HubSpot, Inc. (HUBS), a leading growth platform, today announced financial results for the fourth quarter and full year ended December 31, 2019.

Financial Highlights:

Revenue

Fourth Quarter 2019:

• Total revenue was $186.2 million, up 29% compared to Q4'18.
• Subscription revenue was $179.1 million, up 31% compared to Q4'18.
• Professional services and other revenue was $7.1 million, down 2% compared to Q4'18.

Full Year 2019:

• Total revenue was $674.9 million, up 32% compared to 2018.
• Subscription revenue was $646.3 million, up 33% compared to 2018.
• Professional services and other revenue was $28.6 million, up 12% compared to 2018.

Operating Income (Loss)

Fourth Quarter 2019:

• GAAP operating margin was (4.4%), compared to (5.4%) in Q4'18.
• Non-GAAP operating margin was 9.5%, a slight decline from 9.8% in Q4'18.
• GAAP operating loss was ($8.2) million, compared to ($7.8) million in Q4'18.
• Non-GAAP operating income was $17.7 million, compared to $14.2 million in Q4'18.

Full Year 2019:

• GAAP operating margin was (7.0%), compared to (9.4%) in 2018.
• Non-GAAP operating margin was 8.1%, an improvement from 6.3% in 2018.
• GAAP operating loss was ($47.0) million, compared to ($48.3) million in 2018.
• Non-GAAP operating income was $54.9 million, compared to $32.1 million in 2018.

Net Income (Loss)

Fourth Quarter 2019:

• GAAP net loss was ($10.3) million, or ($0.24) per basic and diluted share, compared to ($11.5) million, or ($0.29) per basic and diluted share in Q4'18.
• Non-GAAP net income was $20.9 million, or $0.49 per basic and $0.45 per diluted share, compared to $15.8 million, or $0.40 per basic and $0.37 per diluted share in Q4'18.
• Weighted average basic and diluted shares outstanding for GAAP net loss per share was 42.8 million, compared to 39.2 million basic and diluted shares in Q4'18.
• Weighted average basic and diluted shares outstanding for non-GAAP net income per share was 42.8 million and 46.9 million respectively, compared to 39.2 million and 43.0 million, respectively in Q4'18.

Full Year 2019:

• GAAP net loss was ($53.7) million, or ($1.28) per basic and diluted share, compared to ($63.8) million, or ($1.66) per basic and diluted share in 2018.
• Non-GAAP net income was $69.8 million, or $1.66 per basic and $1.50 per diluted share, compared to $36.9 million, or $0.96 per basic and $0.89 per diluted share in 2018.
• Weighted average basic and diluted shares outstanding for GAAP net loss per share was 42.0 million, compared to 38.5 million basic and diluted shares in 2018.
• Weighted average basic and diluted shares outstanding for non-GAAP net income per share was 42.0 million and 46.5 million respectively, compared to 38.5 million and 41.6 million, respectively in 2018.

Balance Sheet and Cash Flow

• The company's cash, cash equivalents and investments balance was $1,015 million as of December 31, 2019.
• During the fourth quarter, the company generated $47.9 million of operating cash flow compared to $33.1 million during Q4'18.
• During the fourth quarter, the company generated $24.4 million of free cash flow compared to $25.1 million during Q4'18.
• The company generated $119.0 million of operating cash flow in 2019 compared to $84.9 million in 2018.
• The company generated $65.1 million of free cash flow in 2019 compared to $51.4 million in 2018.

Additional Recent Business Highlights

• Grew total customers to 73,483 at December 31, 2019 up 30% from December 31, 2018.
• Total average subscription revenue per customer was $10,047 during the fourth quarter of 2019 up 0.3% compared to the fourth quarter of 2018.

"Across the company, 2019 was a year centered on making meaningful improvements in the customer experience. I'm exceptionally proud of how we've started to see those investments pay off in the levels of customer net promoter score we saw in the fourth quarter," said Brian Halligan, co-founder and CEO. "Not only was it the right thing to do for our customers, it put us in a far better position to execute in 2020, giving us the foundation to add more power to the HubSpot platform without creating undue friction to the customer experience."

Business Outlook
Based on information available as of February 12, 2020, HubSpot is issuing guidance for the first quarter of 2020 and full year 2020 as indicated below.

First Quarter 2020:

• Total revenue is expected to be in the range of $192.5 million to $193.5 million.
• Non-GAAP operating income is expected to be in the range of $9.5 million to $10.5 million.
• Non-GAAP net income per common share is expected to be in the range of $0.22 to $0.24. This assumes approximately 48.2 million weighted average diluted shares outstanding.

Full Year 2020:

• Total revenue is expected to be in the range of $840.5 million to $844.5 million.
• Non-GAAP operating income is expected to be in the range of $54.0 million to $58.0 million.
• Non-GAAP net income per common share is expected to be in the range of $1.24 to $1.32. This assumes approximately 48.6 million weighted average diluted shares outstanding.

About HubSpot

HubSpot is a leading growth platform. Over 73,400 total customers in over 120 countries use HubSpot's award-winning software, services, and support to transform the way they attract, engage, and delight customers. Learn more at www.hubspot.com.