Core Viewpoint - HubSpot reported quarterly earnings of $3.09 per share, exceeding the Zacks Consensus Estimate of $2.99 per share, and showing an increase from $2.32 per share a year ago, indicating a positive earnings surprise of +3.26% [1] Financial Performance - HubSpot's revenues for the quarter ended December 2025 were $846.75 million, surpassing the Zacks Consensus Estimate by 2.03%, and up from $703.17 million year-over-year [2] - The company has consistently exceeded consensus EPS estimates over the last four quarters [2] Stock Performance and Outlook - HubSpot shares have declined approximately 42.2% since the beginning of the year, contrasting with the S&P 500's gain of 1.4% [3] - The company's current Zacks Rank is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $2.30 on revenues of $833.51 million, and for the current fiscal year, it is $11.44 on revenues of $3.59 billion [7] Industry Context - The Internet - Software industry, to which HubSpot belongs, is currently ranked in the bottom 44% of over 250 Zacks industries, suggesting potential challenges ahead [8]

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Financial Data and Key Metrics Changes - Q4 revenue grew 18.2% year-over-year in constant currency, with full-year 2025 revenue also growing 18.2% to $3.1 billion [6][21] - Q4 operating margin was 22.6%, while the full-year operating margin was 18.6%, reflecting strong operating profit growth [6][24] - Net income for Q4 was $163 million, or $3.09 per share, and for the full year, it was $516 million, or $9.70 per share [24] Business Line Data and Key Metrics Changes - Subscription revenue in Q4 grew 21% year-over-year, while services and other revenue increased by 12% [21] - The number of customers grew to over 288,000, with 9,800 net new customers added in Q4 [6][22] - Average subscription revenue per customer was $11,700 in Q4, up year-over-year [22] Market Data and Key Metrics Changes - Domestic revenue grew 17% year-over-year, while international revenue grew 19% in constant currency and 24% as reported, representing 49% of total revenue [21] - Net revenue retention increased to 105% in Q4, up from 101.8% in 2024, indicating strong customer expansion [22][24] Company Strategy and Development Direction - The company aims to leverage AI to drive growth for mid-market companies, focusing on making AI practical and actionable [10][14] - A new growth playbook for the AI era was launched, alongside AI-powered solutions to enhance marketing efforts [16] - The strategy includes accelerating upmarket growth and enhancing multi-hub adoption, with a focus on delivering both power and simplicity [13][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver durable growth, citing strong core fundamentals and emerging AI levers [29] - The company anticipates net revenue retention to grow by another 1-2 points year-over-year in 2026, driven by continued seat expansion and credit adoption [23][25] - Management highlighted the importance of customer context in AI adoption, emphasizing that the gap between AI output and outcomes is a significant challenge [33][35] Other Important Information - The Board of Directors authorized a share repurchase program of up to $1 billion, reflecting confidence in the business [7][24] - The company expects total as-reported revenue for Q1 2026 to be in the range of $862-$863 million, representing a 16% year-over-year increase in constant currency [26] Q&A Session Summary Question: Concerns about AI disruption in the software industry - Management addressed concerns about AI disruption, emphasizing the importance of customer context and the company's role as a system of record [31][33] Question: Guidance on revenue growth and net new ARR - Management explained that while guidance indicates a 16% growth, net new ARR growth is expected to outpace revenue growth, indicating potential acceleration [39][41] Question: Pricing impact on growth - Management clarified that pricing changes contributed to net revenue retention, but the primary driver was higher upgrade rates for seats [64][66] Question: Internal benefits from AI - Management highlighted that AI has transformed product development and operational efficiency, with significant improvements in support and sales processes [70][72] Question: Adoption among AI-native companies - Management noted that AI-native companies choose HubSpot for its platform value and context, which is essential for decision-making [76][78]

Financial Data and Key Metrics Changes - Q4 revenue grew 18.2% year-over-year in constant currency, with full-year 2025 revenue also growing 18.2% to $3.1 billion [6][21] - Operating margin was 22.6% in Q4 and 18.6% for the full year, reflecting strong operating profit growth [6][24] - Net income for Q4 was $163 million, or $3.09 per share, and for the full year, it was $516 million, or $9.70 per share [24] Business Line Data and Key Metrics Changes - Subscription revenue in Q4 grew 21% year-over-year, while services and other revenue increased by 12% [21] - The number of customers grew to over 288,000, with 9,800 net new customers added in Q4 [6][22] - Average subscription revenue per customer was $11,700 in Q4, up year-over-year [22] Market Data and Key Metrics Changes - Domestic revenue grew 17% year-over-year, while international revenue growth was 19% in constant currency [21] - International revenue represented 49% of total revenue [21] Company Strategy and Development Direction - The company aims to lead with AI, focusing on making AI work for growth companies and reimagining marketing with new products [13][14] - The strategy includes accelerating upmarket growth and enhancing the agentic customer platform [18] - The company has authorized a $1 billion share repurchase program, signaling confidence in future growth opportunities [7][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver durable growth, driven by strong fundamentals and AI momentum [29] - The company anticipates net revenue retention to increase by one to two points year-over-year in 2026 [23] - Management highlighted the importance of customer context in driving AI adoption and outcomes [33][35] Other Important Information - The company reported a significant increase in multi-hub adoption, with 62% of new Pro Plus customers using multiple hubs [9] - The Core Seat adoption has expanded, with nearly 70% of customers utilizing enriched data by Q4 [19] Q&A Session Summary Question: Concerns about AI disruption in the software industry - Management addressed concerns about AI disruption, emphasizing the importance of customer context and the company's role as a system of record [31][33] Question: Guidance on revenue growth and net new ARR - Management explained that while guidance indicates a 16% growth, net new ARR is expected to outpace revenue growth, indicating potential acceleration [39][41] Question: Pricing impact on growth - Management clarified that pricing changes contributed to net revenue retention, but the primary driver was higher upgrade rates for seats [64][66] Question: Internal benefits from AI - Management highlighted that AI has transformed product development and operational efficiency, with significant portions of coding and support handled by AI [70][72] Question: Adoption among AI-native companies - Management noted that AI-native companies are choosing HubSpot for its platform value and context, which is essential for decision-making [76][78]

Financial Data and Key Metrics Changes - Q4 revenue grew 18.2% year-over-year in constant currency, reaching $3.1 billion for the full year 2025, also an 18.2% increase in constant currency [4][18] - Q4 operating margin was 22.6%, with a full-year operating margin of 18.6%, reflecting strong operating profit growth [4][21] - Net income for Q4 was $163 million, or $3.09 per share, and for the full year, it was $516 million, or $9.70 per share [22] - Free cash flow was $209 million in Q4, representing 25% of revenue, and $595 million for the full year, or 19% of revenue [22] Business Line Data and Key Metrics Changes - Subscription revenue in Q4 grew 21% year-over-year, while services and other revenue increased by 12% [18] - The number of customers grew to over 288,000, with 9,800 net new customers added in Q4 [19] - Average subscription revenue per customer was $11,700 in Q4, up year-over-year [19] Market Data and Key Metrics Changes - Domestic revenue grew 17% year-over-year, while international revenue growth was 19% in constant currency and 24% as reported, representing 49% of total revenue [18] - Net revenue retention increased to 105% in Q4, up from 103.5% for the full year, reflecting strong seat expansion and pricing changes [19][20] Company Strategy and Development Direction - The company aims to leverage AI to drive growth for mid-market companies, focusing on embedding AI across its platform [10][12] - A new growth playbook for the AI era was launched, along with AI-powered solutions to enhance marketing capabilities [14] - The strategy includes accelerating upmarket growth and enhancing multi-hub adoption, with a focus on delivering both power and simplicity [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver durable growth, citing strong core fundamentals and emerging AI levers [26] - The company anticipates net revenue retention to grow by another 1-2 points year-over-year in 2026, driven by continued seat expansion and credit adoption [20] - Management acknowledged the challenges posed by AI disruption but emphasized the importance of customer context in driving growth outcomes [29][31] Other Important Information - The Board of Directors authorized a share repurchase program of up to $1 billion, signaling confidence in the business [5] - The company expects calculated billings for Q4 to be $971 million, growing 20% year-over-year in constant currency [20] Q&A Session Summary Question: Concerns about AI disruption and HubSpot's defensibility - Management highlighted the difference between point SaaS solutions and platforms, emphasizing the importance of customer context in driving AI outcomes [29][30] Question: Guidance for 2026 and net new ARR growth - Management confirmed confidence in re-accelerating growth, with net new ARR growth expected to outpace revenue growth [39][40] Question: Pricing impact on growth - Management indicated that pricing changes contributed to net revenue retention, with higher upgrade rates for seats being a significant factor [62] Question: Internal benefits from AI - The company reported that 97% of code committed last year was done with AI assistance, significantly improving innovation speed [66][68] Question: Adoption among AI-native companies - Management noted that AI-native companies choose HubSpot for its platform value and context, which are essential for decision-making [74]

Core Insights - HubSpot Inc. reported fourth-quarter earnings of $3.09 per share, surpassing the analyst estimate of $2.99 [2] - Quarterly revenue reached $846.75 million, exceeding the Street estimate of $830.54 million and increasing from $703.17 million in the same period last year [2] Financial Performance - The company experienced a 16% increase in customers, growing to 288,706 as of December 31, 2025, compared to the previous year [4] - Average Subscription Revenue Per Customer was $11,683 during the fourth quarter of 2025, reflecting a 3% increase on an as-reported basis compared to the fourth quarter of 2024 [4] - Calculated billings for the fourth quarter of 2025 were $971.4 million, marking a 27% increase on an as-reported basis and a 20% increase in constant currency compared to the fourth quarter of 2024 [4] Future Outlook - HubSpot anticipates fiscal 2026 adjusted EPS in the range of $12.38 to $12.46, compared to the analyst estimate of $11.45 [4] - Revenue guidance for fiscal 2026 is projected between $3.69 billion and $3.7 billion, exceeding the $3.61 billion estimate [4] Strategic Highlights - The CEO of HubSpot, Yamini Rangan, emphasized that 2025 was a transformative year, driven by the momentum of their customer platform and accelerated AI adoption [3]

Investor Presentation. Q4 2025 Safe Harbor This presentation 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, foreign currency movement, and business outlook, including our financial guidance for the first fiscal quarter of and full year 2026 and our long-term financial framework; state ...

Employee Growth and Management - The company had 8,882 full-time employees as of December 31, 2025, up from 8,246 in 2024, indicating significant growth in headcount[102]. - The company must effectively manage growth and organizational changes to execute its business plan and maintain service levels[102]. - The company relies heavily on its management team and key employees, and the loss of any key personnel could adversely affect its business[128]. - The company experiences challenges in attracting and retaining qualified personnel, particularly in AI and machine learning, due to competition from other firms[130]. Subscription and Revenue Risks - Subscription renewal rates are critical, as customers may choose lower tiers or not renew, impacting future revenue and operating results[94]. - The company relies heavily on subscription sales, with a substantial portion of revenue derived from these agreements, making it vulnerable to fluctuations in renewal rates[93]. - There is a risk that consumption-based pricing strategies may lead to less predictable revenue compared to traditional subscription models[93]. - The company may face volatility in its financial results due to changes in market prices and impairments of its strategic investments[123]. Competition and Market Dynamics - The competitive landscape is evolving, with new technologies and competitors potentially affecting pricing and customer retention[98]. - The company faces intense competition from established and new software companies, which may hinder its ability to maintain pricing and margins[100]. - The company acknowledges the need for significant investment in developing new products like Breeze, despite uncertainty about market acceptance[114]. - The company’s growth strategy includes expanding its customer base internationally, which may not be successful if past experiences are not addressed[125]. Technology and Innovation - The company is investing in expanding its customer platform capabilities, including AI and machine learning, to enhance market acceptance and revenue growth[105]. - Failure to adapt to rapidly changing technology and customer needs could render the company's platform less competitive[109]. - The company emphasizes the importance of adequate research and development resources to remain competitive, particularly in AI and machine learning, to avoid missing market opportunities[112]. Economic and Regulatory Environment - Global inflation rates have increased to levels not seen in several decades, potentially leading to decreased demand for products and increased operating costs[136]. - Economic uncertainty may lead to reduced customer spending on products, affecting revenue and profitability[140]. - The company anticipates that economic conditions in Europe may adversely affect customer willingness to subscribe to its platform[135]. - The company is subject to various governmental regulations related to privacy, data protection, and information security, which could impair customer base expansion and revenue growth[169]. Cybersecurity and Data Privacy - Security measures are crucial as unauthorized access to customer data could damage the company's reputation and result in significant liabilities[154]. - Cyber-attacks and data breaches are prevalent, with increasing sophistication, which could adversely affect the company's operations and financial condition[155]. - The company may incur significant costs related to remediation and additional security measures following a cyber incident, impacting its competitive position[158]. - Privacy concerns may limit the adoption of the customer platform, affecting overall demand and potentially leading to significant fines for noncompliance[153]. Legal and Compliance Risks - The company may face liabilities related to data breaches, including costs associated with issuing new payment cards if customer payment information is compromised[159]. - Intellectual property infringement claims could disrupt business operations and lead to costly litigation, impacting revenue and operating results[162]. - The company agrees to indemnify customers against third-party claims of intellectual property infringement, which could have material adverse effects on its financial condition[163]. - The evolving landscape of privacy and cybersecurity regulations in the U.S. complicates compliance efforts and increases the risk of regulatory enforcement and litigation[175]. Financial Performance and Capital Management - The company generated net income of $45.9 million in 2025, compared to $4.6 million in 2024, and a net loss of $164.5 million in 2023, resulting in an accumulated deficit of $753.9 million as of December 31, 2025[209]. - The company may face significant losses in the future due to increased operating expenses related to marketing, sales, and infrastructure expansion, which may not be offset by revenue growth[209]. - The company’s credit facility imposes financial covenants that could limit operational flexibility and adversely affect financial condition if not complied with[217]. - The company may experience quarterly fluctuations in operating results, making future performance difficult to predict and potentially leading to stock price declines[211]. International Operations and Market Expansion - The company plans to expand its international operations, which involves various risks including regulatory challenges and cultural differences[124]. - The company is exposed to fluctuations in currency exchange rates, which may materially affect revenue and operating results[132]. - The company has implemented a hedging program in Q1 2024 to mitigate foreign exchange impacts, particularly for significant transactions in currencies other than the U.S. dollar[132]. - Changes in global tax laws, including the OECD's proposals for a global minimum tax, may materially impact the company's financial results and cash flows[207].

Exhibit 99.1 HubSpot Reports Strong Q4 and Full Year 2025 Results Q4'25 revenue grew 20% on an as-reported basis and 18% in constant currency compared to Q4'24 Full year 2025 revenue grew 19% on an as-reported basis and 18% in constant currency compared to 2024 CAMBRIDGE, MA (February 11, 2026) — HubSpot, Inc. (NYSE: HUBS), the customer platform for scaling companies, today announced financial results for the fourth quarter and full year ended December 31, 2025. Operating Income (Loss) Fourth Quarter 2025: ...

Core Viewpoint - The article discusses the recent internal rotation in the U.S. stock market, highlighting a shift from a few large-cap stocks leading the market to a broader participation across various sectors, while also addressing the impact of AI on traditional business models and the resulting market volatility [5][7][8]. Market Performance - On Tuesday, the S&P 500 fell by approximately 0.3%, while the Dow Jones Industrial Average rose by about 0.1%, reaching a new historical high [5]. - The equal-weighted S&P index also reached a record high, indicating a shift in market dynamics with around 300 stocks in the S&P 500 rising [7]. Retail Sales Data - The U.S. Commerce Department reported that December retail sales were flat month-over-month, significantly below the expected 0.4% growth, indicating a slowdown in consumer spending [9]. - Core retail sales, excluding autos and gas, even showed a decline, reflecting weakened consumer spending momentum during the holiday season [9]. Interest Rate Expectations - The weak retail data led to a rise in U.S. Treasury prices and a decline in yields, with the futures market increasing the probability of three rate cuts within the year, with two already priced in [9]. - Historical trends suggest that rate cut expectations typically support risk assets, but the current market shows a divergence where rates are falling but stocks are not rising, particularly in the tech sector [11]. AI Impact on Market Sentiment - Market participants are shifting their interpretation of AI's impact from a growth narrative to concerns about short-term disruptions, leading to a "sell first, think later" mentality [12]. - Investors are moving from an "AI is a panacea" mindset to a more pragmatic "performance realization" phase, anticipating greater differentiation between winners and losers in the market [12]. Institutional Perspectives - There is a noticeable divergence in institutional views on the tech sector, with Goldman Sachs warning about the risks of overestimating AI's growth potential and emphasizing the need for actual earnings and cash flow improvements to support tech valuations [13]. - UBS downgraded its rating on the U.S. tech sector from "overweight" to "neutral," citing key risks while still acknowledging the long-term potential of AI [14]. Wealth Management Sector - The wealth management sector has come under scrutiny following the launch of an AI tool by Altruist Corp., which automates tasks traditionally reliant on human expertise, raising concerns about the core revenue models of wealth management firms [17][18]. - The market reacted sharply, with significant declines in stocks of major wealth management firms, indicating fears about the long-term competitive structure of the industry under AI pressure [19][21]. Broader Market Reactions - The sell-off in the market has been attributed to fears that AI tools could undermine the intermediary value of insurance brokers, leading to a significant drop in the insurance brokerage sector [22]. - The recent downturn in the software sector has seen substantial market capitalization losses, with estimates indicating a combined loss of approximately $611 billion across software, financial services, and asset management sectors [26]. Conclusion - The current market environment reflects a transition from viewing AI as a beneficiary narrative to recognizing potential victims, with traditional software companies facing heightened scrutiny and volatility [27]. - The article suggests that this phase serves as a valuation and business model stress test, prompting a reevaluation of which revenue models are based on irreplaceable value versus those reliant on information asymmetry [34].