Summary
HubSpot reported fiscal 2024 second quarter revenue of $637.23 million, up 20.4% from $529.14 million in the prior-year quarter. Gross profit rose 22.0% to $541.71 million from $444.18 million. Gross margin rose to 85.0% from 83.9%. The company remained unprofitable on a GAAP basis, but the operating loss narrowed to $23.94 million from $116.17 million, an improvement of 79.4%. Net loss narrowed to $14.44 million from $111.80 million. Diluted loss per share narrowed to $0.28 from $2.25.
Customers grew to 228,054 as of June 30, 2024 from 150,865 as of June 30, 2023. The increase came primarily from demand for lower-priced Starter products, as well as Professional and Enterprise products under the new seats model. Average Subscription Revenue per Customer decreased to $11,215 for the three months ended June 30, 2024 from $11,432 for the three months ended June 30, 2023. That decline reflected continued purchases of Starter products and the new seats pricing model, partly offset by demand for Professional and Enterprise products and the addition of customers from the Clearbit acquisition. The mix shift is a key operational theme: the customer base is expanding faster than revenue per customer.
Operating cash flow was $117.83 million for the quarter, up 53.9% from $76.54 million. Capital expenditures were $8.20 million, down 24.6% from $10.88 million. Deferred revenue, current portion, was $708.11 million, up 20.9% from $585.93 million. Remaining performance obligations were $867.20 million, up 29.1% from $671.90 million. Operating margin rose to -3.8% from -22.0%, a change of 18.2 percentage points.
For the six months ended June 30, 2024, revenue was $1.25 billion, up 21.7% from $1.03 billion. Gross profit was $1.06 billion, up 22.9% from $865.47 million. Operating cash flow was $244.92 million, up 55.4% from $157.61 million. Capital expenditures were $14.08 million, down 0.8% from $14.19 million.
Management said it does not expect to be profitable in the next 12 months. It plans to continue investing in sales and marketing, research and development, data center infrastructure, and customer service. The company also expects to incur additional general and administrative expenses as it grows and operates as a public company. The MD&A lists risks including general macroeconomic conditions, pandemics, geopolitical conflicts, foreign currency fluctuations, interest rates, inflation, recession risks, and domestic and foreign laws and regulations. It also points to significant competition from other providers of marketing, sales, customer service, operations, commerce, and content management software, and rapid technological change in the industry. The Restructuring Plan and global lease consolidation remain part of the cost backdrop. HubSpot had 8,002 full-time employees as of June 30, 2024.
The quarter showed stronger gross margin and a much smaller operating loss, but GAAP profitability remains negative. The customer count expanded while average subscription revenue per customer slipped, a mix that management ties to Starter products and the new seats model. Cash generation improved, and deferred revenue and RPO grew. The main open questions are whether the customer mix can support revenue growth and whether spending on sales, marketing, and research and development will eventually close the GAAP loss.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $637.2M | $617.4M | +3.2% | $529.1M | +20.4% |
| Gross profit | $541.7M | $522.3M | +3.7% | $441.9M | +22.6% |
| Gross margin | 85.0% | 84.6% | +0.4 pp | 83.5% | +1.5 pp |
| Research & development | $198.2M | $175.6M | +12.8% | $170.0M | +16.6% |
| Sales & marketing | $293.8M | $300.3M | -2.2% | $265.3M | +10.7% |
| General & administrative | $72.6M | $68.9M | +5.4% | $61.2M | +18.6% |
| Total operating expenses | $565.6M | $545.6M | +3.7% | $560.4M | +0.9% |
| Operating income (loss) | -$23.9M | -$23.2M | -3.0% | -$118.5M | +79.8% |
| Operating margin | -3.8% | -3.8% | ±0.0 pp | -22.4% | +18.6 pp |
| Net income (loss) | -$14.4M | $5.9M | -343.3% | -$118.9M | +87.9% |
| Net margin | -2.3% | 1.0% | -3.2 pp | -22.5% | +20.2 pp |
| Diluted EPS | -$0.28 | $0.12 | -$0.40 | -$2.39 | +$2.11 |
| Customers | 228,054 | 216,060 | +5.6% | 184,924 | +23.3% |
Risks
Competitors may use evolving AI technologies to render HubSpot's products less competitive or obsolete, and the company must invest in AI and generative AI features. The filing notes that developing, testing, and deploying AI systems may increase the cost profile of offerings and that generative AI content can be factually inaccurate or contain protected material, exposing HubSpot to brand, reputational, and legal liability.
Growth is increasingly driven by lower-priced Starter products and the new seats-based pricing model. Average Subscription Revenue per Customer decreased from $11,432 for the three months ended June 30, 2023 to $11,215 for the three months ended June 30, 2024, and from $11,436 to $11,335 for the six months ended June 30, 2023 and 2024. If scalable pricing and cross-selling efforts are unsuccessful, revenue and operating results may suffer.
The risk factors disclose that HubSpot experienced a cybersecurity incident in 2024 and has experienced past attempts to exfiltrate customer data. A compromise could result in reputational harm, customer loss, regulatory fines, remediation costs, and liability under data protection laws.
The conditional conversion feature of the 2025 Notes was triggered because the stock price condition was met, making the notes convertible at holders' option during the calendar quarter ending September 30, 2024. If holders elect conversion, HubSpot may be required to settle in cash, which could adversely affect liquidity. As of August 2, 2024, no material conversion notices had been received.
HubSpot generated net losses of $8.5 million for the six months ended June 30, 2024 and $148.5 million for the six months ended June 30, 2023, with an accumulated deficit of $812.9 million as of June 30, 2024. MD&A states the company does not expect to be profitable in the next 12 months, while research and development, sales and marketing, and general and administrative expenses increased due to headcount growth.
MD&A states that fluctuations in foreign exchange rates and rising inflation have had, and may continue to have, an adverse impact on financial condition and operating results. The risk factors also cite global economic uncertainty, recession risks, interest rate increases, and geopolitical conflicts as factors that could reduce customer spending or delay purchasing decisions.
Headcount grew to 8,002 full-time employees as of June 30, 2024 from 7,663 as of December 31, 2023, placing strain on management and infrastructure. The filing cites a competitive hiring environment in the Greater Boston area and worldwide remote talent competition, and notes that failure to attract or retain key personnel could harm growth prospects.
HubSpot acquired Clearbit in December 2023 and may not fully realize the anticipated benefits. Integration risks include unanticipated costs, failure to generate sufficient revenue, loss of key employees, diversion of management attention, and potential impairment of goodwill or intangible assets.
SaaS KPIs
All quarters →Average Subscription Revenue Per Customer
Customers
Summary, forecast, risks and KPIs are extracted from HUBSPOT INC's SEC filings for Q2 FY2024 (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.