Summary
HubSpot reported third-quarter fiscal 2024 revenue of $669.72 million, up 20.1% from the prior-year quarter. Subscription revenue accounted for 98% of total revenue. The customer count reached 238,128 as of September 30, 2024, up from 194,098 a year earlier. Average subscription revenue per customer fell to $11,235 for the quarter from $11,520 in the prior-year period. That decline reflects a mix shift toward lower-priced Starter products and the company's new seats pricing model. Demand for Professional and Enterprise products and the Clearbit acquisition partly offset the pressure.
Gross profit rose 20.9% to $570.40 million. Gross margin improved 0.5 percentage points to 85.2%. The company still posted an operating loss of $9.63 million, but that loss narrowed from the prior-year quarter. Operating margin improved 1.9 percentage points to -1.4%. Net income was $8.15 million, a swing to profit from a prior-year loss. Diluted earnings per share came in at $0.16, up from a loss per share in the prior-year quarter.
For the first nine months of fiscal 2024, revenue was $1.92 billion, up 21.2% from the prior-year period. Gross profit was $1.63 billion, up 22.2%. Gross margin was 84.9%, up 0.7 percentage points. The operating loss was $56.80 million, a 68.0% improvement from the prior-year period. Net loss was $0.36 million, a 99.8% improvement. Diluted loss per share was $0.01, compared with a loss per share in the prior-year period. Operating margin was -3.0%, up 8.2 percentage points.
Operating cash flow was $159.54 million for the quarter, up 79.2%. Capital expenditures were $11.13 million, up 2.7%. For the nine-month period, operating cash flow was $404.46 million, up 64.0%. Capital expenditures were $25.21 million, up 0.7%. Deferred revenue was $719.60 million, up 24.4% from the prior-year quarter. Remaining performance obligations were $939.70 million, up 36.8%. The deferred revenue figure is the current portion only. Management cautioned that deferred revenue is not an accurate indicator of future revenue because billing terms vary.
HubSpot ended the quarter with 8,103 full-time employees. The company sells to mid-market B2B companies with two to 2,000 employees. It uses a freemium model and Solutions Partners to reach customers in more than 135 countries. The Clearbit acquisition, which closed in December 2023, added Breeze Intelligence, a data enrichment tool. Commerce Hub contributed to professional services and other revenue. Professional services and other revenue was 2% of total revenue. The average subscription revenue per customer declined because of the lower-priced Starter products and the seats model. That mix issue is a watch item.
The filing offers no quarterly or full-year revenue guidance. Management said it does not expect to be profitable in the next 12 months. It plans to keep investing in sales and marketing, research and development, customer service, and data center infrastructure. HubSpot expects to fund these investments with cash flow from operations. The company also flagged risks from macroeconomic conditions, foreign currency fluctuations, inflation, recession risks, competition, and rapid technological change. It depends on expanding its customer base, increasing adoption within existing customers, and developing new products. Restructuring charges in the current quarter were limited to variable facilities-related costs on unused space, a small item compared with the prior-year restructuring plan.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $669.7M | $637.2M | +5.1% | $557.6M | +20.1% |
| Gross profit | $570.4M | $541.7M | +5.3% | $470.0M | +21.4% |
| Gross margin | 85.2% | 85.0% | +0.2 pp | 84.3% | +0.9 pp |
| Research & development | $191.2M | $198.2M | -3.5% | $156.9M | +21.9% |
| Sales & marketing | $309.9M | $293.8M | +5.5% | $271.4M | +14.2% |
| General & administrative | $77.9M | $72.6M | +7.3% | $61.3M | +27.1% |
| Total operating expenses | $580.0M | $565.6M | +2.5% | $490.5M | +18.3% |
| Operating income (loss) | -$9.6M | -$23.9M | +59.8% | -$20.4M | +52.9% |
| Operating margin | -1.4% | -3.8% | +2.3 pp | -3.7% | +2.2 pp |
| Net income (loss) | $8.1M | -$14.4M | +156.4% | -$5.5M | +249.1% |
| Net margin | 1.2% | -2.3% | +3.5 pp | -1.0% | +2.2 pp |
| Diluted EPS | $0.16 | -$0.28 | +$0.44 | -$0.11 | +$0.27 |
| Customers | 238,128 | 228,054 | +4.4% | 194,098 | +22.7% |
Risks
Competitors may use evolving AI technologies to render HubSpot's products less competitive or obsolete, and the company is committing significant resources to Breeze and generative AI features before knowing whether the market will accept them. AI development may also increase computing costs and expose HubSpot to accuracy, bias, copyright, and reputational liability.
MD&A reports Average Subscription Revenue per Customer decreased from $11,520 for the three months ended September 30, 2023 to $11,235 for the three months ended September 30, 2024, and decreased from $11,457 to $11,324 for the nine months, driven by growth in lower-priced Starter products and the new seats-based pricing model. If scalable pricing and cross-sell efforts do not expand customer value, revenue and operating results may suffer.
Risk factors disclose a cybersecurity incident that affected HubSpot in 2024 and past attempts to exfiltrate customer data. A compromise could result in liability, remediation costs, regulatory fines under GDPR, customer claims, and reputational harm.
The 2025 Notes are convertible at the option of holders during the calendar quarter ending December 31, 2024 because the stock price condition was met. If holders elect to convert, HubSpot may be required to settle a portion or all of the conversion obligation in cash, which could adversely affect liquidity.
MD&A states foreign exchange fluctuations and rising inflation have had and may continue to have an adverse impact on financial condition and operating results. Risk factors also cite 2024 U.S. Presidential Election uncertainty, potential government shutdown, and elevated interest rates as sources of economic uncertainty that could reduce customer spending or delay purchasing decisions.
Headcount grew to 8,103 full-time employees as of September 30, 2024 from 7,663 as of December 31, 2023, increasing employee-related costs across research and development, sales and marketing, and general and administrative functions. The company faces competition for skilled personnel, especially in a remote or hybrid environment, and failure to attract or retain key employees could impair growth.
HubSpot acquired Clearbit in December 2023 and Cacheflow in October 2024. Integration risks, unanticipated costs, inability to retain customers or partners, and potential dilution or impairment charges could harm operating results.
As international operations expand, exposure to currency movements increases, particularly the Euro, British Pound Sterling, Australian Dollar, Singapore Dollar, Japanese Yen, Colombian Peso, and Canadian Dollar. MD&A attributes changes in other income to the increase in the value of the Euro and British Pound Sterling relative to the U.S. Dollar, and the hedging program may not be effective.
SaaS KPIs
All quarters →Average Subscription Revenue Per Customer
Customers
Summary, forecast, risks and KPIs are extracted from HUBSPOT INC's SEC filings for Q3 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 1, 2026.