Good afternoon. Thank you for attending today's HubSpot Q4 and fiscal year 2022 earnings conference call. My name is Dani. I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. It is now my pleasure to hand the conference over to our host, Chuck MacGlashan, Head of Investor Relations. Chuck, the floor is yours. Thanks, operator. Good afternoon, and welcome to HubSpot's fourth quarter and fiscal year 2022 earnings conference call. Today, we'll be discussing the results announced in the press release that was issued after the market closed. With me on the call this afternoon is Yamini Rangan, our Chief Executive Officer, Dharmesh Shah, our Co-founder and CTO, and Kate Bueker, our Chief Financial Officer. Before we start, I'd like to draw your attention to the Safe Harbor statement included in today's press release. During this call, we'll make statements related to our business that may be considered forward-looking within the meaning of Section 27A of the Securities Exchange Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended. All statements other than statements of historical fact are forward-looking statements, including those regarding management's expectations of future financial and operational performance and operational expenditures, the expected impact of the restructuring, expected growth, FX movement, and business outlook, including our financial guidance for the first fiscal quarter and full year 2023. Forward-looking statements reflect our views only as of today, and is except as required by law, we undertake no obligation to update or revise these forward-looking statements. Please refer to the cautionary language in today's press release in our Form 10-K, which will be filed with the SEC this afternoon for a discussion of the risks and uncertainties that could cause results to differ materially from expectations. During the course of today's call, we'll refer to certain non-GAAP financial measures as defined by Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure, used or discussed and reconciliation of the differences between such measures can be found within our fourth quarter and fiscal year 2022 earnings press release in the investor relations section of our website. Now, it's my pleasure to turn over the call to HubSpot's Chief Executive Officer, Yamini Rangan. Yamini? Thank you, Chuck. Welcome to everyone joining us on the call. Today, I want to focus on our Q4 results, reflect on 2022, and share our strategy for driving profitable growth going forward. Before we get started, I want to acknowledge the restructuring announcement we just made two weeks ago where we decided to part ways with approximately 500 HubSpotters. This was the most difficult decision in HubSpot's history, and not one we took lightly, but one we believe is in the best interest of the company over the long term. I'll talk further about the rationale and the impact in a few minutes. On to our results. Q4 revenue grew 35% year-over-year in constant currency, and full year 2022 revenue grew 39% in constant currency. Our operating profit margin was 14% in Q4 and 10% for the full year. Total customers grew 24% to over 167,000 globally. Our bi-modal strategy is clearly working. We saw strong net customer adds of 8,400 in Q4, driven by a strong quarter of free CRM sign-ups, CMS Hub Free, which continues to open up our distribution channels, and the Starter Suite, which is delivering more value through better automation. At the same time, we also have momentum up market where we are delivering clear value for larger customers. In fact, large deals were the fastest growing area of our business in Q4. These results demonstrate that HubSpot's connected, easy to use, powerful platform is mission critical for our customers. In terms of the demand environment, I talked in November about what we are seeing with customers, including longer deal cycles, more decision-makers, and increased budget scrutiny. While these trends and macro pressures persisted throughout Q4, they did not get materially worse. We continued to navigate this environment by demonstrating the value HubSpot can deliver, and we're increasingly becoming the platform of choice. We saw more multi-hub deals with the mix shifting even more to three and five-hub deals. I'm pleased with how we continued to solve for the customer with product innovation while executing against our strategic priorities throughout 2022. Now, reflecting on 2022, it truly was a rollercoaster of a year. Much like our peers, we experienced a perfect storm of uncertain macro, tighter customer budgets, and longer decision-making cycles. As I talk to our customers, a few shifts are increasingly clear. SMBs are doubling down on digital. Their businesses are now built on digital compared to pre-pandemic. They're not turning back. Instead of operating in a buy first, understand value later mode, they're now in a understand value deeply, buy cautiously mode. HubSpot has always resonated with customers because we deliver easy to buy, easy to use, and easy to manage solutions. In this environment, we're focused on helping our customers drive innovation and efficiency with a quick time to value, with customers taking under eight weeks on average to activate and see value. Throughout 2022, we had two key areas of focus: maintaining our fast pace of product innovation while driving consistent results. On the product side, innovation was just cranking. We relaunched Service Hub, added CMS Hub Free, and launched hundreds of new enhancements to meet our customers' evolving needs. Three areas I want to highlight. We drove more omnichannel execution with launches like our WhatsApp integration, more intelligence and insights with customer journey analytics and Campaigns 2.0, and more connected commerce with payments objects, recurring ACH, and payment schedules. It was a record year of innovation, capped off by being rated by G2 as the number one global software company in 2023 and the number one product in both marketing and sales. Just awesome recognition and a strong testament to the progress we are making on driving innovation. Also, I'm happy to announce that we are promoting Andy Pitre to lead our product organization as EVP of Product and User Experience. Andy has had an incredible influence on our product over the past 13 years at HubSpot. He is one of the very early product leaders who drove the CRM platform vision, was the brains behind Operations Hub, and is exceptionally customer-centric. Andy will be filling the role formerly held by Steph Cuthbertson, who made a personal decision to step down as Chief Product Officer at the end of 2022. I want to thank Steph for her contributions to HubSpot and wish her the very best. In terms of go-to-market execution, as customer behavior shifted in 2022, we adapted. We leaned more heavily into total cost of ownership and got even better at communicating the tremendous value of HubSpot. We did more team selling and delivered clear messaging to the multiple buyers and personas that are now part of the buying process. In short, we stepped up to the challenge, executed well, and helped our customers navigate choppy waters. Now, let's shift gears to 2023. Our continued focus is on driving profitable growth, maintaining agility, and executing efficiently. I'm confident in our ability to not only navigate uncertain times but also to emerge stronger. Here are some of the decisions we've made to help drive long-term profitable growth. First, in January, we announced plans to reduce our workforce by 7% and consolidate our facilities. We made this decision to thoughtfully align our people and resources to strategic business needs. We're also optimizing our real estate portfolio to better align with the needs of our hybrid workforce. These changes will help us drive profitable growth and enable us to invest more in innovation that solves for our customers long into the future. We're also taking steps to drive more efficiency over the long term. Specifically, we're looking at multiple areas within sales and marketing. On the direct sales side, we're investing in systems and automation to improve rep productivity internally. We're continuing our journey on product-led growth, both to scale the low end of our business with Starter and to drive demand for Pro and Enterprise in a more efficient manner. On the partner side, we're making important changes to our commission structure to align partner incentives with customer value. We're leaning into better reward partners who source demand, who co-sell alongside us, and engage deeply with our customers. These are multi-year initiatives and will lead to a more efficient direct product-led and partner sales motions that set us up for profitable growth and margin expansion. I want to wrap up by sharing our strategic objectives for 2023. While the environment may be uncertain, we operate in massive markets and are confidently pursuing our goal of becoming the number one CRM platform for scaling companies. Our first objective is to become the SMB market share leader in marketing, sales, and service. We are laser-focused on these three mega markets and will enable more upmarket customers to adopt HubSpot with easier customization, greater extensibility, and better governance capabilities. We will help our customers drive revenue through improved customer journeys and greater rep effectiveness. We will lean into omnichannel by expanding channels to serve the changing needs of our customers. Our next objective is to continue on our journey to transform B2B Commerce. We launched HubSpot Payments a little over a year ago, and early customer interest has been strong despite the macro environment. This year, as we continue to ramp, we'll be focused on driving greater awareness of our commerce capabilities and increase customer adoption while adding key functionality like native invoices, flexible billing, and flexible payment processing that our customers need. We will double down on our bi-modal strategy. Our strategy of focusing on volume of customer adds at the low end while expanding the value of customers at the upper end is working. We launched CMS 3, introduced self-guided demos, moved automation down to our Starter edition, and optimized sign-ups. These initiatives drove results, and we added over 30,000 net new customers last year, with the majority landing on the Starter CRM Suite and expanding beyond. We will continue to find creative ways to make it even easier for customers to get started with HubSpot and get value out of our platform quickly. Our final objective is to build a high-performing, sustainable, and equitable company. We are focused on foundational investments that can help us scale better. That includes better coaching and development for top talent, better performance culture, better systems, and better hybrid connection. We know when we invest in our employees' growth, we will drive better outcomes for our customers and for HubSpot. We have a clear opportunity ahead to drive value for our customers, and we have the right strategy in place to drive profitable growth. With that, I'll hand it over to our CFO, Kate Bueker, to take you through our financial and operating results. Thanks, Yamini. Let's turn to our Q4 and full year 2022 financial results. Fourth quarter revenue grew 35% year-over-year in constant currency and 27% on an as-reported basis. Q4 subscription revenue grew 28% year-over-year, while services and other revenue increased 8% on an as-reported basis. Full year 2022 revenue grew 39% year-over-year in constant currency and 33% as reported. Full year subscription revenue grew 34% year-over-year, while services and other revenue decreased 5%, again, both on an as-reported basis. Domestic revenue grew 31% year-over-year in Q4, while international revenue growth was 38% in constant currency and 23% as reported. International revenue represented 45% of total revenue in Q4. We added over 8,400 net new customers in the quarter, bringing our total customer count to 167,000, up 24% year-over-year. Starter CRM Suite continued to fuel our strong net adds again in Q4. Average subscription revenue per customer grew 9% year-over-year in constant currency and 3% on an as-reported basis to $11,200. The primary driver of this strength continues to be the adoption of multiple hubs by professional and enterprise customers. We maintained a healthy gross retention rate in the high 80s in Q4 as customers continued to view HubSpot's platform as mission-critical. Net revenue retention was 107%% in Q4, down 2 points sequentially, driven by continued customer optimization of HubSpot spend. As I've mentioned the last few quarters, we continue to expect net revenue retention to remain pressured as a result of the challenging macro environment. Deferred revenue as of the end of December was $546 million, a 25% increase year-over-year. Calculated billings were $542 million in Q4, growing 29% year-over-year in constant currency and 26% as reported. The remainder of my comments will refer to non-GAAP measures except my comments relating to restructuring charges. Q4 gross margin was 84%, up 2 points year-over-year. Subscription gross margin was 86% in Q4, while services and other gross margin was negative 14%. Full year gross margin was 83%, again up 2 points year-over-year. Subscription gross margin was 85%, while services and other gross margin was negative 29%. Q4 operating margin was 14%, and full year operating margin was 10%, both up compared to 2021. Q4 operating margin benefited from the impact of slower hiring and reduced discretionary spending that we implemented in the second half of 2022. Net income in Q4 was $57 million or $1.11 per fully diluted share. At the end of the fourth quarter, we had approximately 7,400 employees, up 26% year-over-year and up slightly sequentially. This does not include our recent workforce reduction of approximately 500 employees. CapEx, including capitalized software development costs, was $19 million or 4% of revenue in Q4 and $82 million or 5% of revenue for the full year. Free cash flow in the quarter was $71 million or 15% of revenue and $191 million or 11% of revenue for the full year. Our cash and marketable securities totaled $1.5 billion at the end of December. Before I dive into guidance, I wanted to provide a bit more context regarding our recent restructuring. As Yamini indicated, this wasn't a decision we made lightly, but it is one that we believe will better align our people with our strategic needs and help position HubSpot as a more efficient and agile company. Our headcount reductions allow us to continue to invest against a number of strategic business needs, including product innovation and systems and automation to scale better in a hybrid world. We're also taking steps to optimize our real estate portfolio to better serve our hybrid employee base by consolidating leases, including our Davenport headquarters building in Cambridge. As we outlined in the 8-K filing a few weeks ago, we expect to incur charges in a range of $72 million-$105 million in connection with the restructuring. We expect the majority of employee severance costs to be incurred in the first quarter, while the lease consolidation costs are expected to be incurred throughout 2023. These charges and related cash expenditures will be excluded from our non-GAAP operating profit, operating cash flow, and free cash flow results. With that, let's review our guidance for the first quarter and full year of 2023. As we've discussed, the macro environment remains challenging. The customer behavior we're seeing today is very similar to Q4: tighter budgets, deals taking longer to close, and more people involved in the approval process. Our guidance assume that these weaker macroeconomic conditions persist throughout 2023. For the first quarter, total as-reported revenue is expected to be in the range of $473 million-$475 million, up 20% year-over-year at the midpoint. We expect Foreign exchange to be a 4-point headwind to as-reported revenue growth in the first quarter. Non-GAAP operating profit is expected to be between $45 million and $47 million. We expect foreign exchange to be a 1-point headwind to operating profit margin in the first quarter. Non-GAAP diluted net income per share is expected to be between $0.82 and $0.84. This assumes 51.5 million fully diluted shares outstanding. For the full year of 2023, total as-reported revenue is expected to be in the range of $2.05 billion-$2.06 billion, up 19% year-over-year at the midpoint, or 20% in constant currency, including a foreign exchange headwind of 1 point for the full year. Non-GAAP operating profit is expected to be between $248 million and $252 million. We now expect foreign exchange to be a slight headwind to as-reported operating profit margin for the full year of 2023. Non-GAAP diluted net income per share is expected to be between $4.24 and $4.32. This assumes 52.2 million fully diluted shares outstanding. As you adjust your models, keep in mind the following. Most of the operating margin increase we expect from our restructuring will be realized in Q2 through Q4 of 2023 and is included in our guidance. We expect non-GAAP operating profit margins to be between 9% and 10% in the first and second quarters, low double digits in the third quarter, and high teens in the fourth quarter. We expect CapEx as a percentage of revenue to be roughly 5% and free cash flow to be about $225 million for the full year of 2023, with seasonally stronger free cash flow in Q1 and Q4. With that, I will hand things back over to Yamini for her closing remarks. Thank you so much, Kate. As I look ahead, we have a clear long-term vision to become the number one CRM platform for scaling companies and a focused strategy in 2023 to make progress on that vision. Our customers continue to depend on HubSpot, and we are more motivated than ever to help them grow. We also have a clear strategy to drive profitable growth long term and thought ful changes we're making to build a more efficient company. All of this makes me confident in HubSpot's future. I want to thank our employees for their adaptability and continued focus on solving for our customers. I want to thank our customers, our partners, and our shareholders for your support. With that, operator, let's open up the call for questions. Certainly. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. On behalf of the management team, we would ask that you would limit yourself to one question. We will pause here briefly as the question roster compiles. The first question comes from the line of Samad Samana of Jefferies. Please proceed. The initial FY 20 23 guidance is also very healthy considering the macro environment. Samad How should we think about what? Yep. Sorry. Sorry, we missed the first part of that. Can you hear me okay? Yeah, we missed the first part of that. Could you maybe start over for us? Thanks. Yeah. Sorry. Yeah, I started with saying that, you know, it was an impressive 2022 under tough circumstances, and the initial 2023 guidance is also very healthy considering the macro environment. How should we think about what's considered in the guidance when we compare it to your comments in the recent shareholder letter, sorry, the letter to employees about potentially tougher times ahead? Does it factor in the impact from the areas that will be de-emphasized following the layoffs? Hey, Samad. Thanks a lot for your question. This is Yamini. Maybe I'll start with the strategic rationale for the layoff and then give a little bit of color in terms of demand, and then Kate can answer the question on guidance. You know, in terms of the layoff, this was the most difficult decision we had to make in HubSpot's history, and something that we did not take lightly. If we step back, this is not simply a short-term cost-cutting decision. This was a strategic realignment of our people and investments so we can drive long-term profitable growth. There are two reasons why we got to this decision. The first is that we had areas within the business where headcount had grown faster than revenue, areas like recruiting and services. Even when we consider 2023 growth, we had that excess capacity. We wanted to ensure that our people and our resources are clearly aligned to the growth in 2023 and our strategy in 2023. The second rationale is that we want to invest thoughtfully in key areas of the business to drive profitable growth over the next decade. We wanna invest in product innovation so we can drive customer outcomes and emerge stronger from the cycle. We want to invest internally in our own systems and automation wherever we find there are manual processes, so we can be even more efficient and innovative as a company. Those were the two reasons why we got to this difficult decision. Now, you mentioned the employee letter and the comment that we had made in terms of the demand environment. Look, demand environment in Q4 remained very consistent with what we shared in Q3. We saw deal cycles lengthening, we saw more decision-makers involved, we saw more scrutiny of deals and budgets before approvals. Q4 did not get better, but it did not get materially worse. What we have assumed is that the demand environment will remain challenging going into 2023. Yeah. Samad, I will just follow up with Yamini's comments around how we thought about guidance. The baseline assumption in our 2023 guidance is consistent with Yamini's description of the environment. Which is it stays difficult, but it remains very consistent with what we saw throughout Q3. It doesn't get materially better, and it doesn't get materially worse. That said, as you know, we always try to set guidance that contemplates a variety of outcomes, and we did the same thing this time. We feel good about our guidance with that set of base case assumptions, but we also feel good about that guidance, even if the external environment gets a little bit worse from here. Thank you. The next question comes from the line of Mark Murphy of JP Morgan. Please proceed. Yes, thank you very much, and I'll echo my congrats on the ability to navigate this environment out there. I am wondering if, perhaps in any pockets you might have noticed any change in the buyer behavior in the last three or four months. Basically since we started to see some of the cooler CPI inflation data. I'm just curious if that development might be sporadically, loosening up some conversations. I know you're saying the environment was just as tough overall in Q4, but, do you think anything could be changing on the margin as we, you know, head into the spring and summer, or do you think that that will take more time? Yeah, Mark, this is Yamini. Thanks a lot for your question. Look, I think overall, the demand environment has remained consistent. It's not gotten better, and it's not gotten materially worse. As we look at our pipeline, now, our pipelines tend to be just current quarter, next quarter. There are a couple of things that we're seeing at the margin, right? Short cycle deals, ones that are typically created in month and closed in month, and they tend to be in the lower end of our segments, are continuing to maintain velocity. We see reasonable velocity there. Longer cycle deals that typically tend to be upmarket are taking just a little longer to close. Again, this is because of more decision-makers involved, more kind of caution in terms of looking at the budget. So that's the maybe minor change or shift that I would say in terms of the types of deals. Now, if I look at pipeline, I've been talking to customers a lot more in Q3, Q4, and going into Q1. There are a few kinds of, you know, characteristics of what we see within the pipeline. Customers care a lot about time to value. The number one question that I get, we get, is: How quickly can we migrate? What is the value, and how quickly am I going to get there? HubSpot is resonating because we can deliver value in a matter of weeks, not months. The second thing that we are seeing is people care about driving productivity and a tight alignment between marketing and sales. This is the year where driving clear productivity across marketing and sales can get a much better visibility on the customers matter. We begin to see that in the pipeline. Finally, eliminating point solutions and driving down costs. A lot of conversations on platform consolidation and with a view towards cost savings. That's what we're seeing. It's a high bar for action amongst customers, and that high bar remains, but I'm really pleased with how the team is focused in executing in this environment. Thank you. The next question comes from the line of Brent Bracelin of Piper Sandler. Please proceed. Thank you and good afternoon. I wanted to follow up on the large customer cohort. This sounds like it's the fastest-growing part of the business. We've seen an appetite to consolidate vendors, which really spiked up in our CEO survey ahead of the year. Enterprises seem to be more than willing to consolidate vendors more than ever. Have you seen a change relative to the size of the large customers wanting to consolidate onto HubSpot? I ask because it does feel like you're getting pulled into the enterprise. Can you just refresh us on your ambition to move upmarket versus staying in the core mid-market swim lane? Yeah. Thanks a lot for the question. Look, we remain very focused. Our segmentation and the segment that we care about deeply is two to 2,000 employees. That's the segmentation that we care about. Within that, the 200 to 2,000 segment is what we consider upmarket customers. As I mentioned, we certainly saw momentum and a lot more larger deals in Q4, and we are continuing to see that now. I think if you step back and think about these larger customers, they are expecting a lot more out of their marketing and sales spend this year. They want more leads, they want better visibility of pipeline, they want better rep effectiveness, and as you think about this, HubSpot delivers that. We are a connected marketing, sales, and front-office solution, and our hubs are clearly delivering value, which is why we see that. The second thing that you mentioned is also around platform consolidation. One of the key priorities this year is to look at the sales stack and the MarTech stack and look at ways of eliminating point solutions to drive cost savings. In all of those, you know, considerations, HubSpot is becoming the platform of choice. That's certainly because of the product momentum we have. It's because our go-to-market has adapted with our partners to be able to drive value for these upmarket customers. We're really proud of the work that the entire organization is doing in terms of where we are in the market. Thank you. The next question comes from the line of Terry Tillman of Truist. Please proceed. Yeah, thanks for taking my question, and congrats from me as well in terms of the strong execution. Yamini, I had a question related to partners. I mean, partners over time, I mean, some of these partners have grown up with you all and scaled up as you all scaled up, and they've become pretty big themselves. I'm curious if we could get an update on partner influence or percentage of the business that's from partners. If you could just unpack a little bit about. It sounds like there's some changes or evolution with partners. Maybe you could just help us a little bit more on kind of what's instigating that and what kind of outcomes or benefits could come out of the work you're doing there incrementally with partners. Thank you. Yeah, absolutely. Happy to take that, Terry. Look, our partner strategy is working. A few years ago, we went to our partner ecosystem, and we said, "Look, we're transitioning from marketing automation to CRM platform, and our vision is to scale selling and servicing with expert partners." That is working, and our partner-influenced MRR or ARR is about 45%, you know, compared to the overall. It's a good split between direct and partner-influenced MRR. We have momentum. We are co-selling much better over the last three years, and partners are behind us. Now, I did mention that we are making a structural change to the commission. If we step back, our partner commissions was initially set up when HubSpot had one hub and just a couple of additions. This is like, you know, 10 years ago. As you all know, over the last couple of years, we have expanded our product portfolio. We've added Operations Hub, we've added CMS Hub, and we've added more additions to the hub. As we step back and we looked at our partner commission strategy, we want to incentivize our partners who are now coming along this journey with us to do a couple of things. We want them to first be deeply engaged with customers. When partners get involved with customers, it leads to better close rates, and it leads to better retention, and we want to drive that. Second, we want to be enabled to incentivize them on driving more multi-hub as well as co-sales. We just announced, I just came from the partner kickoff today as well as yesterday, where we announced a few changes to the commission structure, which again incentivizes them to have deeper connection with our customers. I've been talking to a number of our top partners over the past few weeks in terms of this change. They get it. They understand that we are evolving to a multi-hub company, and they understand that we are going to continue to invest within the ecosystem. I'm overall excited by the change as well as the evolution of the partner strategy. Thank you. Next question comes from Gabriela Borges of Goldman Sachs. Please proceed. Good afternoon. Thank you. Question for Kate on the net retention number. Give us a little bit of a sense on how much exposure you have to growing and scaling customers in the technology vertical. Specifically looking to understand what's going on with- the shift from hiring in the technology verticals to perhaps seeing more of a headwind. Do you think 107% will be the trough for 2023 in net retention? Thank you. Yeah, a couple of questions in there, Gabrielle, but let me give it a shot. I'm gonna just maybe start with the facts, which is I shared in the prepared remarks that our net revenue retention in the fourth quarter was 107%, which was down a little bit from Q3, but really very much in line with the expectations that we shared in Q3. I think you know there's really two big components of net revenue retention. One is the gross retention or what we call customer dollar, and that's really hung in there very resiliently in that high 80s. The other piece is the net upgrade rate, and that includes a number of motions, some of that you are talking about, which are seat upgrades, contact tier upgrades, addition upgrades, some cross-selling. It's really that net upgrade motion that has been challenged in the economic environment as customers are both slowing the rate at which they are upgrading, but also have a bit of a sharper eye on their overall spend with HubSpot. We're seeing pressure both on the upgrade side and also on the downgrade side. In the near term, you know, we expect that that pressure will remain. We actually think that net revenue retention is likely to tick down again in Q1, but we feel really good about our ability to hold net revenue retention above 100%. Over the longer term, we continue to believe that we can deliver net revenue retention of 110% in any healthier macro environment. Thank you. The next question comes from Rishi Jaluria of RBC. Please proceed. Oh, wonderful. Thanks so much for taking my questions. Nice to see continued resilience in the business model. Yamini, I wanted to dig a little bit more into some of the momentum you're seeing with Service Hub, post-relaunch. you know, what is kind of been the momentum you've seen so far? really importantly, when you think about the feedback that you've gotten from customers so far, you know, are there any other kind of enterprise-grade features or functionality that, you know, you need to be developed further in order to be more competitive against, you know, some of the incumbents like the likes of Zendesk, or is that something that's already happening? Thank you. Hey, Rishi. Thanks a lot for the question. Look, we're very excited about Service Hub. Last year was a pretty big year. We did a relaunch, and there were a number of features that moved the needle in terms of Service Hub, and we see that in the momentum in terms of the go-to-market. I mentioned in the prepared remarks a little bit about multi-hub momentum, a lot more 3 as well as 5-Hub, you know, deals and customer wins that we're seeing, and part of that is the strength of Service Hub. We are going to continue to focus on it. It's one of our strategic objectives in 2023, is to go deep in terms of leadership in Marketing Hub, Sales Hub, and Service Hub. We're evolving the support workspace. We are gonna be driving even more omnichannel service through improved calling functionality, knowledge base, SMS. The recent WhatsApp launch in Q4, that was a pretty big win, and we got a lot of positive feedback from our customers, and we're pretty excited to, you know, share more there. As we do these things, we step back and listen. Are we getting more multi-hub customers? Are we delivering more value? When the customers begin to use it, are we driving improved customer satisfaction? For each of those questions in Service Hub, the answer is yes. We're pleased with it, and it'll continue to be a strategic objective this year to drive thought leadership within Service Hub. Thank you. The next question comes from Alex Zukin of Wolfe Research. Please proceed. Hey, guys. Thanks for taking my question, Congrats on a solid quarter. I guess if we think about the shape of the growth curve for 2023 verse, you know, versus 2022, from the standpoint of customer adds versus ASRPC, how has it changed given some of the momentum upmarket that you're seeing? Where, you know, would you expect it to be similar, you know, slightly different? I guess just to clarify the comment on net revenue retention, expect to keep it over 100% in the short term, but return to potentially 110%. How? You know, Meaning, when does that trough, like, if you were to think about from a quarterly basis, is there a comp that you get past where this activity started, meaning like as of 3Q of this year, will you start to see that rebound or help us there a little bit? Yeah. Thank you. I will try to hit all of your questions. I will do my very best. Let me just start with the revenue retention question. The short answer is, like I wish I knew. To me, it's very much tied to your view of the macroeconomic environment, and I think, you know, when I think about the areas of pressure on the net upgrade rate, they are very much tied to the external environment. As we start to see that like solidify and recover, I think that's when you'll start to see net revenue retention recover. I will then try to address your KPI question around ASRPC and net adds. I think you astutely noticed that things are shifting a little bit here. This is now our second quarter of really strong net customer adds at the low end. We are seeing really nice sign-ups of our free CRM. We're seeing the free CMS really resonate, and it's that sort of sign-up volume converting into our starter tier that is driving our real strength in net customer adds. Now, like, as you know, there's push and pull across ASRPC and net customer adds when it's being fueled by that low end of our bimodal. What you saw in Q4 is, you know, after a period of real strength at the enterprise that drove ASRPC up in the double digits in constant currency pretty consistently, we dipped below 10% in ASRPC growth. That pressure that we're seeing from the success at the low end is gonna continue into 2023. We expect that ASRPC growth in 2023 is gonna look more like low to mid-single digits. Thank you. The next question comes from Arjun Bhatia of William Blair. Please proceed. My apologies. The next question comes from Michael Turits of Key Capital. Please proceed. Yes, thanks. Yeah, thanks. Congrats on everything, especially on the margins. Maybe I'll take that margin as a topic as an extension of Alex's question, where you went with that, Kate, to the extent that you are more focused on adds as opposed to ASRPC as a driver. How does that impact, you know, the balancing act with margin expansion to the extent that, you know, you should be getting a lot of easy, relatively easy leverage out of ASRPC growth, arguably less so out of cost of ads? Yeah, I guess maybe I'll just start by answering your foundational comment, which is like focusing on ads versus focusing on ASRPC. These are output metrics, I think we've talked about this in the past. Like, our goal is consistently to drive top-line growth in ARR over time, not to drive growth in one or the other of ASRPC or new customer adds. When, you know, you see us consistently investing in that bimodal strategy, there's gonna naturally be some periods of time where we have more expansion in ASRPC and more expansion in other times in net customer adds. Frankly, that's just, you know, as the balance of new versus install base sort of moves around. The other question you had was around leverage, I'm glad you asked. We, you know, we provided guidance for this year that reflects our ongoing commitment to balancing growth and profitability. We delivered a nice result in Q4 at a full year of 10% operating profit margin, and our guide implies another 250 basis points of margin improvement. You know, over time, you know, we have the financial framework that shows and demonstrates our balance between growth and profitability, and we continue to remain committed to delivering against that. Yeah, I think, like, Kate hit on all of the points there. The one thing I would say is as we think about this mid- to-l ong term, and especially as we think about our sales and marketing efficiency, look, we have product-led growth with sales rep growth and partner-led growth, all of these are the input engines that then result in our net adds as well as ASRPC. As we think about each of these three things, product-led growth, we're driving more and more initiatives so we can get efficient. Sales-led growth, we're driving more automation, more systems, more investments, so we can make our reps even more productive. Partner-led growth, we talked about some of the changes that we are structurally making so that we can become even more efficient. As we think about how we balance growth and profitability, we have short-term initiatives, and then we have medium-term initiatives, and we are really committed to balancing both growth and profitability. Thank you. The next question comes from Brian Peterson of Raymond James. Please proceed. Hi. Thanks for taking the question, and I'll echo my congrats on the strong quarter. You know, I'd love to understand on the multi-hub adoption and the success you're having there, is that more a function of landing with more hubs and higher attach rates on starter tiers, or are we seeing a lot of success on cross-sell as well? You know, there's a lot of time kind of spent on the net down-sell, but I'd love to understand what the cross-sell motion has looked like for net new in the existing base because I think that's obviously got a secular perspective there. Yeah. I think that's a great question. Look, I think, we're seeing both Multi-Hub lands as well as strong cross sells. Let me step back and maybe, you know, look at this from the customer perspective. As we talk to customers, couple of things are becoming very clear. As they think about 2023, it is a lot about driving sales and marketing alignment. The handoff between marketing and sales has always been tricky. You know, whose pipeline are you getting, and is this good quality of pipeline? If you think about customers, they want more leads, they want better campaign effectiveness, they want more activity tracking, and they want all of this to line up to growth from a sales perspective. Therefore, in our conversations we see that there are more multi-hub starting points, more starting points with Marketing Hub and Sales Hub and Operations Hub, for example, in the initial sale. That's happening within, you know, new lands. Similarly what we see is when a customer has adopted, for example, Marketing Hub or Sales Hub, and they see the value proposition of HubSpot, which is easy to use, easy to manage, and driving adoption, then it becomes an easier conversation to have a cross sell dialogue with the VP of sales or the VP of service. We do find that in the first year of HubSpot purchase, customers have a high propensity to kind of look at additional hubs and get the visibility across customer base. The combination of both of those lead to very healthy 3-Hub as well as 5-Hub, wins from a customer perspective. Thank you. The next question comes from Brad Sills of Bank of America. Please proceed. Oh, great. I'll have to look congratulations on a real nice finish to the year in a tough environment. Maybe if we could drill in a little bit on that same topic there, Yamini. You know, where are you seeing these 3 and 5-Hub, you know, deals where there's incremental strength across the stack? I mean, Sales and Marketing obviously the core. It sounds like Service Hub is strong. CMS, would love to get some color there, and anything on payments. Just any incremental strength across the stack and these larger multi-hub deals. Yeah. Thanks a lot, Brad. Look, I, I think that, you know, if you look at our performance in Q4, we're very pleased because it shows strength in up-market, it shows strength in multi-hub, and it shows strength in our low-end adds of starter suites. You know, this is our bimodal strategy. Our bimodal strategy is we wanna add volume of customers at the lower end, and as they scale and as they see value within HubSpot, they continue to upgrade to Pro and Enterprise tiers and get even more value from HubSpot, and that's bimodal strategy working. In terms of which product areas are we seeing strength, certainly marketing and sales are core front doors, and we are very pleased to see Sales Hub become a legitimate front door. Lot more conversations on tying sales and marketing. That's an area that we've talked about. When they buy sales and marketing and they wanna deeply integrate and connect with other systems within the organization, Ops Hub comes in. Ops Hub, we've talked about how it drives value from an integration, you know, perspective and providing and building on that reporting. Service Hub. Across, you know, all of our core hubs, we are seeing, you know, pretty good momentum. In terms of commerce, now that's a longer term bet. We're pleased with the levels of merchant activation as well as the transactions. It's early stages. There's just a lot more to go. As I look at our strategy this year, it's super clear. We wanna go deep in marketing, sales, and service, and we wanna continue to maintain the momentum that we have in commerce, and we wanna do both of those by focusing on the bimodal strategy, which is working. I hope that gives you a little bit more color, Brad. Thank you. The next question comes from Joshua Reilly of Needham & Company. Please proceed. Hey there. Thanks for taking my question. One of the interesting points I thought highlighted at the Analyst Day last year was the large mix of starter customers as a% of total paying customers, which, you know, potentially is creating this kind of pent-up demand to migrate to Pro and Enterprise when the market recovers. How would you characterize the magnitude of the mix of customers postponing upgrades due to the macro today versus prior slowdowns? Is there a point in time where these customers need to migrate regardless of the macro, or what have you seen in past cycles? Thank you. Yeah. It's an interesting question. Thanks for that. You know, we do feel like the momentum in the Starter customer adds is a great long-term strategy for us. In terms of what we're seeing today around Starter upgrades, you know, the newer cohorts that have started with us are actually upgrading at pretty healthy rates. You know, we took a number of actions last year to solve for the customer, really drive that volume that we're seeing at the lower end. You know, we talked about things like bringing Marketing automation down, introducing the free CMS, We continue to experiment around pricing and packaging. All of that has resulted in, like, a nice expansion of the number of Starter customers that are joining us. At the same time, we watch those cohorts really closely, to make sure that, their usage and their upgrade patterns are, consistent and healthy, and they are pretty consistent with what we've seen in the past. Thank you. The next question comes from Keith Bachman of BMO. Please proceed. Hi, this is Adam on for Keith. First thank you for taking my question. I wanted to dig a little deeper into the 2023 revenue guidance. I hear your comments on payments being relatively early still, but I think you previously commented that you expect contributions to growth next year for payments. I know we have ongoing contribution from the Marketing Hub Enterprise price hike. I was wondering if we could parse out the benefits to each of those for next year. Thank you. Yeah, thanks so much for the question. You're hitting on all of the details here. I would just say payments. I'll reiterate Yamini's comment. Payments is early. We are investing for the long term in payments. As I shared at Analyst Day, it is not going to be a material contributor to our growth or profitability in 2023. On the Marketing Hub Enterprise price change, you know, we continue to hear positive, you know, feedback on the change. Again, it is not a material driver of the results in 2023. Thank you. The next question comes from Elizabeth Porter of Morgan Stanley. Please proceed. Great. Thanks so much. You know, you talked a lot about deals taking longer and more scrutiny, which we're clearly hearing across the broader landscape. You know, I was curious on what you're seeing just at the top of funnel and how the pipeline is shaping up. You know, and anything we should look for outside of just macro factors to help us convert that faster in the medium to near term. You know, I know you highlighted investments around sales and partners. You know, are these more tailwinds that, you know, are after 2023? Thank you. Yeah, Elizabeth, great question. Look, it's very interesting when we talk to customers, two things are happening at the same time. SMBs are deeply committed to digital, and it's, you know, there was a question about whether SMBs are gonna thrive, you know, during the pandemic. There's a question about whether SMBs are going to, you know, survive this downturn. What we find is that SMBs are committed to digital. They're continuing to build their businesses on digital. They're continuing to leverage digital solutions to be able to stay in touch with their customers. I hear this in over and over in my conversations with customers, and we see this within the pipeline. Now at the same time, what we've been talking about is that they wanna understand value deeply. They wanna buy a little bit more cautiously. That translates into longer deal cycles. I think, you know, we, like everybody else, we're gonna continue to monitor and continue to look at leading indicators as we go. How does that change our, you know, dynamic and how we have adapted our execution. I think a few things based on what we are seeing, we're leading with value. Every conversation is, you know, about value, about delivering quick time to value, as well as the cost savings that our customers can see in terms of consolidating on the platform. Our sales teams as well as the partner organizations are enabled to have these conversations, and our value proposition really resonates. For us, the go-to-market has really adopted. From a product perspective, you know, we're in a place of strength. You just heard us talk about G2. In G2, we've been rated as number one in marketing, number one in sales, and we've become, you know, a platform of choice for mid-market companies and scaling companies that are looking at options, whether they're driving productivity or they're driving cost savings, we are in those conversations. I feel, you know, even given the macro conditions, the combination of our product innovation as well as go-to-market execution positions us really strongly. You know, we're all as we all, expect the at some point this cycle, the economic cycle is going to turn. Part of the focus in terms of the leadership team is how do we make strong and, you know, thoughtful decisions right now to position ourselves to emerge stronger when the cycle turns. That's how we think about this year and then beyond. Thank you. The next question comes from Michael Turrin of Wells Fargo. Please proceed. Hi, this is Michael Berg for Michael Turrin. Congrats on a great quarter. I wanted to double-click on the margin seasonality you laid out on your earlier in the call. When I'm thinking about the back half of this year, is there any benefits from the real estate consolidation that's baked into that number, or are those benefits expected to be seen beyond 2023? Thank you for the question. The benefits of the restructuring will accrue to the business in Q2, Q3, and Q4. As you know, we tend to have seasonally stronger back half margins anyway. There is some amount of real estate benefit in the back half of the year. The benefit from the workforce reduction is spread pretty evenly across those quarters. Thank you. Our final question will come from the line of Arjun Bhatia of William Blair. Please proceed. Perfect. Thank you guys for taking the question. Yamini, maybe one for you, just going back to the restructuring a little bit. I'm curious if there is any impact to the product roadmap, to the launch of new Hubs as a result of the restructuring, or if this was purely focused on maybe more support-type roles. How should we see that impact playing out? Good question, Arjun. Just to kind of share some perspective of how we thought about this, we've mentioned this a couple times. This was not a short-term cost-cutting decision. This was a strategic realignment of our investment so that we can drive long-term innovation as well as scalability within the organization. As we step back, we looked across the company on how best to align our people, resources to our strategy so that we can emerge stronger from this economic cycle. The fact is we had, you know, teams with excess capacity, like recruiting and services, and those were the areas that we pulled back aggressively. We also looked at areas where there was duplicate work and opportunities for us to be much more efficient. Throughout the process, we were very careful about protecting product innovation as well as direct quota-carrying roles. In fact, as we've said a couple times, we are reinvesting in areas of product as well as internally so that we can drive scalability. We feel very good in terms of our strategic objectives and ability to continue to fuel the pace of innovation that we have had. Thank you. With that, we will conclude our question-and-answer session for today's call. I would now like to pass the conference over to the management team for closing remarks. Thank you so much, everybody. We really appreciate your support. A huge thanks to HubSpot employees, customers, partners for their resilience as they've navigated all of these times. Look forward to talking to you all next quarter. With that, we will conclude today's conference call. Thank you for participating. You may now disconnect your line.