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

Okay. Good morning, everyone. I'm Mark Murphy, software analyst with JPMorgan. And it is a great pleasure to be here with HubSpot this morning. So we have -- starting next to me, we have Dharmesh Shah, Founder and CTO. Next, we have CFO, Kate Bueker. And then on the far end, we are very pleased to have Chuck MacGlashing, who runs just a majority of the rest of the company. So guys, thank you.

That's true.

Thank you so much for being here. Maybe you could begin by giving us -- just in case there's anyone in the audience who's not familiar with HubSpot, you want to give us a 30-second version, a brief introduction of the company.

Sure. HubSpot is a CRM platform for small- and medium-sized businesses. We're about to turn 16 years old, 2 weeks from now, but focused very much on SaaS and the SMB.

Okay. So maybe we can talk a bit about the state of HubSpot today. It's interesting because I -- when we opened the model, I look back a few years and the growth rate was in the 30s, right, consistently. And so I went back and looked, when revenue was going from $300 million to $1 billion, you have this growth rate in the 30s, ordinarily, the growth rates would slow, right, because of the law of large numbers. For HubSpot, you actually accelerated, right? And so the growth went into the 40s. You crossed through $1 billion. The guidance this year is 38% constant currency, right, after just 1 quarter. What do you think is making it possible to accelerate through kind of $1 billion plus in scale?

Yes. At a macro level, I think we identified a large underserved market. Millions of businesses were going through this digital transformation process because they need to kind of revamp their front office and make it more digitized. And that's been going on for all 16 years of HubSpot's history. Specifically, over the last few years, we made the transition from being a marketing applications company to a CRM platform company and made massive bets in terms of making a legitimate kind of CRM platform that the market would want to buy. And those kind of early bets in CRM and building that foundational layer, we're the only company of our kind that's actually built all of the front office from the ground up because we thought that was necessary for succeeding in SMB. It had to be easy to use. It had to be cohesive. And that's what kind of sets us apart from the folks that play in the mega enterprise market is that in the SMB, that kind of time to join, ease of use is superimportant, and we made big bets in CRM and making that easy.

Yes. I guess what I would add is there are certainly some tailwind over the digital transformation through the last couple of years as a result of the pandemic. But to Dharmesh's point, you -- we have made the investments over the long term to put us in a position to actually capitalize on that. And so it really is the long-term focus and investments that have allowed for this recent success.

So you -- and we appreciate the long term, and I want to come back and specifically and ask you, Dharmesh, about the ease of use in just a moment. But before we do that, people are always trying to figure out how much runway is there, right, how to define the size of the market. So you have 140,000 customers, sounds like a lot. But maybe can you just remind us what is the potential in terms of customers that you see in the market that you serve?

Sure. I think we're still kind of early in our kind of journey in terms of becoming the #1 CRM platform for scaling companies. And 140,000 does sound like a lot. It's actually a fraction of the actual customers that we think are out there that would benefit from HubSpot's products and our candidates for the product. Based on how you measure it, our market share is still in the single digits regardless of which kind of perspective you look at it. So we're still very much early. And I think the reason for that is it took a few years. We launched the CRM roughly 6 years ago. And then about 2 or 3 years ago, the product became and the platform became increasing legitimate. What hasn't caught up yet is the market takes a while for it to kind of figure out. It's like, wait a second, they're not just marketing software. They actually sell us CRM. It actually now has the features that we've been looking for. And so that's partly what's driving some of the growth acceleration that you've seen is that the market now is coming to the realization that there is an alternative to the kind of big 4 kind of CRM companies. And that for SMB, HubSpot is just a better fit in most cases.

Yes. Mark, one thing I would add, too, if we're having this conversation 5 years ago, it would have been all about new, like new marketing, 3 flavors of marketing. The only upsell, cross-sell motion was going to be additional upgrades and more contacts in the database. Today, we're quite a bit more balanced with selling individual hubs, selling multi-hubs, selling the entire CRM suite. We have not just those 2 upgrade motions, but now we have seats, we have the cross-sell of CMS and operation sub into the installed base. And so there's multiple vectors of growth that underpin the growth that you guys are seeing, both on the new side, but as well as in the installed base where it's nice that we have 2/3 of our customers that are taking 2 products or more, but we're still at a point where only 25% of our professional enterprise customers are taking 3 or more products. And so there's still a lot of room to grow and a lot of opportunity within the installed base to further penetrate.

Yes. It makes me think of the -- there's the grid you show at the Analyst Day, right? It's kind of like the tic-tac-toe grid. And it was -- there were only a couple of Xs and Os on there, right? And I think it's like -- it's gone like there's got to be 16 or 25 of this.

We'll take that as a request for a...

Yes, please. Thank you. So maybe the next place we can go is to look back on Q1. It was a recent earnings report. And so clearly, there were some concerns, right, going in among investors, pandemic pull forward, right? Do you get some SMB strain going into an economic slowdown? You have a pretty good amount of European exposure. So people were worried and then everything really felt normal about the quarter, right? So billings grew 44% when we normalized it. You raised the annual guidance. It felt like a normal incredible kind of HubSpot Q1. But there was -- so the one thing that came out, right, there was this comment about some deal cycles that were extending a little bit in Europe. And I'm wondering if you can describe that to us. So just what did you experience and where? And then what were the customers they're concerned about? In other words, were they concerned about the war? Were they concerned about interest rates? Were they concerned about macro?

Yes. It's a good question. We were pleased certainly with the strong results we delivered in Q1. We tried to be on the call very clear about the -- and transparent about what we are seeing in the economy and in our installed base. We did share that we had seen some pockets of deals kind of pushing out a little bit, taking a little bit longer, particularly in EMEA. If I were to call out like any geographies, I would probably point to the Nordics and Germany and sort of that surrounding area. That said, there was not a broad-based impact on the growth of the business. We, like I'm sure everyone in this room, are going to continue to pay very, very close attention to everything that's going on there.

Okay. So one other surprising element of Q1 was the customer additions that -- so it had actually slowed, right? So it had been in a range of about 7,000 to 7,300 per quarter. And then out of nowhere, it kind of came in at 8,200 in Q1. And so you think about going in, you have concerns about SMB, right? You have concerns about small business formation, right? Those numbers have slowed a little bit. And then we see that. So what made that possible? And then can you just put it in perspective, I guess, the bigger picture, how relevant is that as an indicator for you?

Yes. Again, we are happy with the 8,200 net additions in Q1. I still think public service message that 7,000 plus is the right zone for people to be paying attention to in the coming quarters. If you just look at the Q4-to-Q1 movement, the increase was almost exclusively at our starter tier. The majority of our customers continue to be a majority of new customers and total customers continue to be at that starter tier, but that was the piece of the business that drove that quarter-over-quarter. I would say -- you've probably heard me say this a thousand times, this is not a metric that we run the business to attain. It is an output rather than an input metric, but we wouldn't honestly share it if it wasn't important to us. And there's a number of reasons for the importance. I would start actually by saying even though it may not be -- our starter still represents less than 10% of our ARR. It is a great customer acquisition vehicle for us. We pay a lot of attention to the upgrade rate out of starter, and these are customers that will drive future growth for HubSpot. And so we do care a lot about that. The other important thing, and I'll give a little nod to Dharmesh on this one, the larger the customer base, the larger the free user base, the more value there is in the overall ecosystem of HubSpot. And so that is also something that we care a lot about.

Okay. That helps put it into perspective. So let's go into the unfortunate topic, I suppose, of a recession scenario, right, because I think everyone in this room is probably wondering about it. You've had the yield curve invert. You've had housing stocks are cut in half. Transport stocks are cut in half, right? There is this sense that we could get into a European slowdown. But the business has really evolved, right, as you have described it. So how do you think this -- how would the business model perform today, right? So if you get into a recession that, that's not a pandemic-driven recession, if it's more of an economic cycle recession, how do you think this business model would perform?

And maybe I'll start and then others can certainly add. This is obviously not an easy question. Look, I would just start by saying in the case of a deep recession, no one is going to be immune, right? Our business will slow down like I think all businesses will slow down if the economy really does go into a prolonged recession. That said, there are a few things that to me are -- give me a little bit of optimism. One -- and Dharmesh kind of started here, we operate in a pretty big market. We have very low market share, and the market for our front office software is continuing to show nice growth. And so that is, I would say, point number one. Secondly, if we were sitting here 5 years ago, we would be talking about HubSpot as a marketing application. Today, we're a CRM platform with marketing, sales, customer success, an operations hub, a CMS. 60% of our customers are using more than one of our hubs. Like we are the platform from which companies are running their business. And that means, frankly, that they're a bit stickier. And then the last thing that I would say is when you talked, Mark, about the tic-tac-toe board, like we've filled in a lot of the tic-tac-toe board, and one of the things that we get as a positive benefit from that is that we have a lot of flexibility for our own customers in terms of ways that they can stay on HubSpot, right? And so we provide a lot of opportunity to downgrade and remain on HubSpot. And frankly, I think we are a natural landing spot for consolidation of spend out of either point solutions or more expensive legacy platforms.

So wouldn't be immune, growth would slow, but we would see kind of the stickiness shining through and perhaps the value prop would kind of resonate, right, for customers that are on more expensive, more legacy platforms?

The stickiness is, I think, the most important point here. If we were in the advertising space or something else that was discretionary spend, I can see it's like, okay, we're going to move some money around, and we're going to try and take them here and put it over there. HubSpot is the system of record and what the front office relies on. You're not going to delete your customer database and say, okay, unless you're going out of business, that's a different story. But in terms of discretionary spend, the CRM and the front office is nondiscretionary. It's customer-facing. It's the heart of the business.

Yes. And to that exact point that Dharmesh made, when you think about the companies that would have the most exposure at going out of business, right, like that sub-10 category, it's a sort of mid- to high single-digit percentage of our ARR installed base, right? And so from a pure customer perspective, they matter from an upgrade motion and from an enterprise. But when you think about the ARR installed base part of it, I think we have less exposure than the prevailing thought.

Yes. That's very helpful to be able to ring-fence that, that exposure off. Thank you for that. So Dharmesh, maybe we can talk about some more uplifting topics. We didn't mean to go off on there. But I'd like to follow you on Twitter. There's just a lot of great content that comes out there. You had recently said that the product you're most proud of is actually a slide deck, right? And you said it was one that has changed HubSpot's trajectory. It's called the HubSpot Culture Code. Could you tell us more about that? What is it that you're so proud about there?

Sure. So HubSpot thinks of culture as a product, literally as a product. So all the things we would do -- so we have 2 products at HubSpot. We have the product that we build for our customers, which we're known for. Then we have the product that we build for our employees, which is our culture. And we've been working on that for a dozen years, and it's published in a slide deck called the HubSpot Culture Code deck, which has been out for some time now. And when I say we treat culture as a product, I literally mean we treat as a product. So in the same way we survey our customers once a quarter and say, hey, are you happy? What are the bugs? What features do you want? We survey our employees every quarter for 12 years, and we get the data back. It's like, oh, here are bugs in the culture, things that people don't like. Here are features that they really like. Here are features that they want in the new version of the culture. And one thing we've kind of realized now, we've always thought of it as one of those kind of secret assets that HubSpot has because the employer brand has been super important. We're in a competitive talent environment or have been for our entire 16 years. And that's what those secret weapons because it drives the smartest and the best people to kind of join HubSpot to get engaged and to stay because they sort of know what to expect. And if they're unhappy with the culture, we change it. We're not trying to hold on to the culture that existed 16 years ago. And the big lesson now during the course of the pandemic is around what do employees value now versus what they may have valued 3 or 4 years ago. And so they have always valued autonomy as it turns out. They value transparency. They want to know what's going on. The new thing that has bubbled up to like #1 thing that's important is flexibility. That's the #1 feature ask that we get from the employee base, right? So we listened to that. And we said, hey, flexibility above compensation above other things is the #1 thing. We will lose employees if we don't offer this one feature. And so we made the deliberate decision not to say, oh, we're going to pull everyone back into the office, not to say we're going to make everyone go remote and now have offices. We're going to let every one of our 6,000-plus employees individually choose 1 of 3 options, either they're back in the office, either they're remote or they're a hybrid, and that gives us a competitive advantage. We were already kind of on that path of being hybrid. We had double-digit percentage pre-pandemic working remotely. And so as the pandemic now kicked in, it's like, okay, this is the right way to do it. But the reason I'm proud about the culture is it has worked. It helps keep the best and the brightest at HubSpot.

It's funny because I'm listening to this and digesting it. And so you kind of think about having those 2 products. And we noticed HubSpot is always winning all these awards, Best Place to Work, Best Workplace. And then you won -- you had a recent award, which was the #1 CRM product, like the #1 CRM suite. So we feel like we're always kind of seeing and sensing the accolades, right? And we get it from your customers and your ecosystem. I did want to ask you -- so the other thing I am wondering aloud about is when I watch your tweeting, and there's a lot of thought leadership that you're putting out actually on Web 3.0, right? And so I guess I'm just wondering, is there some kind of a play or linkage for HubSpot? Or is that like something that's completely separate?

So I'll give you the 30-second version in terms of what I think Web 3.0 is, and we'll talk about opportunities for HubSpot and what's changing. So I've been around building CRM applications for the original Web, right? So I've been doing this a long, long time. Never before have I been more excited about this evolution in the Web. So the Web 1 was about these kind of open standards. We had HTTP in terms of moving data across; HTML, how do you render a web page; SMTP, how do you send messages? And it was basically kind of open and distributed. So if you had an e-mail address at [ markmurphy.com ], it's like, oh, I can move that to whatever hosting provider. You had your own identity and it worked. What Web 3.0 does is it kind of enhances those kind of core primitives in new ways. One is now we were going to have an open standard for value exchange. So I can actually give you money without an intermediary in place. So it doesn't have to be a Venmo or a PayPal or something else in between. That's important. We're going to have universal identity. So instead of having an e-mail address as a very kind of ephemeral identity thing that's like, okay, this is my e-mail address, that's why I signed up everywhere with. You will have a smart wallet. And the smart wallet will know who you are, but then let you control what parts of your information you disclose to whichever websites you're buying from. So it's like, oh, well, Mark's part of JPMorgan. These are things he's bought in the past, and it's all these things that you can kind of bring to when you're shopping in your Internet experience. And so I think it's going to have a dramatic impact on the industry because it's going to have a dramatic impact on the kind of buyer-seller relationship. For the first time, we will not need intermediaries to kind of build this direct connection with customers anymore, right? So if you're a 50-person company, the way you do it today is like, okay, well, I'm going to pay these 3 that actually own all the data in order for me to advertise to them, we're trying to get to those prospects and get to those customers. In the Web 3.0 world, those intermediaries are much less necessary. So I think it will have an impact. How that translates into actual products at HubSpot, just too early to really say.

Okay. Well...

I'm excited.

Maybe it's a good lead in. Maybe I'll come back and ask you about payments in a moment. Maybe that's how we'll twist that. But before I do that, the one surprising announcement as well in Q1 was that the Marketing Hub surpassed $1 billion in ARR, right? And so you know what we do as an analyst. We -- I think we go into -- it was $840 million last fall. And so we try to kind of think about the growth trajectory there. We look at where it is. It's got to be something -- I mean it's probably something like 60% of the total today. But then Yamini commented that, that's a low single-digit penetration, right, of the TAM. And then she said that -- she said something about there's runway to run a multibillion-dollar business here, right? So that was kind of intriguing. Could you explain to us then what do you feel like you need to accomplish or build to keep this marketing trend chugging along like that?

Yes. It's a great question. So one thing to kind of recognize about marketing, although the industry has been around for a while now in the form that it's -- that we've known it in kind of the HubSpot kind of history, it's 16 years old now, but it's probably changing more quickly now than it ever has, right? So if it were one of those things like, okay, everyone's figured out marketing. They pick their platform. Life's kind of settling down now. The players have been chosen. The winners have been chosen. Nothing to see here. That is the exact opposite of what's actually happening, right? So marketing is changing very quickly. We have new channels that didn't exist 5, 10 years ago. We will continue to have new channels in terms of how we interact with customers. So we think right now, every day, millions of people, CMOs and heads of sales are waking up saying, we need to kind of improve our marketing. Like the things that we used to do in the past don't work anymore. We think of inbound marketing, which HubSpot invented as this kind of old thing, and it is old. People have now accepted the fact that you have to do that, but there are still millions of companies that have not made that transition yet. So this is what kind of excites us. Number one, it's a fast-changing vibrant industry. It's not like, oh, that's been done now. It's already over, number one. Number two is that in the SMB market that we play in, not everyone hasn't figured out yet. Not everyone has kind of gotten their kind of chess pieces on the board where they want them. So we think there's still lots of headroom to kind of grow that. Even though it's at $1 billion in ARR, we think it's an exciting market. And we have as much in our heads for the next 10, 15 years for Marketing Hub as we did the stuff we've already built, like we know what we need to do, that stuff is already happening. So anyway.

Yes.

I look forward to you getting on stage, right? You go through the hallway right there, and you go into the Boston Convention Center. And that's where the INBOUND conference will be. It's my favorite conference of the year kind of right after Labor Day. And the -- Dharmesh will get up there and talk about how he's an introvert and all that.

Can't you tell?

And he will light that entire place on fire, 20,000 people, right? He'll have them in stitches.

I guess that's my point for the shameless plug for Analyst Day at INBOUND on September 7, just look out for invites there.

Excellent. So okay, let me ask you this then. So we know about the Marketing Hub. Do we know what is your fastest-growing hub today if we look across marketing, sales, service, CMS, Ops Hub, et cetera?

Well, another shameless plug for content at our Analyst Day, but our fastest-growing hub is our Ops Hub by virtue of the fact that it's our newest hub. That said, we're pretty happy about the growth of all of our hubs. We think that we have lots of opportunity across our foundational hubs to build multiple $1 billion businesses over the long term.

So okay. So if I take that comment and I think about what's happening sort of below the tier of this $1 billion Marketing Hub that you've got, if we were able to see, right, these arcs that are getting traced out by that Sales Hub, the Service Hub, CMS, Ops Hub, et cetera, are there any of those -- I mean would you look at any of those and say, it kind of looks like it's going to scale up sort of like the Marketing Hub did? Like it kind of looks like it might do -- it might trace out that same arc to $1 billion?

Can I start?

Yes. Why don't you start?

So if you look at kind of Sales Hub and Service Hub, one of the nice things about HubSpot is that if you needed to predict our future, all you have to do is go into the time machine, which is look at what the mega enterprise companies have done in the kind of CRM platform space, because you would have been right all 16 years of our history. You might have gotten a sequencing wrong in terms of which products are going to come first in which order. But the overall scalability -- so we're not putting someone on Mars. We're not inventing electric vehicles. The path for HubSpot is relatively clear in terms of what we're out to do. To answer your question, yes, Sales Hub should -- has the opportunity to grow in the same way Marketing Hub did. Yes, Service Hub is a massive opportunity, can be its front door, can grow the same way that Sales Hub and Marketing Hub did. And going back to your kind of first question in terms of what kind of contributes to that kind of growth acceleration, it's just a kind of large underserved market meets focused execution, right? So we're sitting here having this conversation now. If we went 5 years out and we look back on it, it's -- so what we're doing today is the exact same thing we did with Marketing Hub, which is a, hey, there's a big opportunity. It needs to be easy to use. What are the things customers are looking for? And over the course of many years, we just kind of kind of dropped those features with custom objects and attribution reporting. It's like every time we do one of those, it unlocks another pocket of customers. Conversion rates go up. Salespeople get happier, and the flywheel continues to spin. You saw us do that with Sales Hub with the enterprise tier over the last 2 years. Like that product got legit, right? And it's like that's what's kind of driving that kind of elbow of the curve, was again a massive market. Service Hub -- so all our -- one thing we're not is we're not creative in the sense that we're going to come up with new mechanisms by which we drive growth. The playbook is the same. We did it with Marketing Hub. We did it with Sales Hub. We're still kind of in the mid-stages of that, doing it with Service Hub. And we think all of them represent massive multibillion dollar opportunities over the long term.

The one thing I would add, Mark, is that I'm not sure if it's 3 years or 5 years from now or if it's longer, but I think we're going to be talking less about hubs and more about buying HubSpot the platform, right? You've seen multi-product grow. To Kate's point, 2/3 of our customers are taking 2 or more products. 25% of our customers within the Professional Enterprise segment are taking 3 or more. We're seeing more CRM suite purchases. And what we're hearing from our customers and our partners is that it's getting really difficult to figure out where marketing begins and ends and where sales begins and ends and service begins and ends and like where the CMS fits in there and that operations hub layer that spans all 5 of those hubs that will likely be the payments journey as well, how it sort of all fits together. And I think, ultimately, what you're going to see is people buying HubSpot, the platform, logging into that, doing their work and logging out of it at the end of the day and then using -- utilizing our ecosystem of applications to plug and play on top of the platform for their front office needs and to grow their businesses. And so I think there's going to be a rising tide of sorts that lifts all hubs as we're knocking down features within each of these respective categories to give customers the ability to sort of standardize on the entire platform.

So -- and when you describe that, Chuck, that customer experience, it's harder to tell where one product ends, right, and the next half begins. What it makes me think of is you've had -- Dharmesh, you've had this messaging of crafted, not cobbled, right? And so I think that's not going to happen if someone is building the kind of [ Franken ] stack, right? They're going to feel like completely separate products. The -- you had given this example, you had this experience you had with the automobile company, right? And again, we were all in stitches kind of laughing about that. And you had this -- you said the dream is to have a single cohesive uncomplicated CRM crafted by people who care. So can you maybe take us through some of that vision that you have going here of crafted, not cobbled and just how it advantages you?

Sure. And this goes back to the kind of genesis of HubSpot. The reason we started the company is, number one, we think SMBs were underserved in the front office. That was the thing number one. And thing number two, the reason they were not using the Internet and leveraging it is not because of a dearth of products. There were lots of good products from great companies out there even at that time, but it was just too hard to pull everything together. And so HubSpot story is a little bit like the Apple story when they first launched the iPod, right? It's like, okay, well, when Apple came out with the iPod, there were other MP3 players out there, but you had to be like a rocket scientist to actually pull everything together and get the music from the right place and actually enjoy digital music. And the front office has been similar. It's like, okay, if you had the technical chops and you have the money, you could do it, but 95% of the companies that should have been benefiting warrants. So that was the kind of genesis. And so this kind of led to the, I think, the most important decision the 16-year history of HubSpot is we chose not to grow by acquisition, is to build it kind of from the ground up, which we call kind of crafting it by a team that cares about user experience because we think that's what was necessary in order to pull those kind of the masses of SMBs in onto the platform in the same way that Apple didn't say we're going to give you the most gigabytes per dollar. That was not the thing. They were like, oh, we're going to bring lead partnerships. We're going to give you the device and the content altogether and even your parents can use it, right? That's kind of thing. And that's the beauty of HubSpot. And so we made that choice. Not to say that the other choice hasn't yielded success for lots of great companies. We think in SMB, that cohesion, that short time to joy, make it easy, making a joy to use actually works. It is something that's attractive. And so the 3 lines we use for HubSpot is that we want HubSpot to be easy to buy, easy to use and easy to love. Those are 3 things that the mega players actually have a hard time doing any of them, let alone all 3. It's not the model.

It's so rare in this world. Yes. So well, okay, we're down to about 3 minutes, and I thought I would just do a quick check and see if we do have anything from the audience. We've got one here. Can we get a microphone all the way to the front?

There are a few scale players in the SMB software space that have realized or come to similar realization, which is that companies in the SMB space and SMB market [ one-on-one ] platform that can do everything. One of them is into it. They're going from the back office and expanding outwards. You're obviously starting from the front office and building outwards. How do you see that relationship/ecosystem evolving over time as more and more come or the few scaled players try to build out a singular platform?

Yes. Interesting. So yes, they're moving from back office to front office. The thing I will say is that there are parts of the software industry that are relatively straightforward. CRM is not one of them. And in order to really kind of succeed at the front office, you need to have a scalable, flexible, powerful CRM. And then -- and it's not enough to just get the curdle right. You have to have the partnerships because one thing we have learned over the course of many, many years is that we can only build so many hubs. We can only build so many capabilities, but we have a group of 1,000 plus partners now that have kind of built integrations into HubSpot's platform. And so is it possible for someone else to do that? Sure, Intuit is a great company, we have a lot of respect, but these are things that take 5, 10, 15 years. We're 8 years in the development of HubSpot CRM. That's all we've been maniacally focused on. And I think we've done a pretty good job. It's just it's one of those things that doesn't happen overnight. It's just a -- but what makes life interesting, it's like, yes, things are still constantly moving. I kind of like our position. I like the kind of focus on the mid-market. I like our kind of ease of use and then what we've built so far, and the flywheel seems to be spinning and doing well.

Yes. The one thing I would add, too, is just given the sheer scale of opportunity with millions of businesses out there and tens of billions of dollars in TAM in the same way that there are multiple successful platforms up in the enterprise layer, I don't know that there necessarily needs to be a winner-take-all for the small and end market. Obviously, Intuit is fantastic at that lower sort of sub-5 [ employer ] I suspect that they have aspirations to move that up a bit, right? We tend to focus more on that 20 to sort of 200, although we have the bimodal approach that allows for smaller businesses to start and scale up with us to thousands of employees. And it does feel like there's plenty of opportunity to go around.

Okay. And so with that, we're down to 15 seconds. So I apologize. I know there was another question or 2. Maybe we can kind of move that off into the hallway. But I can't thank you enough, Dharmesh and Kate and Chuck, for being here, and it kind of means the world to us to have you at this conference.

Thanks for having us, Mark.

Thank you.