Loading...
01/11 03:19
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary indicates solid financial performance with strong revenue growth and optimistic guidance. Although there are constraints in billing growth, the company is confident in its AI and credit monetization strategies. The Q&A section reveals positive trends in AI adoption and international growth, despite some uncertainties in revenue translation timing. Overall, the optimistic guidance and strong financial metrics suggest a positive stock price movement in the short term.
Revenue Revenue grew 18.4% year-over-year in constant currency, reaching $810 million. The growth was driven by platform consolidation, multi-hub adoption, and upmarket momentum.
Operating Margin Operating margin was 20%, reflecting a 1-point increase compared to the year-ago period and a 3-point sequential increase. This improvement highlights the company's ability to balance growth and profitability.
Total Customers Total customers increased by 10,900 in the quarter, bringing the global customer base to nearly 279,000, a 17% year-over-year growth. This growth was attributed to the adoption of multi-hub solutions and upmarket traction.
Average Subscription Revenue Per Customer (ASRPC) ASRPC was $11,600 in Q3, up 1 point year-over-year in constant currency and up 3 points on an as-reported basis. This increase reflects higher customer spending on HubSpot's solutions.
Customer Dollar Retention Customer dollar retention remained in the high 80s in Q3, consistent with prior performance.
Net Revenue Retention Net revenue retention was flat sequentially at 103%, as expected. The company anticipates a step-up in Q4, leading to a couple of points improvement for the full year.
Calculated Billings Calculated billings were $804 million in Q3, growing 19% year-over-year in constant currency and 18% on an as-reported basis. This growth reflects strong customer acquisition and retention.
Net Income Net income was $140 million in Q3 or $2.66 per fully diluted share. This reflects the company's profitability and operational efficiency.
Free Cash Flow Free cash flow was $147 million or 18% of revenue in Q3, showcasing strong cash generation capabilities.
Cash and Marketable Securities Cash and marketable securities totaled $1.7 billion at the end of September, indicating a strong liquidity position.
AI-powered features: HubSpot launched over 200 updates and products at the INBOUND conference, including AI-powered email in Marketing Hub, AI meeting assistant in Sales Hub, and Data Hub for centralized data management. They also introduced Breeze Studio for custom agent creation and became the first CRM to connect with ChatGPT, Cloud, and Gemini.
AI agents: Customer agent adoption increased by 48% to 6,200 customers, prospecting agent adoption grew by 94% to 6,400 customers, and the new Data Agent already has 1,700 activations.
AI-enhanced tools: HubSpot launched AEO strategy tools, Marketing Studio, and Data Hub to help customers optimize AI-generated answers and personalize content.
Upmarket momentum: Deals over $5,000 in monthly recurring revenue grew 35% year-over-year, driven by product investments and rising brand awareness among larger companies.
International revenue: International revenue grew 20% in constant currency and 25% as reported, representing 49% of total revenue.
Revenue growth: Q3 revenue grew 18% year-over-year in constant currency, reaching $810 million, with a 20% operating margin.
Customer growth: HubSpot added 10,900 net new customers in Q3, bringing the total to 279,000, a 17% year-over-year increase.
Subscription revenue: Subscription revenue grew 21% year-over-year, with an average subscription revenue per customer of $11,600.
AI strategy: HubSpot is embedding AI into its hubs, focusing on agents, assistants, and connectors to turn data into actionable insights. They are also diversifying marketing channels and acquiring XFunnel to enhance AI-generated brand visibility.
Growth levers: HubSpot is leveraging platform consolidation, multi-hub adoption, and emerging levers like core seats and credits to drive growth.
Market Conditions: The company expects net additions to be in the range of 9,000 to 10,000 in Q4, which is lower than the Q3 net additions of 10,900. This indicates potential challenges in maintaining customer acquisition momentum.
Customer Retention: Customer dollar retention remained in the high 80s, and net revenue retention was flat sequentially at 103%. While stable, these metrics suggest limited improvement in customer retention and revenue growth from existing customers.
Economic Uncertainties: The company highlighted foreign exchange (FX) movements as a factor in financial performance, indicating exposure to currency fluctuations that could impact revenue and profitability.
Strategic Execution Risks: The company is heavily investing in AI and new product launches, such as Data Hub and XFunnel. While these initiatives are promising, they carry execution risks, including adoption challenges and the ability to deliver expected value to customers.
Competitive Pressures: HubSpot is positioning itself as a leader in the AI era, but the competitive landscape in AI and CRM platforms is intensifying. The company must continue to innovate to maintain its market position.
Q4 2025 Revenue Guidance: Total as reported revenue is expected to be in the range of $828 million to $830 million, up 16% year-over-year in constant currency and 18% on an as-reported basis.
Q4 2025 Operating Profit Guidance: Non-GAAP operating profit is expected to be between $183 million and $184 million, representing a 22% operating profit margin.
Q4 2025 Net Income Guidance: Non-GAAP diluted net income per share is expected to be between $2.97 and $2.99, assuming 52.7 million fully diluted shares outstanding.
Full Year 2025 Revenue Guidance: Total as reported revenue is now expected to be in the range of $3.113 billion to $3.115 billion, up 18% year-over-year in constant currency and 19% on an as-reported basis.
Full Year 2025 Operating Profit Guidance: Non-GAAP operating profit is now expected to be in the range of $574 million to $575 million, representing an 18% operating profit margin.
Full Year 2025 Net Income Guidance: Non-GAAP diluted net income per share is now expected to be between $9.60 and $9.62, assuming 53.2 million fully diluted shares outstanding.
Full Year 2025 Free Cash Flow Guidance: Free cash flow is expected to be about $580 million for the full year of 2025.
Full Year 2025 Capital Expenditures: CapEx as a percentage of revenue is expected to be 6% for the full year of 2025, driven by higher capitalized software expenses.
Share Repurchase Program: In Q3, we repurchased 780,000 shares of common stock under our share repurchase program, representing $375 million.
The earnings call summary indicates solid financial performance with strong revenue growth and optimistic guidance. Although there are constraints in billing growth, the company is confident in its AI and credit monetization strategies. The Q&A section reveals positive trends in AI adoption and international growth, despite some uncertainties in revenue translation timing. Overall, the optimistic guidance and strong financial metrics suggest a positive stock price movement in the short term.
The earnings call summary and Q&A reveal strong financial performance, with revenue and profit growth, robust free cash flow, and a positive outlook on AI integration and market strategy. The share repurchase program and customer growth further bolster confidence. Despite some uncertainty in AI monetization specifics, overall guidance remains optimistic, and the market strategy is well-aligned with current trends. These factors suggest a positive stock price movement over the next two weeks.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
