strategies and to support our business;

 

our predictions about industry and market trends;

 

our ability to anticipate and address the evolution of technology and the technological needs of our customers, to roll-out upgrades to our existing software platform and to develop new and enhanced applications to meet the needs of our customers;

 

our ability to maintain our brand and inbound marketing, selling and servicing thought leadership position;

 

the impact of our corporate culture and our ability to attract, hire and retain necessary qualified employees to expand our operations;

 

the anticipated effect on our business of litigation to which we are or may become a party;

 

our ability to successfully acquire and integrate companies and assets;

 

our plans regarding declaring or paying cash dividends in the foreseeable future; and

 

our ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to our business both in the United States and internationally.

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 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.

3


 

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.

4


 

PART I — Financial Information

 

 

Item 1.

Financial Statements

HubSpot, Inc.

Unaudited Consolidated Balance Sheets

(in thousands)

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

201,086

 

 

$

269,670

 

Short-term investments

 

 

934,992

 

 

 

691,834

 

Accounts receivable — net of allowance for doubtful accounts of $4,103 and $1,584

   at June 30, 2020 and December 31, 2019, respectively

 

 

86,184

 

 

 

92,517

 

Deferred commission expense

 

 

36,121

 

 

 

32,078

 

Prepaid expenses and other current assets

 

 

37,936

 

 

 

23,625

 

Total current assets

 

 

1,296,319

 

 

 

1,109,724

 

Long-term investments

 

 

61,095

 

 

 

53,776

 

Property and equipment, net

 

 

89,993

 

 

 

83,649

 

Capitalized software development costs, net

 

 

21,391

 

 

 

16,793

 

Right-of-use assets

 

 

270,462

 

 

 

234,390

 

Deferred commission expense, net of current portion

 

 

20,831

 

 

 

19,110

 

Other assets

 

 

10,875

 

 

 

9,824

 

Intangible assets, net

 

 

10,075

 

 

 

11,752

 

Goodwill

 

 

29,935

 

 

 

30,250

 

Total assets

 

$

1,810,976

 

 

$

1,569,268

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

10,814

 

 

$

12,842

 

Accrued compensation costs

 

 

26,513

 

 

 

26,318

 

Accrued expenses and other current liabilities

 

 

28,211

 

 

 

28,686

 

Operating lease liabilities

 

 

29,807

 

 

 

23,613

 

Deferred revenue

 

 

238,101

 

 

 

231,030

 

Total current liabilities

 

 

333,446

 

 

 

322,489

 

Operating lease liabilities, net of current portion

 

 

275,210

 

 

 

244,216

 

Deferred revenue, net of current portion

 

 

2,914

 

 

 

3,058

 

Other long-term liabilities

 

 

8,832

 

 

 

8,983

 

Convertible senior notes

 

 

467,523

 

 

 

340,564

 

Total liabilities

 

 

1,087,925

 

 

 

919,310

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock

 

 

46

 

 

 

44

 

Additional paid-in capital

 

 

1,167,791

 

 

 

1,048,380

 

Accumulated other comprehensive loss

 

 

461

 

 

 

(336

)

Accumulated deficit

 

 

(445,247

)

 

 

(398,130

)

Total stockholders’ equity

 

 

723,051

 

 

 

649,958

 

Total liabilities and stockholders’ equity

 

$

1,810,976

 

 

$

1,569,268

 

 

The accompanying notes are an integral part of the consolidated financial statements.

5


 

HubSpot, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except per share data)

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription

$

196,415

 

 

$

155,876

 

 

$

387,643

 

 

$

300,102

 

Professional services and other

 

7,193

 

 

 

7,379

 

 

 

14,932

 

 

 

14,951

 

Total revenue

 

203,608

 

 

 

163,255

 

 

 

402,575

 

 

 

315,053

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription

 

30,400

 

 

 

23,578

 

 

 

60,135

 

 

 

44,879

 

Professional services and other

 

8,377

 

 

 

7,564

 

 

 

16,926

 

 

 

15,841

 

Total cost of revenues

 

38,777

 

 

 

31,142

 

 

 

77,061

 

 

 

60,720

 

Gross profit

 

164,831

 

 

 

132,113

 

 

 

325,514

 

 

 

254,333

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

49,372

 

 

 

40,456

 

 

 

95,573

 

 

 

75,633

 

Sales and marketing

 

102,600

 

 

 

84,079

 

 

 

204,928

 

 

 

158,984

 

General and administrative

 

26,484

 

 

 

23,303

 

 

 

52,741

 

 

 

44,477

 

Total operating expenses

 

178,456

 

 

 

147,838

 

 

 

353,242

 

 

 

279,094

 

Loss from operations

 

(13,625

)

 

 

(15,725

)

 

 

(27,728

)

 

 

(24,761

)

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

2,135

 

 

 

5,424

 

 

 

6,192

 

 

 

9,598

 

Interest expense

 

(16,809

)

 

 

(5,673

)

 

 

(22,761

)

 

 

(11,186

)

Other expense

 

(91

)

 

 

(672

)

 

 

(1,143

)

 

 

(684

)

Total other expense

 

(14,765

)

 

 

(921

)

 

 

(17,712

)

 

 

(2,272

)

Loss before income tax expense

 

(28,390

)

 

 

(16,646

)

 

 

(45,440

)

 

 

(27,033

)

Income tax expense

 

(1,011

)

 

 

(711

)

 

 

(1,677

)

 

 

(1,424

)

Net loss

$

(29,401

)

 

$

(17,357

)

 

$

(47,117

)

 

$

(28,457

)

Net loss per share, basic and diluted

$

(0.67

)

 

$

(0.41

)

 

$

(1.08

)

 

$

(0.69

)

Weighted average common shares used in computing basic

   and diluted net loss per share:

 

44,130

 

 

 

42,127

 

 

 

43,703

 

 

 

41,352

 

 

The accompanying notes are an integral part of the consolidated financial statements.

6


 

HubSpot, Inc.

Unaudited Consolidated Statements of Comprehensive Loss

(in thousands)

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net loss

$

(29,401

)

 

$

(17,357

)

 

$

(47,117

)

 

$

(28,457

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

1,159

 

 

 

254

 

 

 

82

 

 

 

(50

)

Changes in unrealized gain on investments, net of income taxes of ($76) thousand for the three and six months ended June 30, 2020, and $156 thousand and $269 thousand for the three and six months ended June 30, 2019.

 

132

 

 

 

588

 

 

 

715

 

 

 

1,014

 

Comprehensive loss

$

(28,110

)

 

$

(16,515

)

 

$

(46,320

)

 

$

(27,493

)

 

The accompanying notes are an integral part of the consolidated financial statements.

7


 

HubSpot, Inc.

Unaudited Consolidated Statements of Cash Flows

(in thousands)

 

 

For the Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

Operating Activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(47,117

)

 

$

(28,457

)

Adjustments to reconcile net loss to net cash and cash equivalents provided

   by operating activities

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

17,683

 

 

 

14,035

 

Stock-based compensation

 

 

58,837

 

 

 

49,869

 

Loss on early extinguishment of 2022 Convertible Notes

 

 

10,493

 

 

 

Repayment of 2022 Convertible Notes attributable to the debt discount

 

 

(48,675

)

 

 

Benefit for deferred income taxes

 

 

(422

)

 

 

(135

)

Amortization of debt discount and issuance costs

 

 

11,662

 

 

 

10,675

 

Accretion of bond discount

 

 

(3,490

)

 

 

(6,821

)

Unrealized currency translation

 

 

184

 

 

 

(18

)

Changes in assets and liabilities

 

 

 

 

 

 

 

 

Accounts receivable

 

 

5,930

 

 

 

3,907

 

Prepaid expenses and other assets

 

 

(20,420

)

 

 

(6,330

)

Deferred commission expense

 

 

(5,837

)

 

 

(5,539

)

Right-of-use assets

 

 

13,398

 

 

 

9,262

 

Accounts payable

 

 

1,837

 

 

 

4,992

 

Accrued expenses and other liabilities

 

 

444

 

 

 

3,288

 

Operating lease liabilities

 

 

(12,314

)

 

 

(10,162

)

Deferred revenue

 

 

7,128

 

 

 

12,847

 

Net cash and cash equivalents (used in) provided by operating activities

 

 

(10,679

)

 

 

51,413

 

Investing Activities:

 

 

 

 

 

 

 

 

Purchases of investments

 

 

(967,028

)

 

 

(597,802

)

Maturities of investments

 

 

710,002

 

 

 

342,385

 

Sale of investments

 

 

10,932

 

 

 

Purchases of property and equipment

 

 

(19,897

)

 

 

(12,056

)

Capitalization of software development costs

 

 

(10,163

)

 

 

(5,328

)

Purchases of strategic investments

 

 

(1,000

)

 

 

(352

)

Net cash and cash equivalents used in investing activities

 

 

(277,154

)

 

 

(273,153

)

Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of 2025 Convertible Notes, net of issuance costs paid of
$9.4 million

 

 

450,614

 

 

 

Proceeds from settlement of Convertible Note Hedges related to the 2022
Convertible Notes

 

 

362,492

 

 

 

Payments for settlement of Warrants related to the 2022 Convertible Notes

 

 

(327,543

)

 

 

Repayment of 2022 Convertible Notes attributable to the principal

 

 

(234,366

)

 

 

Payments for Capped Call Options related to the 2025 Convertible Notes

 

 

(50,600

)

 

 

Proceeds from common stock offering, net of offering costs paid of $365

 

 

 

 

 

342,628

 

Employee taxes paid related to the net share settlement of stock-based awards

 

 

(2,200

)

 

 

(2,735

)

Proceeds related to the issuance of common stock under stock plans

 

 

15,208

 

 

 

10,738

 

Repayments of finance lease obligations

 

 

(28

)

 

 

(205

)

Net cash and cash equivalents provided by financing activities

 

 

213,577

 

 

 

350,426

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

 

(144

)

 

 

(198

)

Net increase in cash, cash equivalents and restricted cash

 

 

(74,400

)

 

 

128,488

 

Cash, cash equivalents and restricted cash, beginning of period

 

 

278,515

 

 

 

117,114

 

Cash, cash equivalents and restricted cash, end of period

 

$

204,115

 

 

$

245,602

 

Supplemental cash flow disclosure:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

508

 

 

 

503

 

Cash paid for income taxes

 

$

1,646

 

 

$

1,843

 

Right-of-use assets obtained in exchange for operating lease liabilities

 

$

51,742

 

 

$

81,692

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Capital expenditures incurred but not yet paid

 

$

447

 

 

$

1,390

 

Asset retirement obligations

 

$

87

 

 

$

517

 

Issuance of common stock for repayment of 2022 Convertible Notes

 

$

330,497

 

 

$

 

2025 Convertible Notes issuance costs incurred but not paid

 

$

490

 

 

$

 

8


 

 

The accompanying notes are an integral part of the consolidated financial statements.

9


 

HubSpot, Inc.

Notes to Unaudited Consolidated Financial Statements

 

 

1. Organization and Operations

HubSpot, Inc. (the “Company”) provides a cloud-based inbound marketing, sales and customer service platform, which is referred to in this document as the Company’s Growth Platform, that enables businesses to grow better. The Company’s Growth Platform, comprised of Marketing Hub, Sales Hub, Service Hub, Content Management System Hub, and a free customer relationship management system (“CRM”), features integrated applications and tools that enable businesses to create a cohesive and adaptable customer experience throughout the customer lifecycle.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) applicable to interim periods, under the rules and regulations of the United States Securities and Exchange Commission (“SEC”).  In the opinion of management, the Company has prepared the accompanying unaudited consolidated financial statements on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2019, and these consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented. All intercompany balances and transactions have been eliminated in consolidation.   

The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2020. The year-end balance sheet data was derived from audited financial statements, but this Form 10-Q does not include all disclosures required under GAAP. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted under the rules and regulations of the SEC.

These interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 12, 2020. There have been no changes in the Company’s significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K that have had a material impact on our consolidated financial statements and related notes.

In March 2020, the World Health Organization, or WHO, declared the outbreak of a disease caused by a novel strain of the coronavirus (COVID-19) to be a global pandemic, or pandemic. The Company has assessed the impact of the pandemic, and while the broader implications of the pandemic on the results of operations and overall financial performance remain uncertain, the Company assessed the potential impact on the June 30, 2020 financial statements and determined there were no material adjustments necessary with respect to these consolidated financial statements.

Given that the economic consequences of the pandemic have been exceptionally challenging for many customers, in March 2020, the Company implemented certain changes to pricing and packaging, including reducing prices on certain products and offering certain product functionality free of charge.  The Company also paid certain Solutions Partners six months of commissions in advance of them being earned.  While revenue, customer retention, and earnings are relatively predictable under a subscription-based business model, the effect of the pandemic will not be fully reflected in the results of operations and overall financial performance of the Company until future periods given the current macro-economic uncertainty.

In March 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law by the United States. The CARES Act provides a substantial stimulus and assistance package intended to address the impact of the COVID-19 pandemic, including tax relief and government loans, grants and investments. In June 2020, the Jobs Support Scheme (“JSS”) was announced by the Singapore government to provide support to employers and help enterprises retain their local employees during the pandemic. The CARES Act and the JSS did not have a material impact with respect to these consolidated financial statements.

Recent Accounting Pronouncements

Recent accounting standards not included below are not expected to have a material impact on our consolidated financial position and results of operations.

10


 

In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance simplifying the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test. Under previous guidance, Step 2 of the goodwill impairment test required entities to calculate the implied fair value of goodwill in the same manner as the amount of goodwill recognized in a business combination by assigning the fair value of a reporting unit to all of the assets and liabilities of the reporting unit. The carrying value in excess of the implied fair value was recognized as goodwill impairment. Under the new guidance, goodwill impairment is recognized based on Step 1 of the current guidance, which calculates the carrying value in excess of the reporting unit’s fair value. The guidance was adopted effective January 1, 2020 and did not have a material impact on the consolidated financial statements.

In June 2016, the FASB issued guidance that introduces a new methodology for accounting for credit losses on financial instruments. The guidance establishes a new forward-looking "expected loss model" that requires entities to estimate current expected credit losses on accounts receivable and financial instruments by using all practical and relevant information. The guidance was adopted effective January 1, 2020 and did not have a material impact on the consolidated financial statements.

In December 2019, the FASB issued guidance simplifying the accounting for incomes taxes by removing (i) the exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items, (ii) the exception to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment, and (iii) the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The guidance also improves consistent application of and simplifies GAAP for other areas of Topic 740, Income Taxes. The guidance was adopted effective January 1, 2020, using a prospective approach and did not have a material impact on the consolidated financial statements.

 

2. Revenues

 

Disaggregation of Revenue

The Company provides disaggregation of revenue based on geographic region (Note 13) and based on the subscription versus professional services and other classification on the consolidated statements of operations as it believes these best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

 

Deferred Revenue and Deferred Commission Expense

Amounts that have been invoiced are recorded in accounts receivable and deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. Deferred revenue represents amounts billed for which revenue has not yet been recognized. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current deferred revenue, and the remaining portion is recorded as long-term deferred revenue. Deferred revenue during the six months ended June 30, 2020 increased by $6.9 million resulting from $409.5 million of additional invoicing and was offset by revenue recognized of $402.6 million during the same period. $127.9 million of revenue was recognized during the three month period ended June 30, 2020 that was included in deferred revenue at the beginning of the period. $178.6 million of revenue was recognized during the six month period ended June 30, 2020 that was included in deferred revenue at the beginning of the period. As of June 30, 2020, approximately $189.1 million of revenue is expected to be recognized from remaining performance obligations for contracts with original performance obligations that exceed one year. The Company expects to recognize revenue on approximately 94% of these remaining performance obligations over the next 24 months, with the balance recognized thereafter.  

 

Additional contract liabilities of $1.9 million and $1.4 million were included in accrued expenses and other current liabilities on the consolidated balance sheet as of June 30, 2020 and December 31, 2019.

 

The incremental direct costs of obtaining a contract, which primarily consist of sales commissions paid for new subscription contracts, are deferred and amortized on a straight-line basis over a period of approximately one to three years.  The one to three-year period has been determined by taking into consideration the type of product sold, the commitment term of the customer contract, the nature of the Company’s technology development life-cycle, and an estimated customer relationship period.  Sales commissions for upgrade contracts are deferred and amortized on a straight-line basis over the remaining estimated customer relationship period of the related customer.  Deferred commission expense that will be recorded as expense during the succeeding 12-month period is recorded as current deferred commission expense, and the remaining portion is recorded as long-term deferred commission expense.

Deferred commission expense during the three months ended June 30, 2020 increased by $4.9 million as a result of deferring incremental costs of obtaining a contract of $15.0 million and was offset by amortization of $10.1 million during the same period. Deferred commission expense during the six months ended June 30, 2020 increased by $5.8 million as a result of deferring incremental costs of obtaining a contract of $26.6 million and was offset by amortization of $20.8 million during the same period.

11


 

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts based on the probability of future collection. The probability of future collection is based on specific considerations of historical loss patterns and an assessment of the continuation of such patterns based on past collection trends and known or anticipated future economic events that may impact collectability. The pandemic has added uncertainty to the collectability of certain receivables, particularly in industries hard hit by the pandemic. As a result, the Company recorded an incremental reserve associated with the pandemic during the three and six months ended June 30, 2020.

The following is a roll forward of the Company’s allowance for doubtful accounts:

 

(in thousands)

 

Balance at December 31, 2019

$

1,584

 

Provision

 

6,953

 

Write-offs, net of recoveries

 

(4,434

)

Balance at June 30, 2020

$

4,103

 

 

3. Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, options to purchase common stock, restricted stock units (“RSUs”), shares issued pursuant to the Employee Stock Purchase Plan (“ESPP”), the Warrants (defined below), the Conversion Option of the 2022 Notes, and the Conversion Option of the 2025 Notes (the “Conversion Options”) (Note 8) are considered to be potential common stock equivalents.

A reconciliation of the denominator used in the calculation of basic and diluted net loss per share is as follows:

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

Net loss

$

(29,401

)

 

$

(17,357

)

 

$

(47,117

)

 

$

(28,457

)

Weighted-average common shares

   outstanding — basic

 

44,130

 

 

 

42,127

 

 

 

43,703

 

 

 

41,352

 

Dilutive effect of share equivalents resulting from stock options, RSUs, ESPP, Warrants and the Conversion Options

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares,

   outstanding — diluted

 

44,130

 

 

 

42,127