Jason M. Lemkin analyzes HubSpot’s accelerating growth to about $1.5B in ARR at ~49% YoY, noting faster growth rates as ARR scaled (≈32% near $1B, 41% at $1.1B). He attributes the acceleration to five main factors: heavy international expansion (from ~22% at IPO to >45% today), strong word-of-mouth acquisition (≈1/3 of new customers), SEO/content (the blog ~13% of new customers), a patient multi-product strategy that preserved an ACV near ~$10K while adding suite value, and customer-count growth enabled by ~100% NRR (now ~120k–150k customers). He frames HubSpot as a bellwether for SMB SaaS and emphasizes that delighting customers and investing in international/local teams drove scale.
Questions this video answers
About $1.5 billion in ARR and ~49% growth.
~32% growth near $1.0B ARR; ~41% growth at $1.1B ARR.
About 22% at IPO; over 45% today (speaker's statement).
Approximately one-third (≈33%).
About 13%.
Chapters
Hey, everybody, I wanted to talk about HubSpot at 1.5 billion in revenue, growing 49%. Not only is that incredible, not only is that incredible that HubSpot is at almost 1.5 billion in AR, growing 49%. But what's even more incredible is the acceleration. At 1.1 billion in AR, it was growing to 41%. And as it was approaching 1 billion in AR, it was growing 32%. So from 1 billion, AR was growing 32 to 41 shortly thereafter to almost 50% at 1.5 billion ARR. This is something we've never seen before. And it isn't just Covid. This is coming out of COVID This is coming out of the COVID boost that the Shopify's and the Zooms all saw, but has now plateaued as we've sort of achieved this new normal. But no, HubSpot is sort of a barometer for rich SMB applications in the marketing automation space. There's hundreds and hundreds of vendors, but HubSpot really has become the marketing plus sort of CRM leader, the dominant leader in this space in a way that's less true in the enterprise, but they really own it and it's so therefore it's a proxy of Bellwether for how SAS is doing for SMBs. And that accelerating growth, 49% at 1.5 billion in AR from just 32 at 1 billion is just stunning. So let's talk about five interesting things about how HubSpot has gotten to almost 50% growth at 1.5 billion AR, and a few other notes. Maybe number one is just realized beyond the growth itself is how important international has been. That has been a big accelerant. And on the Saster series, five interesting things. We look a lot at international and we tend to see sort of this gradual increase. But at HubSpot, it's really a big deal. When HubSpot IPO'd, it had about the same amount of international revenue that many of us do, 22%. If you don't have regulatory or other reasons to be localized, like a lot of fintechs, the bill.coms are just going international. The zeros took a while to try to even get into the US regulatory ones like Samsara we looked at at 500 million, an ARR was just starting to go international because there's so much regulation around fleet tracking. But for a lot of like core B2B SaaS software, it works just as well in the UK and Australia. And if you localize it, much of the world as it does in the US so we tend to see about 20% of our revenue be international just by, just by nurturing it. And that's what HubSpot saw, the IPO. But today it's over 45%. That's a huge boost. So think about that. And that's why I generally encourage founders to if you are going global early, naturally, if the customers are finding you, lean into it. Get a sales team just focused on that. Get customer success on the ground facilitating those customers. Have country managers even at a million or 2 in ARR per country because you want to invest in it. Because HubSpot would not be the engine it is today if, if it remained US based. No soon over half the revenue will be outside of the U.S. okay, number two and this is so interesting but few folks quantify is word of mouth is a third of HubSpot's new customers. They break it out. It's so interesting and it is the number one source of customers and really it is possible with SMBs to get there via outbound and very aggressive growth hacking in the beginning. But all the great SMB plays, all the Adobes, all the intuits, all the Microsofts, the SMB side, all the classics were built off word of mouth and that's what we're seeing at HubSpot. The number one source of new customers is word of mouth. A third number two is Google SEO investing content. That's been a key part of HubSpot strategy since day one and their blog is 13% so between their blog SEO and word of mouth, boy that adds up to over 2/3 of their customers come from sort of the classic high MPS and content marketer playbook. So it really works at scale. That's incredible that a third comes from word of mouth and and track it too many SaaS companies work with don't actually know how many customers come from word of mouth because you have to ask, you have to survey them or this you have to force the sales team to write it up or, or create a field in salesforce because most of our lead tracking systems, marketing automation systems, multivariate attribution systems don't can't really track word of mouth. You sort of have to ask and they do. And it's a third. Super interesting point three and one we've talked about a lot in this series but it's so important is multi product. But HubSpot has done it differently. Look about how HubSpot describes itself today. It does not talk about itself as a marketing automation company. All that, that's what it IPO'd. That's what got it to its first 500 million in AR and really a billion in AR as its marketing hub. But now it's a full featured suite marketing sales service, CMS and ops. And really it's the CRM that they've been investing in for over 5 years. Started off completely and now it's melded into the suite. That has been their growth but they've been patient, they've been patient in growing their suite but now they really are a multi product suite. And what's interesting is they do it differently than others we've seen and I think it's an interesting case study for SMBs. So many folks we've seen drive up their ACVs with multi product. For example Samsara we looked at at 500 million in AR at the IPO. They had two 200 million AR products that they charge for each of Salesforce. As you know you could ratchet up your Salesforce bill pretty vastly by getting sales support, marketing all their different clouds there, half dozen clouds. Pretty soon you could easily spend, you know, be spending $500 a month per seat on Salesforce and more in other departments. But HubSpot's done a different path. Its ACV more or less has been consistent for years, even before ipo at about 10k. And 10k is not cheap for an SMB. And HubSpot actually is deployed in many part by agencies that also mark it up. They may charge another 10k or 20k for HubSpot deployment for us. So for a small business, and that's HubSpot's core, not very small businesses, not one person businesses, they don't have the resources to implement marketing or sales automation. But for a small business, ten grand is a lot of money and they've kept it there and added more value, which is super interesting, super interesting to challenge, challenge this notion that we have to charge more when we provide more products to our customers. Our job in SaaS one way or the other is to add more value each quarter and each year because we forget that even in the days of, you know, 100 to 140% NRR, our customers can always leave us in SaaS, they always can. That's, that's the power. And so we need to always add more value and whether it's by charging for more for more clouds like, like Salesforce or others. But HubSpot challenges that for SMBs it says we're going to give you more for the same point 4 related to this prior point is that their customer count is growing as fast as their revenue. Now it sort of has to be the case if you think about it for a minute, because they have about 100% NRR and at HubSpot, so as your NRR climbs to 120, 130, 140, what we often see is more and more of the revenue comes from the install base. For example, 75% of Salesforce's revenue, you know, well north of 20 billion ARR, 75% comes from its install base. We see this again and again. And in fact it's the most common in the SaaS companies that IPO. Most of the revenue comes from your base. And that high NRR just, just fuels your growth. Slack is an exception. It grew so fast at IPO that it had a similar amount of new customer growth to its, to its revenue growth. And HubSpot's another one. So HubSpot's customers are also growing 49% along with its revenue. And they have over 120,000 customers now, actually almost 150,000. So that's interesting. And it's a reminder that SMB actually in some ways is harder. It's harder. Even with 100% NRR, you've got to close even more customers. HubSpot has to close even more customers than some of its more enterprise offerings. But it makes up for that in having so many customers, having six figures worth of customers instead of, instead of five figures, and by growing frankly faster than anything else. But it's not the easiest way. 100% NRR is not the easiest way because you can't sort of cheat by having high nrr, which lets you kind of coast by not closing quite as many new names as the SMB folks have to. So that's a quick look at where HubSpot is today. Super interesting to see that acceleration. Almost 50% growth at a billion and a half in revenue, up from almost half of that. Just half of that at a billion in air, going international, keeping up with a high customer count and doubling down on word of mouth, word of mouth and making your customers delightfully happy. That seems to work just amazingly. And HubSpot is perhaps the best case study of super happy customers giving you more happy customers.
