Financial Data and Key Metrics Changes - Q2 revenue grew 18% year over year in constant currency and 19% on an as-reported basis, with subscription revenue increasing by 19% year over year [28][29] - Q2 operating margin was 17%, flat compared to the previous year and up three points sequentially [31] - Net income for Q2 was $117 million, or $2.19 per fully diluted share [31] - Free cash flow was $116 million, representing 15% of revenue in Q2 [31] Business Line Data and Key Metrics Changes - Total customers grew to 268,000 globally, with over 9,700 net customer additions in Q2 [29] - Sales Hub seat upgrades increased by 71% year over year, while Service Hub seat upgrades rose by 110% year over year [9] - 61% of new Pro Plus customers landed with multiple hubs, and 42% of the installed base by ARR now uses all three core hubs [8] Market Data and Key Metrics Changes - Domestic revenue grew 18% year over year, while international revenue growth was 19% in constant currency and 21% as reported, representing 48% of total revenue [29] - The company saw a significant increase in leads from diversified channels, with YouTube leads up 96% year over year and newsletter leads growing by 50% [16][17] Company Strategy and Development Direction - The company is focusing on AI integration across its platform to enhance customer experience and operational efficiency [20][25] - HubSpot is adapting to changes in marketing dynamics, emphasizing the importance of content across various channels as traditional SEO becomes less effective [100][101] - The strategy includes a hybrid pricing model that combines seat-based monetization with credits for AI-driven services [80][102] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macro environment but expressed confidence in their proven playbook to navigate these conditions [33] - The company expects net revenue retention to improve due to faster seat upgrades and anticipates strong customer additions in Q3 and Q4 [29][90] - Management highlighted the importance of adapting to AI trends and the evolving landscape of customer engagement [42][106] Other Important Information - The company launched AI feedback summaries and AI ticket sentiment features in Q2 to enhance service team efficiency [24] - HubSpot's cash and marketable securities totaled $1.9 billion at the end of June, including the impact of share repurchases [31] Q&A Session Summary Question: Changes in inbound marketing due to AI - Management noted significant shifts in buyer behavior, with organic search being disrupted and more customers asking questions of LLMs rather than traditional searches [38][39] Question: Core seats and customer personas - The core seat is seen as a growth lever, expanding opportunities beyond traditional sales and service roles to include admins and operations [50][51] Question: Engagement with agents - Customer agent usage has shown strong weekly engagement, with resolution rates consistently around 50% and significant ticket deflections [55] Question: Billings growth and revenue outlook - Management indicated that the gap between billings and revenue growth is due to larger deals and longer billing terms, which should normalize over the next few quarters [67] Question: AI monetization strategy - The company is focused on delivering value before monetizing AI features, with positive indicators for future monetization as customer adoption grows [72][80]

Financial Data and Key Metrics Changes - Q2 revenue grew 18% year over year in constant currency and 19% on an as-reported basis, with subscription revenue increasing by 19% year over year [27][28] - Operating margin for Q2 was 17%, flat compared to the previous year and up three points sequentially [31] - Net income for Q2 was $117 million, or $2.19 per fully diluted share [31] - Free cash flow was $116 million, representing 15% of revenue in Q2 [31] Business Line Data and Key Metrics Changes - Total customers grew to 268,000 globally, with over 9,700 net customer additions in Q2, reflecting an 18% year-over-year increase [27][28] - Sales Hub seat upgrades increased by 71% year over year, while Service Hub seat upgrades surged by 110% year over year [7][8] - 61% of new Pro Plus customers landed with multiple hubs, and 42% of the installed base by ARR now uses all three core hubs [6] Market Data and Key Metrics Changes - Domestic revenue grew 18% year over year, while international revenue growth was 19% in constant currency and 21% as reported, representing 48% of total revenue [28] - The company saw a significant increase in leads from diversified channels, with YouTube leads up 96% year over year and newsletter leads growing by 50% [14][15] Company Strategy and Development Direction - The company is focusing on AI integration across its platform to enhance customer experience and operational efficiency [18][24] - HubSpot is adapting to changes in marketing dynamics, particularly the decline in organic search traffic and the rise of AI-driven search [12][13] - The strategy includes diversifying lead generation channels and enhancing the value of the core platform through AI capabilities [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and innovation pace, despite a volatile macro environment [26][33] - The expectation for Q3 revenue is in the range of $785 million to $787 million, reflecting a 16% year-over-year increase in constant currency [33] - For the full year of 2025, total as-reported revenue is expected to be between $3.08 billion and $3.09 billion, up 17% year over year [34] Other Important Information - The company has launched AI features that are gaining traction, with over 4,000 customers adopting the customer agent [18][19] - The company is becoming an AI-first organization, with AI handling nearly half of support chats in Q2 [25] Q&A Session Summary Question: Changes in Inbound Marketing Due to AI - Management acknowledged significant shifts in inbound marketing due to AI, with organic search being disrupted and a need for companies to adapt their strategies [38][40] Question: Core Seats and Customer Personas - The core seat is seen as a growth lever, expanding opportunities for various customer personas beyond traditional sales and service roles [50][52] Question: Engagement with AI Agents - Early data shows strong engagement with AI agents, with high resolution rates and significant ticket deflections [56][57] Question: Billings Growth vs. Revenue Growth - Management noted that billings growth outpacing revenue growth is a positive indicator of business momentum, driven by larger deals and longer billing terms [70][72] Question: Customer Adoption of AI Agents - The company is seeing good adoption of AI agents, with predictable value leading to potential monetization in the future [78][79] Question: Marketing Hub Evolution - The Marketing Hub is evolving to help customers navigate changes in marketing dynamics, focusing on content distribution across various channels [108][110]

Financial Performance & Guidance - Q2 2025 total revenue reached $761 million, a 19% year-over-year increase[22] - Subscription revenue accounted for $745 million, reflecting a 19% year-over-year growth[22] - The company's Q3 2025 total revenue is projected to be between $785 million and $787 million, representing a 17% year-over-year increase[24] - Full year 2025 total revenue is guided to be between $3.080 billion and $3.088 billion, a 17% year-over-year increase[27] - Q2 2025 operating profit was $129 million, with an operating profit margin of 17%[22] - The company anticipates a full year 2025 operating profit between $568 million and $572 million, resulting in an 18% operating profit margin[27] - Free cash flow for Q2 2025 was $116 million[22] Growth & Market Opportunity - The company is targeting a long-term operating profit margin of 25%[43] - The company estimates its total addressable market (TAM) to be over $100 billion[18] - The company's platform has a penetration rate of less than 10% across all products, indicating significant growth potential[19] Ecosystem & Platform - The company's app marketplace has over 1700 integrations, a 10x increase over the last 5 years[15]

[HubSpot Reports Q2 2025 Results](index=1&type=section&id=HubSpot%20Reports%20Q2%202025%20Results) HubSpot released its Q2 2025 financial results, detailing performance, outlook, and non-GAAP reconciliations [Introduction](index=1&type=section&id=Introduction) HubSpot, Inc. announced its financial results for the second quarter ended June 30, 2025, highlighting key financial and operational achievements - HubSpot, Inc. (NYSE: HUBS) announced financial results for Q2 2025, ended June 30, 2025[2](index=2&type=chunk) [Q2 2025 Financial and Business Highlights](index=1&type=section&id=Q2%202025%20Financial%20and%20Business%20Highlights) This section details HubSpot's strong Q2 2025 financial performance, including revenue growth, improved profitability, robust cash flow, customer expansion, and strategic AI initiatives [Key Financial Performance Indicators](index=1&type=section&id=Financial%20Highlights%3A%20Revenue%2C%20Operating%20Income%20%28Loss%29%2C%20Net%20Income%20%28Loss%29) HubSpot reported strong revenue growth in Q2 2025, with total revenue up 19% year-over-year. GAAP operating margin improved, while non-GAAP operating income and net income saw significant increases Q2 2025 Key Financial Performance (YoY Growth) | Metric | Q2 2025 Value | Q2 2024 Value | YoY Change (as-reported) | | :-------------------------------- | :---------------- | :---------------- | :----------------------- | | Total Revenue | $760.9 million | $637.23 million | +19% (+18% CC) | | Subscription Revenue | $744.5 million | $623.763 million | +19% | | Professional Services Revenue | $16.3 million | $13.467 million | +21% | | GAAP Operating Margin | (3.2%) | (3.8%) | +0.6 ppts | | Non-GAAP Operating Margin | 17.0% | 17.2% | -0.2 ppts | | GAAP Operating Loss | ($24.6) million | ($23.9) million | -3% (larger loss) | | Non-GAAP Operating Income | $129.1 million | $109.3 million | +18% | | GAAP Net Loss | ($3.3) million | ($14.4) million | +77% (smaller loss) | | Non-GAAP Net Income | $117.3 million | $103.5 million | +13% | | GAAP Net Loss Per Share (Basic & Diluted) | ($0.06) | ($0.28) | +79% (smaller loss) | | Non-GAAP Net Income Per Share (Basic) | $2.23 | $2.03 | +10% | | Non-GAAP Net Income Per Share (Diluted) | $2.19 | $1.94 | +13% | [Balance Sheet and Cash Flow Highlights](index=1&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) The company maintained a strong cash position and significantly increased cash flow from operations in Q2 2025, while also repurchasing common stock Q2 2025 Balance Sheet & Cash Flow Metrics | Metric | Q2 2025 Value | Q2 2024 Value | YoY Change | | :-------------------------------- | :---------------- | :---------------- | :--------- | | Cash, Cash Equivalents, & Investments | $1.9 billion | N/A | N/A | | Cash from Operating Activities | $164.4 million | $117.8 million | +39.6% | | Non-GAAP Operating Cash Flow | $167.7 million | $121.7 million | +37.8% | | Non-GAAP Free Cash Flow | $116.2 million | $92.1 million | +26.2% | | Stock Repurchases (Q2) | $125.0 million | N/A | N/A | | Remaining Stock Repurchase Authorization | $375.0 million | N/A | N/A | [Operational Metrics](index=1&type=section&id=Additional%20Recent%20Business%20Highlights) HubSpot continued to expand its customer base, growing customers by 18% year-over-year, and saw a notable increase in calculated billings Q2 2025 Operational Metrics | Metric | Q2 2025 Value | Q2 2024 Value | YoY Change | | :-------------------------------- | :---------------- | :---------------- | :--------- | | Total Customers (as of June 30, 2025) | 267,982 | N/A | +18% | | Average Subscription Revenue Per Customer (Q2) | $11,310 | N/A | +1% | | Calculated Billings (Q2) | $814.3 million | N/A | +26% (+20% CC) | [CEO Commentary and Strategic Vision](index=3&type=section&id=CEO%20Commentary) CEO Yamini Rangan highlighted Q2 as a solid quarter for revenue growth and customer expansion, emphasizing HubSpot's strategy to be the leading AI-first customer platform and its rapid innovation in AI features like Customer Agent and Prospecting Agent - CEO Yamini Rangan stated Q2 was a "solid quarter of continued revenue growth and customer expansion"[7](index=7&type=chunk) - HubSpot's strategy is to be the "leading AI-first customer platform for scaling companies"[7](index=7&type=chunk) - Customer Agent and Prospecting Agent are delivering results, and embedded AI features are helping go-to-market teams work smarter and faster[7](index=7&type=chunk) [Business Outlook and Guidance](index=3&type=section&id=Business%20Outlook) This section provides HubSpot's financial guidance for the third quarter and full year 2025, including projected revenue, operating income, and earnings per share [Third Quarter 2025 Guidance](index=3&type=section&id=Third%20Quarter%202025%3A) For Q3 2025, HubSpot projects total revenue between $785.0 million and $787.0 million, with non-GAAP operating income of $156.0 million to $157.0 million, and non-GAAP net income per share of $2.56 to $2.58 Q3 2025 Financial Guidance | Metric | Guidance Range | YoY Growth (as-reported) | | :-------------------------------- | :--------------------- | :----------------------- | | Total Revenue | $785.0M - $787.0M | +17% (+16% CC) | | Non-GAAP Operating Income | $156.0M - $157.0M | N/A | | Non-GAAP Operating Profit Margin | 20% | N/A | | Non-GAAP Net Income Per Common Share | $2.56 - $2.58 | N/A | | Weighted Average Diluted Shares Outstanding | ~53.0 million | N/A | [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%3A) HubSpot forecasts full-year 2025 total revenue to be between $3.080 billion and $3.088 billion, with non-GAAP operating income ranging from $568.0 million to $572.0 million, and non-GAAP net income per share of $9.47 to $9.53 Full Year 2025 Financial Guidance | Metric | Guidance Range | YoY Growth (as-reported) | | :-------------------------------- | :--------------------- | :----------------------- | | Total Revenue | $3.080B - $3.088B | +17% (+17% CC) | | Non-GAAP Operating Income | $568.0M - $572.0M | N/A | | Non-GAAP Operating Profit Margin | 18% | N/A | | Non-GAAP Net Income Per Common Share | $9.47 - $9.53 | N/A | | Weighted Average Diluted Shares Outstanding | ~53.4 million | N/A | [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) HubSpot hosted a conference call on August 6, 2025, to discuss Q2 2025 results and business outlook, with registration and webcast details provided for investors - HubSpot hosted a conference call on August 6, 2025, at 4:30 p.m. ET to discuss Q2 2025 financial results and business outlook[10](index=10&type=chunk) - An archived webcast of the conference call is available on HubSpot's Investor Relations website[11](index=11&type=chunk) [About HubSpot](index=3&type=section&id=About%20HubSpot) HubSpot is a customer platform for scaling companies, offering AI-powered engagement hubs, a Smart CRM, and an ecosystem of over 1,700 App Marketplace integrations, a community network, and educational content - HubSpot is the customer platform that helps businesses connect and grow better[12](index=12&type=chunk) - The platform includes AI-powered engagement hubs, a Smart CRM, and a connected ecosystem with over 1,700 App Marketplace integrations, a community network, and educational content[13](index=13&type=chunk) [Cautionary Statements](index=5&type=section&id=Cautionary%20Statements) This section outlines important cautionary statements regarding forward-looking information and potential risk factors that could materially affect actual financial and operational results [Forward-Looking Statements and Risk Factors](index=5&type=section&id=Cautionary%20Language%20Concerning%20Forward-Looking%20Statements) This section outlines forward-looking statements regarding future financial and operational performance, growth, and market trends, cautioning that actual results may differ materially due to various risks including history of losses, customer retention, market growth, product development, macroeconomic instability, and regulatory developments in AI - The press release includes "forward-looking statements" regarding management's expectations of future financial and operational performance, growth, and business outlook[14](index=14&type=chunk) - Actual results may differ materially due to risks such as history of losses, ability to retain existing and add new customers, market growth, ability to develop new products and technologies (including AI/ML), macroeconomic instability, and regulatory and legislative developments on the use of artificial intelligence and machine learning[14](index=14&type=chunk) - The company assumes no obligation to update any forward-looking statements contained in this document[14](index=14&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section provides HubSpot's consolidated financial statements, including balance sheets, statements of operations, and cash flows for the reported periods [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, HubSpot reported total assets of $3.68 billion, a decrease from $3.79 billion at December 31, 2024, primarily due to a reduction in short-term investments. Total liabilities also decreased, while stockholders' equity increased Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :-------------- | :---------------- | :------- | | Total Assets | $3,683,964 | $3,795,833 | ($111,869) | | Total Current Assets | $2,309,508 | $2,633,603 | ($324,095) | | Cash and Cash Equivalents | $601,196 | $512,667 | $88,529 | | Short-term Investments | $1,068,335 | $1,556,828 | ($488,493) | | Total Liabilities | $1,618,908 | $1,887,547 | ($268,639) | | Total Stockholders' Equity | $2,065,056 | $1,908,286 | $156,770 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2025, total revenue grew to $760.9 million, up 19% YoY. The company reported a GAAP operating loss of ($24.6) million and a GAAP net loss of ($3.3) million, both showing improvement compared to Q2 2024 Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------- | | Total Revenue | $760,866 | $637,230 | +19.4% | | Gross Profit | $638,705 | $541,713 | +17.9% | | Loss from Operations | ($24,614) | ($23,935) | -2.8% (larger loss) | | Net Loss | ($3,258) | ($14,435) | +77.4% (smaller loss) | | Net Loss Per Share (Basic & Diluted) | ($0.06) | ($0.28) | +78.6% (smaller loss) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) HubSpot generated $164.4 million in net cash from operating activities in Q2 2025, a significant increase from $117.8 million in Q2 2024. Investing activities provided $268.6 million, while financing activities used ($479.6) million, primarily due to repayment of convertible notes and common stock repurchases Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------- | | Net Cash from Operating Activities | $164,362 | $117,828 | +39.5% | | Net Cash from Investing Activities | $268,602 | $213,158 | +26.0% | | Net Cash from Financing Activities | ($479,633) | $20,605 | N/A (shift from inflow to outflow) | | Net Increase (Decrease) in Cash | ($25,183) | $350,082 | N/A | [Non-GAAP Reconciliations](index=9&type=section&id=Non-GAAP%20Reconciliations) This section presents detailed reconciliations of HubSpot's GAAP financial measures to their corresponding non-GAAP counterparts, including operating income, net income, expenses, margins, and cash flows [Non-GAAP Operating Income and Margin Reconciliation](index=9&type=section&id=Reconciliation%20of%20non-GAAP%20operating%20income%20and%20operating%20margin) For Q2 2025, non-GAAP operating income was $129.1 million, up 18% YoY, with a non-GAAP operating margin of 17.0%, slightly down from 17.2% in Q2 2024 Non-GAAP Operating Income and Margin (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------- | | GAAP Operating Loss | ($24,614) | ($23,935) | -2.8% | | Non-GAAP Operating Income | $129,142 | $109,315 | +18.1% | | GAAP Operating Margin | (3.2%) | (3.8%) | +0.6 ppts | | Non-GAAP Operating Margin | 17.0% | 17.2% | -0.2 ppts | [Non-GAAP Net Income Reconciliation](index=9&type=section&id=Reconciliation%20of%20non-GAAP%20net%20income) Non-GAAP net income for Q2 2025 was $117.3 million, an increase of 13% YoY, resulting in diluted non-GAAP net income per share of $2.19 Non-GAAP Net Income (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------- | | GAAP Net Loss | ($3,258) | ($14,435) | +77.4% | | Non-GAAP Net Income | $117,298 | $103,548 | +13.3% | | Non-GAAP Net Income Per Share (Diluted) | $2.19 | $1.94 | +12.9% | [Non-GAAP Expense and Expense as Percentage of Revenue Reconciliation](index=10&type=section&id=Reconciliation%20of%20non-GAAP%20expense%20and%20expense%20as%20a%20percentage%20of%20revenue) Non-GAAP expenses across various categories (COS, R&D, S&M, G&A) were lower than GAAP expenses due to adjustments, leading to improved non-GAAP expense percentages relative to revenue compared to GAAP Non-GAAP Expense as a Percentage of Revenue (Q2 2025) | Expense Category | GAAP % of Revenue | Non-GAAP % of Revenue | | :----------------------- | :------------------ | :-------------------- | | COS, Subscription | 14.0% | 12.6% | | COS, Professional services & other | 2.0% | 1.9% | | R&D | 31.2% | 20.9% | | S&M | 44.7% | 39.8% | | G&A | 11.2% | 7.8% | [Non-GAAP Subscription Margin Reconciliation](index=11&type=section&id=Reconciliation%20of%20non-GAAP%20subscription%20margin) Non-GAAP subscription margin for Q2 2025 was $648.3 million, with a percentage of 87.1%, slightly lower than 88.1% in Q2 2024 Non-GAAP Subscription Margin (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------- | | GAAP Subscription Margin | $637,862 | $542,145 | +17.6% | | Non-GAAP Subscription Margin | $648,310 | $549,468 | +18.0% | | GAAP Subscription Margin Percentage | 85.7% | 86.9% | -1.2 ppts | | Non-GAAP Subscription Margin Percentage | 87.1% | 88.1% | -1.0 ppts | [Non-GAAP Free Cash Flow Reconciliation](index=11&type=section&id=Reconciliation%20of%20free%20cash%20flow) Non-GAAP free cash flow for Q2 2025 increased by 26.2% YoY to $116.2 million Non-GAAP Free Cash Flow (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------- | | GAAP Net Cash from Operating Activities | $164,362 | $117,828 | +39.5% | | Non-GAAP Free Cash Flow | $116,249 | $92,068 | +26.2% | [Non-GAAP Operating Cash Flow Reconciliation](index=11&type=section&id=Reconciliation%20of%20operating%20cash%20flow) Non-GAAP operating cash flow for Q2 2025 was $167.7 million, representing a 37.8% increase from Q2 2024 Non-GAAP Operating Cash Flow (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------- | | GAAP Net Cash from Operating Activities | $164,362 | $117,828 | +39.5% | | Non-GAAP Operating Cash Flow | $167,710 | $121,709 | +37.8% | [Forecasted Non-GAAP Operating Income Reconciliation](index=11&type=section&id=Reconciliation%20of%20forecasted%20non-GAAP%20operating%20income) HubSpot forecasts non-GAAP operating income for Q3 2025 to be between $156.0 million and $157.0 million, and for the full year 2025, between $568.0 million and $572.0 million Forecasted Non-GAAP Operating Income (in thousands) | Metric | Q3 2025 Range | Full Year 2025 Range | | :-------------------------------- | :-------------------- | :------------------- | | GAAP Operating Income (Loss) Range | $7,660 - $8,660 | ($8,238) - ($4,238) | | Non-GAAP Operating Income Range | $156,000 - $157,000 | $568,000 - $572,000 | [Forecasted Non-GAAP Net Income Reconciliation](index=12&type=section&id=Reconciliation%20of%20forecasted%20non-GAAP%20net%20income%20and%20non-GAAP%20net%20income%20per%20share) The company projects non-GAAP net income for Q3 2025 to be $135.5 million to $136.5 million, with diluted EPS of $2.56 to $2.58. For the full year 2025, non-GAAP net income is expected to be $506.0 million to $509.0 million, with diluted EPS of $9.47 to $9.53 Forecasted Non-GAAP Net Income and EPS (in thousands, except per share amounts) | Metric | Q3 2025 Range | Full Year 2025 Range | | :-------------------------------- | :-------------------- | :------------------- | | GAAP Net Income Range | $16,310 - $17,560 | $30,214 - $33,964 | | Non-GAAP Net Income Range | $135,500 - $136,500 | $506,000 - $509,000 | | Non-GAAP Net Income Per Diluted Share | $2.56 - $2.58 | $9.47 - $9.53 | [Explanation of Non-GAAP Financial Measures](index=12&type=section&id=Explanation%20of%20Non-GAAP%20Financial%20Measures) This section clarifies the purpose and definitions of HubSpot's non-GAAP financial measures, detailing specific adjustments made to GAAP results for a clearer view of operational performance [Purpose and Definitions of Non-GAAP Measures](index=12&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) HubSpot uses non-GAAP financial measures to supplement GAAP results, believing they provide a clearer understanding of short-term and long-term financial trends by excluding certain non-cash or non-recurring items. These measures are not intended to replace GAAP presentations - Non-GAAP measures are used to supplement GAAP results, providing insight into short-term and long-term financial and operational trends by excluding certain non-cash or non-recurring items[26](index=26&type=chunk)[29](index=29&type=chunk) - Calculated billings are defined as total revenue recognized in a period plus the sequential change in total deferred revenue[27](index=27&type=chunk) - Non-GAAP operating cash flow is defined as cash and cash equivalents provided by or used in operating activities plus payment of restructuring charges[27](index=27&type=chunk) - Non-GAAP 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 payment of restructuring charges[27](index=27&type=chunk) - Constant currency amounts are presented to provide a framework for assessing operating performance excluding the effect of foreign exchange rate fluctuations[28](index=28&type=chunk) [Specific Non-GAAP Adjustments](index=13&type=section&id=Specific%20Non-GAAP%20Adjustments) HubSpot's non-GAAP adjustments primarily exclude stock-based compensation, amortization of acquired intangible assets, acquisition-related expenses, non-cash interest expense, gains/losses on strategic investments, restructuring charges, and account for income tax effects, to provide a more consistent view of operational performance - 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, gain or impairment losses on strategic investments, restructuring charges, and account for the income tax effects of the exclusion of these non-GAAP items[30](index=30&type=chunk) [Stock-based Compensation](index=13&type=section&id=A.%20Stock-based%20compensation) Stock-based compensation is excluded as a non-cash expense to provide financial results more indicative of operational performance and facilitate comparisons across periods and peer companies - Stock-based compensation is a non-cash expense excluded to allow for financial results more indicative of operational performance and provide for a useful comparison of operating results to prior periods and peer companies[30](index=30&type=chunk) [Amortization of Acquired Intangible Assets](index=13&type=section&id=B.%20Amortization%20of%20acquired%20intangible%20assets) Amortization of acquired intangible assets is excluded as a non-cash expense arising from pre-acquisition activities, which is not typically affected by current operations and can vary inconsistently - Amortization of acquired intangible assets is excluded from non-GAAP measures as it arises from pre-acquisition activities, is a non-cash expense not typically affected by operations, and can be inconsistent in amount and frequency[30](index=30&type=chunk) [Acquisition Related Expenses](index=13&type=section&id=C.%20Acquisition%20related%20expenses) Acquisition-related expenses (e.g., transaction costs, retention payments) and disposition-related income are excluded as they are not necessarily reflective of operational performance during a period - Acquisition related expenses (transaction costs, retention payments, holdback payments) and disposition related income are excluded as they are not necessarily reflective of operational performance during a period[30](index=30&type=chunk) [Non-Cash Interest Expense for Debt Issuance Costs](index=15&type=section&id=D.%20Non-cash%20interest%20expense%20for%20amortization%20of%20debt%20issuance%20costs) Non-cash interest expense from the amortization of debt issuance costs for convertible notes is excluded for better comparability, noting that the 2025 Convertible Notes matured in June 2025, so no further expense is expected - Non-cash interest expense from the amortization of debt issuance costs for convertible notes is excluded for useful comparison; the 2025 Convertible Notes matured in June 2025, so no more expense is expected[31](index=31&type=chunk) [Strategic Investments](index=15&type=section&id=E.%20Strategic%20investments) Gains, impairment losses, or proportionate share of net earnings from non-controlling equity investments in privately held companies are excluded as they are not indicative of fundamental operating activities - Gains, impairment losses, or proportionate share of net earnings from strategic investments (non-controlling equity investments in privately held companies) are excluded as they are not indicative of fundamental operating activities[32](index=32&type=chunk) [Restructuring Charges](index=15&type=section&id=F.%20Restructuring%20charges) Restructuring charges, including severance, employee benefits, and facility costs from the January 2023 plan, are excluded as they fluctuate and are not reflective of core business operating results. Future incremental charges and cash payments related to abandoned facilities are also expected to be excluded - Restructuring charges (severance, employee benefits, facilities, and other costs) from the January 2023 plan are excluded as they fluctuate and are not reflective of core business operating results[32](index=32&type=chunk) - Expected incremental restructuring charges of **$10-11 million** and **$35.0 million** in fixed rent payments through 2027 for abandoned facilities will also be excluded from non-GAAP earnings, operating cash flow, and free cash flow metrics[32](index=32&type=chunk) [Income Tax Effects of Non-GAAP Items](index=15&type=section&id=G.%20Income%20tax%20effects%20of%20non-GAAP%20items) A fixed long-term projected tax rate of 20% is applied to non-GAAP items to ensure consistency across reporting periods, with periodic reevaluation for significant events - A fixed long-term projected tax rate of **20%** is applied to non-GAAP items to provide better consistency across reporting periods, with periodic reevaluation for significant events[32](index=32&type=chunk) [Contact Information](index=15&type=section&id=Contact%20Information) Contact details for investor relations and media inquiries are provided - Investor Relations Contact: investors@hubspot.com[32](index=32&type=chunk) - Media Contact: media@hubspot.com[32](index=32&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 001-36680 HubSpot, Inc. (Exact name of registrant as specified in its charter) Delaware 20-2632791 (State or other jurisdiction of in ...

Core Insights - HubSpot (HUBS) is expected to report quarterly earnings of $2.12 per share, a 9.3% increase year-over-year, with revenues projected at $739.26 million, reflecting a 16% year-over-year growth [1] - Analysts have revised the consensus EPS estimate upward by 2.3% over the past 30 days, indicating a collective reassessment of projections [2] - Changes in earnings projections are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate trends and short-term stock price movements [3] Revenue and Customer Metrics - Subscription revenues are forecasted to reach $722.70 million, marking a 15.9% increase from the previous year [5] - Professional services and other revenues are estimated at $15.21 million, indicating a 13% year-over-year change [5] - The consensus estimate for total customers is 266,775, up from 228,054 in the same quarter last year [5] Additional Financial Metrics - Average Subscription Revenue per Customer is projected at $11,041.30, down from $11,215.00 reported in the same quarter last year [6] - Gross margin (Non-GAAP) for Subscription is expected to be $632.43 million, compared to $549.47 million in the same quarter of the previous year [6] - HubSpot shares have decreased by 7.4% over the past month, contrasting with a 2.3% increase in the Zacks S&P 500 composite [6]

Group 1 - 4Spot Consulting has been recognized by industry leaders Make.com and HubSpot for its innovative automation solutions that help startups and HR teams eliminate inefficiencies and streamline hiring processes [1][7] - The company focuses on enabling high-potential organizations to scale without extensive hiring, emphasizing that automation is essential for profitable growth in today's resource-constrained environment [3][7] - Jeff Arnold, the founder, has shared practical strategies for startups and growth teams through various platforms, highlighting the importance of eradicating human bottlenecks and minimizing repetitive tasks [2][4] Group 2 - Arnold's book, "The Automated Recruiter," provides a framework for modernizing hiring workflows and reducing offer-to-acceptance times using automation and AI tools, contributing to its status as an Amazon best-seller [3][7] - 4Spot Consulting's expertise in deploying low-code and no-code solutions can save companies up to 25% of their operational time through intelligent automation [7] - The firm has been invited to lead workshops and share insights on AI and operational automation by various partners, establishing itself as a trusted voice in the HR tech and startup communities [4][7]

Industry Overview - The Internet Software and Services sector is experiencing growth due to increased IT spending on solutions that support hybrid operating environments [1] - The penetration of mobile devices among users is driving businesses to invest in web-based infrastructure, applications, and security software [1] - The Internet Software industry is currently ranked in the top 32% of Zacks Industry Rank, indicating an expectation to outperform the market in the next three to six months [2] Company Summaries UiPath Inc. (PATH) - UiPath offers an end-to-end automation platform with a range of robotic process automation solutions, primarily in the US and Europe [6] - The platform incorporates AI, ML, and NLP capabilities to enhance decision-making and information processing, with new generative AI features introduced [7] - Expected revenue and earnings growth rates for the current year are 8.5% and 5.7%, respectively, with a 7.7% improvement in the Zacks Consensus Estimate for earnings over the last 60 days [8] Calix Inc. (CALX) - Calix provides cloud and software platforms for broadband service providers across various regions [9] - The Calix Cloud platform includes configurable solutions for revenue-generating services and applications [10] - Expected revenue and earnings growth rates for 2025 are 15.3% and over 100%, respectively, with a 25.6% improvement in the Zacks Consensus Estimate for earnings over the last seven days [11] Arista Networks Inc. (ANET) - Arista Networks is positioned for cloud and AI networking with a focus on proactive products and zero-touch automation [12] - The EOS Smart AI Suite and Arista AVA enhance AI job monitoring and network security [13] - Expected revenue and earnings growth rates for the current year are 19.3% and 13.7%, respectively, with a 0.4% improvement in the Zacks Consensus Estimate for earnings over the last 30 days [14] HubSpot Inc. (HUBS) - HubSpot provides a cloud-based CRM platform and is seeing multi-hub adoption from enterprise customers [15] - The integration of HubSpot AI features is adding value for customers, with a pricing model that lowers barriers for new users [16] - Expected revenue and earnings growth rates for the current year are 15.4% and 15.2%, respectively, with a 2.3% improvement in the Zacks Consensus Estimate for earnings over the last 90 days [17] NICE Ltd. (NICE) - NICE is benefiting from its cloud business and the adoption of AI-powered solutions to enhance customer experience [18] - Investments in automation and analytics are strengthening its competitive edge [19] - Expected revenue and earnings growth rates for the current year are 7% and 11.2%, respectively, with a 1.6% improvement in the Zacks Consensus Estimate for earnings over the last 90 days [19]

Core Insights - Alkami Technology, Inc. has announced a new integration between its Full Funnel Marketing solution and HubSpot, aimed at enhancing personalized, data-driven marketing strategies for financial institutions [1][5] - The integration allows financial institutions to automate audience list updates and execute tailored email campaigns, improving marketing efficiency and effectiveness [2][4] Group 1: Integration Benefits - The integration enables financial institutions to save time and enhance campaign outcomes by linking behavioral insights with automated outreach [1] - Financial institutions can maintain up-to-date audience lists in HubSpot with automatic daily refreshes, ensuring communications are relevant and accurate [2] - Campaigns executed through HubSpot benefit from full-cycle attribution reporting via Alkami, providing visibility into revenue impact [2] Group 2: User Experience and Satisfaction - Research indicates that 42% of digital banking users who are satisfied with how their data is used for product recommendations are more likely to remain loyal and recommend the provider [3] - The integration allows marketers to focus on high-impact engagement rather than time-consuming data management, enhancing the overall marketing strategy [4] Group 3: Company Commitment - Alkami's integration exemplifies its commitment to helping financial institutions deliver timely and relevant messages to account holders [5] - The integration is designed to facilitate agile and results-driven marketing, leveraging Alkami's Customer Insights with HubSpot's automation capabilities [5]

Core Insights - Salesforce, Inc. and HubSpot, Inc. are leading players in the CRM software market, targeting different segments; Salesforce focuses on large enterprises while HubSpot caters to small and mid-sized businesses [1][2] Salesforce Overview - Salesforce remains a dominant force in the CRM market, surpassing competitors like Microsoft, Oracle, and SAP, and is transitioning to a broader enterprise software provider with a focus on AI, data, and collaboration [3] - The introduction of Einstein GPT in 2023 has integrated generative AI into Salesforce's platform, enhancing automation, decision-making, and customer experience [4] - The launch of Agentforce, which has achieved $100 million in annualized revenues within two quarters, demonstrates Salesforce's innovation momentum, with over 4,000 customers utilizing it [5] - Despite its strengths, Salesforce is experiencing a slowdown in sales growth, with Q1 fiscal 2026 revenues increasing by only 7.7% year-over-year and non-GAAP EPS growing by 5.7% [6] - Analysts predict mid-to-high single-digit revenue growth for Salesforce in fiscal 2026 and 2027, with low double-digit growth in non-GAAP EPS [7] HubSpot Overview - HubSpot reported a robust 15.7% revenue growth in Q1, significantly outpacing Salesforce, and is focusing on AI tools and mid-market strategies to enhance growth forecasts through 2026 [8][11] - The company is heavily investing in AI features, workflow automation, and advanced reporting to attract larger mid-market customers, positioning itself for significant expansion as SMBs digitize operations [12] - HubSpot's App Marketplace facilitates customer-centric solutions, enabling seamless integration for businesses, which is likely to create more opportunities as companies adopt a digital-first approach [13] - Analysts forecast mid-teen percentage growth for HubSpot's revenues and non-GAAP EPS for 2025 and 2026, indicating a faster growth trajectory compared to Salesforce [14] Valuation Comparison - HubSpot trades at 8.75 times forward sales, while Salesforce trades at 5.84 times, reflecting HubSpot's higher growth momentum justifying its premium valuation [16] - Salesforce's lower valuation is attributed to its slowing sales growth and macroeconomic challenges [16] Investment Conclusion - While both companies have strong business models, Salesforce is facing growth challenges, whereas HubSpot is maintaining steady growth, making HubSpot a more attractive investment choice despite its higher valuation [18] - HubSpot currently holds a Zacks Rank 1 (Strong Buy), while Salesforce has a Zacks Rank 3 (Hold), indicating a preference for HubSpot among investors [19]