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HubSpot, Inc. (NYSE: HUBS), a leading inbound marketing and sales software company, recently declared financial results for the fourth quarter and full year ended December 31, 2016.

Financial Highlights:

Revenue

Fourth Quarter 2016:

  • Total revenue was $76.4 million, up 44% contrast to the fourth quarter of 2015.
  • Subscription revenue was $72.4 million, up 46% contrast to the fourth quarter of 2015.
  • Professional services and other revenue was $4.0 million, up 15% contrast to the fourth quarter of 2015.

Full Year 2016:

  • Total revenue was $271.0 million, up 49% contrast to 2015.
  • Subscription revenue was $254.8 million, up 52% contrast to 2015.
  • Professional services and other revenue was $16.2 million, up 15% contrast to 2015.

Operating Loss

Fourth Quarter 2016:

  • GAAP operating margin was (18.1%) for the quarter, contrast to (19.7%) in the fourth quarter of 2015.
  • Non-GAAP operating margin was (5.9%) for the quarter, an improvement of about 2 percentage points from (8.3%) in the fourth quarter of 2015.
  • GAAP operating loss was ($13.8) million for the quarter, contrast to ($10.4) million in the fourth quarter of 2015.
  • Non-GAAP operating loss was ($4.5) million for the quarter, contrast to ($4.4) million in the fourth quarter of 2015.

Full Year 2016:

  • GAAP operating margin was (16.5%) for 2016, contrast to (25.5%) in 2015.
  • Non-GAAP operating margin was (4.4%) for 2016, an improvement of about 9 percentage points from (13.8%) in 2015.
  • GAAP operating loss was ($44.7) million for 2016, contrast to ($46.5) million in 2015.
  • Non-GAAP operating loss was ($11.9) million for 2016, contrast to ($25.1) million in 2015.

Net Loss

Fourth Quarter 2016:

  • GAAP net loss was ($13.8) million, or ($0.39) per share for the quarter, contrast to ($10.3) million, or ($0.30) per share, in the fourth quarter of 2015.
  • Non-GAAP net loss was ($4.5) million, or ($0.13) per share for the quarter, contrast to ($4.2) million, or ($0.12) per share, in the fourth quarter of 2015.
  • Fourth quarter weighted average shares outstanding were 35.7 million contrast to 34.2 million shares in the fourth quarter of 2015.

Full Year 2016:

  • GAAP net loss was ($45.6) million, or ($1.29) per share for 2016, contrast to ($46.1) million, or ($1.39) per share, in 2015.
  • Non-GAAP net loss was ($12.8) million, or ($0.36) per share for 2016, contrast to ($24.6) million, or ($0.74) per share, in 2015.
  • 2016 weighted average shares outstanding were 35.2 million contrast to 33.2 million shares in 2015.

Balance Sheet and Cash Flow

  • The company’s cash and cash equivalents and investments balance was $150.1 million as of December 31, 2016.
  • During the fourth quarter, the company generated $2.3 million of operating cash flow contrast to $2.6 million of operating cash flow during the fourth quarter of 2015.
  • During the full year ended December 31, 2016, the company generated $19.4 million of operating cash flow contrast to using ($0.4) million of operating cash flow during the year ended December 31, 2015.

Additional Recent Business Highlights

  • Grew total marketing customers to 23,226 at December 31, 2016, up 28% from December 31, 2015.
  • Raised average subscription revenue per customer during the fourth quarter of 2016 to $12,592 from $11,135 in the fourth quarter of 2015.

“2016 was an exciting year for HubSpot. We expanded our global footprint, added a record number of new customers and made noteworthystrides in our aim to become non-GAAP operating income positive by year-end 2017. But even more importantly, we took steps towards evolving HubSpot from a single product company to a multi-product company with the aim of becoming the mid-market platform for growth,” said Brian Halligan, HubSpot co-founder and CEO. “As we head into 2017, I think the bold bets we’re making in delivering on that aim through our full growth stack will set us up for success into the future.”

Business Outlook

Based on information available as of February 14, 2017, HubSpot is issuing guidance for the first quarter and full year of 2017 as indicated below.

First Quarter 2017:

  • Total revenue is expected to be in the range of $78.5 million to $79.5 million.
  • Non-GAAP operating loss is expected to in the range of ($3.5) million to ($2.5) million. This excludes stock-based compensation expense of about $8.9 million and amortization of attained intangible assets of about $16 thousand.
  • Non-GAAP net loss per common share is expected to be in the range of ($0.10) to ($0.08). This excludes stock-based compensation expense of about $8.9 million and amortization of attained intangible assets of about $16 thousand. This assumes about 36.2 million weighted common shares outstanding.

Full Year 2017:

  • Total revenue is expected to be in the range of $349.0 million to $353.0 million.
  • Non-GAAP operating loss is expected to in be in the range of ($11.5) million to ($7.5) million. This excludes stock-based compensation expense of about $43.3 million and amortization of attained intangible assets of about $16 thousand.
  • Non-GAAP net loss per common share is expected to be in the range of ($0.30) to ($0.22). This excludes stock-based compensation expense of about $43.3 million and amortization of attained intangible assets of about $16 thousand. This assumes about 36.7 million weighted common shares outstanding.

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