Executive Summary

Q4 2024 delivered strong topline and profitability: revenue $703.2M (+21% as-reported; +20% cc) and non-GAAP operating margin 18.9%, both up year over year; non-GAAP diluted EPS was $2.32, with free cash flow at $163.0M .
Versus company guidance set in November, HubSpot beat Q4 targets across revenue ($703.2M vs $672–$674M), non-GAAP operating income ($133.1M vs $128–$129M), and non-GAAP diluted EPS ($2.32 vs $2.18–$2.20) — and also exceeded FY 2024 guidance (revenue $2.6275B vs $2.597–$2.599B; non-GAAP op income $460.2M vs $455–$456M; non-GAAP diluted EPS $8.12 vs $7.98–$8.00) .
Management introduced FY 2025 guidance: revenue $2.985–$2.995B (+16% cc; +14% as-reported), non-GAAP operating margin 18%, and non-GAAP diluted EPS $9.11–$9.19; Q1 2025 revenue $697–$699M, non-GAAP operating margin 14%, and non-GAAP diluted EPS $1.74–$1.76; FX expected to be ~200 bps headwind to 2025 revenue growth and ~50 bps to margin .
Catalysts: visible beats vs guidance, accelerating AI adoption (agents, Copilot, Frame AI), improving net revenue retention (104% in Q4, +2 pts seq), and continued multi-hub momentum; modest ARPC pressure persists and SMB upgrade motion remains value-driven, which investors should monitor .

What Went Well and What Went Wrong

What Went Well

Multi-hub adoption and AI embedding drove durable growth and margin expansion: non-GAAP operating margin reached 18.9% in Q4 from 17.1% a year ago; FY 2024 improved to 17.5% from 15.5% .
AI execution and ecosystem scale: “We are entering the year with more clarity on strategy, more alignment on outcomes and more urgency in execution than ever before,” with a focus on unifying structured and unstructured data and building an active agent ecosystem (Agent.ai users grew from 50k to 500k; builders 5k) .
Customer growth and retention: customers reached 247,939 (+21% YoY); NRR improved two points sequentially to 104% on seat-based pricing upgrades; calculated billings were $767.6M (+16% as-reported; +21% cc) .

What Went Wrong

ARPC dipped slightly: Average Subscription Revenue per Customer was $11,312, down 0.5% YoY (as-reported), reflecting pricing changes and value-oriented SMB purchase behavior .
Upgrade motion (beyond seat upgrades) still soft: “People are still value driven… it’s really going to take a big change in the external environment for that other upgrade motion to really move” .
FX headwinds and margin drag: stronger USD projected to reduce 2025 revenue growth by ~200 bps and operating margin by ~50 bps; Q1 margin faces ~1 pt headwind from higher 401(k) match rate .

Financial Results

Core Financials (Quarterly)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$637.2	$669.7	$703.2
GAAP Diluted EPS ($)	($0.28)	$0.16	$0.09
Non-GAAP Diluted EPS ($)	$1.94	$2.18	$2.32
GAAP Operating Margin (%)	(3.8%)	(1.4%)	(1.5%)
Non-GAAP Operating Margin (%)	17.2%	18.7%	18.9%
Free Cash Flow ($USD Millions)	$92.1	$129.2	$163.0

Year-over-Year (Q4)

Metric	Q4 2023	Q4 2024
Revenue ($USD Millions)	$581.9	$703.2
GAAP Diluted EPS ($)	($0.25)	$0.09
Non-GAAP Diluted EPS ($)	$1.77	$2.32
Non-GAAP Operating Margin (%)	17.1%	18.9%

Segment Breakdown (Q4)

Segment	Q4 2023 ($M)	Q4 2024 ($M)	YoY Growth (%)
Subscription Revenue	$570.2	$687.3	+21% (as-reported)
Prof. Services & Other	$11.7	$15.9	+36% (as-reported)

KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Customers (#)	228,054	238,128	247,939
ARPC ($)	$11,215	$11,235	$11,312
Calculated Billings ($M)	N/A	N/A	$767.6

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	Q4 2024	$672–$674M	$703.2M	Beat
Non-GAAP Operating Income	Q4 2024	$128–$129M	$133.1M	Beat
Non-GAAP Diluted EPS	Q4 2024	$2.18–$2.20	$2.32	Beat
Total Revenue	FY 2024	$2.597–$2.599B	$2.6275B	Beat
Non-GAAP Operating Income	FY 2024	$455–$456M	$460.2M	Beat
Non-GAAP Diluted EPS	FY 2024	$7.98–$8.00	$8.12	Beat
Total Revenue	Q1 2025	N/A	$697–$699M	New
Non-GAAP Operating Margin	Q1 2025	N/A	14%	New
Non-GAAP Diluted EPS	Q1 2025	N/A	$1.74–$1.76	New
Total Revenue	FY 2025	N/A	$2.985–$2.995B	New
Non-GAAP Operating Margin	FY 2025	N/A	18%	New
Non-GAAP Diluted EPS	FY 2025	N/A	$9.11–$9.19	New

Notes: FX headwind ~200 bps to 2025 revenue growth and ~50 bps to margin; capex ~5% of revenue in 2025; FCF ~$560M in 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4 2024)	Trend
AI/technology initiatives	“Embedding AI across all hubs… INBOUND showcased Breeze & Breeze Intelligence” ; durable growth focus	AI-first platform; unify structured/unstructured data; Agent.ai user base 500k+ and builders 5k; Copilot 75k WAUs; Customer Agent resolving ~42% now, aiming >50%	Accelerating adoption and productization
Pricing model migration	Seat-based pricing driving customer acquisition and upgrades	NRR up to 104% on seat upgrades; legacy Clearbit wind-down <1 pt revenue headwind; installed base receives up to 5% price lift post first renewal; 50–60% ARR through first renewal by YE25	Positive NRR tailwind; measured ARPC uplift over time
Partner ecosystem	Ongoing enablement; ecosystem strength	Co-selling +68% YoY; 3-year commission on new deals; lifetime commissions retiring in 2025 unless actively engaged; April changes to existing deals	Stronger upmarket execution via partners
Macro/FX	Neutral FX in FY24 guidance	Stronger USD: ~200 bps revenue growth headwind and ~50 bps margin headwind in 2025	Incremental headwind vs FY24
Upmarket & multi-hub	Upmarket momentum; AI features launched	Large deals +21% YoY; >35% of Pro+ customers use 4+ hubs (+7 pts YoY)	Structural mix shift upmarket
Retention & upgrades	Value-driven SMB behavior; stabilization	Downgrades stabilized; upgrades ex-seat remain muted; NRR improvement mainly from seat model	Gradual improvement; watch external backdrop
Internal AI efficiency	Not highlighted	AI support bot handles >35% tickets aiming >50%; AI sales bot resolves >80% website chats; >10k meetings generated via AI in Q4	Efficiency gains support margin leverage
Regulatory/legal (AI)	Risk factors noted in forward-looking language	Ongoing AI regulation risk disclosure in 8-K	Steady disclosure stance

Management Commentary

Strategy: “We will double down on our customer focus and make our products easy, fast, unified and AI first… focused on Briscoe pilots, agents and the AI platform layer” .
Data advantage: “The combination of structured and unstructured data is a game changer… our acquisition of Frame.ai takes this to a whole new level by doing this in real time” .
Ecosystem: “We’ve grown the user base of Agent.ai over 10x… from 50,000 users… to over 500,000 users and empowered over 5,000 builders” ; later, “as of last night that number crossed 900,000… enabled 7,000 people to build” .
Go-to-market: “Rep-driven growth… improved retention… migration to new pricing… ongoing product innovation with AI” .
Financial posture: “Q4 operating margin was 19% and full year operating margin was 17.5%, both up two points… reflects progress in optimizing product infrastructure, focused hiring, and partner commission changes” .

Q&A Highlights

AI monetization approach: Embed AI features across hubs (no separate SKU); future pricing to be hybrid (seats + usage) once repeat value from agents is established; no direct agent monetization assumed in 2025 guidance .
Cost efficiency: Reasoning models (e.g., DeepSeek) reduce inference costs and expand agent use cases; expected positive COGS impact and broader agent capabilities .
Upgrades/downgrades: NRR up to 104%; downgrades stabilized; broader upgrade motion remains value-driven, requiring macro improvement .
Partner commissions change: Three-year commissions for new deals; legacy lifetime commissions retire in 2025 unless active engagement; ecosystem enablement driving +68% co-selling .
Installed base pricing: Migration to seat-based model through 2025; post-migration renewal price lift up to 5%; 50–60% of ARR through first renewal by YE25 .
2025 trajectory: Q1 constant-currency revenue growth is expected to be the low point; acceleration through the year; FX headwind quantification .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable at request time due to access limits; therefore, formal beat/miss vs consensus cannot be provided at this moment. However, relative to company guidance set on Nov 6, HubSpot posted broad beats on revenue, non-GAAP operating income, and non-GAAP diluted EPS for Q4 and FY 2024 .
Attempted retrieval: Primary EPS Consensus Mean and Revenue Consensus Mean for Q4 2024 via S&P Global were not accessible due to daily request limit exceeded. If desired, we can re-run once access resets to quantify consensus comparisons precisely.

Key Takeaways for Investors

HubSpot delivered a high-quality quarter with robust beats vs its own guidance across revenue, non-GAAP operating income, and non-GAAP EPS; FY 2024 also exceeded guidance, reinforcing operating discipline and durable growth .
AI-first execution is translating to tangible KPIs: improving NRR (104%), multi-hub expansion (>35% of Pro+ using 4+ hubs), and early traction for agents/Copilot — potential upside driver to pipeline and retention over 2025 .
2025 guide is prudent in acknowledging FX headwinds (~200 bps on revenue growth; ~50 bps margin) and limited direct agent monetization assumptions — setting up potential for upside as AI usage-based pricing is introduced .
Watch ARPC dynamics and SMB upgrade motion: ARPC fell slightly YoY and broader upgrades remain value-driven; seat-based pricing and renewal price lifts should support gradual ARPC stabilization into 2H 2025 .
Partner ecosystem is an upmarket accelerator: Commission changes and co-selling momentum (+68% YoY) indicate stronger enterprise engagement and multi-hub implementations .
Cash generation remains a strength: Q4 FCF of $163.0M and FY 2025 FCF guide of ~$560M support investment in AI/R&D and targeted sales capacity additions .
Near-term trading: Expect focus on AI product cadence (Spring Spotlight launches) and Q1 being the growth trough per management, with attention to FX and margin cadence; medium-term thesis: platform + AI agent ecosystem, structured/unstructured data advantage, and multi-hub expansion underpin sustained growth and margin improvement .

Appendix: Select Additional Data and Disclosures

Domestic vs international mix: Q4 domestic revenue +19% YoY; international +20% cc and +23% as-reported; 47% of total revenue .
Balance sheet: Cash, cash equivalents, and investments $2.2B at Dec 31, 2024 .
Non-GAAP subscription margin: 88.2% in Q4 (GAAP 87.0%) .
Acquisitions: Frame AI to unify conversational (unstructured) data with CRM (structured) for real-time insights; Cacheflow (CPQ/billing) strengthens Commerce Hub capabilities .

S&P Global consensus was unavailable at request time; formal estimate comparisons cannot be provided until access resets.

HUBSPOT INC (HUBS)·Q4 2024 Earnings Summary