2. 2
Safe Harbor
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 November 2, 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.
3. Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
RevenueCustomers by Country
An Inbound Marketing & Sales SaaS Company
21,658 customers, 90+ countries, 6 locations worldwide
Cambridge, MA | Portsmouth, NH | Dublin, Ireland | Sydney, Australia | Singapore | Tokyo, Japan
$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
$59.0M
54% Y/Y
3
$65.0M
51% Y/Y
$70.6M
48% Y/Y
6. 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)
6
8. Skip
commercials
Screen calls Delete spam
Ignore print
Straight in
the bin
Pop-up
blockers
Blocking Out the Noise
It’s easier than ever
for customers to
block out the noise
8
9. So how do you reach a consumer
who doesn’t want to be bothered?
Be helpful.
9
12. Inbound is about the size of your brain,
not the width of your wallet
Helpful | Human | Personal | Transformational | Empowering | Educational
12
13. 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
13
16. 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 16
17. 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
17
18. 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”
18
19. In a digital world,
track everything
from clicks to
conversions to
revenue
Measurable
19
20. 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
20
21. 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
21
22. 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.
22
23. 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 Q3’16
There are ~ 3 million
mid-market companies
in US, Canada, and
Europe alone. With an
ASRPC of $12,320, we’re
looking at $30+ billion of
untapped potential.
23
24. 170,000+
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
3,400+ Partners
HubSpot provides training and support
to our agency partners, working
together to sell our products.
54,000+
Certifications
HubSpot’s one-stop-shop
for free education on all
things inbound
51,000+
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
24
26. HubSpot Marketing Pricing
Upgrade based on
contact database
size.
Upgrade based on features.
Cross sell new
products into both
marketing and
sales customers
26
27. 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
● GetApp’s 2016 Q3 report: Named #1 Marketing Automation Software, Content
Marketing App
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.
27
28. 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.
28
29. 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
29
32. Steady Progress in Gross and Operating Margin Trajectory
32All 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.
*This removes the impact of Inbound in 2015.
Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
Operating Margin (Non-GAAP) Gross Margin (Non-GAAP)
~9 point
operating margin
improvement*
-34.3% -26.0% -31.8% -20.7% -16.4% -13.2% -18.3% -8.3% -6.1% -3.9% -1.8%
68.9% 70.0% 70.1% 71.9% 73.5% 74.8% 74.7% 75.1% 77.0% 77.6% 78.4%
33. Key Financial Metrics
Key Financial
Metrics
(% of Revenue)
2011 2012 2013 2014 2015 Q1’16 Q2’16 Q3’16
Gross Margin 61% 70% 65% 70% 75% 77% 78% 78%
R&D 27% 19% 18% 17% 14% 14% 14% 14%
S&M 82% 66% 67% 63% 58% 56% 55% 53%
G&A 21% 16% 19% 18% 16% 14% 13% 13%
Operating (Loss)
/ Income %
(69%) (31%) (39%) (28%) (14%) (6%) (4%) (2%)
*CFFO (44%) (11%) (26%) (11%) (0%) 5% 13% 7%
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.
33