HubSpot, Inc. (NYSE: HUBS), a leading inbound marketing and sales software company, today announced financial results for the second quarter ended June 30th, 2016.

Financial Highlights:

Revenue

• Total revenue was $65.0 million, up 51% compared to the second quarter of 2015.
• Subscription revenue was $60.9 million, up 55% compared to the second quarter of 2015.
• Professional services and other revenue was $4.1 million, up 11% compared to the second quarter of 2015.

Operating Loss

• GAAP operating margin was (17.0%) for the quarter, compared to (26.4%) in the second quarter of 2015.
• Non-GAAP operating margin was (3.9%) for the quarter, an improvement of approximately 9 percentage points from (13.2%) in the second quarter of 2015.
• GAAP operating loss was ($11.0) million for the quarter, compared to ($11.3) million in the second quarter of 2015.
• Non-GAAP operating loss was ($2.5) million for the quarter, compared to ($5.7) million in the second quarter of 2015.

Net Loss

• GAAP net loss was ($11.1) million, or ($0.32) per share for the quarter, compared to ($11.4) million, or($0.34) per share, in the second quarter of 2015.
• Non-GAAP net loss was ($2.6) million, or ($0.07) per share for the quarter, compared to ($5.7) million, or($0.17) per share, in the second quarter of 2015.
• Second quarter weighted average common shares outstanding were 35.0 million compared to 33.2 million shares in the second quarter of 2015.

Balance Sheet and Cash Flow

• The company's cash, cash equivalents and investments balance was $148 million as of June 30, 2016.
• During the second quarter of 2016, the company generated $8.6 million of operating cash flow and invested $5.7 million in purchases of property and equipment and capitalization of internally developed software, resulting in free cash flow of $2.9 million. During the second quarter of 2015, the company generated $1.6 million of operating cash flow and invested $1.2 million in purchases of property and equipment and capitalization of internally developed software, resulting in free cash flow of $400 thousand.

Additional Recent Business Highlights

• Grew total customers to 20,444 at June 30th, 2016, up 29% from June 30th, 2015.
• Increased average subscription revenue per customer during the second quarter of 2016 to $11,978from $10,127 in the second quarter of 2015.

"The second quarter was another strong set of results for HubSpot," said Brian Halligan, co-founder and CEO. "We were able to deliver solid revenue growth, while showing significant operating leverage that allowed us to generate both positive operating and free cash flow in the quarter. As we continue to build on our product offerings across sales and marketing, we're really excited to help usher in a new era of doing business that matches the way modern humans buy."

Business Outlook

Based on information available as of August 3, 2016, HubSpot is issuing guidance for the third quarter of 2016 and raising guidance for full year 2016 as indicated below.

Third Quarter 2016:

• Total revenue is expected to be in the range of $67.2 million to $68.2 million.
• Non-GAAP operating loss is expected to in the range of ($5.2) million to ($4.2) million. This excludes stock-based compensation expense of approximately $9.0 million and amortization of acquired intangible assets of approximately $20 thousand.
• Non-GAAP net loss per common share is expected to be in the range of ($0.14) to ($0.12). This excludes stock-based compensation expense of approximately $9.0 million and amortization of acquired intangible assets of approximately $20 thousand. This assumes approximately 35.4 million weighted common shares outstanding.

Full Year 2016:

• Total revenue is expected to be in the range of $263 million to $265 million.
• Non-GAAP operating loss is expected to in be in the range of ($20) million to ($18) million. This excludes stock-based compensation expense of approximately $33.2 million and amortization of acquired intangible assets of approximately $84 thousand.
• Non-GAAP net loss per common share is expected to be in the range of ($0.55) to ($0.51). This excludes stock-based compensation expense of approximately $33.2 million and amortization of acquired intangible assets of approximately $84 thousand. This assumes approximately 35.2 million weighted common shares outstanding.

About HubSpot

HubSpot is a leading inbound marketing and sales platform. Over 20,000 customers in over 90 countries use HubSpot's award-winning software, services, and support to create an inbound experience that will attract, engage, and delight customers. Learn more at www.hubspot.com .