Hubspot Investor Day Presentation Deck
Definitions
Customers: We define our Customers at the end of a particular period as the number of business entities with one or more paid subscriptions to our CRM Platform either
purchased directly with us or purchased from a Solutions Partner. We do not include in Customers business entities 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 to our CRM Platform, 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.
Install Base: Refer to definition of Annual Recurring Revenue below.
Net Revenue Retention: Net Revenue Retention is a measure of the percentage of recurring revenue retained from customers over a given period of time. Our Net
Revenue Retention for a given period is calculated by first dividing Retained Subscription Revenue by Retention Base Revenue in the given period, calculating the
weighted average of these rates using the Retention Base Revenue for the period, and then annualizing the resulting rates. A definition of each of the key terms used
to calculate Net Revenue Retention is included below.
Average Subscription Revenue per Customer: We define "ASRPC" during a particular period as subscription revenue, excluding revenue from our legacy Sales Hub
($10) and PieSync products, from our Total Customers during the period divided by the average Total Customers during the same period.
Non-GAAP Operating Income: We define as GAAP operating income or loss plus stock-based compensation, amortization of acquired intangible assets, gain on
termination of operating leases, loss on disposal of fixed assets, and acquisition related expenses.
Free Cash Flow: We define "FCF” as cash and cash equivalents provided by or used in operating activities less purchases of property and equipment, capitalization of
software development costs, plus repayments of convertible notes attributable to debt discount.
Annual Recurring Revenue: We define ARR as the annual value of our customer subscription contracts as of the specified point in time excluding any commissions owed
to our partners. For the purposes of this presentation, this excludes payments revenue. For each Hub, this is the sum of customer ARR for the Starter, Basic, Professional
and Enterprise subscriptions, plus applicable contacts (marketing only), Seats, or Add-Ons (e.g., reporting or ads). For multi-product customers, their ARR would be
distributed across based on the value of each SKU/Hub for which they pay. In 2022, we began including our payments revenue run rate, defined as, on an annualized
basis, the trailing three months of payments revenue, into the annual value of our customer subscription contracts. ARR can differ from revenue due to several factors.
ARR is converted into U.S. dollars at fixed rates that are held consistent over time and may vary from those used for revenue or deferred revenue. ARR would exclude
any impact for bad debt and partner commissions (as noted above) and would also differ from Revenue due to timing of revenue recognition.
Customer Dollar Retention (C$R): Customer Dollar Retention is a measure of the percentage of the customers we retain, weighted by ARR dollars. This is calculated by
summing the total dollars that were canceled in a given period, divided by the beginning of period ARR Install Base. We then express the calculated churn inversely as
retention and annualize it.View entire presentation