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 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 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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