#1HubSpot Analyst Day Financial Analyst Day Chuck MacGlashing Vice President, 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, 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, risks associated with the announced leadership changes, impact of COVID-19 on our business, the broader economy, and our ability to forecast our future financial performance as a result of COVID-19; 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 solutions 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 August 4, 2021 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.#3Agenda Tuesday, October 12, 2021 Time (ET) 10:25a - 10:30a 10:30a - 11:30a 11:40a - 12:05p 12:05p - 12:30p 12:40p - 1:15p Subject Welcome Thought Leadership Piece Product + Customers HubSpot Spotlight CEO Overview Finance Overview Executive Q&A Presenter(s) Chuck MacGlashing | VP, Investor Relations Dharmesh Shah | CTO HubSpot Product Leadership Team Yamini Rangan | CEO & Brian Halligan | Executive Chairman Short Break Yamini Rangan Kate Bueker | CFO Short Break Yamini Rangan Brian Halligan Dharmesh Shah Kate Bueker Moderator: Chuck MacGlashing#4Housekeeping Two short breaks between sessions Q A Submit questions starting now using Q&A field below Non-GAAP reconciliations for financials we discuss posted on ir.hubspot.com#5Thank you#6HubSpot Analyst Day Helping Companies Win in the Age of the Connected Customer Yamini Rangan CEO INBOUND2021#7Agenda 365 Year in Review Key Customer Trends Driving Modern CRM If HubSpot's Strategic Pillars#8HubSpot: Year in Review Strong Financial Performance FY'21* $1.27B Revenue $108M Operating Profit 121K+ Customer Count Y/Y Growth +44% +44% +40% * Revenue and operating profit represents current mid-point of FY'21 guidance. Customer count is as of Q2'21 ** Solutions Partner YoY growth as of Q2'21 Powerful Platform; Thriving Ecosystem 5 Powerful & Easy Hubs 900+ App Integrations 47%+ Solutions Partner ARR Growth** Top 100 Software Sellers BEST SOFTWARE AWARDS 2021 TR TrustRadius MOST LOVED 2021 World-Class Talent ~5,000 Employees 13 Global Offices 2021 Best Company LEADERSHIP FORTUNE BEST WORKPLACES FOR WOMEN 2021#9We are in the age of the customer Manufacturing Distribution Information Customer NOW#10Winning in the age of the connected customer#11How companies win in the age of the customer Bring consumer-like buying process into B2B Connect teams and insights ☐☐☐☐☐. Be able to pivot and adapt#12How companies win in the age of the customer Bring consumer-like buying process into B2B Source: Gartner research Connect teams and insights Ⓒ 77% of B2B buyers said latest purchase was difficult Be able to pivot and adapt#13How companies win in the age of the customer Bring consumer-like buying process into B2B Source: Blissfully research Connect teams and insights Be able to pivot and adapt 50 SaaS apps Average size of our target customers' technology stack#14How companies win in the age of the customer Bring consumer-like buying process into B2B Source: McKinsey research Connect teams and insights 72% of companies with effective response to COVID-19 experimented with new tech Be able to pivot and adapt#15From building fitness centers to enabling fitness anywhere. FITNESS#16Now more than ever, companies need a modern CRM platform to win E |||₁ # — [#17Modern CRM is... Customer-centric Connected Customizable LETUL Built for sellers Cobbled Adds complexity Built for buyers Crafted Powers innovation#18HubSpot's modern CRM is right for scaling businesses Payments First step in enabling B2B companies to deliver consumer-grade buying Customer-centric Operations Hub Enterprise Connects teams to each other and to the customer experience Connected Sandboxes + Admin Features Enables companies to stay agile and continually innovate Customizable .....#19Agenda 365 Year in Review Key Customer Trends driving Modern CRM If HubSpot's Strategic Pillars#20Our Path to Becoming #1 CRM Platform for Scaling Companies 1 Deliver a World-Class Front-Office Platform 2 Strengthen Segmentation Approach 3 Invest in B2B Commerce and Payments 4 Continue to Scale HubSpot#21Strategic Pillar 1 Deliver a World-Class Front-Office Platform#22The path to world-class front-office platform is clear Enterprise Professional Starter Content C Marketing Hub + + + Sales Hub Messaging + + + Service Hub + + + Automation CMS Hub + + + 2 Operations Hub + + + Reporting Future Hubs + + Data#23Invest in Platform 1. For Users 2. For Ops 3. For Developers Our strategy is simple Solution Partners B2B eCommerce с Marketing Operations ? Sales O CRM c CMS C Service Developers App Partners Invest in Hubs 1. Continue Investing in Anchor Hubs 2. Accelerate Emerging Hubs 3. Launch New Hubs#24Strategic Pillar 2 Strengthen Segmentation Approach ㅈㅈ#25Segmentation approach drives product innovation High-end, Enterprise features to Starter and Freemium Enterprise Pro Starter Free Q Human-friendly product and purchasing experience to Enterprise and Pro#26Product + Pricing + Go-to-Market are aligned 2000EE 200EE 20EE 2EE Corporate Mid-market Small business Enterprise Pro Starter Free Inside sales and partner led growth High ASP Product led growth High velocity and high volume sales#27Where we plan to invest Driving Volume Optimize touchless buying, onboarding and activation experience Scale product led and lightweight selling motion Product GTM Driving Value Continue to build CRM for upmarket Invest in team selling and driving sales productivity#28Strategic Pillar 3 Invest in B2B Commerce and Payments X#29The rep-assisted sale (Quote to Cash) is a Cobbled mess SORRY WE'RE CLOSED The touchless sale (B2B Commerce) isn't happening#30Commerce has been orphaned X W P QUOTING 2 FRONT OFFICE W CONTRACTS BACK OFFICE qb bill.com X Chargebee stripe xero BILLING TRANSFER qb stripe len PAYMENTS#31Commerce-enabled CRM CRM Commerce WE'RE OPEN Ability to sell online Better rep-assisted experience Complete customer journey#32Strategic Pillar 4 Continue to Scale HubSpot#33Our priorities to scale sustainably are clear Build a diverse and inclusive culture Invest in climate action Double down on customer trust 15.4% increase in BIPOC employee representation at HubSpot in the U.S. since 2017 Offset ~80,000 Mt from 2006-2020 making HubSpot carbon neutral Doubled our investment in teams dedicated to Trust since 2020#34Key Takeaways In the age of the customer, delightful customer experience wins New buyer expectations are defining modern CRM HubSpot's modern CRM is right for scaling businesses We have the right strategy, the right investments and the right team to win#35Hubspot Analyst Day Finance Overview Kate Bueker Chief Financial Officer#36Safe 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, 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, risks associated with the announced leadership changes, impact of COVID-19 on our business, the broader economy, and our ability to forecast our future financial performance as a result of COVID-19; 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 solutions 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 ption "Risk Factors" in our Quarterly Report on Form 10-Q filed on August 4, 2021 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.#37Agenda 29 1. Strong and Durable Business III 2. Strategic Pillars for Growth 3. Long-Term Financial Model#38Agenda 29 1. Strong and Durable Business III 2. Strategic Pillars for Growth 5 3. Long-Term Financial Model#3915 Years of Continuous Growth 2021 Today 2014 .. IPO 2006 Founding IIIIII ☐☐☐☐☐ ☐☐☐☐☐☐☐#40Strong Customer + Revenue Growth Customers 42k 2017 36% CAGR 121k+ Q2'21 Revenue $376m 2017 2021e: Represents current mid-point of FY'21 guidance. CAGR: compound annual growth rate. Customer CAGR based off of Q4 2017 to Q2 2021. Revenue CAGR based off of 2017 to 2021e. Dotted box: We expect to continue to add net new customers in 2H'21. The dotted lines are an estimated illustration of these additional customers and is not to scale. See definition of Total Customers in appendix. 36% CAGR $1,270m 2021e#41Strong Profitability, FCF + Balance Sheet Operating Profit $9m 2017 $108m 2021e: Represents current mid-point of FY'21 guidance. See definition and reconciliation of non-GAAP operating income and free cash flow in appendix. 2021e Free Cash Flow اس. $22m 2017 Ended Q2'21 with $1+ billion in cash and investments $175m 2021e#42Diverse Growth Drivers 49% International 39% Solutions 51% U.S. 32% Other Hubs Partners 000 61% Direct U.S. vs. International; Direct vs. Solutions Partners; and Marketing vs. Sales, Service, CMS and Operations Hub are calculated based on a % of Install Base as of the end of Q2'21. See definition of Install Base in appendix. 68% Marketing Hub#43Agenda ga 1. Strong and Durable Business ī 2. Strategic Pillars for Growth 5 3. Long-Term Financial Model#44Strategic Pillars 1 Deliver a World-Class Front-Office Platform 2 Strengthen Segmentation Approach 3 Invest in B2B Commerce and Payments 4 Continue to Scale HubSpot#45Strategic Pillar 1 Deliver a World-Class Front-Office Platform#46с Marketing Began as an App HubSpot's Platform Evolution Marketing Service Operations Sales CMS Became a Suite Solution Partners 32B eCommerc Marketing Operations Sales O CRM CMS Y Service Becoming a Platform Developers App Partners#47World-Class Front-Office Suite $840m ARR Install Base $60m ARR Install Base Marketing Hub Mid-to-high 30s% YoY Growth Service Hub 80+% YoY Growth ARR Install Base and year-over-year growth rate as of Q2 2021. See definition for ARR in appendix. $290m ARR Install Base $45m ARR Install Base Sales Hub CMS Hub 70+% YOY Growth 55+% YoY Growth#48ARR $8m Install Base Growing... fast ARR Install Base as of Q3 2021. See definition for ARR in appendix. Operations Hub Recent Milestones • Launched Operations Hub Enterprise • Data sync is in top three most-used free features 60+ integrations since launch Future Opportunity Rise of RevOps persona Increase new sales through improvements to reporting, automation and integrations • ASP improvements with suite expansion#49Increasing Adoption of HubSpot as Platform 100% 0% 6% 28% 66% 2017 Customer Adoption 30% 27% 42% H121 3+ Hubs 2 Hubs Single Hub <35% Multi Hub→ 57% Multi Hub Multi-product customers are customers who have subscriptions to any product on two or more distinct product hubs. (Marketing, Sales, Service, CMS, Operations). Data as of 6/30/21. 100% 0% Customer First Purchase 18% 50% 32% 2017 26% 24% 24% 27% H121 <20% Multi Hub → 50% Multi Hub Starter Growth/ CRM Suite Other Multi-Hub Sales Only* Marketing Only Starter Growth/CRM Suite = Customers who bought MHS+SHS+SvHS or MHS+SHS+SvHS+OHS upfront Other Multi-Hub = Customers who bought two or more products upfront, but not on the Starter suite Marketing Only = Customers who bought only Marketing upfront Sales Only* = Any non-Marketing single-hub purchase (Sales Hub, Service Hub, CMS Hub, Ops Hub) ga#50Strong Customer Retention Improvements Net Revenue Retention Customer Dollar Retention 100% Low to mid 80's 2017 110%+ High 80's H1 2021 Dotted lines are illustrative and not to scale See definition for Customer Dollar Retention and Net Revenue Retention in appendix. I 100% → 110%+ Customer Dollar Retention Improvements Deeper customer usage Higher product NPS Longer contract commitments Net Revenue Retention Drivers Starter → Professional upgrades Professional →→ Enterprise upgrades Sales seat expansion Multi-Hub adoption ●#51Strategic Pillar 2 Strengthen Segmentation Approach ㅈㅈ#52Segmentation strategy expands opportunity across our customer base 2000EE 200EE 20EE 2EE Corporate Mid-market Small business High ASRPC • Strong retention Land and expand across product lines and tiers High velocity and lower cost of acquisition • Opportunity for upgrades • Protective moat against disruption#53High Velocity Starter Segment Starter Customer Acquisition builds moat & creates growing pool for upgrade opportunities High Velocity Acquisition 125,000 Customers 0 2017 Pro/Enterprise H121 Starter High Velocity Acquisition: Ending customer count Land and Expand: Cohorts only include customers with initial purchase of Starter, track ARR over time $150M $OM Starter Cohort ARR 2017 2017 Land and Expand 2018 2019 2020 2021 H1'21#54Strong Growth in Upmarket Segment $20K 390x $0k Pro/Enterprise ASRPC 45% Growth 2017 H121 See definition of ASRPC in appendix. ASP is based on the monthly value of our customer subscription contracts as of the specified point in time excluding any commissions owed to our partners. See definition of ASP in appendix. ASRPC expansion in Pro/Enterprise as we continue to invest upmarket Land & Expand creates upsell opportunity Platform adoption through cross-sell increases multi-hub customer base 4x increase in $3K+ ASP deals over same period of time#55Product Mix Influencing KPIs 100% 0% 2017 Customer Breakdown See definition of Install Base ASP in appendix. Ex-Starter Starter H1'21 $16k $8k 2017 Install Base ASP Ex-Starter Total H1'21#56Strategic Pillar 3 Invest in B2B Commerce and Payments X#57B2B Commerce: Launching with Native Payments Featuring: Payment Links Payments on Quotes Credit Card & ACH Recurring Payments Financial Impact: Monetize via per-transaction fee Lower gross margins Initial Target Customers 33%#58Opportunity Expands as Payment Offering Grows Native Payments, basic QTC, recurring payments Businesses with more complex billing needs International expansion Other financial services#59Agenda 8 1. Strong and Durable Business III 2. Strategic Pillars for Growth 3. Long-Term Financial Model#60Our Philosophy on Profit and Growth K Drive durable growth at scale Drive efficiencies and expand margins consistent with long-term financial framework#61Balancing Growth and Profitability Revenue Growth 50% 0% 39% 2% 2017 44% 9% 2021e 15% 0% Op Margin 29#62Long Term Financial Targets Long Term Target Model Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2017 81% 15% 52% 12% 2% 1H'21 81% 19% 45% 9% 8% 81% - 83% 18% - 20% 30% -35% 8% -9% 20% - 25% I I Long-term operating margin unchanged Long Term Target Model: These estimates reflect our current operating plan as of 10/12/2021 and are subject to change as future events and opportunities arise. All percentages are non-GAAP and exclude expenses associated with stock based compensation, amortization of acquired intangibles and acquisition related expenses. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#63Long Term Financial Targets Long Term Target Model Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2017 81% 15% 52% 12% 2% 1H'21 81% 19% 45% 9% 8% 81% - 83% 18% - 20% 30% -35% 8% -9% 20% - 25% I • Stable since 2017 T I • Payments product creates downward pressure on gross margin Long-term operating margin unchanged Long Term Target Model: These estimates reflect our current operating plan as of 10/12/2021 and are subject to change as future events and opportunities arise. All percentages are non-GAAP and exclude expenses associated with stock based compensation, amortization of acquired intangibles and acquisition related expenses. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#64Long Term Financial Targets Remain Unchanged Long Term Target Model Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2017 81% 15% 52% 12% 2% 1H'21 81% 19% 45% 9% 8% 81% - 83% 18% - 20% 30% -35% 8% -9% 20% - 25% T I Continue to invest aggressively in product development Long-term operating margin unchanged Long Term Target Model: These estimates reflect our current operating plan as of 10/12/2021 and are subject to change as future events and opportunities arise. All percentages are non-GAAP and exclude expenses associated with stock based compensation, amortization of acquired intangibles and acquisition related expenses. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#65Long Term Financial Targets Remain Unchanged Long Term Target Model Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2017 81% 15% 52% 12% 2% 1H'21 81% 19% 45% 9% 8% 81% - 83% 18% - 20% 30% - 35% 8% -9% 20% - 25% T I Continue to invest into strong demand and unit economics Long-term operating margin unchanged Long Term Target Model: These estimates reflect our current operating plan as of 10/12/2021 and are subject to change as future events and opportunities arise. All percentages are non-GAAP and exclude expenses associated with stock based compensation, amortization of acquired intangibles and acquisition related expenses. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#66Long Term Financial Targets Remain Unchanged Long Term Target Model Gross Margin R&D % of revenue S&M % of revenue G&A % of revenue Operating Margin 2017 81% 15% 52% 12% 2% 1H'21 81% 19% 45% 9% 8% 81% - 83% 18% - 20% 30% -35% 8% -9% 20% - 25% 1 Consistent leverage, within range Long-term operating margin unchanged Long Term Target Model: These estimates reflect our current operating plan as of 10/12/2021 and are subject to change as future events and opportunities arise. All percentages are non-GAAP and exclude expenses associated with stock based compensation, amortization of acquired intangibles and acquisition related expenses. Please refer to appendix for a reconciliation of GAAP to non-GAAP figures.#67Key Takeaways ga Continued strong financial performance Significant opportunity ahead to expand product offerings, drive growth through segmentation, and launch new revenue streams Strategy will impact P&L but long-term targets remain unchanged 29#68Thank you#69Appendix#70GAAP to Non-GAAP Reconciliation#71GAAP to Non-GAAP Reconciliation Cost of Revenue Subscription Stock-based compensation Amortization of acquired intangibles Acquisition related expenses Non-GAAP subscription Professional services and other Stock-based compensation Amortization of acquired intangibles Acquisition related expenses Non-GAAP professional services and other Gross Margin Gross margin Stock-based compensation Amortization of acquired intangible assets Acquisition related expenses Non-GAAP gross margin Operating Expenses Research and development Stock-based compensation Amortization of acquired intangible assets Acquisition related expenses Non-GAAP research and development Sales and marketing Stock-based compensation Amortization of acquired intangible assets Acquisition related expenses Non-GAAP sales and marketing General and administrative Stock-based compensation Amortization of acquired intangible assets Acquisition related expenses Non-GAAP general and administrative Loss from Operations Loss from operations Stock-based compensation Amortization of acquired intangible assets Acquisition related expenses Non-GAAP (loss) income from operations $ '000s 2017 51,563 (658) (96) 50,809 24,166 (2,327) 21,839 299,883 2,985 96 302,964 70,373 (12,816) (1,266) 56,291 212,859 (19,016) (7) 193,836 56,787 (12,500) 44,287 (40,136) 47,317 103 1,266 8,550 % of Revenues 14% 0% 0% 0% 14% 6% -1% 0% 0% 6% 80% 1% 0% 0% 81% 19% -3% 0% 0% 15% 57% -5% 0% 0% 52% 15% -3% 0% 0% 12% -11% 13% 0% 0% 2% $ '000s 2018 69,718 (1,476) (1,394) 66,848 30,639 (2,924) 27,715 412,623 4,400 1,394 418,417 117,603 (23,328) (2,696) 91,579 267,444 (31,099) 236,345 75,834 (17,434) 58,400 (48,258) 76,261 1,394 2,696 32,093 % of Revenues 14% 0% 0% 0% 13% 6% -1% 0% 0% 5% 80% 1% 0% 0% 82% % of $ '000s Revenues 0% 0% 11% 98,510 (3,127) (3,201) 92,182 -9% 15% 0% 1% 6% 31,448 (2,829) 28,619 544,902 5,956 3,201 554,059 23% 158,237 -5% (33,748) 0% -1% (357) 18% 124,132 52% 340,685 -6% (36,599) 0% 0% 46% 15% 92,971 -3% (21,451) 304,086 2019 (552) 70,968 (46,991) 97,754 3,201 909 54,873 5% 0% 0% 0% 4% 15% 0% 0% 0% 14% 123,937 81% 1% 0% 0% 82% % of $ '000s Revenues 130,685 (4,408) (2,340) 14% -3% 0% 0% 11% -7% 14% 0% 0% 8% 36,274 (2,536) 33,738 716,067 6,944 2,340 725,351 23% 205,589 -5% (39,366) 0% 0% 18% 50% -5% 0% 0% 45% 401,450 2020 (1,287) 164,936 452,081 (50,552) (79) 109,225 (24,626) (545) 84,054 (50,828) 121,488 2,419 1,832 74,911 15% 0% 0% 0% 14% 4% 0% 0% 0% 4% 81% 1% 0% 0% 82% 23% -4% 0% 0% 19% 51% -6% 0% 0% 45% 12% -3% 0% 0% 10% -6% 14% 0% 0% 8% Six months ended June 30, 2021 % of $ '000s Revenues 94,987 (2,892) (475) 91,620 22,624 (1,523) 21,101 474,542 4,415 475 479,432 140,500 (26,564) (684) 113,252 298,816 (32,600) (207) (367) 265,642 66,860 (12,277) (516) 54,067 (31,634) 75,856 682 1,567 46,471 16% 0% 0% 0% 15% 4% 0% 0% 0% 4% 80% 1% 0% 0% 81% 24% -4% 0% 0% 19% 50% -6% 0% 0% 45% 11% -2% 0% 0% 9% -5% 13% 0% 0% 8% 29#72GAAP to Non-GAAP Reconciliation Loss from Operations Loss from operations Stock-based compensation Amortization of acquired intangible assets Acquisition related expenses Non-GAAP (loss) income from operations $ '000s 2017 (40,136) 47,317 103 1,266 8,550 % of Revenues -11% 13% 0% 0% 2% $ '000s 2018 (48,258) 76,261 1,394 2,696 32,093 % of Revenues -9% 15% 0% 1% 6% $ '000s (46,991) 97,754 3,201 909 54,873 2019 % of Revenues -7% 14% 0% 0% 8% 2020 % of $ '000s Revenues (50,828) 121,488 2,419 1,832 74,911 -6% 14% 0% 0% 8% Forecast 2021 % of $'000s Revenues (53,066) 157,720 1,330 2,016 108,000 -4% 12% 0% 0% 9% 29#73GAAP to Non-GAAP Reconciliation GAAP net cash and cash equivalents provided by operating activites Purchases of property & equipment and capitalization of software development costs Repayment of 2022 Convertible Notes attributable to the debt discount Free cash flow $'000s 2017 49,614 (27,347) 22.267 % of Revenues 13% -7% 0% 6% $ '000s 2018 84,851 (33,473) 51,378 % of Revenues 17% -7% 0% 10% 2019 % of $'000s Revenues 118,973 (53,846) 65.127 18% -8% 0% 10% 2020 % of $'000s Revenues 88,913 (58,917) 49.048 79.044 10% -7% 6% 9% As of June 30, 2021 % of Revenues $'000s 100,891 (27,167) 13,028 86,752 17% -5% 2% 15% 29#74Definitions Total Customers: We define our Total Customers at the end of a particular period as the number of business entities or individuals with one or more paid subscriptions to our Sales Hub, Marketing Hub, CMS Hub or Service Hub products, either paid directly or through a Solutions Partner. We do not include in Total Customers business entities or individuals with one or more paid subscriptions solely for our legacy Sales Hub ($10) product or any PieSync product. A single customer may have separate paid subscriptions for separate websites, sales licenses or seats, or our Sales Hub, Marketing Hub, CMS Hub or Service Hub products, but we count these as one customer if certain customer-provided information such as company name, URL, or email address indicate that these subscriptions are managed by the same business entity or individual. Install Base: Refer to definition of Annual Recurring Revenue below. Customer Dollar Retention (C$R): Is a measure of what percentage of our customers we retain, weighted by ARR dollars. We calculate by summing the total dollars that were canceled in a given period and divide that by the beginning of period ARR Install Base. We then express the calculated churn inversely as retention and then annualize. Net Revenue Retention: Is a measure of the percentage of recurring revenue retained from customers over a given period of time. We compare the aggregate Total Contractual Monthly Subscription Revenue of our Total Customer base as of the beginning of each month, which we refer to as Total Retention Base Revenue, to the aggregate Total Contractual Monthly Subscription Revenue of the same group of Total Customers at the end of that month, which we refer to as Total Retained Subscription Revenue. We define Total Contractual Monthly Subscription Revenue as the total amount of subscription fees contractually committed to be paid for a full month under all of our Total Customer agreements, excluding any commissions owed to our Solutions Partners. Our Net Revenue Retention for a given period is calculated by first dividing Total Retained Subscription Revenue by Total Retention Base Revenue for each all months in the period, calculating the weighted average of these rates and then annualizing the resulting rates. 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 acquir intangible assets and acquisition related expenses. Free Cash Flow (FCF): We define 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. Install Base Average Sales Price (ASP): Total Install Base divided by the total number of paying customers as of the end of a given period (i.e. average ARR per customer). Install Base ASP non-Starter excludes Starter only customers. 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 each Hub, this is the sum of customer ARR for the Starter, Basic, Professional and Enterprise subscriptions, plus applicable Contacts (Marketing Only) 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. ARR can differ from Revenue due to several factors. ARR is converted into USD 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. za