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

Welcome HubSpot CEO, Yamini Rangan.

Welcome to INBOUND 2024. I'm Yamini, and I work for HubSpot, and this is my favorite week of the year. I just love seeing people connect, the hugs, the high fives, all of those selfies we take, but more than anything, I just love seeing everybody leave this week inspired. And we need that inspiration, especially when technology is changing everything around us. Now in the last year, I don't think you could have got hit with any news without getting hit with AI hot takes, right. Look at these headlines from 2023. The Wall Street Journal said, "Generative AI is promising an economic revolution." The Washington Post, probably announced the AI gold rush. Meanwhile, New York Times kept it super down to earth, asking questions like, how could AI destroy humanity? Really. Now look at where we are just 1 year later. The Journal says, "The AI revolution is losing steam." The Post says, "The AI bubble is deflating." And my favorite one, from the New York Magazine, "Whatever happened to the AI apocalypse?" Now do they sound a bit disappointed? So what is the truth? Is AI just false hype or a true revolution? Are we at the peak or at the trough? The fact is, these are not the most important questions to ask or answer. Know why? Because these headlines are not the lines in your head. When your customers wake up in the morning, your first thought is not some big sweeping reflection about the state of AI. You're thinking about your job. You're thinking about your team, your next deadline. You're thinking about how you can get your kids out of bed and off to school, so you can start your day already. Or maybe that is just me with my teenage boys. The real question you're thinking is, how do I drive growth? Because lately, because we've all probably felt it has just been harder to grow. So let's focus on the right questions. Why has it been so tough to grow? What is changing with your customers' journey? And most importantly, where do we grow from here? Now to answer this question, you have to understand what changed and how we're going to fix it. The fact is the growth formula is just broken. It is harder to attract customers to a website. It is harder to convert them and they engage, and it is harder to retain them even after you have won them. And we can all feel the shift. And the numbers, reflect it. And traffic is down. The #1 challenge for marketeers today is generating traffic and qualified leads. Conversion is down. Win rates have declined from 23% to 19% in just the past 2 years. And retention is also down. What does this mean? It means growth is down. Only 50% of reps are actually making their quota this year compared to 66% just 2 years ago. The only thing that's up here is our anxiety. So what has changed? Well, 3 big things: search, social and all our customer channels. Search has fundamentally changed. It used to be that your customers would ask questions, and search engines would serve up blue links, and they would click on those blue links and they would get to your website. But now with AI overviews and soon SearchGPT, your customers are getting answers without leaving search. And the same thing is happening with social. These social platforms, they are holding on to your customers much longer. The fact is they just want to create a sticky user experience. That's why when your post includes an external link, it just gets way less reach. Now all of these social platforms they used to be there just to distribute your content, now they have become customer destinations themselves. And you know this is true. Just look at your screen time report every week. Or if you really dare, look at your kids' screen time report. Now that is my scariest data for the week. You know what, this is what it looks like when my teens are playing Minecraft on the laptop, watching Shark Tank on the big screen and streaming Dude Perfect, all at the same time. What does this really mean for you? It means fewer website visitors. Search and social used to be open, feeding new visitors. Now they are closed, keeping your visitors. And that is a huge change, and it's only going to continue. Search volume is set to drop by 25% in the next 2 years, but that's not all the change. There is another big change that's coming, and it's here. People want to talk to people, not brands. And in fact, 7 in 10 customers just trust people over companies. They trust funny people. They trust relatable people. They trust aspirational people. They just don't trust you. And so your customers end up going to G2. They go to Reddit. They watch YouTube videos. They talk to peers. And by the time they do get to your website, your customers know more about you than you know about them. Just think about that, so now when your sales reps connect with your customer, the bar is incredibly high. That conversation needs to be so tailored and insightful, and if it's not, conversion will go down. The same thing is true with service. All of the easy questions are answered by chatbots and search results. And so your support rep also has a high bar to clear. And if they cannot clear it, well, retention is down. I mean there is no wonder why this growth formula is just completely broken. Now what? Well, we have seen time after time, the technology is profound when it can solve old problems in new ways. And now we need new ways to access insights to be able to solve the age-old problem of growth, and AI has the potential to do that. How do we know? Because we went straight to the source. We serve a thousands of customers who have embraced AI in some way, shape or form. We spent hours talking to them about their use cases, their mindsets, their fears, their hopes. I just absolutely love this part of my job. I really love talking to customers, and I just love learning from them. And here's what we learned. Today, our customers are using AI for acceleration. And soon, they will be using it for transformation. So what's the difference? Acceleration is taking what is possible today and making it fast. It means you are just automating specific tasks, maybe summarizing a call or drafting an e-mail, and AI is working with you to drive growth. And it's happening right now. When we spoke to customers, we found example after example of leading growth professionals were already using AI to accelerate their work. The transformation. Well, transformation is taking what is impossible today and making that possible. It means you are reimagining your goals and stringing together new tasks. It means AI is working for you to drive growth. And if acceleration is happening now, transformation will happen next. So the question is, how does this all apply to marketing, to sales, to service, right. Let's actually start with marketing. Fundamentally, marketing is just about attracting customers, right? And we just need to have great content to be able to do that. And this is what we found. These are the 3 top use cases that our customers are using to accelerate content marketing with AI. They're creating content. They are personalizing content, and they are distributing content. 65% of HubSpot AI users are all ready creating content with AI. So the question is, how do you do it well? It starts with understanding what AI is good at. AI is very good at researching topics. It is good at delivering decent first traps and iterating for different audiences, but humans, we are much better at taking those traps from good to great with original authentic creative insights. AI is also good at personalizing content. This year, our amazing marketing team. I want to shout out to our marketing team. They are awesome. Now our amazing marketing team got great at sending personal messages with AI, and the conversion rate improved by 82%. So when a prospect came to our website and filled out a form, we didn't just send back a generic e-mail, we used AI to research that prospect's company, their role, and then we map the most relevant academic content and then sent a personal message to them. How slick is that, that's why conversion went up by 82%. It's not surprising at all. Because everybody who got that message felt like it was written for them, and it was. Now that you have created and personalized content, the next step is you've got to distribute the content. This year, when we launched Content Hub, one AI feature saw incredibly fast adoption. Content Remix, this allows you to take a single piece of content like a blog and convert it into social posts, into short-form videos, into e-mails. That's the way you can take great content and put it out there with your customers. So how does this all look like in practice? Well, let's actually hear from one of our customers, Emily, from Sandler. [Presentation]

Wow. So their sales cycle went from 90 days to 30-to-45 days. That is what acceleration looks like. What's the transformation that's coming next? Well, it's all about agents. No, no, no, it's not James Bond. Although Daniel Craig is welcome to attend INBOUND whenever he wants to. I'm just talking about AI agents. This is a software that uses AI and tools to be able to really reimagine and accomplish multiple steps of the goals, and they can work for you. In the world of marketing, a content agent will work for you to create personalized and distribute content. A social agent will analyze all your social polls and tell you when, where and how you can share it. And a campaign agent will analyze your campaigns and tell you how you can amplify it, okay, that is what transformation looks like. So what lessons can marketeers take from all of these different use cases? A few big ones: AI creates and people curate. The counterintuitive insight here is that AI can help you with better content, not just more content, and that is exciting. So where are my salespeople here? I know you're here. I want to hear some noise. Look, I have worn so many different hats in the last 25 years in tech, but the one that I truly love is sales because sales is this beautiful art of engaging with customers. And for the longest time, the one single metric that we have not been able to move as an industry, it is time in front of customers. I spent years trying to move this single metric in sales. And if we can get just 5% improvement in productivity in 1 year, that is a winning year, but it's so difficult, right? My sales leaders here and my RevOps leaders here, you know that. The average salesperson spends 2 hours a day selling. 2, what are they doing for the rest of the time? No, I know what you're thinking. You're thinking that they're playing golf and sipping martinis. Well, that's not true. They are burried in prep work or they're drowning and follow-up and nobody has been able to help them shrink that time until now. AI can help shrink that time spent in discovery and follow-up, and that's exactly what our customers are doing. They're using AI to research prospects. And when they research it, they score the highest intent prospects. And they're using AI to generate personal images and personal messages to connect with the reps. Across our customers and HubSpot, we have found that using AI in discovery can shrink the time spent by 30%. That is big. Next, they're streamlining the fast follow-ups. They're using AI to summarize all of the calls, and they're identifying new objections within those conversations and generating insightful responses. And that has resulted in 20% faster follow-ups. Super exciting. Let's actually here from another incredible customer, Tillman from Aerotech, who is doing all of this. [Presentation]

Wow. So their win rate improved from 15% to 25%. Anybody want that? Yes, I do. That is what acceleration in sales looks. So what's the transformation that's coming next? Well, prospecting agent. Just imagine you are logging in on Monday and your agent has already found promising leads for that week. And you're going to ask you, "Do you want these leads? Do you want me to clear the message for these leads? Do you want me to set up a meeting with these leads?" And you say, "Yes, yes, and of course, yes." And then you use your time for a great quality connection with your customers because that is the fun part. So what have you learned in sales? AI offers context and people offer connection. AI does all of that busy work, so you can focus on your best work, and that is the way to improve your conversion and quota attainment. And who does not love that in sales. All right. Let's finish up talking about customer service. I know you're here. I can see you. So customer service is the beautiful art of delighting customers. And the north star here has always been the same. We want to be strategic thought partners to our customers. But guess what we're stuck with, being human Band-Aids, solving problems reactively, too little, too late, and we all know how it feels like to be on the other side of that call. For me, this happened last summer when we were on vacation. We went to Johannesburg, but our bags did not. And so I got on this phone with Kathy from customer care, and she's just lovely, but she cannot help me. Where are our bags? Don't know. When will we find them? Don't know. So Kathy and I are on the phone for what seems like half my vacation, and she's now my BFF. And here I am, of course, feeling sorry for ourselves because we're wearing all these like oversized clothes that we picked up from the airport giftshop. But as a CRM professional, I'm also feeling really sorry for Kathy. I mean, why does she not have all this information at her fingertips so she can help me? And I was also thinking, what CRM are they actually using there? Maybe. I can do it so. But the question really is, and the most simple thing is we just want people to get our context and fix our problems right now. That airline is off my list. And just like that, every single conversation can make or break you. So how can AI help? AI can help answer customer questions and fix your problems now. One of our customers, Kaplan, has been doing exactly this with AI. They've used AI to manage their tickets and they're sending faster responses and sharing information with their customers, and they have been able to reduce the average response time by 30%. And they're resolving 30% of their chats using AI. And when they need a human touch, they kind of like do a nice follow-up. And all of this in just 1 year, that is acceleration. So what is the transformation that's coming next in service? By now, you've already guessed it, it is another agent. Imagine a support agent and the support agent knows your context, knows your data, can answer your questions 24/7. And pretty soon, a knowledge-based agent, a knowledge-based agent, AI can actually research and update your knowledge base verticals, allowing your team to spend the rest of their time on customer experience. So what have we learned in service? AI handles simplicity. And people handle subtlety, A, I can handle all of those typical questions. So you and your team can focus on the tricky ones. And that can help you increase your retention. So let's step back and put all of this together. The way to think about AI is not to underplay AI or to overhype AI, it is to understand AI and to cocreate with AI because co-creation is what can catalyze growth across go-to-market functions. AI creates people curate. AI offers context, people offer connection. AI handles simplicity and people handle subtlety. The real way to think about AI is how it can power people and help us scale. That is the biggest unlock. Now if you want to reimagine that growth formula and raise it to the power of AI, just imagine the kind of growth that you can drive. AI provides all of that content to drive your traffic, and it can provide the insights to drive your conversion and retention. And if we can be laser-focused on just that. we might be able to fix that growth formula. And that brings us to our mission at HubSpot. Look, we exist as a company to help you grow, and we are doubling down on that mission and reimagining CRM to help you grow. In order for you all to cocreate with AI, you'll need support not just for structured data, but for unstructured data, data in 10-Ks, 10-Qs, recordings, transcripts, conversations, just all of it. You will not only need support for text. You need multimodal support for text, audio, video, images. You will not only need your apps to work well together, you will need your apps and agents to work well together with the same context. And you all need the ability to control your data and decide when you want to share it, or not share it. And that is exactly what we are building at HubSpot. Now we don't just wonder what is going to change 2, 5, 10 years from now. We also ask are the question, what is not going to change? Customers will always want things to be easy. 2 years from now, nobody is going to wish for things to be harder. That's why we are working hard to make it easy. You will want fast time to value. Five years from now, no one is going to wish for things to take longer to realize value. That's why we are laser focused on immediate impact with every single use case. You'll always want unified data. 10 years from now, nobody is going to wish for data to be in silos. We already know how painful that is. That's why we're bringing together customer and context data to drive insights for you today and into the future. Our mission is to help you grow. Our passion is to make it easy, fast and unified. With that, let me close where we began. What gets you going first thing in the morning? I know it's not AI hot takes, but I hope you take away all the new ideas, the inspiration, the big transition that's happening right now, and that helps you get gong. And as for me, I'm totally not a morning person, certainly not in the East Coast. I don't drink coffee. I don't just jump out of bed, excited about some new AI hot take. Well, I'll tell you what. I wake up and I look at my calendar. And if I get to have some conversations with customers about growth, that fires me up. I am excited. I know that will be a great day because the businesses that we support are the backbone of economies. The ones with fewer resources not enough time are still finding a way to grow. And what is truly motivating for us is the promise that AI has to help businesses scale like never before. And with AI, we know that we can help all businesses play big. With that, it is my absolute pleasure to welcome Andy Pitre, who is our of EVP of Product, to come and show you how you can grow better with HubSpot. Thank you so much, and have a fantastic INBOUND. See you, everyone.

Hello, INBOUND. How's everybody doing? Now my name is Andy, and I work on the Product team here at HubSpot. And we just heard Yamini talked about how go-to-market strategies need to change. She made it clear that easy, fast and unified are the essential ingredients for growth. And I could not agree more. But the problem is, so many companies are facing a much different reality. Their tools are way too hard to use. The average company switches between 15 separate tools just to manage their customers. They need more from their tools, and they need it fast. 80% of leaders say that they're not getting enough value from their tech stacks. And to top it off, they're working in silos. 7 in 10 businesses have disconnected data. Something needs to change. Go-to-market teams have too much at stake and they need a better way to grow. And this is where HubSpot comes in. Instead of disconnected tools, we give you a customer platform. Every feature is easy and works together, including 1,700 apps in our ecosystem. When it comes to value, HubSpot doesn't just deliver, we deliver fast. It's our job to make sure you're getting value in days and not months. And finally, we obsess over making the customer platform unified. Everything works together in harmony, and you always get a complete picture of your customers. Now I want to talk about easy for a second. Last year, I stood on this very stage and talked about all of the possibilities with AI. This year, AI got real. You just heard from HubSpot customers about some incredible things that they're doing. And get this, in the past year alone, HubSpot customers have created almost 1 million pieces of content with AI. How awesome is that. But I have a hunch that it's not all smooth sailing. By a show of hands, how many people are still struggling to get value from AI? It's okay, you can be honest, even if your boss is here. How many people are finding it hard to know exactly where, when and how to use AI? That's what I thought. Now when it comes to AI, we've really only scratch the surface. And we believe that businesses will really start seeing the full potential when it's easy to use. We've spent the last year leading up to this point. And today, we're here to put the wind in your sails. INBOUND, I am excited to introduce Breeze. Breeze is our AI that powers the entire customer platform. It's easier than ever to use, it works everywhere and it will take your efficiency to the next level. It includes Breeze Copilot to assist with your day-to-day work, Breeze agents to automate work and transform your growth. and Breeze features that you can use for specific tasks across the customer platform. Now I have one more question. Who wants to see some demos? First up is Breeze Copilot. Think of Copilot is your AI companion. It's there whenever and wherever you need it to assist with day-to-day tasks so you can work better. Let's take a closer look at how a sales team might use Copilot. Let's say you're a BDR and you need to research new prospects. Just give Copilot a simple prompt, like find SaaS companies in Boston, and boom, you've got results in seconds. From there, Copilot can even add a company right into your smart CRM. In this case, I'm going with my favorite company, HubSpot. All you -- when you're ready to reach out, just give Copilot a few prompts and voila, your outreach e-mail is complete. All you have to do is add your contact details and hit send. Thanks, Copilot. Now your prospect just got a personalized, relevant message and it worked. You've been e-mailing back and forth with your prospect, and it's time for your first call. Copilot will summarize your e-mails and help you prep for that call faster and easier than ever. And the best part is that Copilot works everywhere in HubSpot, in the browser and on mobile. I'm excited to tell you that Breeze Copilot is available in beta now. Who's ready to meet their new work BFF. All right. Now your productivity is through the roof with Copilot. But you remember those agents that Yamini was just talking about, the ones that can make the impossible, possible. We built this. With Breeze agents, it's easier than ever to amp up your growth. If the Copilot works with your business, agents work for your business. They string together tasks and get jobs done from strategy to execution. And guess what, you get an agent, you get an agent, you get an agent. That's right. We've got agents for marketing, sales and service. Let's check them out and marketers, we're going to start with content agent. Gone are the days where you spend hours making content for different formats. Content agent can create blog posts, landing pages, help you edit podcasts, even generate case studies. Now you can spend less time creating content and more time being strategic. It's every marketer's dream come true. Marketers, we've got another one for you. The social media agent is your new social team member. It knows your company details, your audience and industry. It even understands what's trending on social and how that matches up with your business. The social media agent uses all of this to create incredible content for different platforms. Your posts are going to be super relevant and your social engagement is going to skyrocket. Sales, this is your prospecting agent. It can engage with INBOUND leads so you can connect with prospects quickly. The prospecting agent will even handle that backlog of leads that you haven't had time to check in with yet. It's okay. We all have them. It pulls the latest context, personalizes the outreach and sends it for you. Your outreach is going to be on point and on fire. Now last but not least, service teams, the customer agent is your newest team member. The customer agent responds directly to customer questions, and it's always working. Seriously, the customer agent works 24/7 to take care of simple questions so you can help your customers be successful. Now just imagine putting these together, you're not only making your team faster, you're making your customer experience better. Breeze agents are available in beta now, and it's time to put those agents to work. So that's Breeze. I don't know what feature I'm most excited about if I'm being honest, but my favorite part is that it's easy, like AI should be. After all, you don't need to be an Einstein to use AI Who's ready to make growth a Breeze. Now making AI easy is great, but we're not stopping there. Breeze needs to know everything it possibly can about your business and your customers, so you get the full value. And that all comes down to 1 thing. It's all about the data. But here's the problem, about your prospects and your customers is all over the place. It's scattered across the Internet like puzzle pieces. And unless you can put them together, you're not getting the full picture. That means you can't personalize outreach, you can't feed your AI with the context it needs and really, you can't help your business grow. Now the good news is your customer picture is all great with the smart CRM, but we think it's time to finish the puzzle. This is Breeze Intelligence. Our new data enrichment and buyer intent solution to give you the most unified customer picture, and it starts with the Breeze Intelligence data set. We're bringing together more than 200 million company profiles and buyer intent signals. We're constantly updating this, so you have the latest and greatest information at your fingertips. Let's check out some of my favorite features. And first up, we're going to look at data enrichment. Today, just your go-to-market data isn't enough. Breeze Intelligence makes sure you have all the customer data you need. It enriches your records with details like location, industry and revenue right in HubSpot. It can even enrich a ton of records at once and do it fast. With bulk enrichment, you'll be adding new customer details faster than you can say, bulk enrichment. Now it's time to get to the real secret sauce of Breeze Intelligence, finding the highest quality leads with buyer intent. Breeze Intelligence makes it simple to create your target markets, but even better than that, understand their intent. Like if someone is spending time on your pricing page, it's a pretty good sign that they're into you. Breeze Intelligence will look out for those signs and automatically tag prospects is high intent. It will even let you know who's already in your Smart CRM and who is a brand-new prospect so you can give them a little extra TLC. And that is the power of unified data on the customer platform. Now you've gone through all this trouble to reach high intent buyers, and it's time to capture those leads. Wouldn't it be a shame to lose out on a qualified lead all because your form was too long. We've all been there, right? We've all abandoned something online because we get to the form and say, "There is no way I am filling this thing out." Well, I'm here to tell you that with Breeze Intelligence, you will never lose a lead to a long form again. That's because Breeze Intelligence automatically completes the form with information we already know. All your prospect sees, are the fields where we need their input. If you can believe it, Breeze Intelligence just made forms easy and fast. It's like magic. Breeze Intelligence is available in public beta, knowing everything about your customers should be easy and now it's a Breeze. Now speaking about knowing your customers I know one group that does this like no other, can all the marketers in the house make some noise. Hi, everybody. Now you don't know this, but I was actually a marketer back in the day. And so I have a lot of love for marketers. And so does HubSpot. It's where we got our start almost 20 years ago. And on that note, marketers, come on a journey with me. Let's go back 5, 10 years ago to a time when marketing was fun and easy. You were the heroes of your company. You were bringing in leads and getting more budget. Those were the days. But as we just heard from Yamini, this doesn't feel like the reality anymore. So HubSpot is here to help. We just took the trip down memory lane. Now let's take a journey into the future with marketing and content hub. Our new features will help you reinvent every step of the way from segmenting your audience to measuring your impact. So you can feel like you're in the driver's seat again. Our first stop is segmenting your audience. This is our brand-new lead scoring for Marketing Hub. Lead scoring helps you understand your prospect's digital body language, with engagement and FIT scores. Your engagement score measures behaviors like how many times a prospect has visited your page or opened your e-mails. And guess what, the FIT score is AI-powered. It learns about your prospect behaviors and combines it with information from your Smart CRM. Just like that, you can figure out which prospects fit your ideal customer profile. And my favorite part is that these scores work better together just like marketing and sales. You can use a combination to get the hottest leads right to your sales team. Now when it comes to segmenting your audience, you might think that we're stopping there. But guess what, marketers, we know you love data. So we've got even more insights for you, thanks to our new partnership with Amplitude. Amplitude is a fan-favorite for marketers who use HubSpot. So we're bringing together their amazing analytics with the Smart CRM. So you get the best information about your customers in one place. Now I want to show you my personal favorite which is obviously product usage data. This is something our customers love about the Amplitude integration. Now you can understand how your customers are using your products, which features are getting the most love, and then you can use all of that to segment your audience better than ever right in HubSpot. All right, marketers. You just use lead scoring and Amplitude to build audiences better than ever, and we've come to our next stop, creating campaign content. I know, I know, it's part has been a real struggle to keep up with lately. The average marketer is using 5 tools just to manage their content. So we're making it simple with Content Remix. Content Remix helps you build multichannel campaigns in seconds. Just give it a single piece of content, and Content Remix generates everything you need for your campaign, e-mails, social posts, ads. Actually, I want to talk about ads for a second. It's been a bit of a bumpy road in the last few years, new privacy regulations, a cookieless roller coaster, but through it all, one thing is clear, marketers need control over their first-party data. And so that's why we're introducing Google-enhanced conversions in HubSpot. With HubSpot, you have all this rich information about your customers right in your smart CRM, but you need to be able to connect that data to the ad networks in a way that's privacy safe. This is exactly where our work with Google Ads comes in. With Google enhanced conversions you get more accurate reporting for better campaigns with higher performance and what marketer wouldn't love them. Now your ads are on fire, thanks to the new Google integration, but you have more content to create. And in fact, we haven't even talked about everyone's favorite format, video. 91% of businesses video for marketing in 2023. And guess what? Your customers want even more. As a marketer, you need to be ready and now with Content Remix, you are. You can turn a single video into a full campaign with clips, audio for podcast, and content like blogs. What about editing you say? No problem. We make it easy to trim your videos just by editing the transcript. And when you're ready now scheduled posts for YouTube and Instagram reels right in HubSpot. But Andy, what if I don't even have the resources at all? Have no fear, I have a little extra time backstage. So I put together a little something, thanks to our new HeyGen integration. AI Andy, can you help me out?

Hey Andy, I can take it from here. With HubSpot's brand new HeyGen integration, all you need is a single piece of content, like a transcript or a blog. HeyGen uses the power of AI to create videos with avatars who act as influencers. All you have to do is sit back, relax, and get studio-quality videos with ease.

Now yes, there we go. I just want to make it clear. That was not an actual video of me that was completely AI generated. We are working with some crazy stuff here. Now look at how far we've come. Building an audience and creating content are in the rearview mirror, but now it's time to plan your campaign cadence. And this part can get really tricky. We've seen marketers do tons of complex things with their workflows. And so we're here to make it simple with AI-assisted workflows and workflow suggestions. Now you can just tell Breeze what workflows you want, and we'll build them for you. Seriously, that's it. Your campaigns might be complex, but your planning doesn't have to be. We just made it faster and easier than ever. Marketers, now your campaign is crushing it. You've got amazing content, your cadence is set and your e-mail is on cruise control. But if you're not careful, this is where it can all break down. One in every 6 e-mails never makes it to the inbox. You need to give your customers more control or your content becomes spam. So we're here to help you deliver with personalized subscriptions. Personalized subscriptions help marketers create e-mail preferences for different contact segments. This way, your customers and prospects can choose to receive the e-mails they actually want. No more unsubscribes, just a better e-mail experience for your leads. Now last but certainly not least, we need a way to measure all this goodness. And that part has been easier said than done lately. The new buyer journey is all over the place and measuring it is like herding cats. So we're here to help with the marketing analytics suite. We're bringing together everything you need to measure, like ad performance, lead-gen, and traffic insights. And my favorite part is you don't even have to build reports from scratch. We give you templates like customer journey and attribution reports and you can use all of this to make your campaigns better and get results faster. Marketers, guess what, we're about to have some fun again. And we're helping you do it from start to finish with marketing and content hub. Now I know a few minutes ago, I said that I was taking you on a journey into the future, but everything I just showed you is available today. And don't worry, there's enough fun to go around for everybody. We just looked at some of our newest features, Breeze, Breeze Intelligence, our updates to marketing and content hub. But if you can believe it, we've made updates across the entire customer platform. Sales Hub, Service Hub, the Smart CRM, Operations Hub, Commerce Hub, new integrations in the ecosystem. In fact, we have over 200 new features to show you. Some of my favorite are sensitive data, new and improved dynamic forms, sales-guided actions and meeting system, AI insights for reports, bidirectional sync for Snowflake, customer health scores and the new customer success workspace, but you can see it all for yourself because we've packaged it into a dynamic web experience that we call Spotlight. Check it out and let us know what you think. Now whether you're a marketer trying to reinvent, a sales rep trying to close more deals or you're managing customer success, you all have one thing in common, you hold the key to growth in your businesses. And if you remember one thing from my time today is this. The only way to grow is with a platform that's easy, fast and unified, period. Our promise to you is we will keep prioritizing these things because we are as obsessed with your growth as you are. And that is why you use HubSpot. Now I am happy to introduce someone who is constantly thinking about how we innovate and grow. Give it up for HubSpot Co-Founder and CTO, the one, the only, Dharmesh.

When I watched those credits with the 200 features, I tear up like the ending scene of Emily. I'm very proud of the team. It's been amazing. Greetings, everyone. I'm Dharmesh. HubSpot turned 18 years old this past June. And since then, I've had the honor of sharing a number of memorable moments on the INBOUND stage with you over the years. 13 years ago, I shared the launch of my son, Sohan. Back then, he was a tiny language model. Now he's a middle schooler. So he has a teammate language model, which I will confess, I have not completely decoded yet. Parents in the room know what I'm talking about. Now I can't show a current image of Sohan because he's revoked my licensing rights to use his image. No cap, no cap. 10 years ago, we launched the HubSpot CRM, many of you in the audience were here, applaud if you were here for the launch of INBOUND CRM. My lovely wife, Kirsten, who was here. Yes. By the way, she is the one that got me the rocking shoes, just for you -- I know you can't see them on stage. You'll see them later. Yes. Thank you, Honey. So 1 year ago, we launched our first products with generative AI, including ChatSpot. ChatSpot started as a labs project, and now has graduated to become Breeze Copilot. They grow up so quickly. So this is the year of AI agents. When we look back at this event years from now, you're going to remember it as a year of AI agents. Now agents are all the rage this year. But you know what was the range 1980s? Corduroy pillow. They were making headlines everywhere. Let me give that one a couple of seconds. So here's what I'd like to do. First, I'll give you a debrief of what has happened in the world of AI since we last spoke. Then I'll try and demystify AI agents because they can be unnecessarily mysterious. And finally, I'll show you some software that's in development. And as is permitted, in my speaker's contract, I'll sneak in some dad jokes. I apologize for nothing. I bring my full dad self to the stage. Speaking of dad jokes. So I'm building a dad generator agent, this is a true story and I collect all of them. I've got 2,000 -- what I call a database. And so this is basically feedback for the training agents. So thank you for laughing for those that laugh, as we go along. But anyway, so here we go. So a lot has happened in the past year. I'll focus on just the highlights, things that matter to you and your company. First, AI models are getting bigger, bigger in terms of the number of parameters, which sort of defines how big their neural network is. and also their context windows, which defines how much information we can pass to the model at the time we give it a prompt. Bigger models are generally more capable. They can reason better, they can write better, they can follow instructions better. But models aren't just getting better, they're getting better faster. So years ago, Gordon Moore, the CEO of Intel coined what's called Moore's Law. It states that computers double empower every 18 months. That's an exponential curve. That's why a computer that used to fill a room now fits in your pocket. So more said, computers would double in capacity every 18 months, and AI came along and said, "Hold my beer." AI models are doubling every 6 months, and this growth is partly what's causing all excitement around AI. And it's not just that the models are getting bigger and better, but we're seeing innovation along multiple dimensions. We now have multiple highly functional frontier models that are good at different tasks. OpenAI's GPT is really good at reasoning. Claude 3.5 is really great at writing. Google Gemini is really great at supporting huge context windows with millions of tokens. And Llama is really great at being open source and having a cute name. And we have some breaking news on the AI model front. For almost a year now, the industry has been abuzz with the anticipation of a new model from OpenAI. Those are the folks that make ChatGPT. The model's code-named Strawberry. Word on the street was that it was going to be berry impressive. What's not berry impressive is that joke. I did not write that joke. I will not take credit. OpenAI launched that new model this past Thursday, and I've been up late night, even later than usual every night since the model is called GPT o1. Now the reason to be excited about GPT o1 is because of its ability to reason. It's shockingly good, like graduate student PhD level reasoning. And it even shares the kind of chain of thought it had in terms of how it came up with the response that it gave you. So it sort of lets you inside in its brain, super cool. Now this level of reasoning means we can have agents now, they take on much more sophisticated goals that we could even do a week ago. That's how fast this stuff is moving. So the lesson here is that when things are moving this fast, we shouldn't go to where the AI is, we should go to where AI is going. Hat tip to Wayne Gretzky. And we're going to be in a very different place 3 months, 6 months, 12 months from now. Okay. So we have a variety of great models. They're also becoming increasingly multimodal. So we've moved beyond text to the model supporting images, audio and video, too. This means the models can take image as input, not just the prompts that we give it. This is like we're giving these AI models the sense of sight. That's like when your teenager, can first start seeing the clothes on their bedroom floor, it's amazing. When it happens, it's amazing. So this is what AI models used to see when you send them to a web page. This is the web page for School of Rock. Long-standing HubSpot customer, and I'm the parent of a recent customer of School of Rock. So this is what the models used to see. And this is what the models can see today. They see the same web page as we do. So a quick recap of the debriefing. Models are getting bigger and better. We have different models for a diversity of tasks and AI models now have multimodal support. This makes it possible for the first time to create AI agents that can take on a wide variety of assignments. But agents can seem a bit mysterious and complicated. So let's try to demystify them. Let's raise your AIQ, agent IQ. Speaking of IQ, I read somewhere that talking to yourself is a sign intelligence. I've said that to myself hundreds of times. Now first of all, you might be wondering like what is an AI agent anyway? And there are a lot of definitions out there. The one I prefer is the one Yamini shared. An AI agent is software that uses AI and tools to accomplish a goal that requires multiple steps. That's it. Yes, some agents can have -- be able to run autonomously, some have executive planning capabilities, but those are niceties, not necessities to be an AI agent. And there are a range of agents in terms of the complexity of the goals they can take on. Everything from complex goals like the 4 agents that Andy just demonstrated all the way down to very simple goals The thing I want you to remember is that an agent is an agent no matter how small. Now whether big or small, all agents share some things in common. An agent uses one or more AI models. If it doesn't use AI, you can't officially call it an agent, then it's just sparkling automation software. Thank you. Next, an AI agent has the ability to use tools so we can access things like the HubSpot Smart CRM and take action on your behalf. And finally, agents have a memory. They can remember things across tasks. Otherwise, it's like me walking up to refrigerator, opening it and then forgetting why I opened the refrigerator. All right. So let's dig in and talk about what's in development. I'm going to share with you what I've been cooking on late at night, 2:00 in the morning every night. My wife could attest to this. And by cooking, I mean coding. I can't actually cook not in a literal sense. And I also don't stand at my standing desk, which doesn't sit well with my personal trainer, I actually don't have a personal trainer, I use GPT. By the way, it suggested that I maybe do like lunges, and I think that would be a big step forward. And -- so having the honor of being up on stage in INBOUND and sharing the stuff I've been working on is the favorite time of my whole year, and I've probably spent 1,500 hours working on the next 15 minutes that I'm about to show you. And before I do that, before we dig in, a quick disclosure and warning. The upcoming segment is rated x., x for experimental. Everything Andy showed you are part of real products that we sell at HubSpot, products you should buy. By the way, sales team is hiring, that's my sales pitch right there. What I'm about to show you is an experiment. Viewer discretion is advised. And the product I've been staying up late every night working on for many moons this year is agent.ai. Thank you. Agent AI is the #1 professional network for AI agents. It's also the only professional network for AI agents. It's also the only professional network for AI agents. Now at this point, some of you might be thinking, wait, what? Why do agents need their own professional network? Reasonable question because I predict that in the future, our teams are going to be hybrid. They will consist of humans like you and AI agents like me. Just kidding. I'm not an AI agent here on stage. That likely won't happen until far into the future, like INBOUND 25. By the way, inspired by Andy's references to Back to the Future, I was going to tell you guys a joke about time travel, but you didn't like it. So here's the homepage for agent.ai. We see a listing for some of the agents on the network. And every agent has a profile so we can click into the profile. We can follow that agent, we can hire that agent and start using it, it's free. And we have -- and we can add the agent to our team. And we have a bunch of agents around marketing, sales, customer service, operations and a new agency being added every week. So I invite you to check it out. You can sign up for free, you get 100 credits. It's awesome. So it's time to meet some of these agents. Now we're going to look at agents that help us with marketing, selling and how to delight customers. Now the #1 challenge for marketers today is generating traffic and qualified leads. I'm not making that up. One of the most clueful people I know in our industry set this, circa 43, minutes ago. So it's even more important that we take the website traffic that we have coming right now, those website visitors, and convert them to leads at the highest rate possible. And the way to do that is with conversion rate optimization. Now here's the website for School of Rock that we saw earlier. It's a great website. Is there anything that can be tweaked or improved? Yes, always. But is it a pain in the butt to figure out what to change? Yes, always. Because you have to review the copy. You've got to check the CTA. You've got to tweak the headlines, review the testimonials, there's just so much to do and conversion rate optimization is a very specialized skill. Thankfully, we've reduced this down to a few easy clicks. Here's the conversion rate optimizer agent. It's super easy to get started. All you do is you type in the web link for a web page, any public web page, it can be your home page. It can be a landing page. It can be your pricing page. And the agent goes through looks at that entire web page, and it has decades of domain expertise and conversion rate optimization and will it come up with a list of suggestions. It's like you're saying something this way on the web page all bets you will get higher conversions if you change it to this or you're missing a call to action or maybe you should add imagery. It comes up with really, really good suggestions. I encourage you to try it. So it's a simple agent but it's a profitable one. I encourage you to check it out. Now Yamini also mentioned how the average sales rep spends only 2 hours a day with customers, and a large part of their time is spent in prep, and a large part of their prep time is spent researching companies. Now the reason this takes so much time is you have to go to Google, you go to the company's website, you go to Crunchbase and look up their funding, you go to YouTube, you go to social media channel, you go to Glassdoor, you're jumping all over the Internet on this venture hunt with all this unstructured data, we built a company research agent that picks up all of those pieces all over the Internet and puts it together for you with just a few easy clicks. Let's look at how easy this is. We start by entering the website's domain. I'm going to enter openai.com, my favorite AI company. And we get a beautiful, multipage report, broken out into sections. So we can click on any of these sections, so let's say we click on founders to see who the founders of the company are. We can click on the new section and see if there's anything new that's been published about the company. We can click on their web traffic information or their organic keywords, a bunch of different sections brings it all together in 1 place. But the coolest part is this research question section you can type in any question you want. It's like, let's say, you're selling payment software, and you want to know whether this company sells a subscription product. The agent will crawl the company's entire website, call the Internet and come up with an answer for you, and it says, yes, OpenAI sells a subscription product. But what's really cool is you can add that question to the agent. So every future report that you run will automatically answer all of your custom questions. So let's say, yes, OpenAI is a good fit with a single click you can add this company to the HubSpot Smart CRM. And we can see that company record and can do all the things you can do inside HubSpot Smart CRM. And finally, let's say we're interested in this company. We can click the track button and type in English, what we want to track. It's like, okay, if they launch a new product, if they raise a new round of funding, if there's an exec change, describe it in English, whatever is you're interested in tracking and now this agent works on your behalf, and will track all of those things automatically for you and notify you if something interesting to you happens. So that's the company research agent. By far, the most popular agent on the network right now. Now what if I told you, agents can use other agents. I'm telling you, agents can use other agents. We can use existing agents as building blocks for building new, more powerful agents. It's like agent composition. I haven't had this much fun since I played with lego, so this weekend, basically. Okay. So let's say I'm a customer success manager and Canva is one of my accounts. Love Canva, by the way shout out to Canva folks. Yes, I know, a wonderful company. So now as a customer success manager before hopping on a call, I'd like to kind of update myself what's been going on with this company, both within the HubSpot Smart CRM, but then all over the web, news, funding. Now this sounds to me or a lot of that work the company research agent already does. So we built a simple agent that takes all of this information and reduces all that work in terms of creating executive briefing into a few easy clicks. Let's see how easy this is. So here's the executive briefing agent. It knows which company I'm going -- which one is assigned to me, and it will come, and they will say, okay, I'm going to look at the CRM, I'm going to look at the last calls, any issues. I'm going to go look at the customer research agent and I'm going to put all together into a very brief executive briefing and I'm going to convert it to an audio file so you can just kind of listen to it on the commute to work, if you want to, right, just pulling all that information together and giving it in the form that you want. All right. So given the agents that Andy has demonstrated, given the agents I just showed you and the 2 dozen other agents on the agent.ai network already and more coming every week, I could make the prediction that most of you will be using agents this year. And that's an easy prediction to make. So I'm going to make that prediction. Most of you will be using agents this year. But I'm not going to stop there. I predict that many of you will be building agents this year and not just the introverted developers like me. Anyone can build an AI agent. You can build an agent. You can build an agent. You can build an agent. Yes. By the way, if I could have my -- like Steve Ballmer chant right now, it's like, agent build, agent builder, agent builder, but I do not have the dancing skills of my friend, Brian. So we'll just enjoy him for a few seconds. This is him on the INBOUND stage years ago. Brian. By the way, thankfully, Brian does not drive a hard bargain in terms of using his image in my presentations, which is I'm grateful for. So announcing agent builder which lets you build agents. Why should I have all the fun? So let me show you how easy it is. So here's the agent builder for the agent I just showed you, the customer briefing agent. So it goes through 5 steps. It says, okay, go talk to the HubSpot CRM and figure out which account has been assigned to me. Now go do the research agent, collect all that information, now go past all of that context to a large language model, generate an executive briefing and then generate the audio file so I can listen to it on my iPod or my music player. And that's it. It's drag and drop. So I'll give you a sense of if we click on the plus but, there are other actions we could add. Let's say we wanted to add another step to this, and we have access to all sorts of data inside the HubSpot CRM. We can build UI, we can do all sorts of things. It's awesome. So the coolest part about agent builder has access to all the frontier models. So we have access to GPT to Claude. It has access to all the image generation models, DALL·E 3, FLUX.1, Ideogram, Playground, name it, It has access to all the HubSpot CRM, has access to be able to create blog post, create web pages at Google, has YouTube, Twitter, everything you can mix it all up and build an agent with drag-and-drop in the same way you build workflows in the marketing automation product like HubSpot. All right. I'm going to take a breathe, this is a que for me to breathe. So I don't passout that on stage. Thank you. You're welcome to join in and take a breathe as well. This is not a moment of zen. We have work to do. So we're -- all right. So that's agent.ai, the #1 professional network for AI agents, also the only professional network for AI agents. Now normally for labs projects like this, if I get a few hundred users before the launch date, I'm happy. That gives me feedback, gives me signal. If I get a few thousand users before launch date, I'm like this kid's got potential. This one is going to grow up and be something special. And I am thrilled to announce agent.ai already has 47,000 users. They grow up so quickly. This makes it the second most successful innovation project we've done at HubSpot, the first one being HubSpot CRM. All right. And what's equally exciting is we have 1,700 people signed up for the wait list for the agent builder, and I'm approving people literally every night. So I'll be doing that in the hotel room later tonight. So sign up. It's fun. And remember, you don't have to be a coder to be an agent builder, you just have to be curious. All it takes is a few easy clicks. So we started by building a UI, a user interface. This part of it is probably a little geekier than it needs to be for a mainstream audience. I'm a little geekier than I should be for a mainstream audience. It will be okay. This will be quick. Then we layer it on with an application programming interface. This allows applications to be able to talk to HubSpot. The next evolution of this is what I call the AUI that's the Agent User Interface. And the reason this is important is this is what you need for agents to be able to talk to each other and be able to collaborate. And the cool thing about agent builder is every agent that's built on agent builder automatically has an AUI. Now this may not make sense to some of you. That's okay, but your developers are going to love it. I promise. A movie reference, that's a really subtle one, but we'll let it go. Okay. So now some of you are wondering, why is a customer platform company like HubSpot, building an agent network. It's my belief that the next-generation customer platform needs to have 3 things: it needs a Smart CRM that has unified store of structured and unstructured data. Yamini talked about this, and that foundational AI has to be built into the core CRM. The batteries have to be included, right? Otherwise, it's not a Smart CRM. It needs smart engagement apps. You saw Andy talked about this, where we're infusing AI into all the engagement apps at HubSpot. And finally, you need an agent ecosystem just like we have an app ecosystem now. Shout-out to all the app partners that are out there. Thank you. All right. So at HubSpot, we like to dream big iterate small. And our dream has always been to help millions of organizations grow better. We do this by demystifying, democratizing and delivering on the potential of new technology. If you're a Fortune 1000 company with a fortune to spend on AI, there are lots of good options out there for you. But for those of you that just want to get growing with AI, HubSpot's here for you. Our focus is not just to make it exceptionally easy to use agents, but exceptionally easy to build agents and share agents and distribute agents. That's the idea. Now since our founding 18 years ago, we've been inspired a lot by Apple. Apple changed the world years ago with the introduction of the iPhone. But what was equally impactful was the launch of the app store. Their vision was embodied in the phrase, there's an app for that. Our vision for the future is, there's an agent for that. For every marketing sales, customer service, use case imaginable, including use cases, we can't imagine yet, there will be an agent for that. Agents are the new apps. And we expect someday for there to be thousands of agents available. We want 1,000 agents to bloom. Only a small fraction of them will be written and built by HubSpot. Most of them will be built by our partners, by all of you, the community. We see a world where agents and humans that hire them are connected on a network and can collaborate in this vibrant marketplace. Now if we think of agents as tools, we will get wonderful tools, but we should skate to where the puck is going. If we think of agents as future digital teammates, we will get wonderous transformation for our businesses. Now it's natural for this to cause some anxiety because it's not natural to think of a world where agents are members of our team. Deep down inside we may be worried that AI will replace us as humans. As a human myself, I will humbly submit that AI does not reduce your value, it raises it. Even though I use AI every day to help me code, help me develop presentations, help me write dad jokes. I think I'm no less valuable now, I'm more valuable with AI, and the same is true for all of you because humans are more than a sum of the tasks that they do. There is an inexplicable magic in us made for the experiences that we've had. AI may be faster than us. AI may be smarter than us, but it can't be more human than us. It can't be, because it has not had human experiences, like the thrill of starting something new with a friend, or the profound joy of sparking someone new with a love of your life. Or the deep gratitude one feels towards a new friend that is helping continue the dream and vision. AI will not have those feelings because AI cannot have those human experiences. It can read books. It can inhale the entirety of the Internet, but that's not the same as having those human experiences. Having said that, although AI has its limits, it's not going to replace us as humans. AI agents can be wonderfully helpful. So we should let agents automate the mundane and amplify the magic. The magic that makes you, you. It is always an honor to be here. Thank you so much for coming out to INBOUND. Thank you for all the support on behalf of Yamini, Andy and the global team of 8,000-plus HubSpotters. [Break]

Please welcome to the stage, Ryan Burkart.

Good morning, everyone. I'm Ryan Burkart, Senior Director of Investor Relations. And it is my pleasure to welcome you to HubSpot's Analyst Day at INBOUND. Now it is a special Analyst Day for us. In just a few weeks, we are going to celebrate our 10th year anniversary as a public company. And this is the 10th time we posted Analyst Day here at INBOUND. Really exciting day. Thank you to all of you for joining us here in person. Thank you to everyone who has joined us on the webcast, and a very special thank you to all of our shareholders and all of our analysts who have covered us and supported us in our first 10 years as a public company. We really appreciate you, and we feel like we're just getting going. So I hope everyone enjoyed the Spotlight. I know I did. I thought it was fantastic as usual and really highlighted some of the awesome innovation that we've delivered this year, which you're going to hear even more about in just a few minutes. So let's move on to the second part of our program today, beginning with our very exciting safe harbor statement. And you can find this and the entire presentation on our website, ir.hubspot.com. It will be posted shortly after the conclusion of today's event. Now that we've all digested that, this is the agenda for the rest of the day. In just a few minutes, we're going to hear once again from our CEO, Yamini Rangan, who will take us through HubSpot's vision for durable and efficient growth. Immediately following Yamini, you will hear from our Chief Financial Officer, Kate Bueker, who will walk us through how we're executing on that durable and efficient growth. And then finally, we'll wrap the day with a Q&A session with the entire executive team, including Yamini, Dharmesh, Andy and Kate. I want to thank you all again for being here and taking time out of your busy schedules. We really, really appreciate it. And now without further ado, let's get going. [Presentation]

Hello, everybody. Welcome. Welcome to Analyst Day in INBOUND. It is just so fantastic to see so many of you in the room. And if you're joining us online, welcome and thank you for joining us. I hope you enjoyed the Spotlight. How was it? Good. And I really hope that you got to see the level of innovation that we have here at HubSpot. Over the next half hour, I want to lay out our vision for durable and efficient growth. Now I know many of you like to cut right to the chase. So let me start with some of the takeaways that we hope you get from this presentation. We have a fantastic product, and that adds unique value, and we are positioned to win in this large and growing market. We are a platform company. And we have strong momentum as a customer platform and with our AI innovation. Our go-to-market strategy is working, and we are scaling our digital partner and sales-driven motions and we are balancing growth, efficiency and culture in order to build an enduring company. Now in the next few moments, I'm going to talk about each of these, but let me start with our mission and market opportunity. We are a mission-driven company, and we care really deeply about helping our customers grow. From the beginning, we have been different. We've zigged, when others have zagged, and 3 choices, in particular, have been really important for us. First, is our focus on small and medium scaling businesses, with 2 to 2,000 employees. Second is our choice to go from app to suite, the customer platform. And third is the level of conviction we have in organically building our products. Now the question we keep getting asked is, why are you doing something that no other CRM company is doing? Well, precisely because nobody is doing it. From the beginning, we had 2 insights. Scaling companies who were struggling with patching together these point solutions or with clumsy enterprise class solutions. And neither of those worked for them. So we focused on serving those companies with 2 to 2,000 employees. Now second, we found that CRM companies were growing through acquisition, and that was their playbook and left all of the messy integrations for customers to deal with. We took a fundamentally different approach, organically crafting our platform in order to better serve those customers. Now those choices have been our strategic anchors, and they have unlocked a huge opportunity for HubSpot. Within that opportunity, we are focused on delighting our customers. So who is our customer? Our customer is a growth leader. They may be a VP of Marketing. They may be a CRO. They may be a business owner. They may be in a 2-person start-up or a 2,000 person scale up, but they are focused on growth, innovation and driving change. And over the past 12 months, we have spent a lot of time talking to our customers and identifying key attributes that they need within a customer platform in order for them to be successful. The energy behind customer focus at HubSpot is just stronger than ever, and I couldn't be more thrilled. Then the next question we asked ourselves is, so how do we uniquely serve these customers? The answer is clear, by being easy, fast and unified. We craft products that are just easy to use. And because they are intuitive and efficient, they shorten the learning curve for our customers, and that helps drive fast time to value and immediate impact. Our customers see great adoption and value in weeks, not months. And we also offer unified data in a single customer record. That unified data makes HubSpot easy as well as intuitive and accurate. Now we are doubling down on all 3 attributes in order to add unique value to our customers. But don't just take our word for it, let's actually hear from customers. [Presentation]

That is how we add unique value. And that means we have the right to win in a large and growing market. We're not opportunity constrained. The market for CRM and commerce within 2 to 2,000 companies is going to grow from 76 billion this year to over 128 billion by 2029, and we have great product market fit within this large market. And that means we can go from single-digit market share to many times that. Now in order to do that, we are laser-focused on driving the pace of product innovation, and that brings me to our product strategy. Our aspiration is to be the #1 AI-powered customer platform for scaling companies. And to do that, we have great hubs with a unified data in a single layer, embedded with AI and powered by the ecosystem. We believe this can fuel our customers' growth, and this is exactly what we are building with our customer platform. Over the past few quarters, we have ramped up R&D. We've increased the pace of our innovation, and we have gained solid momentum as a customer platform. So I want to walk you through 4 key areas that have advanced our product and platform forward. We have embedded AI into every hub and across the entire platform. We have unified data into a single layer. We've innovated with each of our engagement hubs, and we have expanded our ecosystem. Let's dig into each of these, starting with AI. Our AI strategy is super simple. We just want to embed AI into every hub and across the entire platform. Now the reason we're doing this is because we want to remove the friction for customers in terms of buying, and we want to make it super easy for customers to discover AI features, adopt it and get value from it. That is our strategy. And we are positioned to win. We have the context of over 230,000 customers globally. We have the wealth of marketing sales and service content and a commitment to AI-first innovation. And our usage is beginning to increase. Now the spotlight, I talked about the variety of use cases that our customers have today. But it's not surprising to me that marketing and service are the initial areas of usage. Our customers have created more than 1 million pieces of content across e-mails, blogs, landing pages, social posts, and they have summarized more than 1 million conversations within Service Hub. But what is really important is they are beginning to get real value. Within Content Hub, 91% of HubSpot AI users say the content that they create with AI performs better. And within Sales Hub, 76% of our AI users say, it helps them spend more time in front of customers. And within Service Hub, 84% of our users say that it helps them respond to customers much faster. Now this is great, but it's still early days. And most of these features have been generally available just this year. So we are going to stay laser-focused on building awareness, repeat usage and value with AI. Now we do think that this awareness and adoption is going to increase with the launch of Breeze. Andy launched Breeze today, it is super exciting. But let me explain to you what Breeze is and what it does. Breeze is HubSpot's AI that powers the entire customer platform. We want to drive a level of consistency and awareness of AI features within our product. And we want to make it super easy for customers to identify a new AI feature and get value from it, and that's why we're calling it Breeze. We announced a ton of innovation today. Let me highlight a few. Breeze Copilot. Think of this as the assistant, AI assistant. It knows your job, it knows your business, it knows how to help you with task. So if you're a sales rep, it can help you with researching your prospects, summarizing your call, and it does all of this in the flow of your work within HubSpot on a mobile device or within the browser. Now Breeze agents on the other hand, they work for you, just like an employee would. We announced 4 new agents today, social agent, prospecting agent, content agent and customer agent. And as the name suggests, a social agent will analyze your social posts. A prospecting agent will help you build a pipeline with new leads. A content agent will help you create, prioritize, personalize and distribute that content. And a customer agent is very specific for your customer and answer questions specific to that customer. Now as I look ahead, the road map for innovation with AI is just robust. We are building an AI platform for developers to build agents and apps. We are strengthening our trust and security and providing control to our customers about their data, and we're going to continue innovating with Copilot's agents and features. So the question on your mind is, "Okay, how are you going to monetize AI?" And maybe the real question is, is HubSpot going to be a winner with AI? The answer there is, of course, we are positioned to win with AI. And our philosophy in terms of monetizing has remained very consistent. We care deeply about driving value for customers before we monetize, and we are committed to that approach. And it's working. Embedding AI into Content Hub has 3x the attach rate to Marketing Hub. Embedding AI within Service Hub has increased the number of multi-hub wins, and 65% of our AI features are in pro and enterprise tiers and that will continue to improve the upgrade rates. So if you step back and think about how we have embedded AI across all of the hubs in the platform, that will drive customer additions and add core seat adoption. Now in the future, as these agents begin getting used and add consistent value for our customers, we will look at usage-based pricing. But again, only after making sure that our customers are getting consistent value out of it. Okay. That is our AI strategy and momentum. Let's actually talk about unified data and how we're bringing together data into a single layer to strengthen the value of our platform. AI is only as good the data that powers it. Last year, we acquired Clearbit. And since then, we have been busy at natively bringing the Clearbit data into our platform. And that's why I'm super excited that we launched Breeze Intelligence today. Now our vision with Breeze Intelligence is to provide our customers the best possible data about their customers. And our solution does 3 things: it enriches company and contact data with more than 200 million data points right within our platform. It then allows for intense signals to be recognized by our customers so that they can identify and prioritize prospects. And when those prospects visit our customers' website, we improve the conversion by filling out the fields and shortening the forms. And our customers can do all of this right within HubSpot, Smart CRM with batteries included. Now let's actually talk about Smart CRM. Back in 2014, we launched free CRM. And at that time, it was part of all of our hubs. And since then, we have been driving the pace of innovation. Now this layer is easy to customize, extend, easy to integrate data with. And if you talk to our customers and you ask them, where they're getting value where they spend a lot of time? They will tell you it is from having that single, unified record of the customer. That is why it is now a distinct part of our platform. So what is the Smart CRM? It is a platform layer that unifies customer data, that provides admins control over that data and helps admins bring together the data from their entire tech stack together. And in the past few quarters, we have made huge strides. We have expanded the number of custom objects that we support, enabling more customization. We've added support for sensitive data, opening doors in markets like health care, financial services, insurance, markets that have nearly $12 billion in market potential. And we've added a ton of smart features to make it better to set up, store and improve the quality of data. All of that innovation makes our Smart CRM smarter. Let's talk about the innovation within engagement hubs. Our vision here is to create a system of engagement for the entire front office across marketing, sales, service, support and operations teams, and we have been driving the pace of innovation. You can see that momentum within the slide. We've built great front doors with Marketing Hub and Sales Hub. We're consistently driving multi-hub wins because of the level of innovation we have in Service Hub, Operations Hub and Content Hub. And Commerce Hub has had a year of great momentum. We processed more than $1 billion in GPV this year, and we have doubled the number of enrollments compared to 2023. So we're going to continue doing that. In addition, we have focused in 2 big areas. The first is a focus on usage. Now every hub has a job to be done. Think of that as the use case. For example, Marketing Hub has core use case of lead generation, marketing automation, and we are world-class at it. But in addition to that, we are focused on driving usage and customer value because of that. That's why we are now tracking the usage at that individual use case level, and we are communicating the value of each of those use cases, both within our product as well as via our customer success teams. This is a big area of focus for HubSpot, and I'm really excited about how much value this is going to drive for our customers. The second area of focus is really on the power of multi-hub and platform. Now every single hub is powerful on its own, but the real value for customers comes from the fact that all of these hubs are connected, and we are focused on driving that value. So this brings me to the final area of our product, which is our ecosystem. We have built a trusted network of partners that can extend our reach. We have over 6,500 solution partners and nearly 1,400 application partners that are helping our customers with expert guidance as well as connection. And our app ecosystem is thriving. Now back in 2019, we had just about 170 integrations. And in the last 5 years, we have 10x-ed the number of integrations to over 1,700. That's big. But the proof that we are a platform is customers use us as a platform. Pro+ customers have more than 8 active integrations, connecting HubSpot to ERP, CPQ, product and project management, and that shows that they are bringing together data into HubSpot. Okay. To sum it up, our product strategy is clear, and our pace of innovation is exciting. We are a customer platform company. We have embedded AI into every hub and across the entire platform. We launched Breeze Intelligence, bringing together Clearbit data natively into HubSpot. We have strengthened the value of Smart CRM and made it a distinct layer. We have great use cases. And we're not only making our engagement hubs better, but we are amplifying the value of our hubs through multi-hubs, and our thriving ecosystem is expanding. And all of this makes us a platform of choice for scaling companies. So let's talk about how we are scaling our go-to-market. Now our go-to-market strategy is very simple. We want to deliver world-class volume at the low end and drive value at the high end. At the low end, we want more and more customers to start early in their digital journey with HubSpot and scale with HubSpot. And to help them do that, we're making HubSpot easy to buy, easy to use and easy to upgrade. This not only supports our customers' value, but it strengthens our competitive moat at that low end. And in terms of the upper end, we are really focused on driving multi-hub adoption and platform adoption because that increases value. That is our go-to-market strategy. Now let's talk about how we are scaling distribution across digital partner and sales-driven motions. Our digital-driven motion is scaling. We offer a set of freemium tools that helps businesses get started. These tools, like a Signature Generator or Campaign Assistant, they expand the funnel at the top and they have helped us increase our sign-ups by nearly 27% this year. Next, we offer a compelling value at the Starter tier, so customers can grow their business. Earlier this year, in July, we relaunched that Starter tier with clear use cases and we have streamlined the checkout process. Those changes in the product and checkout process, in addition to the seats pricing change that we made, have helped us acquire customers at scale. Now it's not just about software, we help founders and business builders with great content and a thriving community to support them. So we offer compelling value for customers at the low end, and that's how we are continuing to scale our digital motion. Let's talk about the partner motion. This is a strategic channel for us, and we have a growing network of more than 6,500 solution partners that extend our reach, help us win customers upmarket and drive nearly 40% of our ARR. And over the past few quarters, we have continued to upskill our existing partners while acquiring and activating new partners. And you can see that in the results. 75% of our customers are onboarded by HubSpot partners in more upmarket wins or with partners. Now in addition to that, we are continuing to scale with partners. We have enabled them to source, to co-sell and to service jointly with us, and you can see that in the result. Co-selling grew by nearly 72% year-over-year. So if you step back and look at our partner motion, it's scaling. ASPs are higher. Win rates are higher. Revenue retention is higher. All of that tremendously valuable to us. Let's talk about sales-driven motion. This is scaling as well. Now as you know, in the last few quarters, it has been a big shift in terms of our customer buying behavior, more towards committee buying and consolidating onto fewer platform choices. And our go-to-market teams have swiftly adapted to those changes. In particular, I want to highlight 2 things. One is we have continued to upskill our reps so that they can drive team selling with partners, and we have enabled them to communicate the lower TCO and higher value of our customer platform. How we sell is why we win. Next, we have continued to streamline our sales execution, with clear roles, clear expectations, a global sales methodology and our focus on all of this has helped drive success upmarket. And you can see that in the results. Nearly 38% of our Pro+ customers are on 3 or more hubs, and nearly 28% of new ARR comes from large deals. And both of these have been consistent themes over the last few quarters. Okay. So it is not just about setting ourselves up for growth, but it is also about driving efficiency. And in the past few quarters, we have streamlined our partner-driven motion, we have enhanced our support and service efficiency and we have leveraged systems in order to drive sales and marketing efficiency. I want to highlight how we are internally using AI to set ourselves up to scale even further. Now HubSpot runs on HubSpot, and we are a testing ground for AI. We are actively experimenting, iterating, innovating with AI. And when we see what works, of course, we are going to share that with our product teams. But more importantly, we're sharing those best practices with our customers so we can help them scale, and AI is helping us scale. Within marketing, AI has helped us improve the effectiveness of chat and e-mail. Today, 80% of our inbound chat is automated through AI and only 20% moves on to human agents. And because of the better routing, we see those human agents have higher pipelines. And all of the e-mail personalization that I talked about in the spotlight, that's leading to better conversion rate. We see between 70% to 80% improvement in our conversion rates. Now in sales, reps who are experimenting with AI and leveraging AI see 30% short time in terms of discovery and 20% faster follow-ups. Both of those are just keys to sales productivity. And in service, 30% of our tickets are just managed by AI, and that number is growing. And we're using AI to analyze all of our customer e-mails every single month to improve revenue retention. Now I'll still say it's early days. We have a lot of work to do to be able to scale these efforts internally, but we think we are on the right path to leverage AI to drive efficiency even further. Now it's not just about growth and efficiency, we care deeply about balancing growth, efficiency and culture in order to build a great company. We're focused on building 2 products: 1 for our customers and 1 for our employees, and we take this pretty seriously. In fact, just last quarter, we launched version 38 of our Culture Code. And within the version 38, we're focused on communicating why someone should work at HubSpot, how they can do their best work at HubSpot and who will thrive at work -- at HubSpot. Huge thanks to Dharmesh because he drove a lot of those efforts in terms of the Culture Code. We are a company of go-getters. We care deeply about being customer-first, and I'm so happy that we are doubling down on the customer centricity. We have a growth mindset. We say it as, learn-it-alls are much better than know-it-alls at HubSpot. And we care deeply about accountability, urgency and ownership. And we just love being masters at our craft. I'm really delighted that our teams are aligned, motivated and really focused on solving for our customers. So let me close by saying why I am excited about HubSpot's future. We have a great product that offers unique value, and we have the right to win in a large and growing market. Our momentum as a customer platform is just palpable and the level of innovation is just exciting. We're scaling distribution and building moats, with a clear go-to-market strategy. And we are focused on growth, efficiency and culture to build a great company. With that, it is my absolute pleasure to welcome Kate Bueker, our CFO, who will share how all of this translates into durable and efficient growth. Thank you so much for your support and I hope you enjoy the rest of INBOUND.

Hello, everyone. It is great to see you here at INBOUND. I am excited to share some insights on how our product strategy and our go-to-market strategy translate into strong and durable financial results for HubSpot. In terms of our agenda, I'll start by discussing our business performance over the last year and share some progress on our journey to become a platform company. Then I'll show how our customer platform enables durable growth for HubSpot. And finally, I'll talk about how we're balancing growth and profitability. First, let's quickly reflect on the strong financial performance of our business. HubSpot has a strong track record of delivering consistent top line growth. Since 2019, our revenue has grown at a compound annual growth rate of 31%. We expect 2024 revenue to be nearly $2.6 billion, representing growth of 18%. This revenue growth has been enabled by consistent and strong customer growth. Over the last 5 years, we have grown our customer base at a compound annual growth rate of 29%. At the end of Q2, we had nearly 225,000 -- or we had over -- sorry, over 225,000 customers growing 23% year-over-year. Over the past 5 years, we have delivered strong top line results and strong bottom line results. We have grown our non-GAAP operating profit at a compound annual growth rate of 52% and expect to deliver nearly $440 million in operating profit in 2024. This represents 900 basis points of margin expansion since 2019. Our growth has also translated into strong free cash flow and a strong balance sheet. Over the last 5 years, we have generated nearly $1 billion in cumulative free cash flow and expect 2024 free cash flow to be approximately $380 million. And as of the end of Q2, we had $1.9 billion of cash on the balance sheet, which gives us the flexibility to continue to invest in high-return investment opportunities in our business. And we're still early in capturing a meaningful share of the large and growing markets we serve. As you heard from Yamini, our core market of 2 to 2,000 employee companies is growing from $76 billion this year to $128 billion in 2029. We still have mid-single-digit penetration of our large TAM, and we have single-digit market share across all of our products. Turning to our hubs. As you heard from Yamini, we continue to innovate across all of our engagement hubs, and this is translating into solid growth across the board. Marketing Hub is now $1.5 billion business, growing 13% at the end of Q2. In terms of our other core hubs, Sales Hub is growing 24% year-over-year, and Service Hub is growing in the high 20s. And finally, Content and Operations Hubs are growing at 30% and 57%, respectively. While this hub lens is the way that we have historically looked at the business, it increasingly does not reflect the dynamics of our business today. We've been on a journey for many years, from a marketing application company to a front office suite to a customer platform. Single hub purchases now represent the minority of new ARR on our journey from app to suite to platform, we have become a platform company. And you can see it in the steady growth of customers, who are leveraging the broad capabilities of our platform, about half of our total customers are leveraging 3 or more hubs and more than 1/3 of customers are leveraging 5 or more. You heard from Yamini our strategy is to build the customer platform of choice for scaling companies. And this strategy is enabling multiple paths for durable growth for HubSpot. Specifically, the platform and our go-to-market strategy that endeavors to drive volume at the low end and deliver value at the high end is shaping all of our motions across acquisition, retention, expansion and innovation. Let's start with acquisition. Our starter product delivers a full set of front office capabilities. This compelling value proposition at the low end of our platform is fueling continued strong customer acquisition. Starter customers have grown fivefold in the last 5 years. They are the majority of our new customers in any given quarter, and they now total almost 110,000 customers at the end of Q2. At the high end, we're seeing more of our customers use HubSpot across their front office. This is translating into more large deals and more multi-hub new customers. Let's take a look. A growing portion of our deals in professional and enterprise tiers are at more than $3,000 a month in recurring revenue. This is a threshold we use internally to define a large deal. The volume of our 3,000-plus deals has grown almost twice as fast as our overall net new ARR. And 3,000-plus deals represented 28% of new ARR in the first half of 2024. The share of our new professional and enterprise customer ARR that is multi-hub has also grown steadily over the last 5 years. In the first half of 2024, nearly 70% of new customer ARR came from customers who are buying more than 2 or more hubs. And almost 40% is coming from customers who are purchasing 3 or more HubSpot products. Turning to retention. From 2019 to 2024, our customer dollar retention has improved by approximately 4 points, from 84% to 88%. Now as I've said in the past, we believe that customer dollar retention is the metric that is most closely tied to the value that our customers see in our product. We have seen consistently that customers who use more of the product retain at a higher rate. For example, customers who use 3 or more hubs, enterprise customers who are leveraging more sophisticated features and functionality and customers who are deeply integrated with our ecosystem partners. These segments of customers all use more of the platform, they see more value from HubSpot and they retain at a higher rate. And all of these groups of customers represent a growing share of our overall installed base, which gives me confidence in our ability to continue to deliver strong customer dollar retention. Over the past year, we've seen our net revenue retention contract by 2 points to 102%. Now as you see on the chart, if we move from left to right, we've actually seen a benefit to net revenue retention over the last year from customers who are downgrading and canceling a little less. We've also seen positive early momentum in sales and service seat upgrades under our new pricing model. That said, the biggest driver of the decline in net revenue retention is non-seat upgrades, which does remain under pressure. Well, we obviously don't like to see this contraction, we do still feel comfortable that net revenue retention will remain over 100% in the short term. In addition, our platform enables a number of upgrade drivers that can help to grow net revenue retention over time as the environment improves. I'm going to dive a little bit into a few of them, including upgrades, addition upgrades, cross-sell and seats. Starting with addition upgrades. We see 2 common addition upgrade paths for our customers, and both of them remain healthy. At the low end, we are seeing a consistent and sustained rate of upgrades from starter into professional tiers. And this is translating into higher ARR because the starter cohorts we've seen over the last 6 quarters are a bit larger. Upmarket, our enterprise upgrade rate has grown at a compound annual growth rate 38%. Notably, the upmarket innovation in Sales Hub and Service Hub over the last few years is translating into outsized growth in the upgrade rate for these 2 hubs. Moving on to cross-sell. Significant additional opportunity remains for cross-sell within our installed base. Today, as you look at the left-hand chart, you can see that only about 1/3 of our professional and enterprise customers are using 3 or more hubs. So there's lots of room for additional multi-hub expansion. And as you see on the right-hand chart, customers who use 3 or more HubSpot products spend nearly 3x as much with HubSpot. So as customers adopt more products, there's lots of room for ARR expansion as well. All right. Finally, let's talk about the opportunity to continue to expand through seat upgrades. I want to start with a recap the seats pricing model that we introduced in March. Our goal was to make it even easier to get started and grow with HubSpot. And we made 3 big changes. We simplified the starter tier, and we lowered the price of starter. We eliminated seat minimums, and we introduced a new core seat for customers who require edit access to the CRM. We expect there's going to be 2 big changes to our business as a result of the new pricing model. First, we're going to add more customers. Our pricing addressed a couple of key customer friction points that will allow faster deals and higher win rates at both the starter and professional tier. Now as we talked about on our most recent earnings call, we do expect that this increased deal velocity is going to be offset by lower initial ASPs, but our overall new ARR is going to be roughly neutral. We've made some very nice progress since our global launch in March, and ASPs are performing a bit better and deal velocity continues to move up. Second, the new model will result in higher net retention. There are a few reasons that we believe this. First, customers under the new model are healthier because they buy what they need upfront, and we are seeing higher seat assignment rates for new customers. Second, upgrade rates under the new model are going to be higher with the elimination of seat minimums, and we are starting to see positive early trends and sales and service seat upgrade rates. Finally, the introduction of the core seat allows us to monetize our Smart CRM. And this should result in higher paid seat ratios. So far, what we've seen is that paid seat ratios have roughly doubled under the new model. All of these factors contribute to our expectation that the new model is going to result in higher net revenue retention. Okay. The other question that we get is around the timing of the migration and renewal of our existing customer base onto the new pricing model. We have started to migrate a small number of less complex customers over the last couple of months. As a reminder, we will migrate customers at a neutral ARR, and they will receive up to a 5% price increase at the first renewal following their migration. Our expectation is that between 50% and 60% of our existing installed base will go through the renewal process before the end of 2025. For this reason, the new pricing model will have a multiyear impact for HubSpot. Okay. Let's turn to our final lever for growth, Innovation. We innovate where we think we can add the most value for our customers. This can be improving existing hubs or it can be introducing new products. And this results in a mix of innovation that can drive growth for the long term. Andy and Yamini both spent a lot of time talking about our AI innovation. So I'm going to talk briefly about Commerce and our new Breeze Intelligence product. Okay. Last year has been an exciting one for Commerce. We made meaningful improvements in the product, and we saw a step function increase in the amount of customers transacting on the platform. We expanded our TAM internationally by enabling our customers to leverage multiple back-end payment processors. We launched meaningful new functionality in subscription billings, and we made a major improvement in our integration with QuickBooks. As a result, we saw nice growth in our commerce business over the last year with over 5,000 monthly transacting customers generating more than 90,000 transactions a month, and processing more than $1 billion of gross payment volume over the platform. It is still early for our Commerce business, but I'm pleased with the momentum we have and the value that we are delivering for our customers. Let's turn and talk about our exciting new Breeze Intelligence product. As you heard from Yamini, there are 3 core use cases for Breeze Intelligence that we're launching today, company and contact enrichment, buyer intent and form shortening. I want to talk about the opportunity and pricing for Breeze Intelligence. We believe the data category is a multibillion-dollar TAM opportunity, and we see positive signals for opportunity within our existing installed base. First, data enrichment is a top priority for our customers. Second, our customers are generally dissatisfied with their current enrichment solutions with an average CSAT score of in the high 20s. And finally, the average HubSpot customer spend about the same amount on data as they do on their HubSpot subscription. Turning to pricing. Customers will be able to buy Breeze Intelligence in capacity packs of 100, 1,000 or 10,000 as we move into general availability in Q4. We believe our pricing offers significant value relative to other solutions in the market. Okay. I want to wrap up this section by summarizing our numerous levers for durable growth that are enabled by our successful platform journey. In acquisition, we are enabling more multi-hub purchases, which is fueling volume at the low end and value at the high end. In retention, the higher usage and value of our platform is creating an even stronger foundation for customer dollar retention. Expansion, the breadth of the platform enables multiple paths across addition upgrades, cross-sell and seats. And innovation, we are delivering new functionality that is embedded into existing workflows. Next, I want to shift gears and talk about our long-term model, and how we are balancing growth and profitability. I want to start, as always, by reminding you of our philosophy on balancing growth and profitability, which remains the same. We are committed to building a big and profitable company. And we're going to do this by continuing to invest to drive long-term revenue growth at scale. At the same time, we are committed to consistently expanding margins over time. Before I dive into our margin framework, I want to go through a quick reminder of the progress we've made in recent years. Over the past 5 years, we have delivered an average of 180 basis points per year of operating margin expansion. You can see we've made particularly strong progress over the last couple of years, and I'm pleased to report that we are tracking ahead of our interim margin target. The largest drivers of our recent margin expansion, our product infrastructure optimization, efficiencies and customer support and services and our new partner commissions model that better aligns commissions and customer value. These factors have driven higher gross margins and a reduction in sales and marketing expense as a percentage of revenue. This has been slightly offset by our investments in R&D, where we continue to invest to drive innovation and long-term growth. Given our strong progress, we are updating and increasing our interim margin target. Let's walk through the specifics. Our latest 2024 guidance implies an operating profit margin of 17% for 2024. This is obviously close to our current interim margin target of 18% to 20% by 2026. Given the progress we've made to date and our confidence in our ability to continue to deliver leverage, we are raising our interim target to 20% to 22% by 2027. Now for many of you, who followed us for a while, you will likely notice that this new interim target for 2027 falls within the range of our long-term operating margin target of 20% to 25%. So in addition to raising our interim target, we are also raising our long-term target to 25% from our previous midpoint of 22.5%. Okay. How are we going to get there? Let's start by looking at our major expense buckets, how we stack up against peers, and how we think about future investment. Starting with COGS. Gross margin in our most recent quarter 86%, which is truly best-in-class. Our strategy here is going to be to continue to invest in resilience and security of our platform, while continuing to drive infrastructure optimization. This should allow us to hold gross margins around current levels, give or take. In terms of R&D, we are above our peer company average for R&D spending as a percentage of revenue, and that is by design. We will continue to invest disproportionately in R&D to drive innovation and fuel long-term growth. That said, R&D spending as a percentage of revenue should remain near current levels. Sales and marketing is where we have the most opportunity, and I'm going to come back and talk about the levers here in a second. In terms of G&A expense, today, G&A expense as a percentage of revenue is 8%, which is in line with similar software peer companies. Here, we're focused on really building a foundation that can scale as we grow. And over the longer term, we should see some modest leverage in G&A expense as a percentage of revenue. Okay. Sales and Marketing is where we see the most opportunity to drive further leverage in our business. Yamini talked about our 3 strategies across digital-driven, rep-driven and partner driven. We're committed to finding scale and efficiency across all 3 of these motions. In our digital-driven motion, we are introducing more free tools, and we are using AI to drive more and higher quality demand. We are expanding our successful starter acquisition model to other lower ASP segments, and we are going to reduce friction across the entire customer journey. In rep-driven, we are leveraging systems and AI to help make reps more efficient at discovery and more effective at conversations with customers and prospects. And as we make progress in our digital-driven motion, our reps can even more focus on high ASP and multi-hub deals, which should drive higher productivity. And finally, in our partner-driven, this is a highly valuable motion today. It's got higher win rates, higher ASPs and higher retention when partners are involved. We are going to continue to expand the number of our upmarket customers where we are attaching partner sales and service. All of these are multiyear initiatives that will help us meet our medium-term targets and our long-term target margins. Okay, bringing it all together. We are confident in our ability to deliver 20% to 25% operating profit margins by 2027 and 25% over the long term. Let me close with my 3 key takeaways from today. First, we are the platform of choice for scaling companies in a large and growing market. We are driving innovation throughout the platform, and this is fueling durable and diverse growth opportunities for HubSpot. And finally, we are delivering and expect to continue to deliver strong financial results and consistent leverage. Thank you for your time today and for your continued support of HubSpot. If you could just give us a few minutes, we will set up for Q&A.

All right. That was a quick turnaround.

We are very fast.

We are back with everyone's favorite part of the day, Q&A. A couple of ground rules before we get into it. First, we have about 40 minutes. Please try to limit yourself to 1 question. I know that can be tough with this group, but please do your best. And before you ask a question, if you could just state your name and your firm, that would be helpful as well. We will get going in a second. We'll start with sell-side folks and then go from there. We have 2 mic runners, Jenna and Joe, back there somewhere. I can't see because of the light, but they'll be running around. So just raise your hand, and we can get going.

Tyler Radke, from Citi. Great to see you all. Fantastic presentation in keynote this morning. Kate, I wanted to go back to one of your slides. I thought it was very helpful, all the colors, particularly around NRR. I guess the thing that surprised me was the drag from kind of the non-seat expansions. And I guess in some way, you could say, hey, it's been a tough macro. But you've seen things like retention actually improved year-over-year. So I guess the question is, as you think about that headwind, how much of that is coming from the macro? How much of that is things more in your control in terms of execution? And what are you doing to kind of improve that into next year?

Yes. Thanks for the question. Maybe I'll start and then Yamini if you want to add in. I would say this is not a different story than the one that we've been talking about on the last few earnings calls, right? I think that over the last couple of years, what has happened is initially, we both saw headwinds from expansion rates and also from downgrades of cancellation. And what's been nice is, over the last 5 or 6 quarters, we've seen downgrades and cancellations actually become a modest tailwind for us in terms of retention. But what we're seeing is that budgets are really still tight. We've been talking about that every quarter, which is holding back the overall expansion motion within our existing installed base. That said, like you asked a great question, which is what's in your control. And I think that's like where we focus as much as humanly possible. And what we tried to do today is outline all of the things where we think that we are -- can be focused on to drive expansion of net revenue retention and growth in general, and that's about continuing to drive strong customer acquisition, continuing to drive strong usage from our customers, which is going to further solidify that costumer dollar retention and then to take advantage of the value of the platform and the expansion motions like multi-hub adoption like edition upgrade and importantly, to execute very well on this change to the seats pricing model that we launched in March.

Siti Panigrahi, from Mizuho. Great presentation. I want to go back to the AI, that's a topic du jour right now. So Yamini, now internally, you guys are using AI as well and some of the companies are using. What are you seeing in terms of the efficiency and productivity where it's going? And if you think about this 5 years down the line, do you expect this to be more deflationary in the sense, number of cells and marketers in the firm? And do you think the software is going to get the value from out of that?

Yes. Thank you, Siti. Good to see you. Thanks for the question. So I'll say that internally, we started experimenting way early, right? Like as soon as we found -- we started like using a product, and we were also internally experimenting, and I walked you through different areas of initial kind of improvements that we have seen. Now maybe I want to take a step back and share how we have been experimenting in sales, particularly. So in sales, it is how can we reduce the time for discovery, how can we reduce the time for faster follow-up, and both of those are pretty big keys for improving sales productivity. The thing that people miss is that when sales productivity improves, you can actually grow faster and you can grow better. If we can scale the impact that we are having internally across everybody, every region with the sales, then we'll actually hire more salespeople. We're not going to like reduce the number of salespeople. So I think like everybody talks about the deflationary pressure of AI in development and in sales, in particular, if we get benefits, if we can scale those benefits and if we can consistently achieve those benefits, then we're going to be hiring more engineers and hiring more salespeople. Now I do think on the service side, it remains to be seen. But if a lot of our tickets can be managed by AI as well as automation, and then our reps are going to really go to the higher value-added task. And we likely will see a shift in terms of balance of where AI is used and where we use human agents. But at that point in time, both internally as well as kind of across the industry, we're going to balance how we get value for it. And our consistent approach to pricing has been, if the number of seats decrease, that means we are adding more value, which means we're going to be able to monetize that value. I think that's how we approach it internally as well as externally. The thing I would say is that it's still pretty early days. Internally, there is work to be done to scale the productivity as well as the growth benefits of AI, but we are on the path to really leveraging and iterating with AI. So pretty happy with that.

Great. Jackson Ader, at KeyBanc Capital Markets. On the pricing model, and it seems like that's one of the nice things that can help in expansion, both from expanding seats and also help solve that issue of non-seat expansion being a headwind. So I was just, I guess, surprised to see that only 50% to 60% of the existing base, right, by the end of next year. So I'm just thinking myself, if it's this really nice tailwind, why aren't you like sprinting toward having your existing base be finished by next year instead of just a little over half?

I mean there's some practical reasons for that. The migration requires like all of the customers to move from the existing model onto the new model. It is something that we've never done internally, and we want to make sure that the experience for our customers is the least disruptive as it possibly can be. The other practical reality is that we will migrate customers and then there may be some gap and it could be a couple of months or it could be a bit longer between when we migrate the customers and when they actually are up for renewal, right? And so we will migrate the least complex customers earliest and then we will tackle the harder and harder customer scenarios. And then when they come up for renewal, we will see that price increase. If I were just though, to take a step back and think about where is the benefit of the seats pricing model changeover the next, call it, 1 to 2 years, you really see it very strongly in new customers, right? That's where you see that benefit in net revenue retention and just healthier overall customers. And that will feather in overtime at the same time that our current installed base will be migrated over.

DJ Hynes from Canaccord. Maybe you guys could talk a little bit about Commerce Cloud or Commerce Hub, excuse me. It was the first time that you guys included in the TAM analysis. I noticed I assume there was some intent behind that. Does that mean there's going to be more emphasis on that business? What still needs to happen from a product perspective to get that ready for mainstream?

Yes. Maybe I'll start and Andy jump in with that. I think we are excited about the progress, but it's still very early days in terms of commerce. Now to step back and think about why did we go into Commerce Hub. There are 2 key challenges for our customers. First off, from the point of quoting to getting to the cash, that process is just completely broken. There are too many manual steps and things that our customers need to do and they were looking to us to solve that problem. And the second, which is probably an even bigger thing, is that our customers want to have the transaction data, commerce data within CRM platform, and that is the reason that we went into commerce. And in the last couple of years, we have validated our hypothesis, customers are valuing what we provide in that single unified layer of commerce, and you can see the number of transactions that they do per month as well as the overall transaction volume continue to increase. Andy, I think like you could talk a little bit about the road map and where we are continuing to expand there.

Yes. So if you look back at Q4 of last year, we launched a bunch of updates to Commerce Hub. We renamed it. We allowed people to bring their own payment providers. We made a bunch of updates payments and billing and subscriptions. We added the QuickBooks integration, and we saw a big inflection in the number of HubSpot customers that were adopting our commerce tools. And so now we're looking at those customers and we're looking for the next things that they need. And it's really around like billing and subscriptions is where they need us to build more robust solutions for them. So we're continuing to innovate in Commerce Hub. We're building out those things, and we're continuing to see steady adoption from our customer base. And all of that adoption is product-led adoption. So those are all people who are HubSpot customers who are discovering the tools, who are setting up the tools, who are using the tool. So we have a lot more innovation that we can do on Commerce Hub, and we feel really bullish about it.

Parker Lane, from Stifel here. Yamini earlier talked about driving value through your AI as opposed to monetizing it through a consumption-based model. I was wondering if you could talk about the benchmarks or signals you're looking for to tell you when a consumption-based pricing model would be appropriate or a reality for you guys?

Yes. Thanks a lot, Parker, for that. So if you step back, the way we think about AI features is there are a set of features that are just table stakes. It just needs to be in every hub, it just needs to be through the platform. There cannot be CRM without AI features. And so there's table-stake features. The next set of features, what we call is like differentiated features, where we are doing a lot of monetization already, right? So if you -- the example that I gave, I think, last earnings as well as today is like content remix. If you think about our Content Hub that we relaunched in April during our spotlight, we could have called it an AI Hub because the number of features there in terms of content remix, AI blogs, brand voice, all of those are AI features that are required in today's content marketing to really scale how you think about content. And when we did that, we saw fast adoption for a number of features, and that has actually driven the attach rate. And we said that it's gone up by 3x, right, in terms of Marketing Hub. We'll continue to see that. The same thing with Service Hub, a lot of the innovation that has happened probably in the last couple of quarters have been AI innovation that have helped us drive multi-hub wins, as well as larger seat wins in terms of Service Hub. I think what I mentioned is that for agents, in particular, we just launched agents, it's going beta. It will start getting generally available towards the end of this year and next year, we want to see daily, weekly usage, and we want to see a level of value within agents as we see in the rest of our product. And that has consistently been the approach. And so we will track the usage really clearly. And when we begin to see that type of value being appealed by our customers, we are going to go and look at like usage-based pricing. I think in the future, we expect pricing to be hybrid. And it will be usage based, it will be certainly fee-based in some areas, and we're going to be balancing both of those as we go into the future. Thanks for that.

Brad Sills, from Bank of America. Great to see you all, and thanks for hosting another wonderful event. A lot of great innovation on display today and in AI with Breeze, Breeze Intelligence and the agent builder. Very impressive. Question is on that topic. When you think about the proliferation of AI, that's clear where you're headed right now, that's the focus today is to get AI in the hands of customers with products you have. What are the gating factors to that, if you will? Is it -- is there some go-to-market hurdle where you have to get customers more comfortable with the data governance and understanding the ROI and the value to this new technology? Is it more on the product side, we just need more copilots, more agents in order to see that proliferation?

Do you want to start? Or do you want me to jump right in?

Jump right in.

I mean I think for us, on the product side, the thing that we just keep thinking about is like innovation when it comes to bringing AI into more places in the product. So we've been working on this for multiple years now. We launched a bunch of great things today that we're really excited about, but there is still so much surface area in the product, where we see opportunities to make HubSpot easier, faster and more unified for our customers. And so obviously, AI is the technology. But at the end of the day, what we're trying to do is just provide our customers with the best possible tools for how to grow their business. And like right now in my head, there's huge surface areas in HubSpot, where it's like there's so many obvious places, where we can make things easier, faster for our customers, give them more powerful tools. So I think as we continue to build those things, we're going to see -- there's going to be a day where it's impossible to use HubSpot without AI because it's so deeply embedded in everything we build. And that kind of goes back to Yamini's question around the pricing of AI is like for us, we want AI to -- or HubSpot to be like an AI-native solution, right? Every new product that comes out, there's not going to be like, oh, here's the non-AI version, and here's the AI version that you're going to pay extra for. It's just going to be every product is a given that it's in there. So we have a ton of innovation to do on the product side. And then I think when you look at our user base, you definitely see the innovators and the early adopters, who are using the technologies every single day at this point. It's changed the way they're doing their job. And then you see the late adopters and the late minority who are still trying to get comfortable with AI in general. So I think we've got a ton of innovation we're doing in the product. It's going to bring AI everywhere. It's going to drive more usage of our product overall. And then I think overall, in general, over the next few years, you're going to see just generally people in general becoming more comfortable with it. And I think both of those are going to come together, and that's what I think the future looks like inside the product.

This is Peter Burkly, with Evercore. I'm here on behalf of Kirk Materne. So really interesting with the Breeze Intelligence. I'm curious, and I think Yamini sort of answered this in an earlier reply, but just philosophically, sort of that approach between driving usage and adoption versus capturing monetization from a pricing perspective. But then also, Kate, maybe I'm curious if you could just sort of dimensionalize maybe sort of magnitude and/or timing of when you might see some monetization flow through from that product?

Yes, I'll start with the vision. And Andy, you should just jump in here as well. We're so excited because last year, when we acquired Clearbit, we wanted to do exactly this. We want to be able to build Clearbit data right into our product and really light up every single marketing use case. And if you see the initial set of features that we launched in Breeze Intelligence, it's all marketing, right? It's audience tracking. It's intent tracking. It's really enabling all of that. So I think we are going to add a lot of value. And a big part of the vision goes to Andy, like for thinking through this.

Well, one thing as you were talking about, it just made me think about is like we acquired Clearbit like less than a year ago, and that was like our big ambitious goal for Clearbit. It was like we're launching our product at INBOUND next year. And so I'm actually pretty impressed that we were able to pull it off, and it's a very good product. But for us, like the -- so taking a step back from Breeze Intelligence and Clearbit, the thing that we want inside the product is we want to be the absolute best source of unified data for our costumers. And so there's a bunch of stuff that we already do in HubSpot outside of that, like we capture when people are on your website, when they're opening your e-mails. We integrate with people's inboxes and automatically suck things into HubSpot. So there's a bunch of places where we were already doing, I think, really innovative work there. And the thesis behind Breeze Intelligence and Clearbit acquisition in general was basically like, okay, we have all this data, but what if your CRM could like crawl the entire Internet, find out information about your customers that wasn't already in your CRM and pull that data into your CRM. And we're like that would be a pretty awesome way to get unified data for our customers. And so Clearbit already was the top provider on the market, especially when it came to company level data, we were using them -- every major company was using them in some way. And so they became the obvious target for us. And then with Breeze Intelligence, that's the vision that we're trying to manifest is basically like you're going to have all your customer data inside of HubSpot, and then every single day, every single hour, every single minute, we're going to continue to make that data better and better, so you know everything about your customers.

And I think just to close out, we're going to disruptively price that market, right? And the value doesn't come from just pure data. It comes from data powering the AI tools with innovative world-class engagement hubs. And if we can do all of that right out of the box for our customers, then it's going to be -- it is going to open up a really big opportunity. Now I think the approach that we are taking again stays very consistent add a ton of value. And then as we can drive that value consistently, we'll continue to monetize it.

Great. Elizabeth Porter, here from Morgan Stanley. So you guys have a lot of factors to drive the expansion, whether it's the tiers, the seat upgrades, the cross-sell. And if I think back about the Analyst Day a couple of years ago, there was a slide in there that had a pretty balanced mix of all the different factors. The macro and the new pricing model have changed the equation a bit. So as we look forward kind of getting into a little bit more normalized macro hopefully, how should investors think about the weighting of these different drivers? Are there any of the ones that we should be paying particularly close attention to?

Yes, I think it's a great question. Thanks for asking. I think one of the advantages of having a broad and deep platform is that we do have that diversity in upgrade drivers. And when we looked at the pie chart a couple of years ago, it was almost like 25% each, right? I think you're going to see it ebb and flow a little bit. If you were looking at that pie chart today, you'd see a little less in contact here than you had seen in the original version. If I look at it in 12 months, given the pricing change we've made with the seats model, I think you'll see a little bit more in seats.

Ken Wong, from Oppenheimer. Very impressive margin targets, both interim, longer term, bumping those up. I just want to maybe touch on how we should think about it from a more near-term basis. The keynote was chalk full of very impressive product innovation typically leads me to think maybe a heavier investment year coming up. What's the right way to think about the path to the interim in the long term?

Yes. Thanks for asking. And I guess I'm not surprised that all the people are trying to get early signals for 2025. I am not going to fall for that. What I would tell you and what we tried to do is just to reiterate our desire to drive a balance of growth and profitability over time. I think you've seen us do that consistently over the last 5 years. I think the last couple of years are pretty standout for us. We certainly have a variety of opportunities to continue to drive leverage in the business. But if I take a step back and think about what we want to do is grow the business as fast as we can in a responsible way. And so you will -- you should expect that we continue to deliver leverage over time. We try to put out an interim and long-term target that would give you some guideposts. But again, it's not going to be a straight line between now and either one of those 2 things.

Josh Reilly, from Needham. Thanks for a great presentation today. Right here. So after some discussions with partners last night, it seems they're even more optimistic this year about the outlook going forward versus even last year, which I think, given the change in the commission structure, is a positive feedback for you guys. How do you maintain this momentum with partners while also managing a more efficient direct sales approach, including AI and other tools in the direct sales process and not create too much friction between the 2 channels?

Yes. Thank you for saying that. I'm glad that you did partner checks, and I'm glad it's coming out okay. That's great. Look, I think we had a phenomenal Partner Day yesterday, and we had room completely full, and we talked about our product road map, Andy did his product pitch again, and we talked about our platform road map, and we also talked about how we are investing back into the ecosystem. We have a thriving ecosystem and specifically with partners, we made a commission change very intentionally because we wanted to align the value to customer value. We wanted to align our partners' commissions to customer value. What we launched yesterday and what we introduced is the ways in which we are reinvesting within the partner ecosystem. And we're doing that through certainly increased MDF, marketing development funds, that make an co-market and co-sell with our sales reps. We are certainly doing that by increasing the commissions that we are providing for co-sell. And we actually launched a $10 million partner growth fund to invest in the right type of growth partners. The ones that are sourcing the most, the ones that are driving revenue retention the most and ones that are driving most of the value for our customers. And so they see us walk the walk in terms of taking where we were before and doubling down and investing in growth partners. But I think like stepping back, the biggest excitement that I hear from app partners as well as solution partners is the momentum as a platform. We've been talking to them about this for years. We've talked to them about going from app to suit, to platform and what that means as an opened up opportunity for them. And as our product vision and our platform vision just kind of continues to really drive the innovation forward, we see a lot of excitement with partners. And so I'm thrilled with momentum. And yes, it was a fantastic day yesterday.

Taylor McGinnis, with UBS. Thanks so much for taking the time today, everyone. So you spend a lot of time talking about all of the new and emerging expansion opportunities. So I'm just curious, when you look over the medium term and which one of those could be most impactful to NRR, whether that be the core seats opportunity, some of the levers with AI and driving upsells and cross-sells. I guess, which are those? And how does that materialize into how you're thinking about NRR your aspirations around NRR in that time frame, too?

Yes. I think, Taylor, what we have shared in the past is that our long-term vision for net revenue retention is that 110 type number. That is still our vision for the long term for net revenue retention. We've obviously been operating in an environment that's been choppy here over the last few years. But as I think about the places that we're going to drive investment again, I think, it's diverse, right? We're going to start with that foundation of customer dollar retention and feel very good about our ability to continue to deliver strong costumer dollar retention, just given our ability to drive increased usage of our customers of the entire platform. And then that also enables us to really take advantage of this sort of set of upgrade levers that we see across addition upgrades, across seat expansion and really across multi-hub. I would say, again, in the nearer term, I think you're going to see more impact from seats because we're going to be working through that seats pricing model change, but all of them can be meaningful levers to the business. over time. Thank you.

Arjun Bhatia, with William Blair. Dharmesh, I wanted to get you in here. On your -- in your keynote, you talked about how Breeze was an evolution of ChatSpot. Can you talk just about what has changed that has enabled you to deliver copilots and agents? And how much of that is the underlying LLM versus changes that you've made at HubSpot? And then sorry, last one, Ryan. But the value prop that customers will get at the end of the day from agents and copilots versus your prior AI features, is that night and day? Is that an exponential increase? Or is that just kind of a gradual move up the curve?

Yes. I'll start. I think it's important to understand. So ChatSpot graduated, as we mentioned, in the copilots, and agents are the talk of the year. One thing we didn't get a chance to talk about this in the keynote. So HubSpot is a platform company. We've said that repeatedly, and we're on this journey. And I think one of the strongest kind of moats that we have in business I've been in software for 30 years, is this network effect between -- for a platform between developers and customers. So customers want to go to platforms that have the most number of apps, most number of developers building on it and developers want to go to the platform that has the most number of potential customers. What we're seeing now with agents, this is -- I think this is going to play out is that there's a reset button on the most that have existed before, because now we're going to see lots of new agents being developed and those agent builders and developers are going to want to go to platform where the customers are and where there's a good positive developer experience. So our kind of motivation for kind of driving some of that innovation in agents is to capture that developer mind share early. So that's kind of thing number one. Thing number two, and this is what AI has really been contributing to, it's lowering the bar on what it takes to develop software. So we think we're going to see more developers that may not have classic coding experience. And so we're going to see thousands of these kind of smaller software companies, new generation software companies start, and we want them to start on HubSpot. That's the idea is to capture that mind share now. And we are already kind of the crowd favorite when it comes to start-ups and scale-ups. We've seen that kind of transition over the last 5 years or so, I'll say. So that's what makes it exciting. It's like we're building this network. We're reeling this kind of platform and the agent -- that AI network is the first step in building a platform for this kind of new agent-based AI world. So that's in terms of your kind of first question, ChatSpot eventually kind of morphed into what is copilot and that transition has been great. We see something similar happening with agent.ai. Right now, it's running as an experiment as a labs innovation style thing, increases the kind of cycle time and how fast we can learn, and then we will figure out how we kind of move it into the kind of core team.

Yes. I agree with that.

Good. That's good.

We might have been out of questions [indiscernible] all time first.

Sonak Kolar, here from Mark Murphy at JPMorgan. Kate, you double-clicked during the presentation on the monetization opportunity, specifically for Breeze Intelligence. So I just wanted to understand, relative to the other announcements today, if we think about the broader Breeze platform with agent and copilot as well as agent.ai, is that the one that you double-clicked on potentially because it's the largest near-term monetization opportunity? Or alternatively, is it the largest long-term monetization opportunity? Just trying to understand why focus on that one specifically.

I guess the reason that I double clicked on that is probably answer number C, which is I wanted to double click on it because it was a new and different monetization path, and we have seen through some of the other innovation, and Yamini was covering AI pretty thoroughly. That said, I do believe that we have a big opportunity with Breeze Intelligence. We've talked about it internally as just this no-brainer attach to Marketing Hub, which, as you know, is a big business for us. And so I think over the near term, there's really strong opportunity for Breeze Intelligence within the installed base. But the one note that I would say is, I would remind you that we bought Clearbit with a legacy installed base of customers and a legacy product, and that will be slowing down and will continue to slow down over time. And so in the near term, that's a little bit of an offset in the data space for us, but I think it's a great -- both near-term and long-term opportunity for HubSpot.

Data is kind of known. There's everybody knows how to buy data, how to use data, how to leverage data within marketing, sales, service, all of that. And so I think it's very easy for our customers to understand the value of having data that powers AI that works with our engagement hubs, and we're making the pricing pretty disruptive and easy to kind of start with. And so that is Breeze Intelligence. Now in terms of our AI products features and all of that, as Andy said earlier, we certainly see a lot of adoption in early adopters, early majority. They're using the product every day. They are getting the value. But we want to make sure that it's not just a certain set of customers. We want to get it to a broad set of costumers in. And we do believe that AI is early in a transformative shift. And we want to be the winners in AI, we want our product to just be AI-native product. And as we see that value, we will increase. And so I think those 2 are slightly different, one very known, the other very transformative, both adding up to kind of long-term durable levers.

We're coming up on the top of the hour here, so maybe time for 1 or 2 more.

Darren Baker, here from [ Prime Cap, ] one of your shareholders. I wanted to ask, Yamini, I mean, you started the very first comment that you made in your presentation here was we're well positioned in a large and growing market, right? And you put up some TAM numbers that clearly are several orders of magnitude larger than your revenue base today, right? And when we've talked on recent earnings calls, you've continued to emphasize, "Hey, there's just -- there's a lot of scrutiny out there on spending, right? People are being cautious about the way that they're engaging, sales cycles longer and so on and so forth." Right? And as a result, perhaps, Kate, we didn't hear much in the way of kind of quantitative guidance or commentary about your growth rate. So I'd love to hear if you feel that we are in a more challenged environment right now, similar to the one that we've seen for the last year or 2. As you talk with customers, what do you think is on their minds that could possibly encourage them to kind of get back to a place where they're more focused on growth, there may be more open to kind of incremental spending or to go back to your comment from the Q4 call, I think, feeling a little more sense of urgency around investing in the products that you guys have clearly worked hard to produce here?

Yes. I love that question. It's great. Look, I think the macro is macro, and you all are much better at looking at it. I don't know what happened to interest rates stay, but you all will figure that out. But we focus on really controlling what we can control. And everything that we talked about today, everything that we launched today in terms of the spotlight is driving that innovation. And you can see that pace of innovation pickup. I spent a lot of time talking to customers. I look at our pipeline daily probably obsessively. And when we look at customers, they entered this year with a little bit of a wait-and-see mode. And we saw that in Q1, we saw that in Q2, we're just going to assume that's there. But what is on their mind is they want to consolidate on fewer platforms. Back in 2021, 2022, when there was a party, everybody bought a ton of point solutions. And they now look at their tech stack too many point solutions, not enough value. And so what is on their mind, when we talk to customers, they want to consolidate on fewer platforms, both to reduce cost, but also to get the right visibility on customer insights to be able to drive growth. And so that is exactly what we are focused on, delivering value with a great platform that can help them consolidate their costs and improve value. Then the next thing to your point is, as they begin to hear these stories of customers win rate going from 15% to 25%, which is the use case that Aerotech shared with us today, other customers are going to look at it and say, "Wow, I also need to increase my win rate by 4%. And so I need to start leveraging AI as the next part of the initiative that I want to drive." And so we're showcasing the value. We're training and getting our customers prepared for how to bring their data together and how to get value out of AI. And I think that is going to be a tailwind for many quarters to come. Again, the question is, what can we control? We can control innovation, we can control being AI first, we can control our execution, and then we help our customers drive growth in any environment.

I think that's a great place to wrap. Thank you very much, Yamini. Thank you, Kate. Thank you, Dharmesh. Thank you, Andy, for your time. Thank all of you for being here. Thank you.

Thank you.

We really appreciate it.