HubSpot, Inc. (HUBS) Earnings Call Transcript & Summary

Good afternoon. I'm Derek Neldner, CEO and Group Head for RBC Capital Markets. And on behalf of all of my colleagues at RBC, thank you very much for taking the time to join us for our Global Technology, Internet, Media and Telecommunications Conference. It is absolutely my pleasure today to be joined by HubSpot's Chief Executive Officer; Yamini Rangan. Prior to becoming the second-ever CEO of HubSpot and the first woman of color CEO in software, Yamini served as HubSpot's first-ever Chief Customer Officer, where she was responsible for overseeing the company's marketing, sales and customer service teams. Prior to HubSpot, Yamini was the Chief Customer Officer at Dropbox, the VP of Sales, Strategy and Operations at Workday and held several customer-facing roles at SAP, Siebel. She holds both the Masters in Computer Engineering and an MBA from UC Berkeley. As many of you would be aware, HubSpot has been an absolutely phenomenal growth story and is a leading provider of customer relationship management software with an increasingly broad suite and platform of solutions for sales, marketing, customer service, payments and operations. The company has successfully grown and really transformed the business from an initial focus on marketing automation into a fully fledged CRM platform today. HubSpot's platform finds very unique balance between ease of use and advanced capabilities, which has allowed the company to also grow up market from serving initially predominantly small and midsized businesses to now increasingly servicing mid- and larger-cap enterprises. Yamini, we're absolutely delighted to have you here with us today, looking forward to hearing about your story and very exciting things and what's next for HubSpot.

Well, thank you so much, Derek, for having me. It's truly an honor, and I'm excited to have this conversation with you.

Terrific. Well, I know our audience is keen to get into it, so we'll jump right into the dialogue today. But maybe just to start, Yamini. Can you start -- I provide an introduction, but I could never quite do it justice I'm sure. So can you start to provide a little bit more background on yourself and your journey into the role of CEO.

Oh, for sure, for sure. My journey has been a couple of big steps. I'd say I went from an engineer to a salesperson to a customer-focused executive, not the traditional jumps that you typically see in a career. I started early on as an engineer. And I tell you that a big thing that I took away from the engineering background is first principles thinking. It's always been part of how I operate, how I lead and that is a great foundation. And then a couple of decades ago, I actually started with Siebel, the original CRM company and found myself in sales. This was the point that I was making a transition from business school. I wanted to be in investment banking, but 9/11 happened and the world changed pretty dramatically, and I found myself back in the technology world, and I found myself in sales. Now it was fascinating for me to be in a sales organization for a CRM company and talk to customers every single day. But I tell you that has developed my passion for listening to customers and understanding customer and buyer behavior, and that has continued throughout my career. And then as you mentioned, I did spend about a decade across Workday and Dropbox, both of those organizations were in hyperscale mode. And at that point, it was really all about patent recognition and looking around the corner and seeing how you can help those types of organization scale. And so bringing all of that together to HubSpot seemed like a natural step. As you mentioned, I joined HubSpot 2 years ago as the Chief Customer Officer, and we were going through a fairly big transformation of bringing all of our customer-facing functions, marketing, sales, customer success, all of those functions together and really driving a delightful experience for our customers. That's how I got here. And as you mentioned, I just started as the CEO a couple of months ago. And I have to say congratulations to you as well. I think you mentioned that you became CEO a couple of months or a few months before the pandemic, and I know what a crazy time it is for a transition. So congratulations to you as well Derek.

Thanks, Yamini. I appreciate it. I didn't realize you initially had aspirations to be an investment banker, but I would say spending my career coming up the ranks as an investment banker. I think you maybe made the better call.

I don't know about that, but I'm definitely enjoying what I'm doing right now.

Yamini, you mentioned transition and I went through a transition a couple of years ago, right, before the pandemic. You've obviously gone through a fairly abrupt transition over recent months. You've done a tremendous job, so congratulations. But would love to hear you share a few thoughts just about the transition into the CEO role. What was most difficult or what surprised you as you made that shift?

Oh, everything about this year surprised me. So as you mentioned, my transition is just about 2 months. But earlier this year, Brian Halligan, who's been our Co-founder and CEO for 15 years, he met with an unfortunate accident. And he had a snowmobile accident. He's fully normal, perfect and back in the business right now, but it was fairly big transitional time for us. So he called me in March and asked me to help run the company while he was out and we wanted to give him the space to recover. And so that was having just gone through the pandemic as an organization and then going through a bit of an transition with the leadership that was really big. And I think as you've said, we were talking about this a little bit earlier, having a great team, a great leadership team that is clear in terms of what we need to execute is just exceptionally important. And I do think that at HubSpot, we have just an exceptional team that's ready and executing really well. And so when Brian called me, I think, a few months ago and said, "Hey, I think you should take this role. You're doing a great job, and I'll continue to help you. I'll continue to be involved in the business, but you should take this." I think a couple of different things went through my mind. One is just the enormity of the transition. Going from a founder-led organization where he's been the CEO -- a legendary CEO at that for 15 years to the transition. It's not lost on me. I have a lot of respect for what Brian as well as Dharmesh have built at HubSpot. And then I think the second part of it is also just my life journey. I grew up in a super small town in South India, which didn't have a high school to begin with. And I did finish high school, I moved to a different -- in a city to be able to get through that and from there to being an engineer to a salesperson to the enormity of this role. I think it's definitely been an emotional couple of months, but I am super excited for where we are right now, the way HubSpot is actually serving and the chapter of growth ahead of us. So pretty excited about the journey ahead.

That's great. Tremendous opportunity, and you obviously have stepped in and done a remarkable job in a very short period of time. A lot of our participants would be familiar with HubSpot. But for those that may be newer to the story, I mean, do you mind spending a minute just providing sort of an overview of the company, your strategy. One thing that really jumped up to me that I think we share between our organizations is the focus, first and foremost, on your client. And the concept of the flywheel certainly resonated with me, as I looked at your strategy. But would love it if you can just expand on that a little bit and some of the trends you're seeing for the business.

Yes. I think you mentioned this. HubSpot is a CRM for scaling companies. And our mission is really to help millions of organizations grow better. Now if you take a step back and think about CRM. Historically, CRM has been about enabling the front office, marketing department, the sales department, the customer success department, and more so doing it from the perspective of a seller. I started my career, I have mentioned to you as a seller in a CRM company. And at that point in time, it was who do I contact, which company do I prospect? And does the CRM provide that ability as a seller. What has happened, Derek, in probably the last decade is that the buyer now has a lot more information and therefore, a lot more power in the process. And therefore, CRM is much more about providing the buyer the enablement and empowerment they need, it's not just about the seller. And the way HubSpot approaches the market is that we are all about that buyer empowerment. We provide a modern CRM that helps small and mid companies provide a digital experience for their buyers. We have about 130,000 customers across 120 different countries. And as you mentioned, we're $1 billion plus growing at 45%. And If you look at the strategy ahead, I think the world is now stepping into having a digital presence in terms of marketing, sales and customer success. And we think we are in pretty early innings of that type of digitization, and that's our focus. And as you mentioned, solving for our customer is really one of the core missions of the company, and we take that perspective of the customer to heart, and we've organized the company around serving the customer, and that's part of our strategy to help small, midsize organizations grow.

Well, I think that's great because it sounds simple and every organization will say they put the client first. But I think in practice, there's a big difference between organizations that really live that and plan their strategy around it versus at times it can be lip service. And clearly, you're doing that, which is terrific to see. You mentioned obviously, the acceleration of digitization and this massive shift that we've seen post-pandemic. I'd love to hear your views on the acceleration that you're seeing. But importantly, how sustainable do you think that shift to digital is as we continue to emerge from the pandemic.

Yes, that's a great question. And I'd say, Derek, that even before the digital shift that we have seen accelerating over the last 18 months. A lot of these trends were already happening. And what we find -- to step back, when HubSpot got created 15 years ago, there was one major trend that we were seeing within the industry, which was, at that time, around marketing, B2B companies and B2B customers and buyers in general, were really getting immune to the traditional marketing approach. And the traditional marketing approach at the time was a call that would interrupt you. Remember the time you'd sit to have dinner with your family and you'd get a call from a company. Well, that was the kind of marketing that companies did, and there was a huge shift that was happening. And that was the reason why HubSpot came up with inbound, which is a methodology that we use, which is simply providing great digital content to be able to attract the right kinds of buyers and providing them value even before you bring it that was a trend, and that has been happening for at least a decade. Now the second trend I'd say that we noticed maybe 4 or 5 years ago, is also another big shift in terms of how buyers buy. And they were just getting immune to not having great customer experience. We talked about the importance of serving the customer. In B2C, you do have exceptional customer service and delight. You enter into an Apple store, you get a product walk out in 5 minutes or do an exchange and walk out in 2 minutes. And that's the kind of great customer experience B2B companies also look at and we were not delivering that as an industry. And so that caused us to really bring this flywheel concept. And both of these are trends that kind of got started before the pandemic. Now I think what happened during the pandemic is that companies basically said, we cannot just postpone our digital projects. We need to be digital first. And in a lot of cases, we needed to be digital only, but that was the only way that you can connect to your customer, serve your customer and support your customer. And so that really accelerated a lot of the trends that we've been seeing in the industry for the last decade, and it's made providing remarkable customer experience just a necessity. This is now a much needed necessity. It's not a nice to have, it's a must-have and it's a necessity, and that's why we are seeing this kind of a big shift.

And so certainly, from that vantage point, it sounds like you think those shifts are very sustainable. Obviously, there's been sort of a big tailwind, and there are some companies that have benefited from that, and it's been viewed a little more cyclical or temporary. It sounds like your perspective for HubSpot is it's much more of a secular shift and maybe it's been accelerated, but certainly continues. But as you think about some of the tailwinds from the pandemic slowing and maybe they don't become headwinds, but that acceleration that we saw from the pandemic maybe slows a bit. Do you mind spending a few minutes Yamini on how you're thinking about the next 5 years, 10 years of growth and how you continue to drive a real expansion of your markets and TAM to continue to fuel the kind of growth you've seen in recent years?

Yes. Look, I think what has been surprising is that last March and April, Derek, if you can go back, not that we want to relive that. But if you go back most folks just basically wrote off small and medium businesses. They said, well, this is going to like completely disrupt small and medium businesses. We're all going to go out of business, and we're going to have a huge headwind in terms of this segment within the market. What happened was actually quite interesting, small and medium businesses didn't completely go out. What they did was they embraced technology and figured out new ways to connect with their customers, interact with their customers, serve their customers and really go digital first. And that's the whole tailwind that we saw. Now to your question, and I think the valid point, we don't know how long that will sustain. I do think that this is permanent where people are not going to go back into the ways we were doing business 5 years ago. I think this is a trend that is there to continue. But the way we think about it is that we've seen a decade's worth of change in the last 2 years and it's going to continue to sustain. And so what is our strategy? How do we think about it? We want to provide a world-class CRM platform to help all our customers grow. And you mentioned this during the introduction, we've kind of gone from being a marketing app company to a CRM suite company to a CRM platform. And we're still very early in that transformation. So the way we think about the next few years is we want to build world-class application hubs like marketing, like sales, like customer service and operations, and we want to build a world-class platform that allows extensibility for our customers to be able to adapt and pivot which is what is needed within this economy. And so that's our strategy. And if you continue to see that's -- in the mid-market, if you look at all of the areas, that's a pretty large TAM. One of the other areas that from a strategy perspective, we believe is really important is payments and commerce. And you have heard us talk about this during our Analyst Day. And it is -- we think that commerce-enabled CRM is really the next step in the journey for a lot of our customers. Our customers are looking to grow. They're looking to they serve online. They want to be able to help their customers purchase online and the buyer trends are shifting towards that. And so I think commerce-enabled CRM is really the next step in the journey, and we're pretty excited about it. It's a longer-term opportunity, and we know in terms of our philosophy of developing products, it's always getting to market to learn, iterate, grow and serve our customers. But the combination of providing a world-class CRM platform and driving a commerce-enabled CRM is how we see our strategy evolving over the next few years.

Okay. Terrific. Great, great overview. One of the levers for growth, obviously, that you've acted on very successfully has been this move sort of upmarket from traditionally sort of very small entities to gradually going up to sort of mid-cap and some larger cap organizations. Great results in terms of the implications that has had in terms of average revenue per customer, your net retention data, so it certainly seems to be working. Can you spend a few minutes and talk about how you think about the size of customer segments and how much of your growth go forward may be coming from continuing to move upmarket while how much comes from continuing to serve and grow new clients in that more traditional sort of smaller mid-cap area.

Yes, absolutely. I have mentioned that the market that we serve is companies with 1,000 to 2,000 employees. That's always been our focus area. But if you step back 2 or 3 years ago, Derek, and looked at the segmentations that we had, the 20 to 200 segment, which we call it mid-market internally within HubSpot, that was our really optimized segment, where the product and market fit as well as the go-to-market fit was just exceptional. That's where we saw a lot of success historically. Over the last 2 to 3 years, what we have done is that we've looked at segmentation as 3 big segments. The first is the 1 to 20, which we call SMB segment. And then the third one is that 200 to 2,000, which you're calling the upmarket segment. And we've really optimized from both a product as well as go-to-market's perspective for each of those segments. So now you have us firing in each of the 3 segments that we have like products in. And in terms of upmarket, the needs of a 1,000-person company is certainly very different from the needs of a 10-person company. We recognize that. So from a product perspective, over the last 2 years, you have seen us invest and innovate to be able to serve a 1,000-person company exceptionally well. Our marketing hub, we kind of super powered our marketing hub last year as well as the sales hub towards inbound, which is our big conference, our conference last year, and we've continued to innovate in terms of adding enterprise level features while maintaining a consumer-grade look and feel. And that has worked within the upmarket segment, and that has driven all of the results that you mentioned, which is increased net retention as well as higher ASP. So our strategy is to double down on that. Our strategy is really to strengthen our segmentation approach and optimize both product as well as the go-to-market in each of the 3 segments that we operate in. And we're pretty excited about what is to come and the road map ahead in each of these segments.

Now you just touched on sort of go-to-market strategy. Can you expand a little bit between the different customer segments, how you've had to think about unique go-to-market strategies and whether that's working more in -- with different partners or whether it's changing the approach of account representatives or otherwise, how do you sort of -- when you look at the different segmentation, how do you approach market differently with each?

Yes, absolutely. I think that's a great question, Derek. And so broadly, our go-to-market, there are 3 flavors of go-to-market. The first is product led go-to market, right? And when I talked about the 1 to 20 segment or 2 to 20 segment, which is the small business segment, where we have innovated is to really have the products sell and assist it with a chat-based sales motion. You really don't need a person getting on the phone to have a 5-seat sale and going through a heavy discovery process. What you need is to provide clarity in terms of your product, clarity in terms of your pricing, clarity in terms of your packaging. And what we find is that there might be 1 or 2 questions someone might have if they're buying 5 seats or 10 seats, and we leverage product as well as a chat-assisted sales motion there. And that's the way for us to scale. Now out in the industry, and everybody talks about PLG. And I think that's how we approach that motion. It's a touchless motion. The other 2 ways are partner-driven as well as direct sales driven. And so for the other 2 segments, we leverage a combination of direct sales as well as partner sales. HubSpot is fairly unique even within the SaaS industry, where nearly 40% of our ARR actually comes from the partner channel. So we have a partner channel that's very robust. They are driving all of the capabilities to be able to sell as well as service within the ecosystem, and they have continued to scale with HubSpot and so that's the second channel. And then we do have a direct sales team that serves both our mid-market as well as corporate segment. Now as you mentioned, we're very thoughtful and deliberate about where we drive each of these resources. In the upmarket, we are investing pretty significantly in enabling, driving productivity of the reps that we have and so that they can take on more and more complex conversations with our upmarket customers versus maybe in our mid-market segment. But that's how we think about each of those and each of those carry their own investment cycles for driving productivity.

Okay. Terrific. Great overview. Maybe shifting gears just a little bit, but you've touched on, obviously, another real key area of success for the company has been your expansion over time from sort of a marketing point -- marketing application to a suite of products to a platform. And when you look at your disclosure across all of your different hubs now, I mean, you're really seeing great traction and great growth across all of them. Sales Hub certainly appears that it's really hit a sweet spot in terms of maturation phase where you're really seeing tremendous growth and traction. I'm interested in your thoughts when you look around the sales category in particular, and there's a lot of a lot of chatter or buzz around sales intelligence, sales engagement and enablement, and you're seeing a of number of companies like ZoomInfo or Outreach or Salesloft competing. Interested in how you see HubSpot position there and whether you see some of those companies I mentioned or those services or products as competitive or complementary to what HubSpot is providing?

Yes. That's a great question. I think our Sales Hub overall has seen a really good adoption, and that's the key word. If you think about CRM as a category and sales. Salespeople are just exceptionally hard to have them focus and leverage technology unless that technology is helpful in their day-to-day jobs and productivity. And so from a Sales Hub and approach perspective, we're really focused on solving that sales rep adoption. We've made very easy to use consumer-like tools with really powerful features from an enterprise perspective. Last year, we launched Custom Objects, which was a pretty big domino powerhouse feature. And this year, we introduced Conversation Intelligence in Q1. We continue to drive investments in terms of forecasting and more advanced CPQ tools. Now each of those really drive and empower sellers to adopt CRM so that they can become much more productive. The way HubSpot has approached the whole app to suite to platform is that we focus on crafting solutions, right? We talk about it as our strategy is to craft not cobble together solutions. And so from a technology perspective, we have an underlying framework of primary colors within our product, and they are things like messaging, data, automation, reporting. These are the core primary colors that allow us to develop new hubs as well as features in a much faster cycle and still deliver a crafted experience for our customers. Now if you step back and think about the playbook for most CRM companies, it has been growth through acquisition and kind of bolting on a number of these solutions. And that's exceptionally hard for a small or a mid-market company. That has maybe 1 or 2 developers or a couple of folks within the technology department. They just don't have the bandwidth, the time, the resources to put together the entire stack that you're talking about. For them, a crafted solution that is easy to use, it has all the powerful features, allows them to scale is much, much better value proposition than trying to put all of these different categories and cobbling it together. And so I think that's where we are unique, differentiated and drive value for our customers.

Got it. No, it makes very good sense. You mentioned in your response Yamini data and the importance of data, and we're seeing that in so many businesses now. But maybe switching gears a little bit to customer data platforms and the growth we're seeing around the CDP market. Maybe you can spend a minute and just talk about how Operations Hub in particular can help serve that market? And how do you think about the CDP space in general?

Yes. That's a great question. And you mentioned Operations Hub. In most front office organizations, there is a key persona, which is the revenue operations persona. And their job is really to provide insights to the marketing leader, to the sales leader, to the customer success leader and help drive growth. It's one of the toughest jobs, and I spent a better part of a decade, running these operations teams within organizations. It's really hard. The reason that particular function is key, but is very hard is because they don't have high-quality data. And when they have the data, they are not able to have the right tools to be able to provide the insights. And so -- and as we have thought about our mission to help millions of organizations grow, we've looked at this persona as being a key to be able to help those organizations grow. And so earlier this year, we launched Operations Hub, which is our new hub. And the first set of things that we wanted to solve was to bring all of the data together into HubSpot. And you call it CDP, but really, it's about bringing all of the data within your tech stack and having it in one place. And that was what we launched. In addition to that, if you look at our Pro tier within Operations Hub, once you have the data, what do you do with the data, you need to be able to automate and you need to be able to drive workflows so that you're becoming more efficient in terms of your operations. And so our Pro tier was just focused on automating those workflows. And then a couple of weeks ago, in November, we launched Operations Hub Enterprise. And once you bring the data together and form what is the data lake and a CDP. And then on top of that, you drive the automations, then you need to be able to drive insights and intelligence. And so the focus in terms of Operations Hub Enterprise is to drive better reporting and be able to deliver insights. And so the way we think about Operations Hub is it really supercharges all of CRM. You are able to get the data, you are able to automate the workflows and you're able to drive insights, and that's what really powers all of CRM. So that's our focus there.

Okay. Terrific. So we talked about a few of the different hubs. Obviously, one that is new and quite exciting, and I'm sure lots of investors have questions on, is obviously your new payments product. Very fragmented market still, tremendous growth and opportunity. Can you maybe spend a few minutes Yamini just talking about your vision for the product, how you see it tying into the broader HubSpot platform. And I think importantly, your opportunity to really be differentiated against sort of a crowded market that is still very fragmented.

Yes. That's a great question. And Derek, I mentioned earlier on in terms of our strategy, we really think about the unique opportunity as commerce enabled CRM. And as you mentioned, it is a crowded space, but if you think about payments, historically, payments in commerce has been somewhat of a back office function. You typically approach the finance leader and it is all about how do you collect your payments in a more cost-effective and efficient manner. But we approach this market very differently. For us, it is about enabling growth. And I think that is what is unique in terms of our approach here. Why is it that we think this is important. I think, first of all, going back to our mission of helping companies grow, commerce-enabled CRM is that vehicle. As we think about our B2B customer days, they are still in the early stages of online commerce. And so we want to be able to drive that type of online commerce within our customers, and those are completely new revenue streams. The second aspect of it is that when B2B companies leverage direct sales reps and do a rep-driven approach, most of the process is reasonably efficient. But the last mile of that rep-driven transaction in B2B companies is the most complex one. You typically have contracts and then you send it out for signature and drive an invoice and get a payments. And it's one of those things that for years has been the last mile exceptionally hard. We want to focus on that. We want to make that last mile experience better so that your sales team can focus on revenue-generating activities, not kind of going through the manual process. And then the other way in which we think about this is like once you have all of this commerce context in CRM, every interaction with your customer, whether it's a marketing campaign about abandoned carts or a sales interaction about an invoice or a prioritized conversation in service. Every interaction now has the commerce data. So when you're interacting with a B2B company, imagine having all of that context, your conversations are going to get much better. And so I think we have a very unique approach to how we're thinking about this. Now as I mentioned before, it's a long-term opportunity. We're starting from a very targeted approach, where we're focused on U.S. companies with less than 100 employees that are primarily in B2B. And we think this market, we can get a really good product market fit, we can learn, we can iterate and we can really deliver a great customer experience, and then we'll kind of continue to grow from there. But I'm pretty excited. It's early stages of a large opportunity.

No, it is very exciting. I mean, as I said, it's such a fragmented market but a huge addressable market and so great upside opportunity for you if you can execute on the vision that you just outlined. On the product side, one thing that I think is terrific in getting to know the company better is as you have make this shift to a platform. You've got this breadth of products that are all at different phases of maturity in terms of growth, profitability and how that accelerates your growth strategy overall. We talked a little bit earlier about Sales Hub and it really hitting this sort of sweet spot of maturity where you've got tremendous traction and it really is driving growth and strong margins. Can you maybe just walk through among the product portfolio today how you might group them or bucket them on where they are in that life cycle? And what's next in terms of hitting that sweet spot of maturity where you find Sales Hub today?

Yes. I mean that's a really good question and something that we spend a lot of time thinking about. As you know, most of the audience probably knows we have 5 hubs today, Marketing, Sales, Service Hub, Operations and CMS. And I'd say that Marketing and Sales Hub are kind of our anchor hubs, and we've invested pretty significantly over the last 2 years in terms of product maturity. And our overall strategy is we want to have great powerful features with consumer like ease of use, and that's what you've seen us do with those anchor hubs. Now we want to continue to invest on those. We're going to continue to drive innovation within those anchor hubs. I think the other 3 hubs are on various stages of maturity fairly early in their cycle. So Service Hub, we launched a couple of years ago. And the whole vision there is to provide a modern help desk that makes the interactions with customers really seamless. And you saw us launch customer portal at inbound, which is one of those, again, powerhouse features something that our customers have been asking for a while. And so you'll see us continue to invest in making Service Hub better, and there's a big opportunity ahead in terms of Service Hub. CMS and Operations earlier in their life cycle, we again think of CMS as a critical part of this end-to-end digital experience. Most digital experiences kind of start with a website. And I think it's, again, a unique and powerful differentiator from our perspective to have the digital experience with the CMS and then get connected into the CRM and there's a rich context that we bring in. And so early in the process, a lot more to come. And then Operations Hub is kind of like the newest sibling on the block, and we have a lot more in terms of the development. And where we think about this broadly is that we'll continue to invest in hubs and we'll continue to invest in the platforms. When we see a new set of use cases that our customers are asking for, then we think about solving those use cases, either within the construct of our current hubs or adding a new hub. That's what you saw us do with Operations hub. And so strategy is to continue to add value in every one of the additions as well as continue to expand on our hubs that we have.

Terrific. So from a business perspective, I'm going to end with a bit of a finance question because I'm a banker at the end of the day, and I'm not a technologist. But one thing over the last couple of years with the explosion we've seen in many technology companies, one challenge of some has been great market opportunity, but how do you translate that into the bottom line and tangible earnings and cash flow for investors? One thing that jumped out to me around HubSpot is in addition to a tremendous growth opportunity, I know you have, and your team have a very strong focus on the balance between growth, improving margins, free cash flow and a great story to tell there, but would just love to hear Yamini how you think about that balance of growth and investment versus continuing to drive improvement in margins and efficiency and free cash flow to the bottom line.

Yes. I like the finance question. Thank you. I will say that our primary focus remains building a durable, long-term growth at scale. That is the primary focus of HubSpot in the business. And we feel really positive about this. If you look at the SMB market. It's in early stages of development. Even in the countries, regions, segments that we operate in, there's anywhere between 3 million and 4 million SMBs and we're at 130,000 customers. And so in almost every place that we look at, there is just a tremendous amount of growth opportunity left. And so we're really focused on building an organization that can drive long-term durable growth. Now we do look at inefficiencies. And as you mentioned, that balance between growth and bottom line is really important. So have a long-term framework that we have communicated during the Analyst Day and all of the prior years as well. And we think about that long-term framework and making sure that we grow within the constraints of the long-term framework that we have set. But I think we have a tremendous opportunity to grow in the market that we operate in and we'll kind of continue to do it in a very balanced manner.

Terrific. We'll wrap up here. One final question before I turn it over to you for a few other comments. But we'll end it on a lighter note. Obviously, new into the CEO role, I can only imagine the demands and pressures on your time. For many people that will be taking part in today's event that equally lead very busy lives, and everyone is trying to find the right balance. Would love to hear what do you do to maintain your energy, maintain your drive and deal with all the rigors of the job?

Well, I'm going to turn it around and ask you this question after I answer this question, Derek. But I'll tell you the last couple of years, just being balanced and not getting to a place of burnout has been front and center. I mean every page of paper that you turn, there's something about burnout. And I'll say that towards the end of last year, I found myself at a place where I was like working nonstop. There's no stopping from the morning minute you get up and you take your -- look at your e-mail and the phone to the time you go to sleep. And so I had to like reset and create a little bit of an operating system for myself. And for me, it's about what are the biggest priorities? Given whatever challenges we have professionally, I still am a mom of 2 boys. They're 14 and 12, and constantly demanding attention as they should, and I want to have a balanced life at home as well. And so a few things that I put into my operating system. Three work out a week is on the calendar, no way to escape that. And 3 hours with my sons each week, and it is on the counter again, then it's concentrated time. It's not diluted across any other priorities. And kind of 3 books that I read at any given point in time. And the simple rule of 3 helps me and having something to focus on and having it on my calendar to reset and recharge also helps me a lot. And it's pretty individual, but I find that these things really help me bring balance and also prioritize the things in my life that are as important as my job.

No, that's great to hear. Because it's -- yes, it's...

Yes, so what do you do? I want to hear from you. I'm always constantly learning from...

Interestingly, as you were saying that, you and I, I think, are a lot alike because I've got 4 kids that are between 11 and 16. So for me, a lot of the balance is just making sure I carve off time with kids for different activities or just having some fun with them around the house. I'm probably tilting more to the 2 workouts a week versus 3, so I'll have to step up my game now a little bit. But very similar. It's just about carving off time. And remembering it's a marathon, not a sprint, if you don't find that balance, you just won't be able to keep pace so.

Exactly right.

Well Yamini we've covered a tremendous amount of ground and just before we wrap things up, though, in the event I've missed anything, any key messages or other things you would love to leave with people before we wrap up?

I think we did a phenomenal job of going through the whole a story of HubSpot. So thank you for the opportunity and really grateful to spend the time with you, Derek.

Oh, terrific. As I said at the outset, it's obviously been a very exciting opportunity for you. It's early days, but you clearly have gotten your arms around it quickly and driving tremendous results for the business. It really is an exciting growth story ahead. So congratulations on your success to date, and wish you all the best in the quarters and years to come. And again, on the theme of balance, we know how busy you are. So Yamini really on behalf of everybody participating today, thank you very much for making yourself available to join us for the conference.

Absolutely. Thanks a lot.

Terrific insights.

Yes. Thanks a lot so much for having me and enjoy the rest of the conference.

Great. Take care.