Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: ERN, ERP

HubSpot Reports Q2 2022 Results


CAMBRIDGE, Mass., Aug. 4, 2022 /PRNewswire/ -- HubSpot, Inc. (NYSE: HUBS), the customer relationship management (CRM) platform for scaling companies, today announced financial results for the second quarter ended June 30, 2022.

Financial Highlights:

Revenue

Operating Income (Loss)

Net Income (Loss)

Balance Sheet and Cash Flow

Additional Recent Business Highlights

"Our solid results in the second quarter were driven by strong product innovation and a deep understanding of what our customers need to adapt to this macroeconomic climate," said Yamini Rangan, Chief Executive Officer at HubSpot. "Small and medium businesses are looking to consolidate their technology and boost efficiencies in today's environment and HubSpot's connected CRM platform can help them do both. In Q2, we continued to invest in the tools and functionality customers need to grow better. We enabled more customization of our platform and announced CMS Hub Free, and simple Automation in Marketing Hub Starter. In the second half of the year, we will focus on driving durable, profitable growth, with an eye toward focused execution, product innovation, and solving for our customers."

Business Outlook
Based on information available as of August 4, 2022, HubSpot is issuing guidance for the third quarter of 2022 and full year 2022 as indicated below.

Third Quarter 2022:

Full Year 2022:

 (1) Foreign exchange rates impact on revenue is calculated by comparing current period rates with prior period average rates.

Use of Non-GAAP Financial Measures

In our earnings press releases, conference calls, slide presentations, and webcasts, we may use or discuss 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 a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investors section of our website ir.hubspot.com.

Conference Call Information

HubSpot will host a conference call on Thursday, August 4, 2022 at 4:30 p.m. Eastern Time (ET) to discuss the company's second quarter 2022 financial results and its business outlook. To register for this conference call, please use this dial in registration link or visit HubSpot's Investor Relations website at ir.hubspot.com. Participants who wish to register for the conference call webcast please use this link.

Following the conference call, a replay will be available at (866) 813-9403 (domestic) or +44 (204) 525-0658 (international). The replay passcode is 070988. An archived webcast of this conference call will also be available on HubSpot's Investor Relations website at ir.hubspot.com.

The company has used, and intends to continue to use, the investor relations portion of its website as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD.

About HubSpot
HubSpot is a leading CRM platform that provides software and support to help companies grow better. The platform includes marketing, sales, service, operations, and website management products that start free and scale to meet our customers' needs at any stage of growth. Today, over 150,000 customers across more than 120 countries use HubSpot's powerful and easy-to-use tools and integrations to attract, engage, and delight customers. Learn more at www.hubspot.com.

Cautionary Language Concerning Forward-Looking Statements
This press release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management's expectations of future financial and operational performance and operational expenditures, expected growth, and business outlook, including our financial guidance for the third fiscal quarter of and full year 2022; and statements regarding our positioning for future growth and market leadership; statements regarding expected market trends, future priorities and related investments, and opportunities. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, risks associated with our history of losses; our ability to retain existing customers and add new customers; the continued growth of the market for a CRM platform; our ability to differentiate our platform from competing products and technologies; our ability to manage our growth effectively to maintain our high level of service; our ability to maintain and expand relationships with our solutions partners; our ability to successfully recruit and retain highly-qualified personnel; the price volatility of our common stock; the impact of geo-political conflicts, inflation, macroeconomic instability, and the COVID-19 pandemic on our business, the broader economy, our workforce and operations, and our ability to forecast our future financial performance; and other risks set forth under the caption "Risk Factors" in our SEC filings. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

 

Consolidated Balance Sheets

(in thousands)




June 30,



December 31,




2022



2021


Assets







Current assets:







Cash and cash equivalents


$

305,664



$

377,013


Short-term investments



940,379




820,962


Accounts receivable



165,950




157,362


Deferred commission expense



63,526




59,849


Prepaid expenses and other current assets



56,260




38,388


Total current assets



1,531,779




1,453,574


Long-term investments



162,660




174,895


Property and equipment, net



102,556




96,134


Capitalized software development costs, net



50,228




39,858


Right-of-use assets



263,602




280,828


Deferred commission expense, net of current portion



49,287




42,681


Other assets



49,197




29,244


Intangible assets, net



18,767




10,565


Goodwill



45,883




47,075


Total assets


$

2,273,959



$

2,174,854


Liabilities and stockholders' equity







Current liabilities:







Accounts payable


$

11,822



$

2,773


Accrued compensation costs



55,757




63,836


Accrued expenses and other current liabilities



96,263




74,457


Convertible senior notes


?




19,630


Operating lease liabilities



28,744




26,364


Deferred revenue



469,576




430,414


Total current liabilities



662,162




617,474


Operating lease liabilities, net of current portion



264,234




283,873


Deferred revenue, net of current portion



4,511




4,473


Other long-term liabilities



18,353




12,134


Convertible senior notes, net of current portion



453,232




383,101


Total liabilities



1,402,492




1,301,055


Stockholders' equity:







Common stock



48




47


Additional paid-in capital



1,477,770




1,436,089


Accumulated other comprehensive (loss) income



(11,017)




(1,339)


Accumulated deficit



(595,334)




(560,998)


Total stockholders' equity



871,467




873,799


Total liabilities and stockholders' equity


$

2,273,959



$

2,174,854


 

Consolidated Statements of Operations

(in thousands, except per share data)



For the Three Months Ended June 30,



For the Six Months Ended June 30,



2022



2021



2022



2021


Revenues:












Subscription

$

412,401



$

300,423



$

797,356



$

570,686


Professional services and other


9,354




10,365




19,998




21,467


Total revenue


421,755




310,788




817,354




592,153


Cost of revenues:












Subscription


64,431




51,134




123,816




94,986


Professional services and other


14,500




11,743




28,053




22,625


Total cost of revenues


78,931




62,877




151,869




117,611


Gross profit


342,824




247,911




665,485




474,542


Operating expenses:












Research and development


118,914




72,104




211,650




140,500


Sales and marketing


224,262




157,799




421,396




298,817


General and administrative


51,898




34,610




95,844




66,860


Total operating expenses


395,074




264,513




728,890




506,177


Loss from operations


(52,250)




(16,602)




(63,405)




(31,635)


Other expense:












Interest income


2,050




341




2,564




816


Interest expense


(949)




(7,179)




(1,898)




(16,578)


Other (expense) income


(3,091)




528




602




1,188


Total other (expense) income


(1,990)




(6,310)




1,268




(14,574)


Loss before income tax expense


(54,240)




(22,912)




(62,137)




(46,209)


Income tax (expense) benefit


(2,121)




(1,660)




(3,565)




(1,522)


Net loss

$

(56,361)



$

(24,572)



$

(65,702)



$

(47,731)


Net loss per share, basic and diluted

$

(1.18)



$

(0.53)



$

(1.38)



$

(1.02)


Weighted average common shares used in
  computing basic and diluted net loss per share:


47,815




46,777




47,697




46,603


 

Consolidated Statements of Cash Flows

(in thousands)



For the Three Months Ended
June 30,



For the Six Months Ended
 June 30,



2022



2021



2022



2021


Operating Activities:












Net loss


(56,361)



$

(24,572)



$

(65,702)



$

(47,731)


Adjustments to reconcile net loss to net cash and cash equivalents provided
   by operating activities












Depreciation and amortization


14,265




10,528




27,063




21,736


Stock-based compensation


81,165




43,433




126,868




75,856


Loss on early extinguishment of 2022 Convertible Notes

?




682



?




3,088


Repayment of 2022 Convertible Notes attributable to the debt discount

?




(3,223)



?




(13,028)


Loss (gain) on strategic investments


21




(1,022)




(4,200)




(1,022)


Benefit from deferred income taxes


(152)




(114)




(398)




(1,120)


Amortization of debt discount and issuance costs


510




6,019




1,017




12,512


(Accretion) amortization of bond discount


(735)




1,155




(150)




1,670


Unrealized currency translation


1,277




329




1,980




280


Changes in assets and liabilities












Accounts receivable


(17,901)




(7,531)




(14,349)




8,944


Prepaid expenses and other assets


(17,984)




(10,409)




(21,911)




(7,694)


Deferred commission expense


(5,390)




(10,097)




(13,744)




(16,402)


Right-of-use assets


6,919




8,193




13,447




18,547


Accounts payable


5,335




(5,867)




8,960




(1,269)


Accrued expenses and other liabilities


15,954




17,962




23,089




15,533


Operating lease liabilities


(9,012)




(9,102)




(11,330)




(18,374)


Deferred revenue


23,010




21,827




52,506




49,365


Net cash and cash equivalents provided by operating activities


40,921




38,191




123,146




100,891


Investing Activities:












Purchases of investments


(428,516)




(291,775)




(864,063)




(654,063)


Maturities of investments


220,159




219,684




625,378




596,602


Sale of investments


124,998



?




124,998



?


Purchases of property and equipment


(8,332)




(6,779)




(18,272)




(10,746)


Purchases of intangible assets


(10,000)



?




(10,000)



?


Acquisition of a business, net of cash acquired

?



?



?




(16,810)


Purchases of strategic investments


(8,827)




(4,352)




(13,873)




(6,202)


Equity method investment


(250)




(792)




(250)




(3,100)


Capitalization of software development costs


(10,209)




(9,080)




(19,931)




(16,421)


Net cash and cash equivalents used in investing activities


(120,977)




(93,094)




(176,013)




(110,740)


Financing Activities:












Proceeds from settlement of Convertible Note Hedges related to the 2022
  Convertible Notes


60,483




2




60,483




725


Payment for settlement of 2022 Convertible Notes


(79,807)



?




(79,807)



?


Repayment of 2022 Convertible Notes attributable to the principal

?




(9,509)







(45,409)


Repayment of 2025 Convertible Notes attributable to the principal

?



?




(1,619)



?


Employee taxes paid related to the net share settlement of stock-based awards


(3,410)




(3,949)




(7,764)




(6,913)


Proceeds related to the issuance of common stock under stock plans


7,847




8,529




19,699




24,868


Net cash and cash equivalents provided by (used in) financing
  activities


(14,887)




(4,927)




(9,008)




(26,729)


Effect of exchange rate changes on cash, cash equivalents and restricted cash


(7,826)




668




(9,474)




(3,209)


Net increase in cash, cash equivalents and restricted cash


(102,769)




(59,162)




(71,349)




(39,787)


Cash, cash equivalents and restricted cash, beginning of period


411,462




400,527




380,042




381,152


Cash, cash equivalents and restricted cash, end of period

$

308,693



$

341,365



$

308,693



$

341,365


 

Reconciliation of non-GAAP operating income and operating margin

(in thousands, except percentages)

 


Three Months Ended June 30,



Six Months Ended June 30,



2022


2021



2022


2021


GAAP operating loss

$

(52,250)


$

(16,602)



$

(63,405)


$

(31,635)


Stock-based compensation


81,165



43,433




126,868



75,856


Amortization of acquired intangible assets


752



337




1,163



682


Acquisition/disposition related (income) expenses


(281)



372




(288)



1,567


Non-GAAP operating income

$

29,386


$

27,540



$

64,338


$

46,470












GAAP operating margin


(12.4)

%


(5.3)

%



(7.8)

%


(5.3)

%

Non-GAAP operating margin


7.0

%


8.9

%



7.9

%


7.8

%

 

Reconciliation of non-GAAP net income

(in thousands, except per share amounts)



Three Months Ended June 30,



Six Months Ended June 30,



2022


2021



2022


2021


GAAP net loss

$

(56,361)



(24,572)



$

(65,702)


$

(47,731)


Stock-based compensation


81,165



43,433




126,868



75,856


Amortization of acquired intangibles assets


752



337




1,163



682


Acquisition/disposition related (income) expenses


(281)



372




(288)



1,567


Non-cash interest expense for amortization of debt discount and
debt  issuance costs


510



6,019




1,017



12,512


Loss (gain) on strategic investments


21



(1,022)




(4,200)



(1,022)


Loss on early extinguishment of 2022 Convertible Notes

?



682



?



3,088


Loss on equity method investment


103



83



?



83


Income tax effects of non-GAAP items


(3,485)



(3,738)




(8,920)



(7,789)


Non-GAAP net income

$

22,424



21,594



$

49,938


$

37,246












Non-GAAP net income per share:










Basic

$

0.47


$

0.46



$

1.05


$

0.80


Diluted

$

0.44


$

0.43



$

0.98


$

0.74


Shares used in non-GAAP per share calculations










Basic


47,815



46,777




47,697



46,603


Diluted


51,066



50,637




51,082



50,537


 

Reconciliation of non-GAAP expense and expense as a percentage of revenue 

(in thousands, except percentages)





Three Months Ended June 30,



2022



2021



COS,
Subs-
cription


COS,
Prof.
services &
other


R&D


S&M


G&A



COS,
Subs-
cription


COS,
Prof.
services &
other


R&D


S&M


G&A


GAAP expense

$

64,431


$

14,500


$

118,914


$

224,262


$

51,898



$

51,134


$

11,743


$

72,104


$

157,799


$

34,610


Stock -based compensation


(2,383)



(1,248)



(31,698)



(32,183)



(13,653)




(1,582)



(826)



(15,080)



(18,971)



(6,974)


Amortization of acquired
  intangible assets


(306)



?



?



(446)



?




(236)



?



?



(101)



?


Acquisition/disposition related
  income (expenses)


?



?



300



?



(19)




?



?



(340)



?



(32)


Non-GAAP expense

$

61,742


$

13,252


$

87,516


$

191,633


$

38,226



$

49,316


$

10,917


$

56,684


$

138,727


$

27,604
























GAAP expense as a
  percentage of revenue


15.3

%


3.4

%


28.2

%


53.2

%


12.3

%



16.5

%


3.8

%


23.2

%


50.8

%


11.1

%

Non-GAAP expense as a
  percentage of revenue


14.6

%


3.1

%


20.8

%


45.4

%


9.1

%



15.9

%


3.5

%


18.2

%


44.6

%


8.9

%

 


Six Months Ended June 30,



2022



2021



COS,
Subs-
cription


COS,
Prof.
services &
other


R&D


S&M


G&A



COS,
Subs-
cription


COS,
Prof.
services &
other


R&D


S&M


G&A


GAAP expense

$

123,816


$

28,053


$

211,650


$

421,396


$

95,844



$

94,986


$

22,625


$

140,500


$

298,817


$

66,860


Stock -based compensation


(4,206)



(2,083)



(48,684)



(49,052)



(22,843)




(2,892)



(1,523)



(26,565)



(32,600)



(12,276)


Amortization of acquired
  intangible assets


(628)



?



?



(535)



?




(475)



?



?



(207)



?


Acquisition/disposition related
  income (expenses)


?



?



300



?



(12)




?



?



(684)



(367)



(516)


Non-GAAP expense

$

118,982


$

25,970


$

163,266


$

371,809


$

72,989



$

91,619


$

21,102


$

113,251


$

265,643


$

54,068
























GAAP expense as a
  percentage of revenue


15.1

%


3.4

%


25.9

%


51.6

%


11.7

%



16.0

%


3.8

%


23.7

%


50.5

%


11.3

%

Non-GAAP expense as a
  percentage of revenue


14.6

%


3.2

%


20.0

%


45.5

%


8.9

%



15.5

%


3.6

%


19.1

%


44.9

%


9.1

%

 

Reconciliation of non-GAAP subscription margin

(in thousands, except percentages)






Three Months Ended June 30,



Six Months Ended June 30,




2022


2021



2022


2021


GAAP subscription margin


$

347,970


$

249,289



$

673,540


$

475,700


Stock -based compensation



2,383



1,582




4,206



2,892


Amortization of acquired intangible assets



306



236




628



475


Non-GAAP subscription margin


$

350,659


$

251,107



$

678,374


$

479,067













GAAP subscription margin percentage



84.4

%


83.0

%



84.5

%


83.4

%

Non-GAAP subscription margin percentage



85.0

%


83.6

%



85.1

%


83.9

%

 

Reconciliation of free cash flow










(in thousands)
























Three Months Ended June 30,



Six Months Ended June 30,




2022


2021



2022


2021


GAAP net cash and cash equivalents provided by operating activities


$

40,921


$

38,191



$

123,146


$

100,891


Purchases of property and equipment



(8,332)



(6,779)




(18,272)



(10,746)


Capitalization of software development costs



(10,209)



(9,080)




(19,931)



(16,421)


Repayment of 2022 Convertible Notes attributable to the debt
discount


?



3,223



?



13,028


Free cash flow


$

22,380


$

25,555



$

84,943


$

86,752


 

Reconciliation of operating cash flow

(in thousands)




Three Months Ended June 30,



Six Months Ended June 30,




2022


2021



2022


2021


GAAP net cash and cash equivalents provided by operating activities


$

40,921


$

38,191



$

123,146


$

100,891


Repayment of 2022 Convertible Notes attributable to the debt
discount


?



3,223



?



13,028


Operating cash flow, excluding repayment of convertible debt


$

40,921


$

41,414



$

123,146


$

113,919


 

Reconciliation of forecasted non-GAAP operating income
(in thousands, except percentages)







Three Months Ended
September 30, 2022



Year Ended
December 31, 2022


GAAP operating income range

($40,491)-($39,491)



($137,377)-($136,377)


Stock-based compensation


70,748




278,025


Amortization of acquired intangible assets


743




2,640


Acquisition/disposition related (income) expenses


?




(288)


Non-GAAP operating income range

$31,000-$32,000



$143,000-$144,000


 

Reconciliation of forecasted non-GAAP net income and non-GAAP net income per share
(in thousands, except per share amounts)









Three Months Ended
September 30, 2022



Year Ended
December 31, 2022


GAAP net loss range

($41,849)-($40,599)



($140,305)-($139,055)


Stock-based compensation


70,748




278,025


Amortization of acquired intangible assets


743




2,640


Acquisition/disposition related (income) expenses


?




(288)


Non-cash interest expense for amortization of debt issuance costs


492




2,013


Gain on strategic investments


?




(4,200)


Income tax effects of  non-GAAP items

($4,534)-($4,784)



($21,385)-($21,635)


Non-GAAP net income range

$25,600-$26,600



$116,500-$117,500








GAAP net income per basic and diluted share

($0.87)-($0.84)



($2.92)-($2.90)


Non-GAAP net income per diluted share

$0.50-$0.52



$2.28-$2.30














Weighted average common shares used in computing GAAP basic and
diluted net loss per share:


48,101




48,100


Weighted average common shares used in computing non-GAAP diluted
net loss per share:


50,984




51,139


HubSpot's estimates of stock-based compensation, amortization of acquired intangible assets, non-cash interest expense for amortization of debt issuance costs, gain or loss on strategic investment, and income tax effects of non-GAAP items assume, among other things, the occurrence of no additional acquisitions or dispositions, and no further revisions to stock-based compensation and related expenses.

Non-GAAP Financial Measures 
We report our financial results in accordance with accounting principles generally accepted in the United States of America, or GAAP. However, management believes that, in order to properly understand our short-term and long-term financial and operational trends, investors may wish to consider the impact of certain non-cash or non-recurring items when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in frequency and impact on continuing operations. In this release, HubSpot's non-GAAP operating income, operating margin, subscription margin, expense, expense as a percentage of revenue, net income, operating and free cash flow are not presented in accordance with GAAP and are not intended to be used in lieu of GAAP presentations of results of operations. Free cash flow is defined as cash and cash equivalents provided by or used in operating activities less purchases of property and equipment and capitalization of software development costs, plus repayments of convertible notes attributable to debt discount. We believe information regarding free cash flow provides useful information to investors in understanding and evaluating the strength of liquidity and available cash provides a comparable framework for assessing how our business performed when compared to prior periods which excluded repayments of our convertible notes attributable to debt discount from operating cash flow. With the adoption of Accounting Standards Update ("ASU") 2020-06 on January 1, 2022, there are no longer repayments of convertible notes attributable to debt discount. 

Management believes that these non-GAAP financial measures provide additional means of evaluating period-over-period operating performance. Specifically, these non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management's ability to make useful forecasts. In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. Management may, however, utilize other measures to illustrate performance in the future. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included above in this press release.

These non-GAAP measures exclude stock-based compensation, amortization of acquired intangible assets, acquisition related expenses, non-cash interest expense for the amortization of debt issuance costs, loss on early extinguishment of 2022 Convertible Notes, gain or loss on strategic investments, gain or loss on equity method investment, and account for the income tax effects of the exclusion of these non-GAAP items. We believe investors may want to incorporate the effects of these items in order to compare our financial performance with that of other companies and between time periods:

A.

Stock-based compensation is a non-cash expense accounted for in accordance with FASB ASC Topic 718. We believe that the exclusion of stock-based compensation expense allows for financial results that are more indicative of our operational performance and provide for a useful comparison of our operating results to prior periods and to our peer companies because stock-based compensation expense varies from period to period and company to company due to such things as differing valuation methodologies and changes in stock price.



B.

Expense for the amortization of acquired intangible assets, excluding backlog acquired intangible assets amortized as contra revenue, is excluded from non-GAAP expense and income measures as HubSpot views amortization of these assets as arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is a non-cash expense that is not typically affected by operations during any particular period. Valuation and subsequent amortization of intangible assets can also be inconsistent in amount and frequency because they can significantly vary based on the timing and size of acquisitions and the inherently subjective nature of the degree to which a purchase price is allocated to intangible assets. We believe that the exclusion of this amortization expense provides for a useful comparison of our operating results to prior periods, for which we have historically excluded amortization expense, and to our peer companies, which commonly exclude acquired intangible asset amortization. It is important to note that although we exclude amortization of acquired intangible assets from our non-GAAP expense and income measures, revenue generated from such intangibles is included within our non-GAAP income measures. The use of these intangible assets contributed to our revenues earned during the periods presented and will contribute to future periods as well.



C.

Acquisition related expenses, such as transaction costs and retention payments, and disposition related income, such as proceeds from sale of assets, are transactions that are not necessarily reflective of our operational performance during a period. We believe that the exclusion of these expenses and income provides for a useful comparison of our operating results to prior periods and to our peer companies, which commonly exclude these expenses and income.



D.

In June 2020, the Company issued $460 million of convertible notes due in 2025 with a coupon interest rate of 0.375%. In August 2020, the FASB published ASU 2020-06, which was adopted on January 1, 2022. ASU 2020-06 simplifies the accounting for convertible debt and other equity-linked instruments and eliminates requirements to separately account for liability and equity components of such convertible debt instruments. Consequently, our convertible notes are accounted for as a single liability and the discount created by the recognition of a component of the convertible debt in equity is eliminated. The issuance cost of the debt is amortized as interest expense over the remaining term of the debt. We believe the exclusion of this non-cash interest expense provides for a useful comparison of our operating results to prior periods and to our peer companies.




Prior to January 1, 2022, the difference between the fair value and carrying value of debt conversion settlements was recorded as a loss on early extinguishment of debt within interest expense. Upon the adoption of  ASU 2020-06, no loss is recognized.



E.

Strategic investments consist of non-controlling equity investments in privately held companies. The recognition of gains or losses can vary significantly across periods and we do not view them to be indicative of our fundamental operating activities and believe the exclusion of gains or losses provides for a useful comparison of our operating results to prior periods and to our peer companies.



F.

We made a contribution to the Black Economic Development Fund (the "investee") managed by the Local Initiatives Support Corporation and have committed to make additional capital contributions.  We account for this investment under the equity method of accounting. The proportionate share of our equity method investee's net earnings have been excluded in order to provide a comparable view of our operating results to prior periods and to our peer companies. We believe this activity is not reflective of our recurring core business operating results.



G.

The effects of income taxes on non-GAAP items reflect a fixed long-term projected tax rate of 20% to provide better consistency across reporting periods. To determine this long-term non-GAAP tax rate, we exclude the impact of other non-GAAP adjustments and take into account other factors such as our current operating structure and existing tax positions in various jurisdictions. We will periodically reevaluate this tax rate, as necessary, for significant events such as relevant tax law changes and material changes in our forecasted geographic earnings mix.

 

SOURCE HubSpot


These press releases may also interest you

at 08:44
Communications Industry Researchers (CIR) has just issued a new report stating that revenues from active optical cables (AOCs) will reach approximately $4.2 billion by 2027. This reflects an expected surge in 400G AOC deployments, soon to be followed...

at 08:44
NauticEd, the world leader in on-the-water and online sailing training, today announced a partnership with MarineVerse, an Australian-based pioneer of virtual reality (VR) sailing simulation, to jointly offer the first-ever virtual reality sailing...

at 08:43
Misconceptions and novice mistakes are frequent for those who participate in investing in this new form of highly volatile digital asset, cryptocurrencies. Derysq aims to provide the everyday individual with a secure platform for simple and...

at 08:43
Inowize introduces QBIX, the newest 6-player unattended attraction! Entertainment Venues can offer their guests a memorable experience through engaging 5-8 minute games in a very small footprint: only a 13 ft x 13 square feet cube. It only takes 3...

at 08:43
RuggON, an international maker of ruggedized mobile solutions, today introduced its latest fully rugged tablet, the 8" LUNA 3. Featuring an eco-friendly design, it is the most powerful yet highly efficient model in its class. With Windows 10 IoT...

at 08:43
Urbanworld Film Festival will mark its 26th year with a strong film slate beginning with an opening night special screening of Sony Pictures and Black Label Media's DEVOTION, directed by JD Dillard, and starring Jonathan Majors. Majors will serve as...



News published on 4 august 2022 at 16:10 and distributed by: