Hubspot Investor Day Presentation Deck
Definitions
Total Customers: We define our Total Customers at the end of a particular period as the number of business entities or individuals with one or more paid subscriptions to our Sales Hub, Marketing Hub,
CMS Hub or Service Hub products, either paid directly or through a Solutions Partner. We do not include in Total Customers business entities or individuals with one or more paid subscriptions solely for
our legacy Sales Hub ($10) product or any PieSync product. A single customer may have separate paid subscriptions for separate websites, sales licenses or seats, or our Sales Hub, Marketing Hub, CMS
Hub or Service Hub products, but we count these as one customer if certain customer-provided information such as company name, URL, or email address indicate that these subscriptions are managed
by the same business entity or individual.
Install Base: Refer to definition of Annual Recurring Revenue below.
Customer Dollar Retention (C$R): Is a measure of what percentage of our customers we retain, weighted by ARR dollars. We calculate by summing the total dollars that were canceled in a given period
and divide that by the beginning of period ARR Install Base. We then express the calculated churn inversely as retention and then annualize.
Net Revenue Retention: Is a measure of the percentage of recurring revenue retained from customers over a given period of time. We compare the aggregate Total Contractual Monthly Subscription
Revenue of our Total Customer base as of the beginning of each month, which we refer to as Total Retention Base Revenue, to the aggregate Total Contractual Monthly Subscription Revenue of the
same group of Total Customers at the end of that month, which we refer to as Total Retained Subscription Revenue. We define Total Contractual Monthly Subscription Revenue as the total amount of
subscription fees contractually committed to be paid for a full month under all of our Total Customer agreements, excluding any commissions owed to our Solutions Partners. Our Net Revenue
Retention for a given period is calculated by first dividing Total Retained Subscription Revenue by Total Retention Base Revenue for each all months in the period, calculating the weighted average of
these rates and then annualizing the resulting rates.
Average Subscription Revenue per Customer: We define "ASRPC" during a particular period as subscription revenue, excluding revenue from our legacy Sales Hub ($10) and PieSync products, from our
Total Customers during the period divided by the average Total Customers during the same period.
Non-GAAP Operating Income: We define as GAAP operating income or loss plus stock-based compensation, amortization of acquir intangible assets and acquisition related expenses.
Free Cash Flow (FCF): We define as cash and cash equivalents provided by or used in operating activities less purchases of property and equipment, capitalization of software development costs, plus
repayments of convertible notes attributable to debt discount.
Install Base Average Sales Price (ASP): Total Install Base divided by the total number of paying customers as of the end of a given period (i.e. average ARR per customer). Install Base ASP non-Starter
excludes Starter only customers.
Annual Recurring Revenue: We define "ARR" as the annual value of our customer subscription contracts as of the specified point in time excluding any commissions owed to our partners. For each Hub,
this is the sum of customer ARR for the Starter, Basic, Professional and Enterprise subscriptions, plus applicable Contacts (Marketing Only) or Add-Ons (e.g. Reporting or Ads). For multi-product
customers, their ARR would be distributed across based on the value of each SKU/Hub for which they pay. ARR can differ from Revenue due to several factors. ARR is converted into USD at fixed rates
that are held consistent over time and may vary from those used for Revenue or Deferred Revenue. ARR would exclude any impact for Bad Debt and Partner Commissions (as noted above) and would
also differ from Revenue due to timing of revenue recognition.
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