hubspot, inc. (hubs) ceo brian halligan on q1 2019 results - earnings call transcript
HubSpot, Inc. (NYSE:HUBS)
At 5: 00 P. M. on May 7, 2019, ETCompany participant Schuck MacGlashing Q1 2019 earnings call-
Brian Halligan, Director of Investor Relations-
Chairman and chief executive
Roderick, chief financial officer at the meeting-
Stiffey Brian Peterson
Raymond James Brad Sears
Bank of America Merrill Lynch
Samana JPMorganSamad-
Jeffries Stan in, Excel-based
Eric Morgan StanleyLemus -
Jennifer Lao
Levin-
Evercore Michael Turrin-
Rutherford-Deutsche Bank
Wang Shifeng-
Guggenheim Stock Exchange-Macmillan
Good afternoon, RBC Capital Market Operator.
My name is Mike. I will be your conference operator today.
At that time, you are welcome to participate in the first quarter of HubSpot 2019 earnings conference call.
All lines are muted to prevent any background noise.
There will be a question after the speaker speaks --and-answer session. [
Operation instructions]
I now transfer the call to Chuck MacGlashing, head of investor relations.
You can start your meeting.
Chuck MacGlashingThanks, operation.
Good afternoon, everyone. welcome to HubSpot\'s first quarter earnings call.
Today, we will discuss the results announced in the press release released after the market close.
I was on the phone this afternoon with our CEO and chairman, Brian Halligan;
And our chief financial officer, Kate Bueker.
Before we begin, I would like to draw your attention to the Safe Harbor statement contained in today\'s press release.
In this conference call, we will issue statements relating to our business that may be considered to be moving forward
Judging from the meaning of Article 27A of the revised Securities Trading Act of 1933 and article 21E of the revised Securities Trading Act of 1934.
Except for statements of historical facts, all statements are forward --
Outlook statements, including management statements on future financial and operational performance and expectations of operating expenditures, expected growth and business prospects, including our financial guidance for the second fiscal quarter of 2019. Forward-
Forward-looking statements reflect only our views today and we are not obliged to update or amend them unless required by law
Look at the report.
Please refer to the warning language in today\'s press release and our Form 10-
K was submitted to SEC on February 12, 2019 to discuss risks and uncertainties that could lead to significant differences between actual results and expectations.
In today\'s conference call, we will mention some non-
GAAP financial measures defined by Regulation G
GAAP financial measures are most directly related to each
The accepted accounting principles used or discussed financial measures and for each non-
GAAP Financial indicators and comparable GAAP financial indicators can be found in the first quarter 2019 earnings press release in the Investor Relations section of the HubSpot website. com.
Now, I am happy to transfer the call to Brian Halligan, CEO and chairman of HubSpot.
Good afternoon, Brian HalliganThanks, Collet.
Thank you for joining us today as we review HubSpot\'s 2019 earnings results for the first quarter.
We have a good start to the overall 35% constant exchange rate calculation revenue growth this year, 9%
GAAP operating profit margin and 35% customer growth make our total customers more than 60,000. Great quarter.
Now, I want to take a step back and show you how we see the world these days.
Today, we feel that the real arbitrage opportunity is the ability of the company to create a superior customer experience.
In the past, business schools taught you how to win the chance to create 10 times better products.
But in the future, I\'m sure they will teach you that you need to create a 10 times better experience in order to win the game.
You may have heard this before, but I\'ll remind you of my morning routine as an example of what I\'m talking about.
So you see, I wake up every morning wearing a purple mattress.
Then I put my hand on my dresser and put on my puck glasses that I deserve to praise.
Then I picked up my iPhone, put on Spotify, dance to the Grateful Dead and walk into the bathroom.
I shave with my $ shave club razor and then I put on my stitch fixing set and take the elevator to work.
Why should I tell you about my morning routine?
Well, the companies that I do business with are very attractive. they all started. ups.
All these start-up companies
They grow like weeds.
All these companies have won my business, not by selling me better products, but by creating a better, lighter customer experience --of-mouth.
It is this new arbitrage opportunity that has prompted us to launch a series of new products in the past few years.
These new products enable us to grow from a company that helps customers generate leads to a company that helps customers create these exceptional buying experiences.
These new products enable us to move from a company that only sells one application to a company that sells a full set of software.
The shift went very smoothly.
Our multi-professional
In our customer base, a large number of new customers have purchased our entire growth suite in advance.
This is good news because it shows me that our product value proposition is working and our flywheel is spinning.
We are very proud of the progress we have made in this transformation.
One thing I\'m not proud of is the downtime of our recent product.
I think that means that our customers have them re-run HubSpot on HubSpot and facilitate us.
That\'s what it says about power outages.
It only strengthens our determination to please our customers.
Since the power outage, we have reduced the stability, security and reliability of HubSpot in an all-round way.
We have set up a new reliability team with some of the best engineers who have made great progress.
Now, the next phase of HubSpot is moving from a sweet platform to more.
You might ask why we do this?
The fact is that over the past decade, the number of valuables SaaS applications has surged and most of our customers have used dozens of them.
They want to enable our customers to plug all of these applications into HubSpot and help them coordinate all of them to create a more superior experience for their customers, rather than fighting gravity.
This shift is early on for us, but good progress has been made.
If you are a HubSpot customer, you can select nearly 300 integrations from the integrations built by our integration partners.
This is the top of 10 integrations built locally by ourselves or our top use cases, and the almost endless integrations that can be created through our partnership with iPass.
The class really started working.
The average customer of HubSpot has integrated five different applications into HubSpot.
This year, we added momentum to our platform by opening more API endpoints and increasing our investment in the developer experience.
In fact, last week we had 150 developer partners entering HubSpot at each meeting.
I am happy to chat with many of them and they get better with us.
The health of any platform depends basically on two things.
You have to invest in the supply of top products
You need new and growing users to use them.
Our free value-added campaign is the primary source for new users, and our commitment to developers is the primary source for new applications.
The more users we get, the more developers we want to build on the platform.
The more apps developers develop, the more valuable our platform is for thousands of HubSpot users, all of which make our FlyWheel spin faster.
Now, we want not only to enable our customers to create exceptional experiences for their customers, but also to use our own platform to create a pleasant low friction experience for our own customers.
As you can see, our customers want consumers to experience well when they come to us.
Specifically, they want to be able to try it before buying the product.
To this end, we launched a set of free value-added products a few years ago.
This decision alone eliminated a lot of friction and started HubSpot, which went very well.
Now, we are trying to increase the amount of processes that we can automate by relying heavily on HubSpot\'s software, so that the purchase process is better for these users, working hard to learn about chat and boxes, build our sales organization with the information they need to help customers grow better and make our software more intuitive to our users.
We have just started this project and I doubt we can make some good progress here. All right. We\'re laser-
Focus on HubSpot customers.
We develop our value proposition for them from the app to the suite to help them grow better over the last few years.
To help them grow better, we are moving from a suite to a platform.
We also focus on applying HubSpot\'s technology to our own opportunities to make our own purchase process easy and enjoyable.
I will give it to Kate with it.
Thanks Brian.
Let\'s talk about our financial results for the first quarter and our guidance for the second quarter.
2019 is a good start.
I am satisfied with the growth of income, free cash flow and non-free cash flow
Our GAAP operating profit delivered in q1.
First quarter revenue rose 35% year on yearover-
Year calculated in fixed currency and 33% reported.
Subscription revenue rose 33% in the first quarterover-
Service revenue rose 27% year on yearover-Two years in-reported basis.
HubSpot ended the first quarter with 60,814 of total customers, up 35% year on yearover-year.
Average subscription revenue per customer in the first quarter was $9,811, down 2% year on yearover-
Year and flat in fixed currency.
We continue to expect that this indicator will rebound based on the product mix and the number of new and installed sales in any quarter.
Domestic income grew by 27% year on year, and international income increased by 50% year on year. over-
Fixed currency year and as-42%reported basis.
International revenue accounted for 39% of total revenue in the first quarter, up 3 percentage points year on yearover-year.
We continue to see tremendous growth opportunities at home and around the world.
Deferred revenue at the end of the year was $0. 193 billion, up 28% year on yearover-year.
The bill was calculated at $0. 16 billion, up more than 31% year on yearover-
Year in fixed currency and as-27%
Almost five reports-
The first quarter calculated the foreign exchange headwinds of the bill.
The rest of my comments will refer to nonGAAP measures.
Gross profit margin in the first quarter was 82%, up slightly year on year. over-year.
The subscription gross margin was 86% and the service gross margin was 4%, up 12 percentage points from last year. over-year.
Operating profit margin of 8 in the first quarter.
6%, up nearly four points from the first quarter of last year.
The adoption of ASC 606 had minimal impact on operating leverage in the first quarter, but reminded us that we still expect ASC 606 to be an adverse factor in operating leverage throughout the year.
Net income for the first quarter was $16 million, or $0.
36 per share after dilution.
At the end of the first quarter, we had 2,745 employees, up 20% year on year. over-year.
Capital expenditures, including capitalized software development costs, amounted to $7 million, or 4.
7% of revenue this quarter.
Due to the time of construction of our facilities, capital expenditure was lower in the first quarter
Plans for the full year of this year and some planned spending to enter the second quarter.
We still expect capital expenditure to account for about 8% of income in 2019, mainly due to construction
Come out of our new Dublin factory in the second half of this year.
Finally, our cash, cash equivalents and securities totaled $0. 984 billion at the end of the third quarter.
Real Quarter-over-
The quarterly growth was mainly due to the $0. 343 billion we received from the 2 Th.
We completed the issuance of 15 million ordinary shares in February.
Therefore, let us explore the guidance of 2019 in depth.
Total revenue is expected to be within $156.
$5 million to $157. 5 million. Non-
GAAP operating income is expected to be between $9.
$2 million to $10. 2 million. Non-
Diluted net income per share is expected to be between $0. 24 and $0. 26.
This assumes about 47.
6 million fully diluted shares issued.
Total revenue for the full year of 2019 is expected to be within $655.
$5 million to $658. 5 million. Non-
GAAP\'s operating profit is expected to be between $50 million and $52 million. Non-
Diluted net income per share is expected to be between $1. 26 and $1. 30.
This assumes about 47.
5 million fully diluted shares issued.
We now expect free cash flow for the full year to be around $62 million, up from our previous forecast of about $60 million.
When you adjust your model, remember the following points.
America\'s recent strength. S.
Dollar creates an incremental headwind
Revenue growth in the second quarter and throughout the year.
We now expect the headwinds of foreign exchange trading to be around $10 million.
The reported revenue was $2019, higher than the $8 million impact we had previously predicted.
This revised prediction is equivalent to a complete two.
Point the negative to-
Revenue growth reported in 2019 was 1 to 2 percentage points higher than we had previously forecast.
In the second quarter, we expect a full three points of foreign exchange headwinds.
Revenue growth.
As we pointed out in our last call, we expect 2019 of our operating leverage to be in the bulk of the first and fourth quarters.
Given that we provided strong leverage in the first quarter, we still expect the remaining operational leverage in the fourth quarter.
Again, we saw strong free cash flow in q1.
The second and third quarters will be the quarter where free cash flow is lower, as we have increased our capital expenditure in our annual inbound activities in September.
So we expect most of our remaining 2019 free cash flow to come in the fourth quarter.
Finally, the first quarter is a good start for this year and we are confident that we are fully capable of continuing this momentum during 2019.
With this, I will hand over his concluding remarks to Brian.
Thanks, Kate.
We will have a very strong start in 2019.
With our customers investing in HubSpot, our suite product Games are making a bonus as their marketing sales and services are leading in all directions, and our flywheel games are reducing friction, so, for our customers, it\'s easier to try to buy to start and run with HubSpot.
As our customers and partners find it easier and more valuable to scale, build and get more leverage from their HubSpot investments than ever before, their platform games are gainingOkay.
Finally, I would like to thank our customers, our partners, our investors and all the focus people around the world for helping us to accomplish our mission of helping millions of organizations grow better.
Operator, can we open the phone for a few questions? Question-and-
[Answer]
Operation instructions]
Your first question is from Tom Roderick from Stiffel.
Tom Roderick, your phone is on.
Guys, Tom Rodrich. Good afternoon.
Thank you for answering my question.
So I want to talk about forex headwinds here, I think you said five points at the time of booking and was curious about how much you would talk a little more about the comparison of deferred revenue to one-year incomeon-
Year base hit compared to this quarter extension-on-quarter basis.
Also, it would be great if there were any specific geographical locations that performed particularly well in the international arena and you would stress that you saw the strongest FX shock in them.
Then there is forward modeling, is there any idea about how we should try to think about the backwinds that are delayed in future models? Thanks.
Catherine buccles. Thanks.
As we talked about in the past, there are a lot of factors that affect the bill, which is why we don\'t use the bill as one of the main indicators of our internal concerns.
The story of the first quarter is clearly a foreign exchange story, and the foreign exchange headwinds actually have two components because it has to do with the calculated bill.
The first one is about income, so you will remember that we define the calculated bill as a change in income plus an extension.
This year\'s revenue growth is about two and a half headwinds. over-
Quarter-on-quarter, frankly, the same is true of the revaluation of deferred revenue. So we -
As you know, recalculate the value in the United StatesS.
At the end of the third quarter, the difference between the dollar of deferred income balance on the balance sheet and the starting and ending foreign exchange rates affects this, which is another two-and-a-half headwinds for us.
Tom RoderickExcellent. Excellent. That\'s great.
Then go to the product side and look at the customer growth for 36%, I know Brian both talked about the ARPU rebound.
But I would love to hear about some of the new SKUs you introduced, how it started to make an impact relative to ARPU.
Maybe you can talk about the sales center Pro and the SKU that might start moving the needle on the ARPU. Thanks.
Tom.
Thank you for your question.
Just to get everyone on the same page, and if you roll the clock back to the entry on last September, we are there to release a bunch of new products and a bunch of new products on the enterprise side, for us, the business is really mid-term.
Market, but what we call enterprise, then a bunch of new products on starter SKU
Ups and small businesses.
In general, I would say it did a good job.
I am very satisfied with the performance of all new products.
All our products
We have never done it.
It\'s not like the sculptures we have crafted.
This is done but they do a good job on these products and they will all get better and feel good.
The tricky thing for investors is the ARPU number because it is-
We have some customers who will definitely move up and we have some customers who will definitely move down.
This starter product line, especially the marketing starter product line, is doing a great job, which makes it a bit appealing.
But overall, I feel very good about these new products.
Kate, is there anything you \'d like to add?
Catherine bukeno.
I think the trend of Q1 is very similar to what we have seen in the last few quarters, and that is that the portfolio does affect the customer account and ASRPC, and we see it again in q1.
That said, if you look at the various centers, we will see the growth or expansion of ASRPC, so on a separate basis, both the sales center and the marketing X Starter show a positive trend.
Brian HalliganThat has put on a good growth in getting started with the marketing point gears X.
Tom RoderickOutstanding.
Great. Thank you guys.
I\'ll jump back in.
The next question comes from Brian Peterson of Raymond James.
Brian petersonch
Thank you for answering this question.
So maybe just a follow-up
As for Tom\'s question
But, in terms of international strength, can you expand a little bit where you see some success?
If I think about the difference between products that resonate in the world and what you see in the country?
How do you do, Brian? This is Brian.
International is great.
Over the past five years, we have invested a lot in the international market.
We have Australia.
We did it in Japan.
We did it in Bogota, Singapore.
We have just announced and opened up our Paris office system with a lot of investment and I think we see a very good return on those investments.
We also used some IT language in our localization investments that went well and I think we saw good growth.
Interestingly, the growth of the international market looks much like the domestic market.
The mix between products is almost the same.
You think there will be some subtle differences there, but it\'s almost the same in all the different product lines.
This question is very good. Thanks.
Brian PetersonAnd may just be a quick follow-up-
Just look for Kate on the reserved number.
I\'m sorry if I missed this on the call, but can you share anything that the net income keeps? Thanks guys.
Catherine bookers.
Therefore, we do not actually disclose the specific number of reservations.
First-quarter revenue remained at the expected 90 s.
We said the number would move up and down.
We tend to see some strength in the third quarter and the fourth quarter, calling it more booking quarters, and we tend to see it a bit more gently in the first quarter.
We still think we can do 100.
Plus long term reservationsterm.
Brian Peter PineThank you.
The next question comes from Brad Sears of Merrill Lynch.
Thank you, Brad Seeley.
I would like to ask about the sales situation, as well as the sales situation of the advertising agency channel and your direct sales team.
Any color on how these two channels speed up and boost the learning curve in salesin sales?
Brian Harry, Brad. this is Brian. I\'ll take that.
If I step back and describe the HubSpot Channel situation, HubSpot was just a marketing software company when we first started HubSpot.
We help lead people.
We started very early in the agency channel, so a lot of SEO agencies, website building agencies and PR agencies are great.
Basically what happens is that people have a choice if they are going to buy HubSpot.
If they want to do it themselves, they will buy it directly from us.
If they want to buy through the agency, they will buy through the agency, which is very large in size.
Over the past few years we have been shipping our value props from Leads
Generation business is a complete flywheel business that helps people not just generate clues by creating the entire process.
What\'s happening behind the scenes is that our best marketing organization has transformed itself into a customer experience Agency, a flywheel agency, an organization that really helps people experience the whole experience.
Then we started a new effort to attract different types of agents. we have many such agents registered many boutique sales agents, sales guidance, sales implementation, CRM implementation, we are starting to register for more IT implementation, proxy types.
This is probably a plan that we started a year ago and it\'s being tracked and it\'s going well.
Now, in the next few weeks, we will get all of our top agent partners into HubSpot.
I met them and I asked them to have dinner at my house.
I\'m really looking forward to seeing them.
The group and the entire agency project performed very well in HubSpot.
I am very satisfied with the progress of the whole group, I am optimistic about the new sales and IT partners in the medium termand long term.
Brad Sears is amazing. Thanks, Brian.
If you can, do it again.
You made some comments earlier on the power outage that interrupted your own sales business.
Can you elaborate on that?
Have you seen transactions from partner channels and direct channels enter the second quarter?
Or, given that you are running HubSpot yourself, are you talking more about the impact on your own sales operations? Thank you.
Brian Harry Gans
I mean, I want to make a broader comment on the power outage.
People were very interested and we posted a bundle there.
It points to our blog JD, where our COO published an article during the blackout.
Then our lead architect posted an article on our blog.
An analysis of what happened inside
If you really want to dig those places, look.
Regarding the power outage that occurred at the end of the parade, I have spoken to many of our clients and if any of these clients are answering the phone, I just wanted to apologize for it.
This is destructive to you, it is destructive to us, it is a long day for HubSpot.
So frankly, we were a little disappointed with the power outage.
We have been very active since then.
We built a new team of reliability.
We hired top engineers and built the reliability team.
We have changed them in the process of building our products, we only have a few weeks and we have made some very good progress.
So I am very satisfied with this effort.
As the Dalai Lama says, don\'t lose your lesson when you make a mistake.
I don\'t think we will lose our lesson.
I think we will learn the lesson and make sure we change the process and change the organization so that we will be better in the future.
As far as we are concerned, yes, we use HubSpot.
No significant impact, this is the day of the quarter.
It\'s not a huge, huge impact that could have had a very, very slight impact there on the last day of the quarter, but I didn\'t lose any sleep.
We need more sleep for the disruption we bring to our customers.
Thanks, Brian.
The next question comes from Mark Murphy of JPMorgan Chase.
Thanks, Brian, Mark.
If you continue to succeed in the long run, what do you think is the proportion of customers who will eventually use all three parts of the growth stack?
In other words, marketing, sales, and services, or basically treating HubSpot as the core front desk system.
I\'m also curious about what you think this can do for retention and stickiness if they end up integrating many apps into HubSpot.
Brian Harry Ganis
How are you, Mark?
Thank you for your question. Mark mufigud.
Brian HalliganI doesn\'t know what the number is, but it will be high.
I made a lot of sales calls and talked to a lot of customers.
What I see in the market is people.
Kind of like myself-
Better yet, I\'m an Apple man.
I have an iPhone, several Apple computers, and even earplugs that use Apple TV.
I don\'t want the Windows machine to mix up with my iPhone.
I think the company is doing the same thing, they are picking a core platform provider for the front desk, buying some apps from that platform provider, and then inserting many other apps.
This is what I see in the market, and the two main ones I see --
Obviously I see HubSpot every day and we see Salesforce every day, which is our very good competitor.
I think our competition is very good.
Our products are very good. I think our products are getting stronger and stronger every day.
So I think in the long run our customers will pick a very high percentage from the platform.
They may not use us for these three products, they may insert different things in different parts of our products, but I think they will treat us as their record system
In several of our apps, they insert dozens of other apps into it.
In the long run, what impact will this have on retention?
I think our retention rate is probably much higher than it is today.
I don\'t know what that might be.
I think Kate is staring at a hole in my head right now.
I dare not-
I don\'t know what that is.
But I think it gave me a lot.
But the problem is that when we let a lot of existing customers buy all three of our products and really work on our platform, there are a lot of people who just buy the marketing entry.
So that\'s why we say in the long run, because as JD likes to say, in the short run, we have-
What do you call it?
Catherine buecola humidifierhumidifier.
Brian HalliganDo we send the humidifier or go
The humidifier is performed on ASRPC and is retained within HubSpot.
In this solution, there are few great things happening to many new customers, and many people are upgrading.
But in the long run, I think our retention rate will be much better than after.
I think Mark your intuition is right.
We do see that retention rates are higher for multi-product customers than for individual customers we see
Product customers.
But Brian is right on this journey and there is still a long way to go. Mark murphyokOkay, great.
Kate got up quickly.
OK, I think you said Billings grew 31% in fixed currency and it\'s nice to see.
You have adjusted it to currency.
Do you also adjust this for the duration as I believe you did in the previous quarter, or just for the currency?
Catherine Booker, this is the actual result of the constant currency.
But as you pointed out, there are a lot of different things in Billings.
That\'s why we don\'t put it inside.
Q1 has some seasonal billing.
The bill terms have some push and pull, and we are proud of the impact of the key terms, so a lot has happened in the bill this quarter.
Brian HalliganOverall, although I look at that-
We look at millions of numbers.
The leading indicators of the business are very good.
I feel good-
Really, I feel good about where the business is in the currency headwinds, but I feel as good as a year ago. Mark murphyok
This is a reference to the forwarding pipeline, just the tone and tone of the sales feedback, and the rest on your dashboard, is that what you call Brian?
Brian Harry GanisThere\'s -
We look at millions of numbers, many of which are behind.
Look, some are forward-looking. looking.
Everything looks good compared to yours.
Nothing is perfect, but like I was bullish today compared to a year ago, I was bullish a year ago, I am still bullish today, just like the sales rep is counting, our winning rate is good, I think our competitive position is still good.
There is a bit of currency headwind there and I have a hard time getting it by controlling the app, but the business is good.
Of course, Chuck MacGlashingWhich has grabbed our guide, Mark.
Thanks for Chuck\'s clarification.
All right. Good night.
The next question comes from Samad Samana from Jefferies.
Thank you for answering my question.
I just wanted to make sure.
I remember you said the number of people this year was up 20%. over-year.
Looking back, I think this is a pretty good slowdown in terms of the growth rate of the number of employees.
I\'m just curious about how you guys think about hiring.
Is this just a seasonal effect?
Should we expect higher growth?
When I think about some of the other companies that we see are bigger and they are still growing faster, I\'m just curious about what the company\'s employees are investing in.
And then I did.
There are problems.
Catherine buccles.
So frankly, the number of people in the first quarter is a very difficult comparison for us.
2018 Q1 is a very compelling and strong recruitment quarter.
Still, I think the pace at which we started our holiday was a bit slow in January.
We are very encouraged by the recruitment trends we saw in April, 3, and we continue to see relatively low attrition levels, which is great.
Samad SamanaGot you.
Then there may be only one Kate.
There was also a power outage in other companies.
Is there any type of thing that just might change, or is there a churn rate or any impact, or is there any financial remedy for the client?
Just wanted to make sure if there was-
We will adjust the time items accordingly.
Catherine bookers.
I mean, it\'s clear that it\'s hard to quantify the specific effects of power outages, but I think these effects may have a very small impact on a range of different things, including income.
I would like to add Brian HalliganSo
Catherine bookers.
Brian HalliganOne is one of the millions of indicators that we focus on, and it is the customer net promoter score, the customer happiness recommendation rate.
As you can imagine, they are really down.
I watched it really drop to a low point that week because I was looking at it all the time and it steadily climbed all the way up to three power outages.
So I think it\'s very unfortunate and we apologize for that.
But I don\'t think it will change our game.
Samad SamanaWe is very appreciative of the amount of information in the blog.
I think it is very helpful.
I just wanted to ask, maybe there\'s only one Brian.
Picture problem
I think we have been rolling out customer service for about a year.
I\'m curious, maybe how you feel about this trend and how it affects the adoption of the entire suite.
That\'s it for me.
Thank you again for asking this additional question.
It\'s okay with Brian halganna, Samad.
It\'s a pleasure to hear from you.
Of course, the operation is doing very well.
We came up with it.
I think we started in last May.
Historically, the way we release the product is that the product we release covers a small area and then it will keep getting better and we have seen this service product.
A year has become much better from now on;
It will be better.
We feel good seeing people adopt it. It\'s growing.
I think one of the things we said last quarter or the previous quarter is that from the date we released the service product, compared to the growth rate of the service product, relative to what we do in selling products, it continues to grow faster than the sales business.
It was really exciting to see a lot of customers throughout the suite.
The next question comes from Stan zlottsky at Morgan Stanley.
Stan ZlotskyPerfect.
Thank you very much for accepting my question.
Brian, maybe if I could mention more about you.
Product adoption.
Can you guys share with us any metrics regarding the adoption of this approach, such as the 20,000 you mentioned in the fourth quarter call?
I can accept Catherine Bukelon.
I think what we\'re talking about is we\'re going to give you some milestone numbers and we \'ve exceeded 20,000 milestones
Product customers, we are more comfortable than this now.
We\'re tracking.
Our 30% customer base has more than one HubSpot product.
Stan zlottsky understands.
Maybe I can go back to the average subscription revenue for each customer indicator.
Fell 2% in the first quarteron-
I know there\'s some forex headwinds, but we\'re-
In the past two years, the first quarter has fallen sharply compared to all other quarters.
Is there a phenomenon in Q1 that happens in a hybrid transfer, or does some kind of customer dynamics that happens in Q1 really reach the average revenue per user? Thank you.
Catherine buccles.
I think we announced a lot of products in the fourth quarter, we announced the new Enterprise Suite, we announced the price increase
I think I call it the humidifier of the equation.
Then the first quarter is a particularly strong quarter for sales and service centers.
So, depending on the sales composition for any quarter, you will continue to see this rebound.
Stan zlottsky understands. All right.
Thank you very much.
The next question comes from Bhavan Suri of William Blair.
Analysis of unknown causes
This is actually Arjun of Bhavan.
I just want to touch it on a little bit.
More product customers.
I know you see more and more customers coming to HubSpot with more than one product.
But just curious if you see any impact on the sales cycle and how long the customer stays in the funnel before making the purchase decision.
Is the proportion of this customer even greater? multi-
Product customers who log in to HubSpot through channels?
Or is it quite consistent in terms of a single
Product customers?
Brian HalliganI thought, I will continue to use the humidifier
Humidifier theme.
If you look at the overall sales cycle, it really doesn\'t change much.
Some deals are faster, especially if they buy a growth suite or point-start solution.
It could be a little longer if they buy the enterprise growth suite, but net, net really doesn\'t change much. In terms of -
I didn\'t look at this carefully, but I believe it is very similar --
I don\'t know if you have this very similar direct and indirect channel. . .
Catherine burkyrie doesn\'t actually know the answer, but I \'d be happy to follow --up.
Brian Harry Ganis
This is fair.
Then I know that international economic growth has reached an amazing 50%.
Just wondering if there is-
If you see the foreign competitive environment from the perspective of the existence of competitors or other aspects is different from what you see at home?
Brian HalliganPretty has similar dynamics in the international market in the United States. S.
Companies and others like HubSpot and Salesforce are more likely to go international.
We are now operating in more than 100 countries.
So you don\'t need to set up an office in Tanzania to get a bunch of companies out of business, as do our competitors.
So, unlike 10 or 15 years ago, the competitive environment looks very similar.
Unknown analyst
Thank you for answering my question.
The next question comes from Terry Tillman at SunTrust Bank. Eric. LemusHey guys. This is Eric.
Let\'s go find Terry.
Thank you for answering this question.
I just bought you one.
We have talked in the past about reducing friction during the purchase process.
Have you seen any results in your strategy to reduce friction during the purchase process?
Is there anything else in that purchase?
One of our big moves is around the idea of free value-added and reduced engagement.
If I just want to write HubSpot big, we have two channels to create clues and opportunities for US Inside HubSpot.
The traditional channel we use is that we create a lot of content for people to search through links, blogs, and something like that.
I would say we did a good job in that.
We have room for improvement.
There are many opportunities, but we are very good at it.
Free value-added is a very new concept.
We are the first innings of this plan, and I would say, very happy with its development.
There are many opportunities in the free value-added model.
And then what I\'m drawing is, I \'ve been painting this thing on the whiteboard here, and one side of my whiteboard is my favorite company, Atlassian.
Then on the other side of the whiteboard, I will draw Oracle sales force, a company with a long sales cycle, enterprise sales staff, we are in the middle, we are moving closer to the Atlassian model.
We are not on the way, there are many opportunities from here to there.
I don\'t know how to get there all the way but so far this is where we are going and it\'s good and there are plenty of opportunities. Eric. LemusGreat. Thanks Brian.
The next question comes from Jennifer Lowe at UBS.
Thanks, Jennifer Lowell.
I want to talk about the success of the business you see.
I guess the first question is, how many customers are at another price level, your traditional goal compared to you starting to win customers through the upper tier of the market segment?
Catherine burkrit is relatively similar.
I think about 60-
But we can give you an exact number.
Brian halliangenerally, what is happening in the market is that people will buy a HubSpot and they will grow with us, which is a very good model for us.
We learned about this model from many other companies, such as Slack, such as AWS, and they will join in when you first start --
The stage of five people.
Next thing, I have 50 people. next thing, you have 500 people. we are the platform of choice.
This is the game we are playing.
We will definitely enter 500.
Personal company, if they haven\'t settled down on the platform yet, we did a great job there.
But they are already on a competitive platform, completely built and customized, and everyone is trained, which is a bit difficult for us.
Jennifer Lowell
When people begin to accept that there is more to it, where will this question go. I think a lot of opportunities in the past were that Greenfield customers didn\'t have anything that would have very decentralized tools HubSpot could go in and change one or push it out.
Now, when you start to own this kit and you start to have larger customers that you can target, do you start to see more technical alternatives than green spaces?
From this point of view, what is the landscape like?
Brian HalliganIt is a good question like I think-
We take five.
Personal company or 50-
Personal companies and 500-person company. A five-
Individual companies have not yet chosen a platform. A 50-
50 people Company
50 The opportunity for them to choose the platform, so let\'s say that half of them choose the platform, half of them are not satisfied with their choice, and have fully established and trained everyone, so they lost their socket a bit.
The other half don\'t have a platform yet.
This is a bunch of points.
Let\'s say that 75% of people are very suitable. 500-
Personal company, this is a total swag, more people choose a platform that you can imagine, and more people build it.
There are, of course, many more.
We won these deals and people will replace the existing platforms, but we have been very competitive over the past 50 years.
I think where the business will go, where all spoilers will go over time, they will enter early and grow with their customers. And that play -
A play has been on for a while and it works very well.
Jennifer LowellGreat. Thank you.
The next question comes from Kirk Materne at Evercore.
Peter LevineGreat. Thank you.
I\'m Peter Levin from Kirk.
So most of my questions have been answered.
But, I think, one of the outstanding issues is that the cash equivalents are about $0. 95 billion, $0. 96 billion.
So how are you going to deploy these capital?
I don\'t believe-
I believe you have discussed the potential fourth center on the previous phone call.
So maybe we can discuss it.
What do you think about today\'s M & A assessment and organic development? Thank you.
Brian Harry Gans
Let\'s talk-talk about M&A.
We do have some cash on our balance sheet.
I would say that cash does not add to the urgency of our agreement, but it increases the flexibility of our agreement.
I just spent a month in San Francisco.
I rented an Airbnb apartment in San Francisco for a month.
When I was outside, I made a study trip and met with the person in charge of the company, just like the ceo of the company that successfully conducted the merger.
So, I learned a lot and we have a small team to study the deal.
But, in general, I think you will see our approach and we are cautious about it.
If we don\'t buy anything, you want to enable it-
Let our customers grow better, so that they can really integrate into the story and help us grow better stories.
We want to buy a team that suits our culture and we have learned a lot from it.
If the company you buy doesn\'t have a team that really suits you, it\'s dangerous.
The technology stack is a problem.
If it is a completely different technology stack, it will be much more difficult to integrate.
Then evaluate, everything.
Today you see a higher multiple.
So, we will be careful, we will be careful, we will be good stewards of cash, what will I think.
Peter LevineGreat. Thank you.
The next question comes from Michael Turrin of Deutsche Bank.
Michael trilin greatThanks.
Soon, I want to follow up on this channel.
I\'m sorry if I missed it, but could you please add how many contributors are available this quarter?
Do we have enough combinations to consider in the long run?
Is the 40% we \'ve seen recently also a good mileage mark?
Or, when you prefer this Atlassian type of motion, does this change or affect this blend in any way? Thanks.
Catherine Busso-
I can start with the quarterly performance.
So 40% of our income comes from the Channel.
Brian HalliganAnd, then in the long run, it\'s been 40 for a while from the Channel.
If you look at the way we invest in HubSpot, we have put a lot of indirection and channels into it.
The unit economy is quite similar, so it gets a similar level of investment and we continue to invest.
We will be bringing in our partners in a few weeks and we will not talk about some of the investments we are making.
So it\'s easier to be a partner.
It is easier to be a partner for happiness and profitability.
So, similar investments.
I don\'t know it\'s going to be long term, but it-
I just want to say that we are keeping a close eye on both or investing in both at the same time.
Both of them are working.
So, as far as I\'m concerned, she\'s going steady.
Michael turringet is here. That\'s helpful. Thanks.
The next question is James Rutherford from Stephens.
James Rutherford. Good afternoon.
Just give me one.
Thank you for answering this question.
Kate, the net income you mentioned stays at a high in your 90 s, which seems to be similar to what you said in the first quarter of last year.
I\'m just curious, since you \'ve rebuilt the marketing product in the enterprise, can you comment on what you see when you keep it to the enterprise tier.
Do you see any benefit of investing in these products starting to reach the retention line at that level?
Catherine bookers.
I mean, we don\'t tend to share information other than this top number, but we do --
I think you have a gut feeling about relative retention, business and starter products are right.
James Rutherford. Thanks.
That\'s it for me.
The next question comes from Ken Wong of Guggenheim Securities. Ken WongGreat.
Thank you for answering my question.
Brian, I believe you mentioned a lot last quarter.
In 2019, the project was dedicated to the return of enterprises that are valuable to customers.
Just wondering about any updates on this and how do you think this might affect some upward migration of customers to businesses and potential multi-product attachments?
Brian Halligan
I think we made a lot of investments last year and last year.
I think we did a very good job of investing in products and over time we saw a good return.
What I think about the product is
I\'m not sure if I got your question exactly, but the way I think about products and modern software companies is that you want to do the front end, so it\'s consumer grade.
You want it to be fast, you want it to be highly available, and you want the uptime to be very good.
At the same time, you want the backend to reach the enterprise level.
Again you want a high uptime;
You want to scale as people grow and you want to have an open api that people use.
This is a way for us to think about problems.
To this extent, to the extent that we can continue to provide value to our customers and win word of mouth, we will continue to invest.
We are good at recruiting developers and we think we can develop more products and we think we can make the existing products better. Ken WongGot it.
Thank you very much for your answer. Thanks.
The next question comes from Ross MacMillan of RBC Capital Markets.
Thank you so much, Ross McMillan.
I ate two for Brian and one for Kate.
As a result, Brian, a net customer, was again strong this quarter.
Have you done anything specific, such as the free value added funnel or the low layer at the top of the funnel might be pushed, and I don\'t know how much performance the net customer has added?
Then Kate.
On the Calculation Bill, you clearly mentioned forex.
I\'m just curious, what is the impact of this number from the average duration to the entire quarter? Thanks so much.
Catherine bookers.
Maybe I\'ll start first and then Brian you can join in.
Regarding Billings, I think the main player in the first quarter billings story is definitely FX.
But you\'re right.
There are many other things that affect Billings.
We talked about seasonality, we talked about the bill terms, we talked about some of the effects, so all of these factors also have an impact, but in fact foreign exchange is the main driving force.
Brian Harry ganrose. this is Brian. Nothing -
We didn\'t do anything special in q1.
Our free value-added campaign, our free CRM, all of which are cases of continuous innovation.
Our product focus is on continuing to deliver features in an effort to make the product faster, more available, and more high performance.
There are no special activities.
She walked smoothly.
Catherine bookers.
Customer volume growth in the first quarter continues to show the same trend as in the past few quarters.
The launch of the marketing center continues to be very strong, the customer added.
But, as Brian said, we have a balance in that, there are also strong trends and multi-product adoption.
Ross McMillan is amazing.
Thank you very much. Congrats.
Thanks, Brian Halligan.
This is our last question.
At this point in time, I am now transferring the call to HubSpot\'s chief executive Brian Halligan.
Brian HalliganThanks joined the phone.
Looking forward to talking to you again soon.
This is the end of today\'s conference call.
You can disconnect now.
At 5: 00 P. M. on May 7, 2019, ETCompany participant Schuck MacGlashing Q1 2019 earnings call-
Brian Halligan, Director of Investor Relations-
Chairman and chief executive
Roderick, chief financial officer at the meeting-
Stiffey Brian Peterson
Raymond James Brad Sears
Bank of America Merrill Lynch
Samana JPMorganSamad-
Jeffries Stan in, Excel-based
Eric Morgan StanleyLemus -
Jennifer Lao
Levin-
Evercore Michael Turrin-
Rutherford-Deutsche Bank
Wang Shifeng-
Guggenheim Stock Exchange-Macmillan
Good afternoon, RBC Capital Market Operator.
My name is Mike. I will be your conference operator today.
At that time, you are welcome to participate in the first quarter of HubSpot 2019 earnings conference call.
All lines are muted to prevent any background noise.
There will be a question after the speaker speaks --and-answer session. [
Operation instructions]
I now transfer the call to Chuck MacGlashing, head of investor relations.
You can start your meeting.
Chuck MacGlashingThanks, operation.
Good afternoon, everyone. welcome to HubSpot\'s first quarter earnings call.
Today, we will discuss the results announced in the press release released after the market close.
I was on the phone this afternoon with our CEO and chairman, Brian Halligan;
And our chief financial officer, Kate Bueker.
Before we begin, I would like to draw your attention to the Safe Harbor statement contained in today\'s press release.
In this conference call, we will issue statements relating to our business that may be considered to be moving forward
Judging from the meaning of Article 27A of the revised Securities Trading Act of 1933 and article 21E of the revised Securities Trading Act of 1934.
Except for statements of historical facts, all statements are forward --
Outlook statements, including management statements on future financial and operational performance and expectations of operating expenditures, expected growth and business prospects, including our financial guidance for the second fiscal quarter of 2019. Forward-
Forward-looking statements reflect only our views today and we are not obliged to update or amend them unless required by law
Look at the report.
Please refer to the warning language in today\'s press release and our Form 10-
K was submitted to SEC on February 12, 2019 to discuss risks and uncertainties that could lead to significant differences between actual results and expectations.
In today\'s conference call, we will mention some non-
GAAP financial measures defined by Regulation G
GAAP financial measures are most directly related to each
The accepted accounting principles used or discussed financial measures and for each non-
GAAP Financial indicators and comparable GAAP financial indicators can be found in the first quarter 2019 earnings press release in the Investor Relations section of the HubSpot website. com.
Now, I am happy to transfer the call to Brian Halligan, CEO and chairman of HubSpot.
Good afternoon, Brian HalliganThanks, Collet.
Thank you for joining us today as we review HubSpot\'s 2019 earnings results for the first quarter.
We have a good start to the overall 35% constant exchange rate calculation revenue growth this year, 9%
GAAP operating profit margin and 35% customer growth make our total customers more than 60,000. Great quarter.
Now, I want to take a step back and show you how we see the world these days.
Today, we feel that the real arbitrage opportunity is the ability of the company to create a superior customer experience.
In the past, business schools taught you how to win the chance to create 10 times better products.
But in the future, I\'m sure they will teach you that you need to create a 10 times better experience in order to win the game.
You may have heard this before, but I\'ll remind you of my morning routine as an example of what I\'m talking about.
So you see, I wake up every morning wearing a purple mattress.
Then I put my hand on my dresser and put on my puck glasses that I deserve to praise.
Then I picked up my iPhone, put on Spotify, dance to the Grateful Dead and walk into the bathroom.
I shave with my $ shave club razor and then I put on my stitch fixing set and take the elevator to work.
Why should I tell you about my morning routine?
Well, the companies that I do business with are very attractive. they all started. ups.
All these start-up companies
They grow like weeds.
All these companies have won my business, not by selling me better products, but by creating a better, lighter customer experience --of-mouth.
It is this new arbitrage opportunity that has prompted us to launch a series of new products in the past few years.
These new products enable us to grow from a company that helps customers generate leads to a company that helps customers create these exceptional buying experiences.
These new products enable us to move from a company that only sells one application to a company that sells a full set of software.
The shift went very smoothly.
Our multi-professional
In our customer base, a large number of new customers have purchased our entire growth suite in advance.
This is good news because it shows me that our product value proposition is working and our flywheel is spinning.
We are very proud of the progress we have made in this transformation.
One thing I\'m not proud of is the downtime of our recent product.
I think that means that our customers have them re-run HubSpot on HubSpot and facilitate us.
That\'s what it says about power outages.
It only strengthens our determination to please our customers.
Since the power outage, we have reduced the stability, security and reliability of HubSpot in an all-round way.
We have set up a new reliability team with some of the best engineers who have made great progress.
Now, the next phase of HubSpot is moving from a sweet platform to more.
You might ask why we do this?
The fact is that over the past decade, the number of valuables SaaS applications has surged and most of our customers have used dozens of them.
They want to enable our customers to plug all of these applications into HubSpot and help them coordinate all of them to create a more superior experience for their customers, rather than fighting gravity.
This shift is early on for us, but good progress has been made.
If you are a HubSpot customer, you can select nearly 300 integrations from the integrations built by our integration partners.
This is the top of 10 integrations built locally by ourselves or our top use cases, and the almost endless integrations that can be created through our partnership with iPass.
The class really started working.
The average customer of HubSpot has integrated five different applications into HubSpot.
This year, we added momentum to our platform by opening more API endpoints and increasing our investment in the developer experience.
In fact, last week we had 150 developer partners entering HubSpot at each meeting.
I am happy to chat with many of them and they get better with us.
The health of any platform depends basically on two things.
You have to invest in the supply of top products
You need new and growing users to use them.
Our free value-added campaign is the primary source for new users, and our commitment to developers is the primary source for new applications.
The more users we get, the more developers we want to build on the platform.
The more apps developers develop, the more valuable our platform is for thousands of HubSpot users, all of which make our FlyWheel spin faster.
Now, we want not only to enable our customers to create exceptional experiences for their customers, but also to use our own platform to create a pleasant low friction experience for our own customers.
As you can see, our customers want consumers to experience well when they come to us.
Specifically, they want to be able to try it before buying the product.
To this end, we launched a set of free value-added products a few years ago.
This decision alone eliminated a lot of friction and started HubSpot, which went very well.
Now, we are trying to increase the amount of processes that we can automate by relying heavily on HubSpot\'s software, so that the purchase process is better for these users, working hard to learn about chat and boxes, build our sales organization with the information they need to help customers grow better and make our software more intuitive to our users.
We have just started this project and I doubt we can make some good progress here. All right. We\'re laser-
Focus on HubSpot customers.
We develop our value proposition for them from the app to the suite to help them grow better over the last few years.
To help them grow better, we are moving from a suite to a platform.
We also focus on applying HubSpot\'s technology to our own opportunities to make our own purchase process easy and enjoyable.
I will give it to Kate with it.
Thanks Brian.
Let\'s talk about our financial results for the first quarter and our guidance for the second quarter.
2019 is a good start.
I am satisfied with the growth of income, free cash flow and non-free cash flow
Our GAAP operating profit delivered in q1.
First quarter revenue rose 35% year on yearover-
Year calculated in fixed currency and 33% reported.
Subscription revenue rose 33% in the first quarterover-
Service revenue rose 27% year on yearover-Two years in-reported basis.
HubSpot ended the first quarter with 60,814 of total customers, up 35% year on yearover-year.
Average subscription revenue per customer in the first quarter was $9,811, down 2% year on yearover-
Year and flat in fixed currency.
We continue to expect that this indicator will rebound based on the product mix and the number of new and installed sales in any quarter.
Domestic income grew by 27% year on year, and international income increased by 50% year on year. over-
Fixed currency year and as-42%reported basis.
International revenue accounted for 39% of total revenue in the first quarter, up 3 percentage points year on yearover-year.
We continue to see tremendous growth opportunities at home and around the world.
Deferred revenue at the end of the year was $0. 193 billion, up 28% year on yearover-year.
The bill was calculated at $0. 16 billion, up more than 31% year on yearover-
Year in fixed currency and as-27%
Almost five reports-
The first quarter calculated the foreign exchange headwinds of the bill.
The rest of my comments will refer to nonGAAP measures.
Gross profit margin in the first quarter was 82%, up slightly year on year. over-year.
The subscription gross margin was 86% and the service gross margin was 4%, up 12 percentage points from last year. over-year.
Operating profit margin of 8 in the first quarter.
6%, up nearly four points from the first quarter of last year.
The adoption of ASC 606 had minimal impact on operating leverage in the first quarter, but reminded us that we still expect ASC 606 to be an adverse factor in operating leverage throughout the year.
Net income for the first quarter was $16 million, or $0.
36 per share after dilution.
At the end of the first quarter, we had 2,745 employees, up 20% year on year. over-year.
Capital expenditures, including capitalized software development costs, amounted to $7 million, or 4.
7% of revenue this quarter.
Due to the time of construction of our facilities, capital expenditure was lower in the first quarter
Plans for the full year of this year and some planned spending to enter the second quarter.
We still expect capital expenditure to account for about 8% of income in 2019, mainly due to construction
Come out of our new Dublin factory in the second half of this year.
Finally, our cash, cash equivalents and securities totaled $0. 984 billion at the end of the third quarter.
Real Quarter-over-
The quarterly growth was mainly due to the $0. 343 billion we received from the 2 Th.
We completed the issuance of 15 million ordinary shares in February.
Therefore, let us explore the guidance of 2019 in depth.
Total revenue is expected to be within $156.
$5 million to $157. 5 million. Non-
GAAP operating income is expected to be between $9.
$2 million to $10. 2 million. Non-
Diluted net income per share is expected to be between $0. 24 and $0. 26.
This assumes about 47.
6 million fully diluted shares issued.
Total revenue for the full year of 2019 is expected to be within $655.
$5 million to $658. 5 million. Non-
GAAP\'s operating profit is expected to be between $50 million and $52 million. Non-
Diluted net income per share is expected to be between $1. 26 and $1. 30.
This assumes about 47.
5 million fully diluted shares issued.
We now expect free cash flow for the full year to be around $62 million, up from our previous forecast of about $60 million.
When you adjust your model, remember the following points.
America\'s recent strength. S.
Dollar creates an incremental headwind
Revenue growth in the second quarter and throughout the year.
We now expect the headwinds of foreign exchange trading to be around $10 million.
The reported revenue was $2019, higher than the $8 million impact we had previously predicted.
This revised prediction is equivalent to a complete two.
Point the negative to-
Revenue growth reported in 2019 was 1 to 2 percentage points higher than we had previously forecast.
In the second quarter, we expect a full three points of foreign exchange headwinds.
Revenue growth.
As we pointed out in our last call, we expect 2019 of our operating leverage to be in the bulk of the first and fourth quarters.
Given that we provided strong leverage in the first quarter, we still expect the remaining operational leverage in the fourth quarter.
Again, we saw strong free cash flow in q1.
The second and third quarters will be the quarter where free cash flow is lower, as we have increased our capital expenditure in our annual inbound activities in September.
So we expect most of our remaining 2019 free cash flow to come in the fourth quarter.
Finally, the first quarter is a good start for this year and we are confident that we are fully capable of continuing this momentum during 2019.
With this, I will hand over his concluding remarks to Brian.
Thanks, Kate.
We will have a very strong start in 2019.
With our customers investing in HubSpot, our suite product Games are making a bonus as their marketing sales and services are leading in all directions, and our flywheel games are reducing friction, so, for our customers, it\'s easier to try to buy to start and run with HubSpot.
As our customers and partners find it easier and more valuable to scale, build and get more leverage from their HubSpot investments than ever before, their platform games are gainingOkay.
Finally, I would like to thank our customers, our partners, our investors and all the focus people around the world for helping us to accomplish our mission of helping millions of organizations grow better.
Operator, can we open the phone for a few questions? Question-and-
[Answer]
Operation instructions]
Your first question is from Tom Roderick from Stiffel.
Tom Roderick, your phone is on.
Guys, Tom Rodrich. Good afternoon.
Thank you for answering my question.
So I want to talk about forex headwinds here, I think you said five points at the time of booking and was curious about how much you would talk a little more about the comparison of deferred revenue to one-year incomeon-
Year base hit compared to this quarter extension-on-quarter basis.
Also, it would be great if there were any specific geographical locations that performed particularly well in the international arena and you would stress that you saw the strongest FX shock in them.
Then there is forward modeling, is there any idea about how we should try to think about the backwinds that are delayed in future models? Thanks.
Catherine buccles. Thanks.
As we talked about in the past, there are a lot of factors that affect the bill, which is why we don\'t use the bill as one of the main indicators of our internal concerns.
The story of the first quarter is clearly a foreign exchange story, and the foreign exchange headwinds actually have two components because it has to do with the calculated bill.
The first one is about income, so you will remember that we define the calculated bill as a change in income plus an extension.
This year\'s revenue growth is about two and a half headwinds. over-
Quarter-on-quarter, frankly, the same is true of the revaluation of deferred revenue. So we -
As you know, recalculate the value in the United StatesS.
At the end of the third quarter, the difference between the dollar of deferred income balance on the balance sheet and the starting and ending foreign exchange rates affects this, which is another two-and-a-half headwinds for us.
Tom RoderickExcellent. Excellent. That\'s great.
Then go to the product side and look at the customer growth for 36%, I know Brian both talked about the ARPU rebound.
But I would love to hear about some of the new SKUs you introduced, how it started to make an impact relative to ARPU.
Maybe you can talk about the sales center Pro and the SKU that might start moving the needle on the ARPU. Thanks.
Tom.
Thank you for your question.
Just to get everyone on the same page, and if you roll the clock back to the entry on last September, we are there to release a bunch of new products and a bunch of new products on the enterprise side, for us, the business is really mid-term.
Market, but what we call enterprise, then a bunch of new products on starter SKU
Ups and small businesses.
In general, I would say it did a good job.
I am very satisfied with the performance of all new products.
All our products
We have never done it.
It\'s not like the sculptures we have crafted.
This is done but they do a good job on these products and they will all get better and feel good.
The tricky thing for investors is the ARPU number because it is-
We have some customers who will definitely move up and we have some customers who will definitely move down.
This starter product line, especially the marketing starter product line, is doing a great job, which makes it a bit appealing.
But overall, I feel very good about these new products.
Kate, is there anything you \'d like to add?
Catherine bukeno.
I think the trend of Q1 is very similar to what we have seen in the last few quarters, and that is that the portfolio does affect the customer account and ASRPC, and we see it again in q1.
That said, if you look at the various centers, we will see the growth or expansion of ASRPC, so on a separate basis, both the sales center and the marketing X Starter show a positive trend.
Brian HalliganThat has put on a good growth in getting started with the marketing point gears X.
Tom RoderickOutstanding.
Great. Thank you guys.
I\'ll jump back in.
The next question comes from Brian Peterson of Raymond James.
Brian petersonch
Thank you for answering this question.
So maybe just a follow-up
As for Tom\'s question
But, in terms of international strength, can you expand a little bit where you see some success?
If I think about the difference between products that resonate in the world and what you see in the country?
How do you do, Brian? This is Brian.
International is great.
Over the past five years, we have invested a lot in the international market.
We have Australia.
We did it in Japan.
We did it in Bogota, Singapore.
We have just announced and opened up our Paris office system with a lot of investment and I think we see a very good return on those investments.
We also used some IT language in our localization investments that went well and I think we saw good growth.
Interestingly, the growth of the international market looks much like the domestic market.
The mix between products is almost the same.
You think there will be some subtle differences there, but it\'s almost the same in all the different product lines.
This question is very good. Thanks.
Brian PetersonAnd may just be a quick follow-up-
Just look for Kate on the reserved number.
I\'m sorry if I missed this on the call, but can you share anything that the net income keeps? Thanks guys.
Catherine bookers.
Therefore, we do not actually disclose the specific number of reservations.
First-quarter revenue remained at the expected 90 s.
We said the number would move up and down.
We tend to see some strength in the third quarter and the fourth quarter, calling it more booking quarters, and we tend to see it a bit more gently in the first quarter.
We still think we can do 100.
Plus long term reservationsterm.
Brian Peter PineThank you.
The next question comes from Brad Sears of Merrill Lynch.
Thank you, Brad Seeley.
I would like to ask about the sales situation, as well as the sales situation of the advertising agency channel and your direct sales team.
Any color on how these two channels speed up and boost the learning curve in salesin sales?
Brian Harry, Brad. this is Brian. I\'ll take that.
If I step back and describe the HubSpot Channel situation, HubSpot was just a marketing software company when we first started HubSpot.
We help lead people.
We started very early in the agency channel, so a lot of SEO agencies, website building agencies and PR agencies are great.
Basically what happens is that people have a choice if they are going to buy HubSpot.
If they want to do it themselves, they will buy it directly from us.
If they want to buy through the agency, they will buy through the agency, which is very large in size.
Over the past few years we have been shipping our value props from Leads
Generation business is a complete flywheel business that helps people not just generate clues by creating the entire process.
What\'s happening behind the scenes is that our best marketing organization has transformed itself into a customer experience Agency, a flywheel agency, an organization that really helps people experience the whole experience.
Then we started a new effort to attract different types of agents. we have many such agents registered many boutique sales agents, sales guidance, sales implementation, CRM implementation, we are starting to register for more IT implementation, proxy types.
This is probably a plan that we started a year ago and it\'s being tracked and it\'s going well.
Now, in the next few weeks, we will get all of our top agent partners into HubSpot.
I met them and I asked them to have dinner at my house.
I\'m really looking forward to seeing them.
The group and the entire agency project performed very well in HubSpot.
I am very satisfied with the progress of the whole group, I am optimistic about the new sales and IT partners in the medium termand long term.
Brad Sears is amazing. Thanks, Brian.
If you can, do it again.
You made some comments earlier on the power outage that interrupted your own sales business.
Can you elaborate on that?
Have you seen transactions from partner channels and direct channels enter the second quarter?
Or, given that you are running HubSpot yourself, are you talking more about the impact on your own sales operations? Thank you.
Brian Harry Gans
I mean, I want to make a broader comment on the power outage.
People were very interested and we posted a bundle there.
It points to our blog JD, where our COO published an article during the blackout.
Then our lead architect posted an article on our blog.
An analysis of what happened inside
If you really want to dig those places, look.
Regarding the power outage that occurred at the end of the parade, I have spoken to many of our clients and if any of these clients are answering the phone, I just wanted to apologize for it.
This is destructive to you, it is destructive to us, it is a long day for HubSpot.
So frankly, we were a little disappointed with the power outage.
We have been very active since then.
We built a new team of reliability.
We hired top engineers and built the reliability team.
We have changed them in the process of building our products, we only have a few weeks and we have made some very good progress.
So I am very satisfied with this effort.
As the Dalai Lama says, don\'t lose your lesson when you make a mistake.
I don\'t think we will lose our lesson.
I think we will learn the lesson and make sure we change the process and change the organization so that we will be better in the future.
As far as we are concerned, yes, we use HubSpot.
No significant impact, this is the day of the quarter.
It\'s not a huge, huge impact that could have had a very, very slight impact there on the last day of the quarter, but I didn\'t lose any sleep.
We need more sleep for the disruption we bring to our customers.
Thanks, Brian.
The next question comes from Mark Murphy of JPMorgan Chase.
Thanks, Brian, Mark.
If you continue to succeed in the long run, what do you think is the proportion of customers who will eventually use all three parts of the growth stack?
In other words, marketing, sales, and services, or basically treating HubSpot as the core front desk system.
I\'m also curious about what you think this can do for retention and stickiness if they end up integrating many apps into HubSpot.
Brian Harry Ganis
How are you, Mark?
Thank you for your question. Mark mufigud.
Brian HalliganI doesn\'t know what the number is, but it will be high.
I made a lot of sales calls and talked to a lot of customers.
What I see in the market is people.
Kind of like myself-
Better yet, I\'m an Apple man.
I have an iPhone, several Apple computers, and even earplugs that use Apple TV.
I don\'t want the Windows machine to mix up with my iPhone.
I think the company is doing the same thing, they are picking a core platform provider for the front desk, buying some apps from that platform provider, and then inserting many other apps.
This is what I see in the market, and the two main ones I see --
Obviously I see HubSpot every day and we see Salesforce every day, which is our very good competitor.
I think our competition is very good.
Our products are very good. I think our products are getting stronger and stronger every day.
So I think in the long run our customers will pick a very high percentage from the platform.
They may not use us for these three products, they may insert different things in different parts of our products, but I think they will treat us as their record system
In several of our apps, they insert dozens of other apps into it.
In the long run, what impact will this have on retention?
I think our retention rate is probably much higher than it is today.
I don\'t know what that might be.
I think Kate is staring at a hole in my head right now.
I dare not-
I don\'t know what that is.
But I think it gave me a lot.
But the problem is that when we let a lot of existing customers buy all three of our products and really work on our platform, there are a lot of people who just buy the marketing entry.
So that\'s why we say in the long run, because as JD likes to say, in the short run, we have-
What do you call it?
Catherine buecola humidifierhumidifier.
Brian HalliganDo we send the humidifier or go
The humidifier is performed on ASRPC and is retained within HubSpot.
In this solution, there are few great things happening to many new customers, and many people are upgrading.
But in the long run, I think our retention rate will be much better than after.
I think Mark your intuition is right.
We do see that retention rates are higher for multi-product customers than for individual customers we see
Product customers.
But Brian is right on this journey and there is still a long way to go. Mark murphyokOkay, great.
Kate got up quickly.
OK, I think you said Billings grew 31% in fixed currency and it\'s nice to see.
You have adjusted it to currency.
Do you also adjust this for the duration as I believe you did in the previous quarter, or just for the currency?
Catherine Booker, this is the actual result of the constant currency.
But as you pointed out, there are a lot of different things in Billings.
That\'s why we don\'t put it inside.
Q1 has some seasonal billing.
The bill terms have some push and pull, and we are proud of the impact of the key terms, so a lot has happened in the bill this quarter.
Brian HalliganOverall, although I look at that-
We look at millions of numbers.
The leading indicators of the business are very good.
I feel good-
Really, I feel good about where the business is in the currency headwinds, but I feel as good as a year ago. Mark murphyok
This is a reference to the forwarding pipeline, just the tone and tone of the sales feedback, and the rest on your dashboard, is that what you call Brian?
Brian Harry GanisThere\'s -
We look at millions of numbers, many of which are behind.
Look, some are forward-looking. looking.
Everything looks good compared to yours.
Nothing is perfect, but like I was bullish today compared to a year ago, I was bullish a year ago, I am still bullish today, just like the sales rep is counting, our winning rate is good, I think our competitive position is still good.
There is a bit of currency headwind there and I have a hard time getting it by controlling the app, but the business is good.
Of course, Chuck MacGlashingWhich has grabbed our guide, Mark.
Thanks for Chuck\'s clarification.
All right. Good night.
The next question comes from Samad Samana from Jefferies.
Thank you for answering my question.
I just wanted to make sure.
I remember you said the number of people this year was up 20%. over-year.
Looking back, I think this is a pretty good slowdown in terms of the growth rate of the number of employees.
I\'m just curious about how you guys think about hiring.
Is this just a seasonal effect?
Should we expect higher growth?
When I think about some of the other companies that we see are bigger and they are still growing faster, I\'m just curious about what the company\'s employees are investing in.
And then I did.
There are problems.
Catherine buccles.
So frankly, the number of people in the first quarter is a very difficult comparison for us.
2018 Q1 is a very compelling and strong recruitment quarter.
Still, I think the pace at which we started our holiday was a bit slow in January.
We are very encouraged by the recruitment trends we saw in April, 3, and we continue to see relatively low attrition levels, which is great.
Samad SamanaGot you.
Then there may be only one Kate.
There was also a power outage in other companies.
Is there any type of thing that just might change, or is there a churn rate or any impact, or is there any financial remedy for the client?
Just wanted to make sure if there was-
We will adjust the time items accordingly.
Catherine bookers.
I mean, it\'s clear that it\'s hard to quantify the specific effects of power outages, but I think these effects may have a very small impact on a range of different things, including income.
I would like to add Brian HalliganSo
Catherine bookers.
Brian HalliganOne is one of the millions of indicators that we focus on, and it is the customer net promoter score, the customer happiness recommendation rate.
As you can imagine, they are really down.
I watched it really drop to a low point that week because I was looking at it all the time and it steadily climbed all the way up to three power outages.
So I think it\'s very unfortunate and we apologize for that.
But I don\'t think it will change our game.
Samad SamanaWe is very appreciative of the amount of information in the blog.
I think it is very helpful.
I just wanted to ask, maybe there\'s only one Brian.
Picture problem
I think we have been rolling out customer service for about a year.
I\'m curious, maybe how you feel about this trend and how it affects the adoption of the entire suite.
That\'s it for me.
Thank you again for asking this additional question.
It\'s okay with Brian halganna, Samad.
It\'s a pleasure to hear from you.
Of course, the operation is doing very well.
We came up with it.
I think we started in last May.
Historically, the way we release the product is that the product we release covers a small area and then it will keep getting better and we have seen this service product.
A year has become much better from now on;
It will be better.
We feel good seeing people adopt it. It\'s growing.
I think one of the things we said last quarter or the previous quarter is that from the date we released the service product, compared to the growth rate of the service product, relative to what we do in selling products, it continues to grow faster than the sales business.
It was really exciting to see a lot of customers throughout the suite.
The next question comes from Stan zlottsky at Morgan Stanley.
Stan ZlotskyPerfect.
Thank you very much for accepting my question.
Brian, maybe if I could mention more about you.
Product adoption.
Can you guys share with us any metrics regarding the adoption of this approach, such as the 20,000 you mentioned in the fourth quarter call?
I can accept Catherine Bukelon.
I think what we\'re talking about is we\'re going to give you some milestone numbers and we \'ve exceeded 20,000 milestones
Product customers, we are more comfortable than this now.
We\'re tracking.
Our 30% customer base has more than one HubSpot product.
Stan zlottsky understands.
Maybe I can go back to the average subscription revenue for each customer indicator.
Fell 2% in the first quarteron-
I know there\'s some forex headwinds, but we\'re-
In the past two years, the first quarter has fallen sharply compared to all other quarters.
Is there a phenomenon in Q1 that happens in a hybrid transfer, or does some kind of customer dynamics that happens in Q1 really reach the average revenue per user? Thank you.
Catherine buccles.
I think we announced a lot of products in the fourth quarter, we announced the new Enterprise Suite, we announced the price increase
I think I call it the humidifier of the equation.
Then the first quarter is a particularly strong quarter for sales and service centers.
So, depending on the sales composition for any quarter, you will continue to see this rebound.
Stan zlottsky understands. All right.
Thank you very much.
The next question comes from Bhavan Suri of William Blair.
Analysis of unknown causes
This is actually Arjun of Bhavan.
I just want to touch it on a little bit.
More product customers.
I know you see more and more customers coming to HubSpot with more than one product.
But just curious if you see any impact on the sales cycle and how long the customer stays in the funnel before making the purchase decision.
Is the proportion of this customer even greater? multi-
Product customers who log in to HubSpot through channels?
Or is it quite consistent in terms of a single
Product customers?
Brian HalliganI thought, I will continue to use the humidifier
Humidifier theme.
If you look at the overall sales cycle, it really doesn\'t change much.
Some deals are faster, especially if they buy a growth suite or point-start solution.
It could be a little longer if they buy the enterprise growth suite, but net, net really doesn\'t change much. In terms of -
I didn\'t look at this carefully, but I believe it is very similar --
I don\'t know if you have this very similar direct and indirect channel. . .
Catherine burkyrie doesn\'t actually know the answer, but I \'d be happy to follow --up.
Brian Harry Ganis
This is fair.
Then I know that international economic growth has reached an amazing 50%.
Just wondering if there is-
If you see the foreign competitive environment from the perspective of the existence of competitors or other aspects is different from what you see at home?
Brian HalliganPretty has similar dynamics in the international market in the United States. S.
Companies and others like HubSpot and Salesforce are more likely to go international.
We are now operating in more than 100 countries.
So you don\'t need to set up an office in Tanzania to get a bunch of companies out of business, as do our competitors.
So, unlike 10 or 15 years ago, the competitive environment looks very similar.
Unknown analyst
Thank you for answering my question.
The next question comes from Terry Tillman at SunTrust Bank. Eric. LemusHey guys. This is Eric.
Let\'s go find Terry.
Thank you for answering this question.
I just bought you one.
We have talked in the past about reducing friction during the purchase process.
Have you seen any results in your strategy to reduce friction during the purchase process?
Is there anything else in that purchase?
One of our big moves is around the idea of free value-added and reduced engagement.
If I just want to write HubSpot big, we have two channels to create clues and opportunities for US Inside HubSpot.
The traditional channel we use is that we create a lot of content for people to search through links, blogs, and something like that.
I would say we did a good job in that.
We have room for improvement.
There are many opportunities, but we are very good at it.
Free value-added is a very new concept.
We are the first innings of this plan, and I would say, very happy with its development.
There are many opportunities in the free value-added model.
And then what I\'m drawing is, I \'ve been painting this thing on the whiteboard here, and one side of my whiteboard is my favorite company, Atlassian.
Then on the other side of the whiteboard, I will draw Oracle sales force, a company with a long sales cycle, enterprise sales staff, we are in the middle, we are moving closer to the Atlassian model.
We are not on the way, there are many opportunities from here to there.
I don\'t know how to get there all the way but so far this is where we are going and it\'s good and there are plenty of opportunities. Eric. LemusGreat. Thanks Brian.
The next question comes from Jennifer Lowe at UBS.
Thanks, Jennifer Lowell.
I want to talk about the success of the business you see.
I guess the first question is, how many customers are at another price level, your traditional goal compared to you starting to win customers through the upper tier of the market segment?
Catherine burkrit is relatively similar.
I think about 60-
But we can give you an exact number.
Brian halliangenerally, what is happening in the market is that people will buy a HubSpot and they will grow with us, which is a very good model for us.
We learned about this model from many other companies, such as Slack, such as AWS, and they will join in when you first start --
The stage of five people.
Next thing, I have 50 people. next thing, you have 500 people. we are the platform of choice.
This is the game we are playing.
We will definitely enter 500.
Personal company, if they haven\'t settled down on the platform yet, we did a great job there.
But they are already on a competitive platform, completely built and customized, and everyone is trained, which is a bit difficult for us.
Jennifer Lowell
When people begin to accept that there is more to it, where will this question go. I think a lot of opportunities in the past were that Greenfield customers didn\'t have anything that would have very decentralized tools HubSpot could go in and change one or push it out.
Now, when you start to own this kit and you start to have larger customers that you can target, do you start to see more technical alternatives than green spaces?
From this point of view, what is the landscape like?
Brian HalliganIt is a good question like I think-
We take five.
Personal company or 50-
Personal companies and 500-person company. A five-
Individual companies have not yet chosen a platform. A 50-
50 people Company
50 The opportunity for them to choose the platform, so let\'s say that half of them choose the platform, half of them are not satisfied with their choice, and have fully established and trained everyone, so they lost their socket a bit.
The other half don\'t have a platform yet.
This is a bunch of points.
Let\'s say that 75% of people are very suitable. 500-
Personal company, this is a total swag, more people choose a platform that you can imagine, and more people build it.
There are, of course, many more.
We won these deals and people will replace the existing platforms, but we have been very competitive over the past 50 years.
I think where the business will go, where all spoilers will go over time, they will enter early and grow with their customers. And that play -
A play has been on for a while and it works very well.
Jennifer LowellGreat. Thank you.
The next question comes from Kirk Materne at Evercore.
Peter LevineGreat. Thank you.
I\'m Peter Levin from Kirk.
So most of my questions have been answered.
But, I think, one of the outstanding issues is that the cash equivalents are about $0. 95 billion, $0. 96 billion.
So how are you going to deploy these capital?
I don\'t believe-
I believe you have discussed the potential fourth center on the previous phone call.
So maybe we can discuss it.
What do you think about today\'s M & A assessment and organic development? Thank you.
Brian Harry Gans
Let\'s talk-talk about M&A.
We do have some cash on our balance sheet.
I would say that cash does not add to the urgency of our agreement, but it increases the flexibility of our agreement.
I just spent a month in San Francisco.
I rented an Airbnb apartment in San Francisco for a month.
When I was outside, I made a study trip and met with the person in charge of the company, just like the ceo of the company that successfully conducted the merger.
So, I learned a lot and we have a small team to study the deal.
But, in general, I think you will see our approach and we are cautious about it.
If we don\'t buy anything, you want to enable it-
Let our customers grow better, so that they can really integrate into the story and help us grow better stories.
We want to buy a team that suits our culture and we have learned a lot from it.
If the company you buy doesn\'t have a team that really suits you, it\'s dangerous.
The technology stack is a problem.
If it is a completely different technology stack, it will be much more difficult to integrate.
Then evaluate, everything.
Today you see a higher multiple.
So, we will be careful, we will be careful, we will be good stewards of cash, what will I think.
Peter LevineGreat. Thank you.
The next question comes from Michael Turrin of Deutsche Bank.
Michael trilin greatThanks.
Soon, I want to follow up on this channel.
I\'m sorry if I missed it, but could you please add how many contributors are available this quarter?
Do we have enough combinations to consider in the long run?
Is the 40% we \'ve seen recently also a good mileage mark?
Or, when you prefer this Atlassian type of motion, does this change or affect this blend in any way? Thanks.
Catherine Busso-
I can start with the quarterly performance.
So 40% of our income comes from the Channel.
Brian HalliganAnd, then in the long run, it\'s been 40 for a while from the Channel.
If you look at the way we invest in HubSpot, we have put a lot of indirection and channels into it.
The unit economy is quite similar, so it gets a similar level of investment and we continue to invest.
We will be bringing in our partners in a few weeks and we will not talk about some of the investments we are making.
So it\'s easier to be a partner.
It is easier to be a partner for happiness and profitability.
So, similar investments.
I don\'t know it\'s going to be long term, but it-
I just want to say that we are keeping a close eye on both or investing in both at the same time.
Both of them are working.
So, as far as I\'m concerned, she\'s going steady.
Michael turringet is here. That\'s helpful. Thanks.
The next question is James Rutherford from Stephens.
James Rutherford. Good afternoon.
Just give me one.
Thank you for answering this question.
Kate, the net income you mentioned stays at a high in your 90 s, which seems to be similar to what you said in the first quarter of last year.
I\'m just curious, since you \'ve rebuilt the marketing product in the enterprise, can you comment on what you see when you keep it to the enterprise tier.
Do you see any benefit of investing in these products starting to reach the retention line at that level?
Catherine bookers.
I mean, we don\'t tend to share information other than this top number, but we do --
I think you have a gut feeling about relative retention, business and starter products are right.
James Rutherford. Thanks.
That\'s it for me.
The next question comes from Ken Wong of Guggenheim Securities. Ken WongGreat.
Thank you for answering my question.
Brian, I believe you mentioned a lot last quarter.
In 2019, the project was dedicated to the return of enterprises that are valuable to customers.
Just wondering about any updates on this and how do you think this might affect some upward migration of customers to businesses and potential multi-product attachments?
Brian Halligan
I think we made a lot of investments last year and last year.
I think we did a very good job of investing in products and over time we saw a good return.
What I think about the product is
I\'m not sure if I got your question exactly, but the way I think about products and modern software companies is that you want to do the front end, so it\'s consumer grade.
You want it to be fast, you want it to be highly available, and you want the uptime to be very good.
At the same time, you want the backend to reach the enterprise level.
Again you want a high uptime;
You want to scale as people grow and you want to have an open api that people use.
This is a way for us to think about problems.
To this extent, to the extent that we can continue to provide value to our customers and win word of mouth, we will continue to invest.
We are good at recruiting developers and we think we can develop more products and we think we can make the existing products better. Ken WongGot it.
Thank you very much for your answer. Thanks.
The next question comes from Ross MacMillan of RBC Capital Markets.
Thank you so much, Ross McMillan.
I ate two for Brian and one for Kate.
As a result, Brian, a net customer, was again strong this quarter.
Have you done anything specific, such as the free value added funnel or the low layer at the top of the funnel might be pushed, and I don\'t know how much performance the net customer has added?
Then Kate.
On the Calculation Bill, you clearly mentioned forex.
I\'m just curious, what is the impact of this number from the average duration to the entire quarter? Thanks so much.
Catherine bookers.
Maybe I\'ll start first and then Brian you can join in.
Regarding Billings, I think the main player in the first quarter billings story is definitely FX.
But you\'re right.
There are many other things that affect Billings.
We talked about seasonality, we talked about the bill terms, we talked about some of the effects, so all of these factors also have an impact, but in fact foreign exchange is the main driving force.
Brian Harry ganrose. this is Brian. Nothing -
We didn\'t do anything special in q1.
Our free value-added campaign, our free CRM, all of which are cases of continuous innovation.
Our product focus is on continuing to deliver features in an effort to make the product faster, more available, and more high performance.
There are no special activities.
She walked smoothly.
Catherine bookers.
Customer volume growth in the first quarter continues to show the same trend as in the past few quarters.
The launch of the marketing center continues to be very strong, the customer added.
But, as Brian said, we have a balance in that, there are also strong trends and multi-product adoption.
Ross McMillan is amazing.
Thank you very much. Congrats.
Thanks, Brian Halligan.
This is our last question.
At this point in time, I am now transferring the call to HubSpot\'s chief executive Brian Halligan.
Brian HalliganThanks joined the phone.
Looking forward to talking to you again soon.
This is the end of today\'s conference call.
You can disconnect now.
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