HubSpot, Inc.

Please stand by, we're about to begin. Good afternoon, everyone, and welcome to the HubSpot Q4 2021 earnings conference call. Just a quick reminder, today's call is being recorded. At the end of today's prepared remarks, we will have a formal question and answer session. To queue up for questions, please press star one. We do ask that you please limit yourself to one question. And now at this time, I'll turn the call over to the head of investor relations, Mr. Chuck McClashy. Please go ahead, sir.

Thanks, operator. Good afternoon and welcome to HubSpot's fourth quarter and full year 2021 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 Yamini Rangan, our chief executive officer, Dharmesh Shah, our co-founder and CTO, 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, leadership transitions, and Business Outlook, including our financial guidance for the first fiscal quarter and full year 2022. Forward-looking statements reflect our views only as of today and, as except is 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 was filed with the SEC on November 3, 2021, 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 fourth quarter and fiscal year 2021 earnings press release in the investor relations section of our website. Now, it's my pleasure to turn over the call to HubSpot's Chief Executive Officer, Yamini Rangan. Yamini?

Thank you so much, Chuck, and welcome, everyone. Thank you for joining us as we review HubSpot's fourth quarter and full year 2021 results. Last year was one of immense change, and I'm incredibly proud of how the HubSpot team was able to adapt and execute to meet the needs of our customers. Going into 2021, our goal was to be the number one CRM platform for scaling companies. We made significant progress towards that goal, and you can see that in our results. We've continued to see broad-based strength across the business, with revenue growing 47% year-over-year in constant currency in the fourth quarter. We closed out 2021 with more than 135,000 customers globally, nearly $1.5 billion in ARR, and we generated more than $200 million of free cash flow. We also recently hit the exciting milestone of having more than 1,000 apps available in our marketplace. We know that customers who use integrations are more successful, and so having a robust ecosystem is essential to delivering on our platform vision. Now, I want to take a step back and look at the macro trends that drove our sustained growth in 2021. Since HubSpot's inception, we've evangelized the shift towards digital transformation. That shift accelerated as small and medium businesses around the world have had to quickly pivot to doing business online. In this world of rapid digital transformation, providing a remarkable customer experience has gone from being a competitive advantage to being a necessity. Now more than ever, businesses need a modern and powerful CRM that helps them create those experiences. And HubSpot is becoming a CRM provider of choice for these SMBs as they navigate this journey. We did two things exceptionally well in 2021. We drove product innovation and we aligned our product and go-to-market functions for tight execution. First, let's talk about product innovation. We both innovated on our anchor hubs and expanded our CRM platform with new product offerings. Operations Hub, which we launched in April, is one of those new products. This new hub meets the needs of operations teams struggling to get clean data, automate that data, report on that data, and drive insights to help their businesses grow. Through Operations Hub, Revenue operations teams have access to more than 100 native integrations that bring even more data into HubSpot to make it very powerful. Operations Hub supercharges the HubSpot CRM and drives more value, and we are seeing that in the numbers. We surpassed more than 15,000 customers using Operations Hub in Q4 and are seeing strong demand among both existing customers and new customers adopting it as part of our CRM suite. We also introduced a new level for growth with payments and commerce, and believe that commerce-enabled CRM can drive growth for our customers. I'm really thrilled to share that HubSpot Payments is now available to all US customers, with our target segment being companies with fewer than 100 employees. Customer feedback is validating our hypothesis that a commerce solution is much more powerful when it's natively built inside of a CRM. We know that native payments are vitally important for SMBs to grow their businesses online, particularly when it comes to having commerce context embedded in CRM. This actually ensures that all front office teams have visibility into their interactions with the customer. While it's very early days, We're encouraged by the momentum we're seeing with our payments offering. In addition to launching new products, we've continued to invest in our anchor hubs of marketing, sales, and service. We extended our lead in CRM and drove sustained growth with new enterprise-level features platform-wide. Getting insights across the entire front office is still a huge challenge for many scaling companies. They're forced to use siloed, disparate systems that don't give them the visibility they need to grow their business. The improvements we made in 2021 are helping to solve those challenges, particularly when customers adopt multiple hubs. Multi-hub adoption now accounts for 60% of our customer base compared to 34% in 2017, which is a powerful indicator that our customers are seeing value in adopting HubSpot across multiple parts of their business. Take a look at reseller ratings, a user-generated content platform for retail brands. Like many scaling companies, they were bogged down with a disparate stack of multiple front office tools that did not provide visibility across the business. So their marketing and sales teams consolidated all of their work on HubSpot and saw a 25% increase in traffic, 30% increase in contract value, and a 75% decrease in customer churn rate. This is exactly what we expect to see when customers adopt our CRM suite. Reseller ratings is creating better experience for their customers and scaling with HubSpot. Now let's shift gears to talk about the alignment between product and go-to-market and how that drove great execution in 2021. Our sweet spot historically has been the 20 to 200 employee segment. Last year, we set out to optimize the customer experience across all three key segments in which we operate. At the lower end, we're providing a full suite that is easy to use and easy to buy, and we are driving better experience through touchless and chat-assisted sales. We're making it seamless for customers to adopt our product, and we see that within our suite momentum. At the higher end of the market, We've continued to invest significantly in internal enablement initiatives that are driving higher sales productivity. We're also working to strengthen the alignment between inside sales and our solutions partners, and we're seeing momentum there. The process rigor that we have is enabling our sales team to better communicate the value of HubSpot and win higher value, higher ASP, upmarket deals that contributed to the strong results we saw across the year. As I look back on our accomplishments in 2021, we made remarkable progress on our path to becoming the CRM platform of choice for scaling companies. Small and medium businesses need great front office solutions that can provide insights to drive growth. That increased need coupled with our product innovation and go-to-market execution, gives us a solid foundation for strong growth in 2022. Looking to this year, we're going to stay focused on the four strategic priorities that I outlined at the analyst day. Our first priority is to deliver a world-class front office platform by continuing to invest in new and existing hubs, as well as driving extensibility of that platform. Our second strategic priority is to strengthen our segmentation approach across product and go-to-market. We will continue to deliver consumer-grade experiences with powerful enterprise-grade features. That will translate into a focus on driving broad suite adoption at the starter tier while enabling customers to gain more value from professional and enterprise tiers. Our third strategic priority is to invest in payments and commerce. We will be laser focused on driving full adoption through the entire customer journey from payment discovery to transaction. We will also look to increase the volume that merchants transact in the product. Finally, our priority is to build a sustainable company. We'll do that by hiring and developing diverse talent, adopting and reporting on environmentally sustainable practices, and investing in data privacy solutions that build customer trust. I am really excited about the opportunity ahead and the investments we're making in 2022 to execute towards that opportunity. With that, I'll hand it over to Kate to discuss our financial results. Kate?