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HUBSPOT INC (HUBS)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was a strong beat: revenue $760.9m (+19% y/y) vs consensus ~$740.1m; non-GAAP diluted EPS $2.19 vs consensus ~$2.12. GAAP operating margin improved to -3.2% and non-GAAP operating margin was 17.0% . Consensus values retrieved from S&P Global.*
  • FY 2025 guidance raised: revenue to $3.080–$3.088b (from $3.036–$3.044b), non-GAAP operating income to $568–$572m (from $558–$562m), and non-GAAP diluted EPS to $9.47–$9.53 (from $9.29–$9.37) .
  • KPIs healthy: customers 267,982 (+18% y/y), calculated billings $814.3m (+26% as-reported), NRR ~103% (up ~1pt q/q), and non-GAAP FCF $116.2m (15% of revenue) .
  • Stock-relevant catalysts: guidance raise; accelerating billings and seat upgrades; AI product and connector momentum (ChatGPT, Claude) and the credit-based monetization for Customer Agent rolling into the installed base now, with broader consumption tailwinds expected in 2026+ .

What Went Well and What Went Wrong

What Went Well

  • Platform consolidation and seats expansion: 42% of installed base by ARR uses all three core hubs; Sales Hub seat upgrades +71% y/y; Service Hub seat upgrades +110% y/y; core seat adoption expanding personas (admins/ops/finance) .
  • AI adoption and product velocity: 4,000+ Customer Agent customers with ~55% avg resolution rates; 3,700+ Prospecting Agent customers and 17,000 waitlist; 12,000+ Content Agent customers; first CRM connectors with ChatGPT and Claude enable LLM-grounded actions in HubSpot .
  • Billings and guidance: Calculated billings up 26% as-reported (+20% constant currency) with duration tailwinds upmarket; raised FY 2025 guidance across revenue, operating income, EPS; anticipated ~$580m FCF for FY25 .

What Went Wrong

  • GAAP profitability still negative: GAAP operating loss ($24.6m) and GAAP net loss ($3.3m), though improved y/y; non-GAAP margins flat y/y (17.0% vs 17.2%) .
  • ASRPC only modest growth: $11,310, up ~1% as-reported y/y; CFO noted continued value-focused customer behavior and challenges in non-seat upgrade motions; upgrades outside seats remain constrained .
  • Macro uncertainty persists: Management reiterated volatile conditions and prudent posture; FX contributed tailwinds to billings and was embedded into H2 guidance (~$20m), highlighting sensitivity to currency shifts .

Financial Results

Core P&L vs prior periods and estimates

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$637.230 $714.137 $760.866
GAAP EPS ($)($0.28) ($0.42) ($0.06)
Non-GAAP Diluted EPS ($)$1.94 $1.78 $2.19
GAAP Operating Margin (%)(3.8%) (3.8%) (3.2%)
Non-GAAP Operating Margin (%)17.2% 14.0% 17.0%

Q2 2025 vs Wall Street consensus

MetricConsensusActual
Revenue ($USD Millions)$740.082*$760.866
Non-GAAP Diluted EPS ($)$2.124*$2.19
EPS - # of Estimates29*—
Revenue - # of Estimates28*—
Values retrieved from S&P Global.*

Segment Revenue Breakdown

SegmentQ2 2024 ($USD Millions)Q2 2025 ($USD Millions)
Subscription$623.763 $744.532
Professional services & other$13.467 $16.334
Total Revenue$637.230 $760.866

KPIs and Cash Flow

KPIQ2 2024Q2 2025
Customers (period end)—267,982
Net Customer Adds—9,700+
Average Subscription Revenue per Customer (ASRPC)—$11,310
Calculated Billings ($USD Millions)—$814.3
Net Revenue Retention (NRR)—~103%
GAAP Operating Cash Flow ($USD Millions)$117.828 $164.362
Non-GAAP Operating Cash Flow ($USD Millions)$121.709 $167.710
Non-GAAP Free Cash Flow ($USD Millions)$92.068 $116.249

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025$3.036–$3.044B $3.080–$3.088B Raised
Non-GAAP Operating IncomeFY 2025$558–$562m $568–$572m Raised
Non-GAAP Diluted EPSFY 2025$9.29–$9.37 $9.47–$9.53 Raised
FCF ($)FY 2025~$570m ~$580m Raised
CapEx (% of Revenue)FY 2025~5% 5%–6% Raised
Total RevenueQ3 2025—$785–$787m New
Non-GAAP Operating IncomeQ3 2025—$156–$157m (20% margin) New
Non-GAAP Diluted EPSQ3 2025—$2.56–$2.58 (53.0m diluted shares) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
AI/agents adoptionEarly momentum; Customer Agent avg resolution ~42%; agent.ai ecosystem scaling; 75k weekly Copilot users Customer Agent doubled to ~2,500 customers; Copilot users grew to 660k; Spring Spotlight launched 200+ AI features 4,000+ Customer Agent users (~55% resolution); 3,700+ Prospecting Agent users; Content Agent >12k; connectors with ChatGPT and Claude Accelerating
Platform consolidation & multi-hub35% of Pro+ using 4+ hubs; large deals up 21% y/y 37% of Pro+ using 4+ hubs; large deals up 23% y/y 42% installed base by ARR on all three hubs; 61% of new Pro+ land with multiple hubs Strengthening
Seats pricing & upgradesIntroduced seats model; NRR up 2pts to 104% Seats migrations proceeding; ASRPC expected flat; NRR seasonally down to 102% Sales Hub +71% y/y seat upgrades; Service Hub +110% y/y; NRR ~103% (+~1pt q/q) Improving
Demand environment/macroMore openness to growth initiatives but value-driven decisions; caution embedded in FY25 guide Uncertainty remains; FX added $50m to FY guide; prudent assumptions Macro uncertainty reiterated; FX tailwinds embedded (~$20m H2) Cautious but stable
Billings/durationQ4 billings +21% cc; FX headwind Q1 billings +18% cc Q2 billings +20% cc; duration tailwinds upmarket; as-reported +26% Positive lead indicator
Top-of-funnel/search shifts—Diversification; blog dependence down; agentic marketing vision Organic search decline; AI answers rise; YouTube leads +96% y/y; newsletter leads +50% y/y Structural shift underway
Partner ecosystemCo-selling +68% y/y; changes to partner commissions Co-selling +41% y/y; partner influence ~40% ARR Co-selling +29% y/y; partners drive upmarket wins Durable lever

Management Commentary

  • “Q2 was another solid quarter of continued revenue growth and customer expansion… Our strategy is to be the leading AI-first customer platform for scaling companies… Heading into Q3, we’re strongly positioned to deliver durable, long-term growth.” — Yamini Rangan, CEO .
  • “Calculated billings were $814,000,000 in Q2, growing 20% year over year in constant currency and 26 on an as reported basis… larger deals, more multi hub deals… extension of duration… helps create a bit of a positive gap for billings growth vs revenue.” — Kate Bueker, CFO .
  • “We’re now cited in LLMs more than any other CRM… clicks from LLMs convert much better than organic search… we’re helping our customers lead through it.” — Yamini Rangan (on AI answers and diversified channels) .
  • “Core seat expands beyond personas to admins, ops, finance… we’ll add a ton of value into that core platform layer… sustained growth.” — Yamini Rangan .

Q&A Highlights

  • Inbound and agentic marketing: Management detailed structural shifts from SEO to AI answers and diversified channels (YouTube, social, newsletters), with higher-converting LLM traffic; playbook being shared with customers .
  • Core seats strategy vs persona seats: Clear delineation; no cannibalization expected; daily-flow AI belongs in core/persona seats; work-doing AI (Customer/Prospecting Agents) monetized via credits .
  • Billings leading indicators: Constant-currency billings +20% with upmarket duration tailwinds; expectation of billings and revenue tracking with small duration benefit in coming quarters .
  • AI monetization (credits): Customer Agent added to credit-based pricing in June; early rollout to installed base; broader monetization impact expected in 2026; philosophy is value-first .
  • FX and guidance: Dollar weakness tailwind embedded; ~$20m FX tailwind added in H2 guidance; Q2 beat largely core performance plus some FX .

Estimates Context

  • Q2 2025 consensus revenue ~$740.1m vs actual $760.9m; consensus non-GAAP diluted EPS ~$2.12 vs actual $2.19. Both revenue and EPS were beats. EPS estimates count: 29; revenue estimates count: 28. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Raised FY 2025 guidance across revenue, operating income, and EPS indicates durable growth trajectory; Q3 guide implies continued y/y growth and margin expansion on a non-GAAP basis .
  • Leading indicators improving: billings growth outpacing revenue on duration and upmarket momentum; NRR trending up on seat upgrades; core seats expanding personas—supporting multi-hub consolidation .
  • AI as a multi-year tailwind: strong agent adoption; embedded AI features driving attach and seat upgrades; new LLM connectors (ChatGPT, Claude) deepen workflows, likely supporting expansion and future consumption monetization .
  • Cash generation remains robust: Q2 non-GAAP FCF $116.2m (15% margin) and full-year FCF guide ~$580m; modest CapEx uplift reflects higher capitalized software costs .
  • Watch for 2026 consumption contribution: credits for Customer Agent now live; broader agent monetization expected to contribute meaningfully over time; near-term focus remains seats expansion and platform consolidation .
  • Near-term trading: Guidance raise plus estimate beats are positive; monitor FX sensitivity and macro commentary; track billings duration and upmarket mix as indicators of sustained acceleration .
  • Risks: GAAP losses persist; non-seat upgrade motions remain value-constrained; macro uncertainty and FX swings can impact reported growth .

Additional Data and Reconciliations

  • Non-GAAP operating income Q2: $129.1m; subscription margin non-GAAP 87.1%; operating cash flow and free cash flow reconciliations provided in 8-K .
  • Balance sheet: Cash, cash equivalents, and investments $1.9b at 6/30/25; repurchased ~$125m of common stock; $375m remaining authorization .

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