HubSpot, Inc. (the “Company”) provides a customer platform that helps businesses connect and grow better. The Company delivers seamless connection for customer-facing teams with a unified platform that includes three layers: AI-powered engagement hubs, a Smart customer relationship management product (“CRM”), and a connected ecosystem supporting the customer platform with a marketplace of integrations, templates, and expert partners, a community network, and an academy of educational content.

The engagement hubs include Marketing Hub, Sales Hub, Service Hub, Operations Hub, Content Hub and Commerce Hub, as well as other tools and integrations that enable companies to attract, engage, and delight customers throughout the customer experience.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) applicable to interim periods, under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). In the opinion of management, the Company has prepared the accompanying unaudited consolidated financial statements on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2023, and these consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented. All intercompany balances and transactions have been eliminated in consolidation.

The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2024. The year-end balance sheet data was derived from audited financial statements, but this Form 10-Q does not include all disclosures required under GAAP. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted under the rules and regulations of the SEC.

These interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 14, 2024. Other than the addition of the accounting policy related to derivatives as described in Note 6, there have been no changes in the Company’s significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K that have had a material impact on our consolidated financial statements and related notes.

Recent Accounting Pronouncements

Recent accounting standards not included below are not expected to have a material impact on our consolidated financial position and results of operations.

In November 2023, the Financial Accounting Standards Board ("FASB") issued guidance enhancing the disclosures of reportable segment information, primarily about significant segment expenses. The new standard will be effective for the Company for the annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025, with early adoption permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The adoption of this standard only impacts disclosures and is not expected to have a material impact on the Company's consolidated financial statements.

In December 2023, the FASB issued guidance enhancing income tax disclosure requirements by requiring specified categories and greater disaggregation within the rate reconciliation table, disclosure of income taxes paid by jurisdiction, and providing clarification on uncertain tax positions and related financial statement impacts. The new standard will be effective for the Company on January 1, 2025, with early adoption permitted. The adoption of this standard only impacts disclosures and is not expected to have a material impact on the Company's consolidated financial statements.

Revision of Previously Issued Financial Statements

During the financial close process for the first quarter of 2024, the Company identified an error related to the calculation of contractual credits in one of its third-party vendor agreements which impacted the Company's previously issued financial statements beginning with the quarter ended December 31, 2021. The error impacted subsequent annual and quarterly reporting periods through December 31, 2023. The Company assessed the materiality of the error, in consideration of both quantitative and qualitative factors, and concluded that it is not material to any previously presented interim or annual financial statements. The Company revised its financial statements for the periods impacted. In connection with the revisions, the Company also corrected a previously identified immaterial error related to the recording of certain deferred tax balances.

Changes to the interim consolidated statements of operations for the three and six months ended June 30, 2023, as a result of the error, were as follows (in thousands, except per share data):


Consolidated Statements of Operations and Comprehensive Loss	For the Three Months Ended June 30, 2023
	As Previously Reported			Adjustments			As Revised
	(in thousands)
Cost of revenues - Subscription	$	73,824		$	(2,330	)	$	71,494
Total cost of revenues		87,286			(2,330	)		84,956
Gross profit		441,852			2,330			444,182
Loss from operations		(118,499	)		2,330			(116,169	)
Loss before income tax expense		(105,564	)		2,330			(103,234	)
Income tax expense		(13,382	)		4,813			(8,569	)
Net loss		(118,946	)		7,143			(111,803	)
Comprehensive loss		(119,575	)		7,143			(112,432	)
Net loss per common share, basic and diluted	$	(2.39	)	$	0.14		$	(2.25	)


	For the Six Months Ended June 30, 2023
	As Previously Reported			Adjustments			As Revised
	(in thousands)
Cost of revenues - Subscription	$	142,163		$	(4,047	)	$	138,116
Total cost of revenues		169,332			(4,047	)		165,285
Gross profit		861,426			4,047			865,473
Loss from operations		(163,264	)		4,047			(159,217	)
Loss before income tax expense		(141,583	)		4,047			(137,536	)
Income tax expense		(15,645	)		4,658			(10,987	)
Net loss		(157,228	)		8,705			(148,523	)
Comprehensive loss		(152,723	)		8,705			(144,018	)
Net loss per common share, basic and diluted	$	(3.17	)	$	0.17		$	(3.00	)