HubSpot, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the HubSpot Q2 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Chuck McGlashan, Head of Investor Relations. Thank you. Please go ahead.

Thanks, Operator. Good afternoon and welcome to HubSpot's second quarter 2020 earnings conference call. Today we'll be discussing the results announced in the press release that was issued after the market closed. With me on the call this afternoon is Brian Halligan, our Chief Executive Officer and Chairman, and Kate Bucher, our Chief Financial Officer. Before we start, I'd like to draw your attention to the Safe Harbor Statement included in today's press release. During this call, we'll make statements related to our business that may be considered forward-looking within the meaning of Section 27A of the Securities Exchange Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended. All statements other than statements of historical fact are forward-looking statements, including those regarding management's expectations of future financial and operational performance and operational expenditures, expected growth, and business outlook, including our financial guidance for the third fiscal quarter and full year 2020. Forward-looking statements reflect our views only as of today and, except as required by law, we undertake no obligation to update or revise these forward-looking statements. Please refer to the cautionary language in today's press release and our Form 10-Q, which will be filed with the SEC this afternoon for discussion of the risks and uncertainties that could cause actual results to differ materially from expectations. During the course of today's call, we'll refer to certain non-GAAP financial measures as defined by Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed and a reconciliation of the differences between such measures can be found within our second quarter 2020 earnings press release in the investor relations section of our website. Now, it's my pleasure to turn over the call to HubSpot CEO and Chairman, Brian Halligan.

Thanks, Chuck. Good afternoon, folks. Thank you for joining us today. The world's been through a lot in the last few months. Collectively, we're still weathering the storm, but I'm happy to share progress HubSpot's made over the last quarter. Constant currency revenue growth was 26% in Q2, and non-GAAP operating margin was 9%. Total customers grew 34% year over year, surpassing 86,000, while multi-product adoption continued to grow nicely, representing over 38,000 customers. We were fortunate back in Q1 to have some wind in our backs after a strong start to the year. Nevertheless, the onslaught of the global pandemic was felt throughout our company and our customer base. and much of our spring was focused on helping our customers and partners respond to the economic downturn. Today, I'm thankful to say that the disruptive headwinds we faced early in Q2 have eased and might have even begun to shift a bit in our favor, helped along by some nice execution in some important plays we ran. We've had a strong product year so far that's raised the power of our enterprise tier while also adding new products to the mix. This began in Q1 with the introduction of an entirely updated version of Marketing Hub Enterprise. With this relaunch came a ton of advanced features, including revenue attribution reporting, AI-powered A-B testing, and account-based marketing. Marketers can now start with us at an early stage and grow with us into a large scale-up now that we've released this product. Marketing Hub Enterprise is really resonating nicely for us in the market. In Q2, We introduced a new product line, CMS Hub. This was a completely reimagined version of our previous CMS add-on with advanced features making up a pro and enterprise tier. We have found strong product market fit in the mid-market between simple but limited website products and overly complex content management systems. CMS Hub gives companies the benefit of advanced features like dynamic content, adaptive testing, and 24 by 7 security monitoring without all that heavy maintenance and design needs that comes with legacy content management system solutions. Companies and organizations like ClassPass, World Wildlife Fund, and Randstad have now built sites on the new CMS hub. The formalization of our CMS hub through the addition of these tiers led to a really nice rate of acceleration and growth in that product line. You see, The traditional enterprise SaaS playbook is to cobble together a product through acquisitions. This approach has led to a pretty rough enterprise front end for a lot of products, married to a pretty solid enterprise back end. HubSpot has skewed that traditional approach. We've chosen instead to handcraft our product in-house. You see underneath HubSpot, there's only one view of that customer and a consistent user experience across that front end. We've married a consumer consumer-like front end with new enterprise power. And this is giving us a real advantage in the marketplace. I think our patient approach and our slight obsession with Apple is starting to really pay off. Now, we haven't just been working on that enterprise tier. To help more businesses make the transition from offline to online after the crisis hit, we reduced the first-year price of our starter growth suite by more than 50% and increased email send and call limits. Additionally, we released greater editing controls of our ad campaigns across Google, Facebook, and LinkedIn in marketing HubSpot starter. All of this resulted in a 400% plus increase in our starter install-based growth as free users upgraded and many new businesses moved fully online for the first time. We coupled this on-ramp to HubSpot with a surge in educational content, and we've seen record engagement in HubSpot Academy as a result. In fact, in Q2, we saw nearly 150% increase year over year in Academy signups and similarly strong growth in the number of people getting certified on HubSpot. Really great stuff. I'm incredibly proud of the way the entire HubSpot team continues to deliver on our product roadmap and pivoted to help our customers amid rapidly changing times. Companies in nearly every industry have had to move their teams or go-to-market strategies and the entire customer experience online. What might have been a gradual digital transformation for some businesses has now been dramatically accelerated by the impact of the pandemic, and we've become the platform to support that transformation in the mid-market. I'm encouraged by the traction we saw in the second quarter, and we see evidence of a continuation of that performance in the early part of Q3, but this short-term demand environment is still quite fluid, so we're watching things very closely. Now, I'll hand things over to Kate to take you through our Q2 financial and operating results in more detail.