Ir deck 5 21-16 final q1 - NEW

1. 1

2. This presentation includes certain “forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995,
including statements concerning our cash flow and margin improvement expectations, our position to execute on our growth strategy in the
mid-market, and our ability to expand our leadership position and market opportunity for our inbound platform. These forward-looking
statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press
release that are not historical facts and statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates" or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions,
expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have
made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-
looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or
achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a
variety of risks and factors that are beyond our control including, without limitation, our history of losses, our ability to retain existing
customers and add new customers, the continued growth of the market for an inbound platform; our ability to differentiate our platform from
competing products and technologies; our ability to manage our growth effectively to maintain our high level of service; our ability to maintain
and expand relationships with our marketing agency partners; our ability to successfully recruit and retain highly-qualified personnel; the
price volatility of our common stock, and other risks set forth under the caption "Risk Factors" in our Quarterly Report on Form 10-Q filed
on May 4, 2016 and our other SEC filings. We assume no obligation to update any forward-looking statements contained in this document as
a result of new information, future events or otherwise.
Safe Harbor
2

3. Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
$30.4M
51% Y/Y
$34.2M
53% Y/Y
$38.2M
58% Y/Y
$42.9M
58% Y/Y
$47.7M
57% Y/Y
$53.1M
56% Y/Y
RevenueCustomers by Country
An Inbound Marketing & Sales SaaS Company
19,322 customers, 90+ countries, 5 locations worldwide
Cambridge, MA | Portsmouth, NH | Dublin, Ireland | Sydney, Australia | Singapore | Tokyo, Japan (Q3 2016)
$59.0M
54% Y/Y
3

4. Why does exist?
4

5. 94%
skip TV ads
94%
unsubscribe
from email
27%
direct mail is
never opened
50%
(Over 200M)
are on do-not-call lists
Base: Varied bases, minimum 598 global digital consumers
Source: HubSpot Global Interruptive Ads Survey, Q4 2015 – Q1 2016.
The old marketing and sales playbook is broken.
(Because the way people shop for and buy things has changed)
5

6. Marketing has become an arms race for attention.
6

7. Aggressively seeks to
extract value by interrupting
the consumer’s life
Commercials Cold calls Spam
Print ads MailersPop-up ads
Old School Tactics
7

8. But today’s consumers have
the tools to fight back.
8

9. Skip
commercials
Screen calls Delete spam
Ignore print
Straight in
the bin
Pop-up
blockers
It’s easier than ever
for customers to
block out the noise
Blocking Out the Noise
9

10. So how do you reach a consumer
who doesn’t want to be bothered?
Be helpful.
10

11. Inbound Marketing & Sales
1111

12. “Wait. What is inbound?”
12

13. Inbound is about the size of your brain,
not the width of your wallet
Helpful | Human | Personal | Transformational | Empowering | Educational
13

14. How Does Inbound Work?
Aggressively pushes
content at innocent
bystanders, interrupting
their life
Inbound pulls in prospects
by offering helpful content
and experience when
they need it
VS.
Outbound Inbound
SEO | Blogs | SocialCold Calling | Spam | Interruptive Ads
14

15. How does HubSpot do inbound?
15

16. Inbound Methodology
16

17. The Inbound Value Proposition:
Simply put, it’s about growing an asset vs. renting one.
1 2 3
Predictable Measurable Proven ROI
Icon Source: http://thenounproject.com via Gregor Cresnar 17

18. Did you know: More than 90% of
HubSpot’s new leads each month
come from “Old Content”?
92% Leads
from Old Posts
8% Leads from
New Posts
In other words, if HubSpot’s blogging team took
next month off,
we’d still generate 92% of leads
as if we’d continued to publish new content.
Source: Historical Blog Post Optimization Project (learn more here: http://blog.hubspot.com/marketing/historical-blog-seo-conversion-optimization)
Predictable
18

19. This post was written by HubSpot CEO
Brian Halligan in July 2010. In 2015, it:
● Still ranks #1 in Google searches
● Received 17,854 views
● Generated 117 leads
5 Years later, still moving the needle.
What Does an Inbound Asset Look Like?
Article ranks #1 for “inbound marketing vs outbound marketing”
19

20. In a digital world,
track everything
from clicks to
conversions to
revenue
Measurable
20

21. No matter the size of your
marketing budget, inbound
can bring you ROI.
This is the real deal.
From big marketing budget to small, a
significant number of businesses saw
higher returns from inbound marketing
than from outbound.
0%
10%
20%
30%
40%
50%
60%
$25K or less $25,001 to
$100K
$100,001 to
$500K
$500,001 to
$1M
$1M to $5M More than
$5M
We see higher ROI using inbound
marketing
We see higher ROI using outbound
marketing
42%
Inbound vs. Outbound ROI by Marketing Spend
Big budget or small – everyone gets big returns from inbound
8%
47%
52%
44%
48%
52%
14%
11%
18%
14%
18%
Proven ROI
Source: HubSpot’s 2015 State of Inbound Report; survey of approximately 4,000 respondents; majority of respondents are marketers at B2Bs; approx one-third of respondents have
an affiliation with HubSpot; approx ½ of respondents generate revenue under $1M
21

22. 0% 10% 20% 30% 40% 50% 60% 70% 80%
0 to 25 employees
26 to 200 employees
201 or more employees
As it turns out,
ROI matters.
A lot.
Proving the ROI of
our marketing activities
Securing
enough budget
Managing
our website
Identifying the right
technologies for my needs
Training our team
Targeting content for
an international audience
Hiring top talent
Finding an
executive sponsor
42%
57%
71%
32%
32%
51%
32%
31%
31%
31%
22%
29%
23%
24%
26%
23%
23%
24%
19%
25%
22%
9%
5%
8%
Top Challenges by Company Size
Proving ROI and subsequently securing more budget are marketers’ biggest roadblocks
Source: HubSpot’s 2015 State of Inbound Report; survey of approximately 4,000 respondents; majority of respondents are marketers at B2Bs; approx one-third of respondents have an affiliation with HubSpot; approx ½ of respondents generate revenue under $1M
22

23. We are an inbound marketing & sales SaaS company.
Our mission is to transform how companies market and sell.
Our vision is a world where business is inbound.
23

24. Total Addressable Market
With growth in international
via new market exploration
and in ASRPC via new
products, we anticipate this
opportunity will continue to
grow.
Mid Market Opportunity
-3.0M is US, CAN, and Europe. 1.6M mid-market businesses with a web presence in the United States and Canada. 1.4M mid-market
businesses with a web presence in Europe. -AMI Partners data, 2014. Avg. Subscription Revenue per Customer from Q1’16
There are ~ 3 million
mid-market companies
in US, Canada, and
Europe alone. With an
ASRPC of $11,494, we’re
looking at $30+ billion of
untapped potential.
24

25. 150,000+
Members
Where the inbound
movement grows the
other 360 days of the
year
14,000+ Registered
Attendees
Where the inbound movement
grows every year
● 40% more registered
attendees than 2014
● 250+ speakers; hundreds
of hours of content
● 123k mentions of
#INBOUND15
3,100 Partners
HubSpot provides training and support
to our agency partners, working
together to sell our products.
35,000+
Certifications
HubSpot’s one-stop-shop
for free education on all
things inbound
46,000+
Linking Domains
The number of websites linking
back to HubSpot, providing us
with both authority in search
engines and recognition among
industry professionals
The Inbound Community
25

26. HubSpot Marketing
All-in-one marketing
software platform
Sales Productivity Tools Free CRM for Small Business
HubSpot CRM
Content
Marketing Automation
Analytics & Reporting
Websites
Ads Add-on
Email Templates
Profiles
Email Tracking
Sequences
Contact Timeline
Reporting
Analytics
Prospects
HubSpot Sales
The HubSpot Platform
26

27. HubSpot Marketing Pricing
Upgrade based on
contact database
size.
Upgrade based on features.
Cross sell new
products into both
marketing and
sales customers
27

28. Company Awards
● Glassdoor: #4 Workplace
● Fortune & Great Place to Work: Top Workplace for Camaraderie, Best Small &
Medium Workplace, Top Workplace for Women
● Entrepreneur: Top Company Culture
● The Boston Globe: Top Place to Work
● Boston Business Journal: Best Place to Work
Product and Service Awards
● Named a “Visionary” in Gartner’s 2015 Magic Quadrant for CRM Lead Management
● Frost & Sullivan 2015 Global Marketing Automation Software Customer Value
Leadership Award
● G2 Crowd: Best Marketing Automation Software, Best Web Content Management
Software, Named a “Leader” in the Summer 2015 Marketing Automation Grid
What do these accolades mean? In combination with HubSpot’s close
proximity to Boston’s top-tier schools, we attract top talent.
HubSpot, in the words of others.
28

29. Customer Case Study: VeriFirst Background Screening
• Low organic traffic
• Poor web presence
• Multiple point solutions
• Inefficient sales funnel
• Poor lead nurturing
• Poor S&M alignment
• Slow sales onboarding
Problem Solution Tools
• Blog
• Sites
• SEO
• Email templates
• Email tracking
• Sequences
• Contact timeline
• Prospects
• Tasks
6X
increase in
monthly customers
12X
increase in
monthly traffic
11X
increase in monthly
contacts generated
Three Year
Results:
Source: Customer data; Note: “Three Year Results” compare the 6-month trailing averages of visits, contacts, and customers in August 2012 to the same values in May 2016.
29

30. HubSpot, in short…
Growth opportunity with multiple drivers
- Large, diversified and expanding global addressable market
- Drive new customer growth, cross sell existing products and grow internationally
Efficient and scalable customer acquisition model
- We expect margin improvement will drive sustained positive operating cash flow throughout
‘16 and break-even free cash flow in 1H17
30

31. Financial Review
31

32. GROWTH DRIVERS: Domestic | International | Cross Sell Opportunity
REVENUE CUSTOMERS ASRPC
Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
$30.4M
51% Y/Y
$34.2M
53% Y/Y
$38.2M
58% Y/Y
$42.9M
58% Y/Y
$47.7M
57% Y/Y
$53.1M
56% Y/Y
Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
12,478
31% Y/Y
13,607
35% Y/Y
14,746
35% Y/Y
15,839
36% Y/Y
16,854
35% Y/Y
18,116
33% Y/Y
Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16
$9,183
15% Y/Y
$9,530
14% Y/Y
$9,740
15% Y/Y
$10,127
15% Y/Y
$10,607
16% Y/Y
$11,135
17% Y/Y
$59.0M
54% Y/Y
19,322
31% Y/Y
$11,494
18% Y/Y
32

33. Operating Margin (Non-GAAP) Gross Margin (Non-GAAP)
-13.2%-26.0% -31.8% -20.7% -16.4%-34.3%
68.9% 70.0% 70.1% 71.9% 73.5% 74.8%
Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’15
1000 bps improvement
operating margin year-on-year
Steady growth in Gross and Operating Margin trajectory
Q1’16
-18.3% -8.3% -6.1%
74.7% 75.1% 77.0%
33All percentages for historical period are non-GAAP and exclude expenses associated with stock based compensation
and amortization of acquired intangibles. Please refer to the end of this presentation for a reconciliation of GAAP to non-GAAP figures.

34. Key Financial Metrics
Key financial
metrics
2011 2012 2013 2014 2015 Q1’16
Gross Margin 61% 70% 65% 70% 75% 77%
R&D 27% 19% 18% 17% 14% 14%
S&M 82% 66% 67% 63% 58% 56%
G&A 21% 16% 19% 18% 16% 14%
Operating (Loss) /
Income %
(69%) (31%) (39%) (28%) (14%) (6%)
CFFO (44%) (11%) (26%) (11%) (0%) 5%
All percentages for historical period are non-GAAP (other than CFFO) and exclude expenses associated with stock based compensation
and amortization of acquired intangibles. Please refer to the end of this presentation for a reconciliation of GAAP to non-GAAP figures.
34

35. Thank you from HubSpot!
35

36. GAAP to Non-GAAP Reconciliation
36
HubSpot, Inc.
GAAP to Non-GAAP Reconciliation
$ '000s
% of
Revenues $ '000s
% of
Revenues $ '000s
% of
Revenues $ '000s
% of
Revenues $ '000s
% of
Revenues $ '000s
% of
Revenues
Cost of Revenue
Subscription* 4,964 17% 9,689 19% 18,745 24% 23,655 20% 32,271 18% 8,910 15%
Stock-based compensation (16) 0% (27) 0% (50) 0% (128) 0% (341) 0% (94) 0%
Amortization of acquired intangibles (130) 0% (224) 0% (359) 0% (118) 0% (70) 0% (18) 0%
Non-GAAP subscription* 4,818 17% 9,438 18% 18,336 24% 23,409 20% 31,860 18% 8,798 15%
Professional services and other 6,368 22% 6,004 12% 8,759 11% 11,425 10% 15,652 9% 5,061 9%
Stock-based compensation (131) 0% (100) 0% (211) 0% (498) 0% (1,216) -1% (324) -1%
Amortization of acquired intangibles - 0% - 0% - 0% - 0% - 0% - 0%
Non-GAAP professional services and other 6,237 22% 5,904 11% 8,548 11% 10,927 9% 14,436 8% 4,737 8%
Gross Profit
Gross Profit* 17,221 60% 35,911 70% 50,130 65% 80,796 70% 134,020 74% 44,989 76%
Stock-based compensation 147 1% 127 0% 261 0% 626 1% 1,557 1% 418 1%
Amortization of acquired intangibles 130 0% 224 0% 359 0% 118 0% 70 0% 18 0%
Non-GAAP gross profit* 17,498 61% 36,262 70% 50,750 65% 81,540 70% 135,647 75% 45,425 77%
Operating Expenses
Research and development 10,031 35% 10,585 21% 15,018 19% 25,638 22% 32,457 18% 9,804 17%
Stock-based compensation (2,341) -8% (739) -1% (691) -1% (6,190) -5% (6,327) -3% (1,758) -3%
Amortization of acquired intangibles - 0% - 0% - 0% - 0% - 0% 0%
Non-GAAP research and development 7,690 27% 9,846 19% 14,327 18% 19,448 17% 26,130 14% 8,046 14%
Sales and marketing 24,088 84% 34,949 68% 53,158 68% 78,809 68% 112,629 62% 35,198 60%
Stock-based compensation (647) -2% (691) -1% (1,194) -2% (5,596) -5% (7,658) -4% (2,427) -4%
Amortization of acquired intangibles - 0% - 0% - 0% (20) 0% (26) 0% (6) 0%
Non-GAAP sales and marketing 23,441 82% 34,258 66% 51,964 67% 73,193 63% 104,945 58% 32,765 56%
General and administrative* 7,517 26% 9,117 18% 16,204 21% 24,958 22% 35,408 19% 9,848 17%
Stock-based compensation (1,484) -5% (958) -2% (1,318) -2% (3,946) -3% (5,766) -3% (1,628) -3%
Amortization of acquired intangibles - 0% - 0% - 0% - 0% - 0% - 0%
Non-GAAP general and administrative* 6,033 21% 8,159 16% 14,886 19% 21,012 18% 29,642 16% 8,220 14%
Loss from Operations
Loss from operations (24,415) -86% (18,740) -36% (34,250) -44% (48,609) -42% (46,474) -26% (9,861) -17%
Stock-based compensation 4,619 16% 2,515 5% 3,464 4% 16,358 14% 21,308 12% 6,231 11%
Amortization of acquired intangibles 130 0% 224 0% 359 0% 138 0% 96 0% 24 0%
Non-GAAP loss from operations (19,666) -69% (16,001) -31% (30,427) -39% (32,113) -28% (25,070) -14% (3,606) -6%
* Amounts in years ended 2011 - 2014 have been adjusted from prior SEC filings for reclassification of customer credit card fees from cost of revenue, subscription to general and administrative expenses to conform with current year's presentation.
Three Months Ended
March 31, 20162014
Year ended December 31,
2011 2012 2013 2015