#1HubSpot Analyst Day 2023 Ryan Burkart Investor Relations#2Safe Harbor Statement This presentation includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management's expectations for future financial and operational performance and operating expenditures, expected growth, and business outlook, including our long-term financial framework; our focus on profitable growth; cash flow and margin improvement expectations; our product plans, strategies, and trends; our ability to expand our total addressable market; our position to execute on our growth strategy and related growth drivers; our opportunities in international markets; and our ability to expand our leadership position and market opportunity for our CRM 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, exp tations 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, risks associated with our history of losses; our ability to retain existing customers and add new customers; the continued growth of the market for a CRM 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 solutions partners; our ability to successfully recruit and retain highly-qualified personnel; the price volatility of our common stock; the impact of geopolitical conflicts, inflation, macroeconomic instability, and the COVID-19 pandemic on our business, the broader economy, our workforce and operations, and our ability to forecast our future financial performance; and other risks set forth under the caption "Risk Factors" in our 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.#3Today's Agenda Wednesday, Sep 6, 2023 9:40 a.m. 10:00 a.m. 11:30 a.m. 12:00 p.m. 12:50 p.m. 1:20 p.m. Welcome and Safe Harbor Ryan Burkart | Investor Relations Short Break INBOUND Spotlight Short Break HubSpot's Vision for Durable and Efficient Growth Yamini Rangan Customer Platform Value Kipp Bodnar | Chief Marketing Officer Lunch Break Executing Durable and Efficient Growth Kate Bueker | Chief Financial Officer Short Break Executive Q&A#4Thank You#5HubSpot HubSpot's Vision for Durable and Efficient Growth#61 Mission and market 23¹ Product and growth strategy Balancing growth, efficiency and culture#7Our Mission Why Help millions of organizations grow better How Become the #1 Customer Platform for scaling companies ● What Engagement Hubs Smart CRM Connected Ecosystem#8We are in massive markets $51B 2023 1000 - 2000 100 - 999 employees 1 - 99 Software TAM for Marketing, Sales, Service, CMS, and Ops $77B 2028#9What matters to our customers? Acquire customers 66 Quality rather than quantity. Sr. CRM Manager, Cambridge University Press (EE: 2000+) Make data-driven decisions Being smarter with our data. Marketing Manager, Safe Contractors (EE 101-500) Improve customer experience Winning where winning matters. COO, Owl Cyber Defence (EE 101-500) Increase efficiency 66 Don't scale chaos. Director Client Success, Sandler EAM Consulting (EE: 1-10) Thrive with Al 66 We want to show up like people, not bots. CIO, IDEO (EE 101-500)#10Why we win K G Easy to use Easy to grow Easy to run#11Our foundational choices Focus on SMB Move from app to suite to platform Build products organically Deliver value before you monetize#12TWO MAJOR TRANSFORMATIONS M#13We are in the early stages of major transformations *** App Suite KEKK KRI ମମମମ ---- Platform Small Small and Mid-market#14Aspiration: #1 Customer Platform for Scaling Companies Marketing Hub™ Lead generation Marketing Automation Sales Hub™ Prospecting Deal Management Unified Customer Data Marketplace Find integrations, templates & services Al-Powered Service Hub™ Help Desk Self Service CMS Hub® Content Creation Content Management Smart CRM Customer Intelligence Academy Learn new skills, gain credentials Operations Hub™ Advanced Reporting Process Automation Commerce Hub Payments & Subscriptions Billing & Invoices Customization & Extensibility Network Join our community, grow your craft#152014 Every organization deserves a great CRM 2023 Every organization deserves an Al-powered Customer Platform#16✔ HubSpot Al: Powering all Hubs and Platform Al Assistant in Text Editors Al Content Recommendations Al Powered Image Generation Content remix to ads + social Generate campaign + social copy Generate marketing + sales emails Al Assistants Al Agents Al Insights ChatSpot GA by end of '23 Al Chatbot (Available in Service Hub) Al-driven chatbots that respond to incoming support inquiries. Al Conversation Summaries Al Sales Email Summaries Al Driven Call Summaries Accelerated Sales Prospecting Integrated Content Generation Beta by end of '23 Automation Cleanup ● Al Sales Forecasts ● Al Sales Talking Points Deep Company Insights SEO Analysis Al-powered Smart CRM ● Al Assisted Report Creation Al Powered Content Ideas Al Knowledgebase Article Editing Action Item Identification Automatic CRM Associations Call Speaker Identification HubSpot CRM Integration#17Approach to Al Monetization We plan to communicate pricing when features hit GA by early 2024 + Increase market share across all tiers Drive value with Pro and Enterprise tiers Expand with add-ons#18Engagement Hub strategy: Become the Al-powered system of engagement Marketing Hub™ Lead generation Marketing Automation CMOs and marketing ops 59B marketing emails 20B workflows Sales Hub™ Prospecting Deal Management Sales reps and leaders 1.1B deals created 430M deals closed won Al-Powered Service Hub™ Help Desk Self Service Support reps and managers 516M conversations 136M tickets closed CMS Hub® Content Creation Content Management Marketers and content managers 34B website visitors 45M pages published Operations Hub™ Advanced Reporting Process Automation Ops teams and business analysts 4.9M active workflows 43k active data syncs#19npower Business Solutions powered by e-on Multi-hub journey The power of connected Hubs MH, SH, SvH, CMS Consolidated from 5 tools to 1 10% increase in website visits, leads, conversion LEGARTIS Land and expand journey MH, SH, SvH, CMS, Ops, Full CRM Decreased Cost Per Lead by 75% Boosted conversions by 200%#20O Commerce Strategy: Build the single source of truth for commerce and CRM Customer Need: Convert closed opportunities to revenue quickly Unify commerce and customer data to drive growth#21Commerce Hub + Smart CRM = Connected Experience Invoices Channels Payment Links HubSpot Payments Commerce Powered Insights Quotes Customer Data including commerce Customer Experience B2B Checkout Payments 3rd party payments: Stripe & others Smart CRM Customer Intelligence Accounting Integrations Subscriptions Billing Instant Payouts Customization & Extensibility Taxes#22Commerce Hub: Clear momentum across key metrics Are we adding customers? 60% activation growth YoY Are customers returning? 50% growth in transactions/ merchants/month YoY Is transaction volume growing? 240% GPV growth YoY#23Smart CRM Strategy: Become the Al-powered system of record III Unified Customer Data Smart CRM Q Customer Intelligence F7 KY Customization & Extensibility#24Marketing Hub™ Lead generation Marketing Automation HubSpot Customer Platform Sales Hub™ Prospecting Deal Management Unified Customer Data Marketplace Find integrations, templates & services Al-Powered Service Hub™ Help Desk Self Service CMS Hub® Content Creation Content Management Smart CRM Customer Intelligence Academy Learn new skills, gain credentials Operations Hub™ Advanced Reporting Process Automation Commerce Hub Payments & Subscriptions Billing & Invoices Customization & Extensibility Network Join our community, grow your craft#25Our bi-modal strategy is working Drive value K Drive volume Lower end: Acquire customers early Make the product easy to use Build a competitive moat Upmarket: • Scale multi-hub and full suite Drive Pro and Enterprise adoption Be the #1 platform for the mid-market#26Our focus is on driving broad and efficient distribution Who is buying Large Medium Small Digital, sales and partner-driven Digital and sales-driven Digital-driven How we are serving#27We are scaling GTM motions for long-term durable growth Je Digital-driven Scaling from acquisition to activation and retention 85% of Starter customers purchase online Partner-driven Expanding and moving upmarket ~50% of services are delivered by partners O Sales-driven Focusing on consistent execution 32% of new ARR in Pro & Ent is from 3+ Hubs#28Build a company future generations will be proud of }#29We are balancing growth, profitability and culture Drive diverse levers for growth 1 Focus on multi-year efficiency initiatives Scale a diverse and sustainable culture#30HubSpot is positioned for long-term, durable growth Mission Aspiration Product Strategy Go-to-Market Strategy Company Strategy Help millions of organizations grow better. Become the #1 Customer Platform for scaling companies. Power our Engagement Hubs and Smart CRM with Al. Scale breadth of distribution with multiple GTM motions. Build an equitable, sustainable organization.#31Thank You#32HubSpot Customer Platform Value Kipp Bodnar, CMO 8#331 Why CRM is not enough: Customer Platform Today's Agenda 2 Value of Smart CRM 30 Value of Engagement Hubs 45 Value of a Connected Ecosystem#34Why Customer Platform?#35How it started... CRM for Sellers: A simple system of record for sellers to track customer relationships Why CRM is Not Enough CRM with multiple duplicate records and outdated versions of customer data 6. How it's going... We are at a breaking point#36HubSpot: The Customer Platform That Helps Your Business Connect and Grow Better Engagement Hubs that connect your front office with customers across the entire journey Smart CRM that combines customer data with artificial intelligence to power the entire platform Ecosystem that extends the customer platform with an app marketplace, educational content, and community network#37HubSpot: The Customer Platform That Helps Your Business Connect and Grow Better Marketing Hub® Lead generation Marketing Automation Sales Hub® Prospecting Deal Management Unified Customer Data Marketplace Find integrations, templates, & services Customer Platform Service Hub® Help Desk Al-Powered Self Service CMS Hub Content Creation Content Management Smart CRM Customer Intelligence Academy Learn new skills, gain credentials Operations Hub® Advanced Reporting Process Automation Commerce Hub™ Payments & Subscriptions Billing & Invoices Customization & Extensibility Network Join our community, grow your craft#38K What is the value of HubSpot's Customer Platform?#39Smart CRM = Data + AI Legacy CRM is unified by force Legacy CRM is hard to configure Legacy CRM gives you information 个个 Smart CRM is unified by default Smart CRM is easy to customize Smart CRM gives you intelligence#40| Contacts ✓ Conversations ✓ Data Management Properties Objects Contacts Companies Leads Deals Tickets Products Quotes Invoices Forecast Activities Campaigns Custom Objects Import & Export Audit Logs Tools Meetings Calling Inbox Marketing NEW Custom Objects Specific to Your Business Marketing ✓ Sales Service ✓ Automation ✓ Reporting ✓ Select an object: Applications - Setup Associations Pipelines Properties Manage Review properties Manage the information you collect about your Reviews. Creating Reviews CRM Development Choose what information you collect about your Reviews and how you keep your records updated. Record Customization Customize the 'Create Review' form Add, remove, or edit fields on the 'Create Review form . INBOUND 2023 Demos Search HubSpot Create Custom Object Actions#41< Deals V Hub Spa - New Deal Amount: $12,999.50 Close Date: Stage: Qualified to Buy X Email Contacts ✓ Conversations ✓ Call Phone number 857-829-5060 About this company Create Date: Lifecycle stage Customer 10/10/2014 11:30 AM PDT Lead status Open 09/05/2023 Buying role End user Log postal... Became a Lead Date 08/18/2017 5:23 PM EDT Contact owner CRM Customization to Extend Your Data Task Marketing ✓ Actions More Sales Service ✓ Overview Hub Spa - New Deal Deal stage: Qualified to buy Pipeline Sales Pipeline Hub Spa Automation ✓ Activities LinkedIn Company Domain Name hubspa.com Contacts linkedin.com/hubspa Search associated contacts Reports ✓ Operations Forecast category Most likely Number of employees 1,062 Annual revenue $3,400,000.00 Next step Schedule follow-up City Cambridge Industry Health, Wellness, and Fitness Amount $12,999.50 Customize this tab State/Region MA Create date 10/24/21 + Add ☀ * - «#42Value of Engagement Hubs#43Outcomes Activity Armageddon Outcome Obsessed "Smart System" Activity Activity Obsessed "Spam System"#44Engagement is Core to a Great Customer Platform g Engagement Pre-AI Data was a nice to have across several systems Email was king Human activity drove connection Engagement Post-AI Era Data is a must have in one place Omni-channel rules Agents + Humans drive personal connection#45< Back to workflows A Alerts 100% e Details Show minimap panel Workflows to Automate Email Outreach Campaign: Form to Meeting Scheduled Actions Settings Goals Contact enrollment trigger Set up triggers Changes Choose the triggers that decide how a contact enters this workflow. END Actions Workflow is OFF Review and publish A Clean up Test More - B …..#46Prospecting Workspace to Easily Engage with Leads Contacts Prospecting Summary Beth Dutton Yellowstone Ranch Task progress To dos Emails Calls Conversations ✓ Marketing ✓ LinkedIn 8:00am 9:00am Leads Schedule Beth <> John Sales v Feed Due today Service ✓ 0 of 42 completed O of 15 completed 77 tasks due today 42 to dos, 15 emails, 20 calls, O LinkedIn tasks 3 of 21 completed 25 of 25 completed Automation ✓ Total tasks (128) Tasks due today (78) U To-dos Reports ✓ 42 to-do tasks X Emails 15 email tasks. Calls 18 call tasks LinkedIn You're all caught up on LinkedIn tasks. Start all 78 tasks due today ✓ Sequences (4) Warm lead 23 contacts currently enrolled Overdue tasks (50) To dos 33 to do tasks Emails 15 email tasks. Calls 21 call tasks in LinkedIn O LinkedIn tasks Start all 50 overdue tasks Prospecting - Call heavy (23) 31 contacts currently enrolled#47HelpDesk to Quickly Reach Your Customers Rose Got any questions? I'm happy to help. Hi! I recently upgraded my subscription but I haven't received a shipment since June for my dog, Milo. Hoping to talk to someone who can help! Write a message 01:54 PM#48Value of a Connected Ecosystem#49Philosophy on a Connected Ecosystem Invest in platform customization Build for our marketplace#50State of the app ecosystem Number of Marketplace Integrations 54 2017 2018 2019 2020 2021 2022 1500 2023 Number of Active Marketplace Installs 2,121,449 787,132 2020 2021 2022 2023#51State of the app ecosystem Other/Uncategorized Marketing G2 Categorization of Marketplace Listings % of currently listed integrations Analytics Development Vertical Industry Content Commerce IT Infrastructure Customer Service Office Collaboration ERP Sales#52LinkedIn CRM Sync to Save Time and Craft Better Conversations <Dashboard Settings Contacts Your Preferences General Notifications Account Setup Account Defaults Users & Teams Integrations Marketplace Downloads Tracking & Analytics Privacy & Consent Sandboxes Security Data Management Properties Objects Import & Export Conversations Marketing Sales Audit Logs NEW < Back to connected apps LinkedIn SMSC Linkedin Sales Navigator Sync overview All object syncs ▾ OBJECT SYNCS Company sync On Listening for changes Contact sync On Listening for changes Deal sync Feature discovery Service ✓ Workflows Reports Owner sync On Scanning 2 HubSpot records On Listening for changes CRM Development Q IN SYNC - 389 1879 356 7 A FAILING O 0 34 5 O linkedin-sales-nav-test-portal Data Quality EXCLUDED O 0 103 3 O Account actions Support resources Sync now Actions Actions Actions Actions Help#53Ecosystem is more Than Apps: Academy Expansion Today, we have: 100+ courses 6 languages 38% of our install base consumes that content monthly#54How one of HubSpot's biggest customers customizes the customer platform#55Chatbots Built with OpenAI to Augment Human Support English HubSpot High Contrast < Get a demo Contact Sales Software ✔ Grow better with HubSpot Software that's powerful, not overpowering. Seamlessly connect your data, teams, and customers on one CRM platform that grows with your business. Pricing Resources Trello Get a demo of our premium software, or get started with free tools. Get started free reddit eventbrite HubSpot CRM makes growing your business a joy for everyone a Log in A7 Your Weekly Activity 184,000+ customers in over 120 countries grow their busine with HubSpot Get a demo EMAILS CALLS MEETINGS 17 25 15 ▲4 42 Customer Support About DOORDASH Get started free Services Breakdown < Contacts HOWARD UNIVERSITY Aisha Saah > What is HubSpot? HubSpot is a CRM platform with all the software, integrations, and resources you need to connect your marketing, sales, content management, and customer service. HubSpot's connected platform enables you to grow your business faster by focusing on what matters most: your customers. Actions Get a demo to learn about our premium CRM platform features, or get started with our full suite of free tools and upgrade as you grow.#56Value of Customer Platform easy to use easy to run easy to grow#57Thank You *#58HubSpot Executing Durable and Efficient Growth Kate Bueker Chief Financial Officer#59Durable levers for growth 1 Balancing growth and profitability Long-term shareholder value#60Durable levers for growth ÷ Balancing growth and profitability Long-term shareholder value#61Strong revenue growth 33% CAGR 2019 2023 ¹ Represents the mid-point of FY '23 guidance on an as-reported basis as of August 2, 2023 $675m 2019 $2.1b¹ 2023#62Strong customer growth 30% CAGR 2019 → 1H'23 ¹ 185K represents customer count through June 30, 2023. 73k 2019 185k¹ 2023#63Early stages of large TAM opportunity $51b¹ 2023 <10% Penetration across all product and customer segments 1 Includes Total Addressable Market for software in HubSpot's core product groups including Marketing Hub, Sales Hub, Service Hub, Operations Hub and CMS Hub. Does not include Commerce Hub. Source: IDC and HubSpot estimates $77b 2028#64Multiple levers for growth + CI Land Expand Innovate#65Multiple levers for growth + Land Expand Innovate#66Balanced growth drivers 57% International 40% Partner 43% U.S. 60% Direct 50% New 50% Install base U.S. vs. International; Direct vs. Solutions Partners; New vs. Install Base are calculated based on a % Net New ARR from end of December 2022 to end of June 2023. See definition of Net New ARR appendix.#67Expanding multi-hub lands Balanced front doors¹ Other Multi-Hub Sales Only ¹ Professional and Enterprise Tiers only, excludes Starter. 2 Designates new ARR associated with 2+ Hub 3 Designates new ARR associated with 3+ Hub Marketing Only More multi-hub deals 49% 2+ Hubs² 21% 3+ Hubs³ 2019 63% 32% 1H'23#68Driving volume at the low end Strong Starter customer growth 47% CAGR 2019 → 1H'23 21k 2019 79k 1H'23#69Driving value at the high end Growing percentage of large deals 1.7x $3k+ MRR deals % New ARR 2019 → 1H'23 15% 2019 26% 1H '23#70Multiple levers for growth + Land Expand Innovate#71Platform driving increased customer dollar retention 90% 3 Hub+¹ customer dollar retention 1 Customers subscribed to three or more Hubs. 84% 2019 +3% 87% 1H '23#72Diverse upgrade and downgrade drivers Marketing contacts Seat expansion Edition upgrades Cross-sell Consumption-driven Value-driven More macro sensitive Less macro sensitive#73Components of Net Revenue Retention Value and churn more resilient 100% FY'19 Consumption Value Churn 110% FY'22 Consumption Value Churn 104% 1H'23#74World-class Engagement Hubs Marketing Hub 20% YOY Growth CMS Hub 25% YOY Growth Sales Hub 30% YOY Growth Service Hub 40% YOY Growth Operations Hub 100%+ YOY Growth#75Significant opportunity for multi-hub adoption #Hubs 5 4 3 2 1 || = 33% of Customers Customers¹ ¹ Professional and Enterprise Tiers only, excludes Starter. #Hubs ARR¹ 50% of ARR#76Upgrade motions remain resilient 53% CAGR Starter to Professional¹ 2019 TTM1H'23 Starter upgrade rate holding steady, driving increased ARR ¹ ARR from upgrades 45% CAGR Any edition to Enterprise¹ 2019 TTM1H'23 Expanding and diversifying upgrade motions to Enterprise Other Sales Marketing#77Meaningful opportunity for seat expansion 2019 1H '23 1.7m Active users 1.1m Paid seats 140k Sales or Service Hub customers#78Multiple levers for growth + CI Land Expand Innovate#79Driving value in existing Hubs Add value first before extracting value + Key value additions ● ● ● Custom objects Conversation intelligence Prospecting Crafted data management Granular permissions Scheduling Handoffs ● ● ● ● ● Reporting Playbooks Forecasting Pipeline health metrics LinkedIn integration AI-driven features $ Sales Hub price increase $150 per seat (up from $120) Effective 11/1/23¹ New customers Incremental seats for existing customers¹ ¹ Existing customers who are yet to purchase more than the 10 seat minimum as of November 1, 2023 will be subject to the price increase when purchasing additional seats. Existing customers who have already expanded beyond the 10 seat minimum as of November 1, 2023 will not be subject to the price increase when purchasing additional seats..#80Planting new seeds Generative AI Robust product pipeline AI embedded everywhere Monetization framework Driving adoption at the low end Differentiated value add features in higher priced tiers : T $ Commerce Payments →→ Commerce Hub Transaction-based monetization Multi-billion dollar TAM opportunity#81Durable levers for growth Balancing growth and profitability Long-term shareholder value#82Philosophy on balancing growth and profitability 기 $ Drive durable revenue growth at scale Generate operating leverage as we scale toward long-term margin targets#83Substantial margin expansion over the last five years 52% CAGR OP 2019 → 1H '23 600 bps margin expansion 8% 2019 14% 2023 Operating Profit#84Long term financial targets remain unchanged Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2019 82% 18% 45% 11% 8% 2023¹ 85% 20% 43% 8% 14% Long Term Target Model 81% - 83% 20% 30% -35% 8% 20% - 25% ¹ Long-Term Target Model: These estimates reflect our current operating plan as of September 6, 2023 and are subject to change as future events and opportunities arise. 2023 represents the current midpoint of HubSpot's full year 2023 guidance. All percentages are non-GAAP and exclude expenses associated with stock-based compensation, amortization of acquired intangibles and acquisition related expenses. Percentages are based on actual values. Totals may not sum due to rounding. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#85Long term financial targets remain unchanged 2026 Target Model Key Variables Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2019 82% 18% 45% 11% 8% 2023¹ 85% 20% 43% 8% 14% 18-20% ¹ Long-Term Target Model: These estimates reflect our current operating plan as of September 6, 2023 and are subject to change as future events and opportunities arise. 2023 represents the current midpoint of HubSpot's full year 2023 guidance. All percentages are non-GAAP and exclude expenses associated with stock-based compensation, amortization of acquired intangibles and acquisition related expenses. Percentages are based on actual values. Totals may not sum due to rounding. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#86Long term financial targets remain unchanged 2026 Target Model Key Variables 84% Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2019 82% 18% 45% 11% 8% 2023¹ 85% 20% 43% 8% 14% +Infrastructure optimization +Services & support leverage -Reliability, speed, security -Commerce ¹ Long-Term Target Model: These estimates reflect our current operating plan as of September 6, 2023 and are subject to change as future events and opportunities arise. 2023 represents the current midpoint of HubSpot's full year 2023 guidance. All percentages are non-GAAP and exclude expenses associated with stock-based compensation, amortization of acquired intangibles and acquisition related expenses. Percentages are based on actual values. Totals may not sum due to rounding. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#87Long term financial targets remain unchanged 2026 Target Model 84% Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2019 82% 18% 45% 11% 8% 2023¹ 85% 20% 43% 8% 14% 20% Key Variables +Infrastructure optimization +Services & support leverage -Reliability, speed, security -Commerce Invest in R&D to fuel growth ¹ Long-Term Target Model: These estimates reflect our current operating plan as of September 6, 2023 and are subject to change as future events and opportunities arise. 2023 represents the current midpoint of HubSpot's full year 2023 guidance. All percentages are non-GAAP and exclude expenses associated with stock-based compensation, amortization of acquired intangibles and acquisition related expenses. Percentages are based on actual values. Totals may not sum due to rounding. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#88Long term financial targets remain unchanged 2026 Target Model 84% Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2019 82% 18% 45% 11% 8% 2023¹ 85% 20% 43% 8% 14% 20% 36% - 38% Key Variables +Infrastructure optimization +Services & support leverage -Reliability, speed, security -Commerce Invest in R&D to fuel growth Digital and AI-enabled GTM ¹ Long-Term Target Model: These estimates reflect our current operating plan as of September 6, 2023 and are subject to change as future events and opportunities arise. 2023 represents the current midpoint of HubSpot's full year 2023 guidance. All percentages are non-GAAP and exclude expenses associated with stock-based compensation, amortization of acquired intangibles and acquisition related expenses. Percentages are based on actual values. Totals may not sum due to rounding. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#89Levers for S&M efficiency * ↑6 Digital-Driven Sales-Driven Partner-Driven Today Starter acquisition Commerce Primary motion across customer journey 40%+ of deals with partner attached Driving tighter alignment Goal Grow top of funnel demand All customer segments Consumption-based expansion Commerce Hub AI & systems-driven productivity growth Higher ASP through platform selling 90%+ of upmarket deals with partner attached 75%+ of customers serviced by partners#90Long term financial targets remain unchanged 2026 Target Model 84% Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2019 82% 18% 45% 11% 8% 2023¹ 85% 20% 43% 8% 14% 20% 36% - 38% 8% Key Variables +Infrastructure optimization +Services & support leverage -Reliability, speed, security -Commerce Invest in R&D to fuel growth Digital and AI-enabled GTM Workforce planning Systems and Automation ¹ Long-Term Target Model: These estimates reflect our current operating plan as of September 6, 2023 and are subject to change as future events and opportunities arise. 2023 represents the current midpoint of HubSpot's full year 2023 guidance. All percentages are non-GAAP and exclude expenses associated with stock-based compensation, amortization of acquired intangibles and acquisition related expenses. Percentages are based on actual values. Totals may not sum due to rounding. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#91Long term financial targets remain unchanged 2026 Target Model 84% Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2019 82% 18% 45% 11% 8% 2023¹ 85% 20% 43% 8% 14% 20% 36% - 38% 8% 18% - 20% Key Variables +Infrastructure optimization +Services & support leverage -Reliability, speed, security -Commerce Invest in R&D to fuel growth Digital and AI-enabled GTM Workforce planning Systems and Automation ¹ Long-Term Target Model: These estimates reflect our current operating plan as of September 6, 2023 and are subject to change as future events and opportunities arise. 2023 represents the current midpoint of HubSpot's full year 2023 guidance. All percentages are non-GAAP and exclude expenses associated with stock-based compensation, amortization of acquired intangibles and acquisition related expenses. Percentages are based on actual values. Totals may not sum due to rounding. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#92Durable levers for growth :: Balancing growth and profitability Long-term shareholder value#93Strong balance sheet and financial discipline Track record of financial stewardship $1.7B In cash, Q2 '23 $684m FCF → 1H '23 2-3% Gross dilution outlook SBC² moderating as a % of revenue#94Strong shareholder value creation $ Ţ 33% Revenue CAGR¹ 600bps Margin Expansion¹ $684m FCF¹ 1 Period from 1/1/2019 - 6/30/2023. Source: HubSpot and Bloomberg ² Software sector returns based on returns of iShares Expanded Tech-Software ETF (Ticker: IGV) over the period from 1/1/2019 - 6/30/2019. Source: Bloomberg 38% Annualized Shareholder Return¹ >2.5x S&P 500 >2.0X NASDAQ Composite >2.0x Software Sector²#95Key takeaways 1 2 3 4 Customer Platform driving strong and diverse growth Early in a massive opportunity On path toward long term financial targets Delivering shareholder value#96GAAP to Non-GAAP Reconciliations#97GAAP to Non- GAAP Reconciliation HubSpot, Inc. GAAP to Non-GAAP Reconciliation Cost of Revenue Subscription Stock-based compensation Amortization of acquired intangibles Gain on termination of operating leases Loss on disposal of fixed assets Non-GAAP subscription Professional services and other Stock-based compensation Gain on termination of operating leases Loss on disposal of fixed assets Non-GAAP professional services and other Gross Margin Gross margin Stock-based compensation Amortization of acquired intangible assets Gain on termination of operating leases Loss on disposal of fixed assets Non-GAAP gross margin Operating Expenses Research and development Stock-based compensation Acquisition/disposition related income (expenses) Gain on termination of operating leases Loss on disposal of fixed assets Non-GAAP research and development Sales and marketing Stock-based compensation Amortization of acquired intangible assets Acquisition related expenses Gain on termination of operating leases Loss on disposal of fixed assets Non-GAAP sales and marketing General and administrative Stock-based compensation Acquisition related expenses Gain on termination of operating leases Loss on disposal of fixed assets Non-GAAP general and administrative Restructuring charges Loss from Operations Loss from operations Stock-based compensation Amortization of acquired intangible assets Acquisition related expenses Gain on termination of operating leases Loss on disposal of fixed assets Restructuring charges Non-GAAP loss from operations 2019 $'000s 98,510 (3,127) (3,201) 92,182 31,448 (2,829) 28,619 544,902 5,956 3,201 554,059 158,237 (33,748) (357) 124,132 340,685 (36,599) 304,086 92,971 (21,451) (552) 70,968 (46,991) 97,754 3,201 909 54,873 % of Revenues 15% 0% 0% 0% 0% 14% 5% 0% 0% 0% 4% 81% 1% 0% 0% 0% 82% 23% -5% 0% 0% 0% 18% 50% -5% 0% 0% 45% 14% -3% 0% 0% 0% 11% 0% -7% 14% 0% 0% 0% 0% 0% 8% $'000s 2020 130,685 (4,408) (2,340) 123,937 36,274 (2,536) 33,738 716,067 6,944 2,340 725,351 205,589 (39,366) (1,287) 164,936 452,081 (50,552) (79) 401,450 109,225 (24,626) (545) 84,054 (50,828) 121,488 2,419 1,832 74,911 % of Revenues 15% 0% 0% 0% 0% 14% 4% 0% 0% 0% 4% 81% 1% 0% 0% 0% 82% 23% -4% 0% 0% 0% 19% 51% -6% 0% 0% 0% 0% 45% 12% -3% 0% 0% 0% 10% 0% -6% 14% 0% 0% 0% 0% 0% 8% $'000s 2021 211,132 (6,297) (937) 395 (600) 203,693 47,725 (3,092) 275 (415) 44,908 1,041,801 9,389 662 (670) 1,015 1,052,197 301,970 (61,614) (1,152) 1,346 (2,036) 238,514 649,681 (67,413) (389) (367) 1,839 (2,781) 580,570 144,949 (28,345) (568) 421 (636) 115,821 (54,799) 166,761 1,326 2,087 (4,276) 6,468 117,567 % of Revenues 16% 0% 0% 0% 0% 16% 4% 0% 0% 0% 3% 80% 1% 0% 0% 0% 81% 23% -5% 0% 0% 0% 18% 50% -5% 0% 0% 0% 0% 45% 11% -2% 0% 0% 0% 9% 0% -4% 13% 0% 0% 0% 0% 0% 9% $ '000s 2022 257,513 (9,076) (1,203) 247,234 56,746 (4,393) 52,353 1,416,710 13,469 1,203 1,431,382 442,022 (107,517) 300 334,805 886,069 (107,640) (1,426) 777,003 197,720 (47,223) 150,497 (109,101) 275,849 2,629 (305) 169,072 % of Revenues 15% -1% 0% 0% 0% 14% 3% 0% 0% 0% 3% 82% 1% 0% 0% 0% 83% 26% -6% 0% 0% 0% 19% 51% -6% 0% 0% 0% 0% 45% 11% -3% 0% 0% 0% 9% 0% -6% 16% 0% 0% 0% 0% 0% 10% Six Months Ended June 30, 2023 $'000s 142,163 (6,261) (804) 135,098 27,169 (2,546) 24,623 861,426 8,807 804 871,037 297,638 (97,384) 200,254 515,977 (68,794) (892) 446,291 118,627 (36,055) 82,572 92,450 (163,266) 211,040 1,696 92,450 141,920 % of Revenues 14% -1% 0% 0% 0% 13% 3% 0% 0% 0% 2% 84% 1% 0% 0% 0% 85% 29% -9% 0% 0% 0% 19% 50% -7% 0% 0% 0% 0% 43% 12% -3% 0% 0% 0% 8% 9% -16% 20% 0% 0% 0% 0% 9% 14%#98GAAP to Non-GAAP Reconciliation HubSpot, Inc. GAAP to Non-GAAP Reconciliation Loss from Operations Loss from operations Stock-based compensation Amortization of acquired intangible assets Acquisition/disposition related income (expenses) Gain on termination of operating leases Loss on disposal of fixed assets Restructuring charges Non-GAAP (loss) income from operations $ '000s 2019 (46,991) 97,754 3,201 909 54,873 % of Revenues -7% 14% 0% 0% 0% 0% 0% 8% $'000s % of Revenues (50,828) 121,488 2,419 1,832 2020 74,911 -6% 14% 0% 0% 0% 0% 8% $ '000s 2021 (54,799) 166,761 1,326 2,087 (4,276) 6,468 117,567 % of Revenues -4% 13% 0% 0% 0% 0% 0% 9% $ '000s 2022 (109,101) 275,849 2,629 (305) 169,072 % of Revenues -6% 16% 0% 0% 0% 0% 0% 10% Forecast 2023 $'000s (257,045) 452,212 3,383 96,450 295,000 % of Revenues -12% 21% 0% 0% 0% 0% 0% 14%#99GAAP to Non-GAAP Reconciliation GAAP net cash and cash equivalents provided by operating activites Purchases of property & equipment and capitalization of software development cost Repayment of 2022 Convertible Notes attributable to the debt discount Free cash flow $ '000s 2019 118,973 (53,846) 65,127 % of Revenues 18% -8% 0% 10% $ '000s 2020 88,913 (58,917) 49,048 79,044 % of Revenues 10% -7% 6% 9% $ '000s 2021 238,728 (61,865) 26,428 203,291 % of Revenues 18% -5% 2% 16% $ '000s 2022 273,174 (81,771) 191,403 % of Revenues 16% -5% 0% 11%#100Definitions Customers: We define our Customers at the end of a particular period as the number of business entities with one or more paid subscriptions to our CRM Platform either purchased directly with us or purchased from a Solutions Partner. We do not include in Customers business entities with one or more paid subscriptions solely for our legacy Sales Hub ($10) product or any PieSync product. A single customer may have separate paid subscriptions to our CRM Platform, but we count these as one Customer if certain customer-provided information such as company name, URL, or email address indicate that these subscriptions are managed by the same business entity. Install Base: Refer to definition of Annual Recurring Revenue below. Net Revenue Retention: Net Revenue Retention is a measure of the percentage of recurring revenue retained from customers over a given period of time. Our Net Revenue Retention for a given period is calculated by first dividing Retained Subscription Revenue by Retention Base Revenue in the given period, calculating the weighted average of these rates using the Retention Base Revenue for the period, and then annualizing the resulting rates. A definition of each of the key terms used to calculate Net Revenue Retention is included below. Average Subscription Revenue per Customer: We define "ASRPC" during a particular period as subscription revenue, excluding revenue from our legacy Sales Hub ($10) and PieSync products, from our Total Customers during the period divided by the average Total Customers during the same period. Non-GAAP Operating Income: We define as GAAP operating income or loss plus stock-based compensation, amortization of acquired intangible assets, gain on termination of operating leases, loss on disposal of fixed assets, and acquisition related expenses. Free Cash Flow: We define "FCF” as cash and cash equivalents provided by or used in operating activities less purchases of property and equipment, capitalization of software development costs, plus repayments of convertible notes attributable to debt discount. Annual Recurring Revenue: We define ARR as the annual value of our customer subscription contracts as of the specified point in time excluding any commissions owed to our partners. For the purposes of this presentation, this excludes payments revenue. For each Hub, this is the sum of customer ARR for the Starter, Basic, Professional and Enterprise subscriptions, plus applicable contacts (marketing only), Seats, or Add-Ons (e.g., reporting or ads). For multi-product customers, their ARR would be distributed across based on the value of each SKU/Hub for which they pay. In 2022, we began including our payments revenue run rate, defined as, on an annualized basis, the trailing three months of payments revenue, into the annual value of our customer subscription contracts. ARR can differ from revenue due to several factors. ARR is converted into U.S. dollars at fixed rates that are held consistent over time and may vary from those used for revenue or deferred revenue. ARR would exclude any impact for bad debt and partner commissions (as noted above) and would also differ from Revenue due to timing of revenue recognition. Customer Dollar Retention (C$R): Customer Dollar Retention is a measure of the percentage of the customers we retain, weighted by ARR dollars. This is calculated by summing the total dollars that were canceled in a given period, divided by the beginning of period ARR Install Base. We then express the calculated churn inversely as retention and annualize it.