Summary
HubSpot reported fourth quarter 2021 total revenue of $369.3 million, up 46.5% from $252.1 million in the fourth quarter of 2020. Full year revenue was $1.30 billion, up 47.3% from $883.0 million. Gross profit was $297.7 million for the quarter, up 45.4%, and $1.04 billion for the full year, up 45.5%. Gross margin slipped to 80.6% in the quarter from 81.2%, and to 80.1% for the full year from 81.1%. The company remained unprofitable on a GAAP basis. Fourth quarter operating loss was $8.2 million, down from $7.6 million. Full year operating loss was $54.8 million, down from $50.8 million. Fourth quarter net loss was $16.4 million, down from $15.4 million. Full year net loss was $77.8 million, up from $85.0 million. Diluted EPS for the full year was -$1.66, up from -$1.90. Operating margin was -2.2% in the quarter, up from -3.0%, and -4.2% for the full year, up from -5.8%.
On a non-GAAP basis, fourth quarter operating income was $38.2 million, compared with $24.6 million, and non-GAAP operating margin was 10.3%, compared with 9.8%. Full year non-GAAP operating income was $117.6 million, compared with $74.9 million, and non-GAAP operating margin was 9.0%, compared with 8.5%. Non-GAAP net income was $29.6 million for the quarter, or $0.58 per diluted share, compared with $20.1 million, or $0.40 per diluted share. Full year non-GAAP net income was $92.5 million, or $1.82 per diluted share, compared with $64.5 million, or $1.32 per diluted share. GAAP operating cash flow was $95.2 million in the quarter, up 56.2% from $60.9 million. Full year GAAP operating cash flow was $238.7 million, up 168.5% from $88.9 million. Free cash flow, a non-GAAP measure, was $78.3 million in the quarter, compared with $45.8 million, and $203.3 million for the full year, compared with $79.1 million. Capital expenditures were $11.3 million in the quarter, up 19.0% from $9.5 million, and $28.7 million for the full year, down 22.9% from $37.3 million.
Customers grew to 135,442 at December 31, 2021, up 30% from December 31, 2020. Average Subscription Revenue Per Customer was $10,875 during the fourth quarter of 2021, up 11% compared to the fourth quarter of 2020. Deferred revenue was $430.4 million at December 31, 2021, up 37.6% from $312.9 million. Remaining performance obligations were $376.6 million, up 47.3% from $255.6 million. The company had 5,895 full-time employees and served customers in more than 120 countries. Subscription revenue accounted for 97% of total revenue for the year ended December 31, 2021.
Management issued guidance for the first quarter of 2022 and full year 2022. For the first quarter of 2022, non-GAAP operating income is expected to be $30 million to $31 million, and non-GAAP net income per common share is expected to be $0.46 to $0.48. For full year 2022, non-GAAP operating income is expected to be $155 million to $157 million, and non-GAAP net income per common share is expected to be $2.34 to $2.42. The guidance assumes approximately 51.3 million weighted average diluted shares for the first quarter and 51.5 million for the full year. The company continues to face risks including its history of losses, the need to retain existing customers and add new customers, competition in the CRM market, rapid technological change, the ability to manage growth, dependence on solutions partners, the need to recruit and retain highly qualified personnel, stock price volatility, and the impact of COVID-19 on the business and the broader economy. HubSpot also noted that it does not expect to be profitable in the near term.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $369.3M | $339.2M | +8.9% | $252.1M | +46.5% |
| Gross profit | $297.7M | $269.6M | +10.4% | $204.8M | +45.4% |
| Gross margin | 80.6% | 79.5% | +1.1 pp | 81.2% | -0.6 pp |
| Research & development | $83.0M | $78.5M | +5.8% | $55.6M | +49.4% |
| Sales & marketing | $180.8M | $170.0M | +6.4% | $127.9M | +41.4% |
| General & administrative | $42.1M | $36.0M | +16.8% | $29.0M | +45.1% |
| Total operating expenses | $305.9M | $284.5M | +7.5% | $212.4M | +44.0% |
| Operating income (loss) | -$8.2M | -$14.9M | +44.8% | -$7.6M | -7.8% |
| Operating margin | -2.2% | -4.4% | +2.2 pp | -3.0% | +0.8 pp |
| Net income (loss) | -$16.4M | -$13.7M | -19.2% | -$15.4M | -6.2% |
| Net margin | -4.4% | -4.0% | -0.4 pp | -6.1% | +1.7 pp |
| Diluted EPS | -$0.35 | — | — | -$0.34 | -$0.01 |
| Customers | 135,442 | 120 | +112768.3% | 120 | +112768.3% |
Risks
HubSpot faces intense competition from cloud marketing automation, email marketing, sales force automation and CRM, enterprise suites, customer service, and content management vendors; some competitors may bundle competing software at little or no additional cost, potentially forcing price reductions and margin pressure.
Substantially all subscriptions are one year or less and customers have no obligation to renew; renewal rates may decline due to pricing, competition, or economic downturns, and deferred revenue recognition may delay the impact on reported results.
A significant portion of operating cost is from third-party data hosting and transmission services, including AWS, which hosts the substantial majority of products and platform; cost increases or AWS service interruptions could harm operating results.
The filing highlights increasing sophistication and frequency of cyberattacks, supply chain attacks such as SolarWinds, Log4j, and Kaseya, and increased risk from remote work; it also notes extensive database access for the development team.
Headcount grew to 5,895 full-time employees as of December 31, 2021 from 4,225 as of December 31, 2020, increasing strain; the company cites competitive hiring in Greater Boston and worldwide remote talent and notes no employment agreements with key personnel.
As of December 31, 2021, $19.4 million of principal remained on the 2022 Notes and $460.0 million on the 2025 Notes; conversion conditions were triggered because the stock price was at least 130% of the conversion price, so holders may convert, potentially requiring cash settlement and reclassification of principal as a current liability.
The continuing effects of COVID-19 remain highly unpredictable; the filing notes supply chain disruption, inflationary pressures, a global labor shortage, and changes in economic policy could impact outlook, and customer spending or renewal rates could be adversely affected.
Changes in the sizes or types of businesses that purchase the platform could affect results; enterprise customers may entail longer sales cycles and more significant selling efforts, while small businesses involve greater credit risk, and mix changes could decrease gross margins.
Rapid headcount and international office expansion strain management, administrative, operational, and financial infrastructure; the hybrid workplace model may create unpredictability in expenses, local tax laws, and employee culture.
Further international expansion exposes HubSpot to EU data security rules, differing labor regulations, Brexit-related uncertainty, currency exchange rate fluctuations, and adverse tax burdens.
The filing warns that many employees critical to disclosure controls and internal control over financial reporting work remotely, and HubSpot has limited experience maintaining effective control systems in remote environments.
HubSpot completed the Hustle acquisition in 2021 and may pursue more; integration risks include diversion of management, failure to realize benefits, dilution, additional expenses, and potential goodwill impairment.
Privacy concerns and end users' acceptance of Internet behavior tracking may limit adoption; GDPR and customer data processing agreements impose breach notification obligations and potential fines.
The CRM Platform is complex and updated several times per day without traditional human quality control reviews; defects or outages could cause data loss, service credits, warranty claims, and customer non-renewal.
Growth depends on Solutions Partners referring customers and providing services; failure to attract or retain partners would require HubSpot to provide services itself and increase operating costs.
The software industry faces patent litigation and patent trolls; open source license compliance could require source code disclosure or an injunction, and HubSpot generally does not indemnify customers for third-party IP infringement claims.
As international operations expand, exposure to the Euro, British Pound, Australian Dollar, Singapore Dollar, Japanese Yen, Colombian Peso, and Canadian Dollar has increased; currency fluctuations may cause revenue and operating results to differ materially from expectations.
The stock price has ranged from $25.79 to $866.00 through December 31, 2021; volatility could lead to securities class action litigation and divert management resources.
SaaS KPIs
All quarters →Average Subscription Revenue Per Customer
Non-GAAP Operating Margin
Non-GAAP Subscription Margin
Customers
Free cash flow
Summary, forecast, risks and KPIs are extracted from HUBSPOT INC's SEC filings for Q4 FY2021 (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.