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HUBSPOT INC (HUBS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a clean beat and margin expansion: revenue $809.5M (+21% y/y; +18% cc) and non-GAAP diluted EPS $2.66; non-GAAP operating margin rose to 19.9% from 18.7% y/y, driven by operating leverage and continued mix shift to subscription . Against S&P Global consensus, revenue and EPS exceeded $786.9M and $2.586, respectively*.
  • FY25 guidance raised across the board: revenue to $3.113–$3.115B (from $3.080–$3.088B), non-GAAP operating income to $574–$575M (from $568–$572M), and non-GAAP EPS to $9.60–$9.62 (from $9.47–$9.53). Q4 introduced with revenue $828–$830M, non-GAAP OI $183–$184M, EPS $2.97–$2.99 .
  • KPIs remained healthy: customers reached 278,880 (+17% y/y), ASRPC rose 3% as reported to $11,578, calculated billings were $804.0M; non-GAAP free cash flow was $146.9M (18% of revenue). HUBS repurchased $375M of stock in Q3 and ended with ~$1.7B in cash and investments .
  • Management emphasized accelerating AI adoption (Customer Agent 6,200 customers; Prospecting Agent 6,400 activations; Data Agent early traction) and the new “Loop” playbook to navigate AI-driven changes in marketing (AEO), supporting a durable growth narrative into 2026+ .

What Went Well and What Went Wrong

  • What Went Well

    • Beat on revenue and EPS with operating leverage: $809.5M revenue; non-GAAP op margin 19.9%; non-GAAP EPS $2.66 .
    • Strong AI momentum and multi-hub adoption: “Our AI strategy is working…Customer Agent and Prospecting Agent are delivering results…we released over 200 new product innovations and launched the Loop” — CEO Yamini Rangan .
    • Up-market strength: deals >$5K MRR grew 35% y/y; 43% of Pro Plus installed base by ARR on three core hubs and 39% on 4+ hubs, supporting expansion and pricing/seat model leverage .

  • What Went Wrong

    • Billings growth moderated versus Q2’s outsized print; mix shift to install-based selling and less duration benefit narrowed the billings/revenue gap this quarter, despite healthy fundamentals .
    • ASRPC growth still modest in constant currency; while improving, management continues to cite value-focused customers and upgrades as a key swing factor for ASRPC momentum .
    • Net revenue retention remained 103% in Q3 (flat q/q) with step-up expected in Q4; other net upgrade motions outside seats remain challenged as customers stay value oriented .

Financial Results

P&L and Margins (chronological: oldest → newest)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($M)669.7 714.1 760.9 809.5
GAAP Diluted EPS ($)0.16 (0.42) (0.06) 0.31
Non-GAAP Diluted EPS ($)2.18 1.78 2.19 2.66
GAAP Operating Margin (%)(1.4%) (3.8%) (3.2%) 1.4%
Non-GAAP Operating Margin (%)18.7% 14.0% 17.0% 19.9%

Segment Revenue ($M)

SegmentQ3 2024Q2 2025Q3 2025
Subscription654.7 744.5 791.7
Prof. Services & Other15.0 16.3 17.8
Total669.7 760.9 809.5

KPIs and Mix

KPIQ1 2025Q2 2025Q3 2025
Customers (Period End)258,258 267,982 278,880
ASRPC ($)11,038 11,310 11,578
Calculated Billings ($M)766.8 814.3 804.0
International Revenue Mix (%)—48 49
Net Revenue Retention (%)—103 103
Non-GAAP Free Cash Flow ($M)122.3 116.2 146.9

Actuals vs S&P Global Consensus

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue Actual ($)669,721,000 714,137,000 760,866,000 809,518,000
Revenue Consensus ($)647,292,640*700,401,390*740,082,190*786,884,180*
Primary EPS Actual ($)2.18 1.78 2.19 2.66
Primary EPS Consensus ($)1.90888*1.76310*2.12399*2.58596*

Values with asterisks are from S&P Global consensus via GetEstimates. Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025$3.080–$3.088B $3.113–$3.115B Raised
Non-GAAP Operating IncomeFY 2025$568–$572M $574–$575M Raised
Non-GAAP Diluted EPSFY 2025$9.47–$9.53 $9.60–$9.62 Raised
Total RevenueQ4 2025—$828–$830M Introduced
Non-GAAP Operating IncomeQ4 2025—$183–$184M Introduced
Non-GAAP Diluted EPSQ4 2025—$2.97–$2.99 Introduced
CapEx as % of RevenueFY 20255–6% 6% Raised (upper bound reaffirmed)
Free Cash FlowFY 2025≈$580M ≈$580M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 and Q1)Current Period (Q3 2025)Trend
AI/Technology initiativesFirst CRM connectors for ChatGPT and Claude; 20K+ customers using; strong AI embed across hubs Direct connectors to ChatGPT, Claude, Gemini; Customer Agent 6,200 customers; Prospecting Agent 6,400 activations; Data Agent launched; Loop playbook at INBOUND Accelerating adoption and product cadence
Platform consolidation & Multi-hub42% of installed base (ARR) on three core hubs 43% on three core hubs; 39% on 4+ hubs Strengthening
Up-market momentumLarger deals, partner co-selling up 29% y/y Deals >$5K MRR +35% y/y; brand awareness up Positive
Pricing/Seats/CreditsCore seat adoption building; credits introduced, early Credits consumption led by Customer Agent; Data Hub syncs rising; disciplined activation → monetization framework Building line of sight to monetization
Marketing & AEODiversifying channels; AI search/LLM shifts; early AEO efforts “Loop” playbook; AEO tools; planned XFunnel acquisition to track LLM presence Maturing GTM response
Regional trendsInternational 48% of revenue International 49% of revenue Stable/slight expansion
Governance/Board—Clara Shih (Meta Business AI) appointed to Board Enhanced AI governance/insight

Management Commentary

  • Strategic positioning: “Our AI strategy is working, and customers are seeing value. Customer Agent and Prospecting Agent are delivering results…we released over 200 new product innovations and launched the Loop, a new growth playbook for the AI era.” — CEO Yamini Rangan .
  • Growth levers: “Platform consolidation, multi-hub adoption, and up-market momentum…emerging levers are gaining momentum, including seats pricing change, core seats, and credits.” — CEO .
  • Estimates framework: “Net new ARR is the leading indicator…It will take repeating quarters of net new ARR growth above revenue for revenue to inflect.” — CFO Kate Bueker .
  • Capital allocation: Repurchased $375M of stock; ended Q3 with ~$1.7B in cash and investments .

Q&A Highlights

  • Path back to 20% growth: Management underscored durable drivers (platform consolidation, up-market, multi-hub) and emerging monetization (seats, credits) while noting revenue inflects after sustained net new ARR outperformance versus revenue growth .
  • Billings dynamics: Q3 billings grew solidly but with less duration tailwind versus Q2; mix shifted toward install-base selling with fewer upfront months, aligning billings more closely with revenue .
  • Credits monetization: Early but encouraging signals led by Customer Agent and Data Hub syncs; framework focuses on activation → repeat usage → consistent value → paid usage .
  • NRR trajectory: NRR was 103% in Q3 (flat q/q); management reiterated a step-up in Q4 driven by seat upgrades and price model changes at renewal cohorts .
  • Marketing/SEO to AEO: Broad customer interest in Loop/AEO tools as AI overviews disrupt traditional search; diversification across channels (YouTube, social, newsletters) driving top-of-funnel resiliency .

Estimates Context

  • Q3 2025 beat: Revenue $809.5M vs S&P Global consensus $786.9M*; Primary EPS $2.66 vs $2.586*. Q2 2025 revenue $760.9M vs $740.1M*; EPS $2.19 vs $2.124*. Q1 2025 revenue $714.1M vs $700.4M*; EPS $1.78 vs $1.763*. Values retrieved from S&P Global.
  • With FY25 raised guidance and a Q4 non-GAAP operating margin target of ~22%, models likely move higher on revenue, operating income, and EPS; watch ASRPC and credit consumption ramps for incremental 2026 estimate risk/upside .

Values with asterisks are from S&P Global consensus via GetEstimates. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Quality beat with rising margins: non-GAAP operating margin expanded to 19.9% and FY25 margin guide increased; Q4 guide embeds ~22% non-GAAP margin .
  • AI adoption is translating to monetization pathways: embedded AI drives seat upgrades; agents (Customer/Prospecting/Data) underpin credit consumption; both levers support durable growth .
  • Positive mix: multi-hub and up-market momentum (35% y/y growth in >$5K MRR deals) increase ASP durability and contract quality into 2026 .
  • NRR poised to improve in Q4 on seat/pricing changes; track renewal cohorts and upgrade rates for confirmation .
  • Marketing disruption (SEO → AEO) is a tailwind for HUBS as the “Loop” playbook and tooling position it as a share gainer in AI-era demand generation .
  • Capital returns supported by strong cash/FCF: ~$1.7B liquidity; Q3 non-GAAP FCF $146.9M; ongoing buybacks provide downside support .
  • Watch items: Billings duration effects and credit monetization slope; sustained ASRPC improvement and international mix (49% in Q3) can further de-risk the model .

Citations:

  • Q3 2025 press release and 8-K exhibits
  • Q3 2025 earnings call transcript
  • Q2 2025 8-K and call
  • Q1 2025 8-K

S&P Global consensus: Revenue and EPS estimates marked with asterisks are from S&P Global via GetEstimates. Values retrieved from S&P Global.