Summary
HubSpot reported second quarter fiscal 2022 total revenue of $421.76 million, up 35.7% from the prior-year quarter. Gross profit rose to $342.82 million, up 38.3%, and gross margin improved to 81.3%, up 1.5 percentage points. The top line and gross profit grew, but GAAP profitability moved the other way. The company posted an operating loss of $52.25 million, and the loss widened from the prior-year quarter. Net loss widened to $56.36 million. Diluted EPS was -$1.18, and that loss also widened. Operating margin was -12.4%, down 7.0 percentage points. Non-GAAP results were positive. Non-GAAP operating income was $29.4 million, with a 7% non-GAAP operating margin, compared to 9% in the prior-year quarter. Non-GAAP net income was $22.4 million, or $0.44 per diluted share, compared to $21.6 million, or $0.43 per diluted share. The gap between GAAP and non-GAAP results reflects items such as stock-based compensation and amortization of acquired intangibles, which the company excludes from its non-GAAP measures.
Customer metrics and cash generation held up. HubSpot ended the quarter with 150,865 customers, up 25% from June 30, 2021. Average Subscription Revenue Per Customer was $11,198 in the second quarter of 2022, up 10% from the second quarter of 2021. Deferred revenue was $469.58 million, up 30.9% from the prior-year quarter. Remaining performance obligations were $423.70 million, up 38.6%. Operating cash flow was $40.92 million, up 7.1% from the prior-year quarter. Capital expenditures were $8.33 million, up 22.9%. Free cash flow, a non-GAAP measure, was $22.4 million, compared to $25.6 million in the prior-year quarter. Operating cash flow and free cash flow are different measures, and the company defines free cash flow as operating cash flow less purchases of property and equipment and capitalization of software development costs, plus repayments of convertible notes attributable to debt discount. The cash flow statement shows the company also used cash for investing activities and financing activities during the quarter.
Management issued guidance for the third quarter of 2022 and the full year 2022. For the third quarter, non-GAAP operating income is expected to be $31 million to $32 million. Non-GAAP net income per common share is expected to be $0.50 to $0.52, assuming approximately 51.0 million weighted average diluted shares outstanding. For the full year 2022, non-GAAP operating income is expected to be $143 million to $144 million. Non-GAAP net income per common share is expected to be $2.28 to $2.30, assuming approximately 51.1 million weighted average diluted shares outstanding. The company said unfavorable foreign exchange rates are expected to be an 8 point headwind to third quarter 2022 revenue growth. For the full year 2022, foreign exchange is now expected to be a 6 point headwind to revenue growth, up from the prior quarter expectation of a 5 point headwind. The guidance reflects a tougher macroeconomic backdrop, including inflation, recession risks, and the decline in the value of the Euro relative to the U.S. Dollar.
Operational highlights and risks. Management said the quarter was driven by product innovation and a deep understanding of what customers need to adapt to the macroeconomic climate. Small and medium businesses are looking to consolidate technology and boost efficiencies. HubSpot enabled more customization of its platform and announced CMS Hub Free and simple Automation in Marketing Hub Starter. In the second half of the year, the company will focus on durable, profitable growth, focused execution, product innovation, and solving for customers. The company continues to face risks. These include a history of losses, the ability to retain existing customers and add new customers, competition from other providers of marketing, sales, customer service, operations, and content management software, the ability to differentiate the platform, the ability to manage growth effectively, the ability to maintain and expand relationships with solutions partners, the ability to recruit and retain highly qualified personnel, and the price volatility of the common stock. Macroeconomic risks include geopolitical conflicts, inflation, macroeconomic instability, the COVID-19 pandemic, foreign currency fluctuations, interest rates, and recession risks. The company does not expect to be profitable in the near term.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $421.8M | $395.6M | +6.6% | $310.8M | +35.7% |
| Gross profit | $342.8M | $322.7M | +6.2% | $247.9M | +38.3% |
| Gross margin | 81.3% | 81.6% | -0.3 pp | 79.8% | +1.5 pp |
| Research & development | $118.9M | $92.7M | +28.2% | $72.1M | +64.9% |
| Sales & marketing | $224.3M | $197.1M | +13.8% | $157.8M | +42.1% |
| General & administrative | $51.9M | $43.9M | +18.1% | $34.6M | +50.0% |
| Total operating expenses | $395.1M | $333.8M | +18.4% | $264.5M | +49.4% |
| Operating income (loss) | -$52.3M | -$11.2M | -368.4% | -$16.6M | -214.7% |
| Operating margin | -12.4% | -2.8% | -9.6 pp | -5.3% | -7.1 pp |
| Net income (loss) | -$56.4M | -$9.3M | -503.4% | -$24.6M | -129.4% |
| Net margin | -13.4% | -2.4% | -11.0 pp | -7.9% | -5.4 pp |
| Diluted EPS | -$1.18 | — | — | — | — |
| Customers | 150,865 | 143,689 | +5.0% | 120 | +125620.8% |
Risks
MD&A and Risk Factors highlight increased economic uncertainty, with U.S. inflation at levels not seen in several decades and Federal Reserve rate increases. The filing warns customers may reduce spending on HubSpot products, delay purchasing decisions, seek extended billing terms or pricing discounts, which could limit growth and pressure operating results after Q2 2022 operating loss widened to $52.25 million from $16.60 million in Q2 2021.
Headcount grew to 7,045 full-time employees as of June 30, 2022 from 5,895 as of December 31, 2021, placing strain on management and infrastructure. The filing cites a competitive hiring environment in the Greater Boston area and worldwide remote talent market, cost inflation, and stock price declines as factors that could hurt retention of key employees and equity incentive value.
The market for marketing, sales, customer service, operations, and content management software is described as highly competitive and fragmented, with competitors that have greater resources and may bundle competing products at little or no additional cost. This could force price reductions or less favorable terms and reduce margins.
HubSpot's international exposure is concentrated in currencies including the Euro, British Pound, Australian Dollar, Singapore Dollar, Japanese Yen, Colombian Peso, and Canadian Dollar. MD&A attributes an offset to subscription revenue growth and an increase in foreign currency transaction losses in Q2 2022 to the decline in the value of the Euro relative to the U.S. Dollar.
HubSpot sells to organizations from small businesses to enterprises, and the filing states enterprise sales may entail longer sales cycles and more significant selling efforts while small-business sales carry greater credit risk. Changes in customer mix or product plan mix could decrease gross margins and adversely affect operating results.
The company experienced rapid growth and organizational change, opening international offices and implementing a hybrid workplace model. It warns that failure to manage growth and scale systems, controls, and personnel could impair its ability to attract customers and execute its business plan.
Risk Factors cite heightened cyber risk from the ongoing conflict between Russia and Ukraine, including possible retaliatory attacks against U.S.-based companies, and mention residual risk from supply chain attacks such as SolarWinds, Log4j, and Kaseya. A breach or supply chain compromise could lead to liability, remediation costs, and reputational harm.
HubSpot faces expanding U.S. state privacy laws, including the CPRA effective January 1, 2023 and other state acts, plus foreign privacy regimes. The filing says these laws may require changes to data collection practices and increase compliance costs and regulatory exposure.
SaaS KPIs
All quarters →Average Subscription Revenue Per Customer
Non-GAAP Operating Margin
Non-GAAP Subscription Margin
Free cash flow
Total Customers
Summary, forecast, risks and KPIs are extracted from HUBSPOT INC's SEC filings for Q2 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.