How commonly do customers choose Customer Agent over hiring, and does credit consumption meaningfully exceed traditional Service Hub subscription costs?

Management confirmed that customers are using Customer Agents for after-hours/weekend augmentation and Tier 1 support, freeing human reps for complex issues. They cited examples where customers quickly consume included credits and then purchase significant additional credits (e.g., 100k to 300k monthly), indicating that credit consumption is generating revenue beyond traditional seat costs and increasing TAM. “That is clearly what we get above and beyond what we would have gotten from a Service Hub seat. And those are obviously initial patterns. We are now seeing it over and over again, where customers are going beyond included credit and using it to resolve tickets that then increases our TAM.”

Why was sales retraining done in April, outside the usual January/February timeframe, and what was the specific impact?

The April retraining was tied to the Spring Spotlight innovations and new pricing model. It was a planned effort to get the entire sales team aligned with the new agent-first go-to-market motion, focusing on driving proof of value earlier in the sales process and setting up for expansion. This is a learning curve for the organization as they adapt to selling AI capabilities and outcome-based pricing. “But what we're really taking the time to get the whole organization behind is the new selling motion because we are leaning into helping our customers adopt and transform with AI.”

Is HubSpot shifting focus from top-line growth to margin delivery? And what is the outlook for net new ARR and subscription revenue acceleration given recent changes?

Management clarified there is no shift away from growth; they remain committed to balancing both. While Q1 net new ARR growth was below constant currency revenue growth, they still expect net new ARR growth to exceed constant currency revenue growth for FY26. They acknowledge short-term challenges from sales enablement and pricing changes but believe core drivers and increasing AI monetization will drive modest acceleration in constant currency revenue growth for the remainder of the year. “you should not note this as a shift away from a focus on growth to a focus on profitability. We have always been committed to balancing growth and profitability, and we remain committed to balancing growth and profitability.”

HUBS

HubSpot (HUBS) Q1 FY26 earnings call: guidance and Q&A

Q: How have the April AI pricing changes impacted customer adoption and utilization, and what does the NRR look like for customers consuming credits?

Management stated the pricing changes (outcome-based pricing, 28-day trials) are in response to customer feedback and are expected to accelerate adoption by removing blockers. Early feedback (3 weeks) is positive. They are not disclosing cohort-specific NRR but expect overall NRR to expand 1-2 points in 2026, driven by core seats and credit consumption. “Look, what we are doing is methodically removing every blocker in terms of AI adoption so that our customers have confidence in terms of adopting AI and driving outcomes.”

Earnings call· Mar 2026 (Q1 FY26)· Information Technology· May 7, 2026

Source: earnings call transcript

Executive summary

HubSpot Q1 FY26 — Strong AI Adoption and Margin Expansion

HubSpot delivered a solid quarter, showcasing strong core growth drivers and accelerating AI monetization through core seats and credits. The company is balancing aggressive AI innovation with significant operating margin expansion, reaching its 2027 margin targets a year ahead of schedule. Strategic pricing adjustments and sales enablement efforts are underway to drive long-term AI adoption and value for customers, despite some near-term impacts on sales cycles.

Highlights

Revenue grew 18.2% year-over-year in constant currency in Q1 FY26.
Non-GAAP operating margin expanded by 4 points year-over-year to 17.8% in Q1 FY26.
Total customer count reached nearly 300,000, with 10,800 net customer additions in Q1 FY26.
Deals over $120,000 annual recurring revenue grew 64% year-over-year in Q1 FY26.
Total credits consumed grew 67% quarter-over-quarter, indicating accelerating AI monetization.

Concerns

Q1 net new ARR growth was below constant currency revenue growth.
Pricing and packaging changes in April may extend sales cycles in the near term.
Sales capacity was reduced in April due to a deliberate investment in sales rep training.
Q2 FY26 got off to a slow start due to these dynamics.

Guidance & targets

Category	Target	Timeline	Confidence
Total revenue	$897 million to $898 million high materiality	Q2 · FY26	High
Total revenue growth (as-reported)	18% year-over-year medium materiality	Q2 · FY26	High
Total revenue growth (constant currency)	16% year-over-year medium materiality	Q2 · FY26	High
Non-GAAP operating income	$173 million and $174 million high materiality	Q2 · FY26	High
Non-GAAP operating margin	19% high materiality	Q2 · FY26	High
Non-GAAP diluted net income per share	$3 and $3.02 high materiality	Q2 · FY26	High
Fully diluted shares outstanding	51.2 million low materiality	Q2 · FY26	High
Total revenue	$3.7 billion to $3.708 billion high materiality	FY26	High
Total revenue growth (as-reported)	18% year-over-year medium materiality	FY26	High
Total revenue growth (constant currency)	17% year-over-year high materiality	FY26	High
Non-GAAP operating income	$762 million to $766 million high materiality	FY26	High
Non-GAAP operating margin	21% high materiality	FY26	High
Non-GAAP diluted net income per share	$13.04 and $13.12 high materiality	FY26	High
Fully diluted shares outstanding	51.8 million low materiality	FY26	High
SBC as a percentage of revenue	14% medium materiality	FY26	High
CapEx as a percentage of revenue	5% to 6% low materiality	FY26	High
Free cash flow	$750 million high materiality	FY26	High
Net new ARR growth	above constant currency revenue growth high materiality	FY26	Medium
Net revenue retention	expand by 1 to 2 points year-over-year medium materiality	FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Domestic Domestic revenue growth in Q1 FY26.	—	18%	—	—
International International revenue growth in Q1 FY26, representing nearly half of total revenue. Percentage of total revenue: 49%	—	29% as reported, 18% in constant currency	—	—
Subscription Subscription revenue growth in Q1 FY26 on an as-reported basis.	—	23%	—	—
Services and Other Services and other revenue growth in Q1 FY26 on an as-reported basis.	—	22%	—	—

HUBS operating KPIs by quarter

HUBS operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Customers	<300K Q1 marked a meaningful milestone for HubSpot as our total customer count reached nearly 300,000 globally, driven by 10,800 net customer additions in the quarter. Source: earnings call transcript	306K+ Our total customer count reached over 306,000 globally with 7,000 net additions in the quarter. Source: earnings call transcript	—
Net revenue retention rate	103% Customer dollar retention remained healthy in the high 80s while net revenue retention was 103%, down sequentially as expected, but up over 0.5 point year-over-year. Source: earnings call transcript	102% Customer dollar retention remained healthy in the high 80s, while net revenue retention was 102%, down 1 point year-over-year as continued seat and credit expansion was offset by other net upgrade headwinds as a result of customer budget optimization. Source: earnings call transcript	-1 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Calculated billings $912 million Q1 FY26

19% year-over-year as reported, 17% in constant currency

Product announcements

Product	Type	Timeline
HubSpot AEO (AI Engine Optimization)	launch	Spring Spotlight
Prospecting Agent	update	Spring Spotlight
Smart Deal Progression	launch	Spring Spotlight
Data Agent	update	Spring Spotlight
Customer Agent	update	Spring Spotlight

Deals & partnerships

The Hustle Acquisition to diversify top of funnel

Acquired in 2022 to diversify top-of-funnel demand.

Mindstream Acquisition of an AI-focused newsletter

Acquired to drive top-of-funnel demand with an AI-focused newsletter.

Starter Story Acquisition to diversify top of funnel

One of two incremental acquisitions in Q1 FY26 to diversify top-of-funnel demand.

Futurepedia Acquisition to diversify top of funnel

One of two incremental acquisitions in Q1 FY26 to diversify top-of-funnel demand.

Risks & headwinds

Back-end loaded bookings cadence Ongoing

Not quantified, but noted as a continuing trend.

Mitigation:Management expects this dynamic to continue but is confident in overall growth drivers.

Pricing and packaging changes extending sales cycles Near term

May extend sales cycles in the near term.

Mitigation:These are deliberate actions to drive adoption and usage, with a focus on proof of value and outcome-based pricing. Sales reps are being trained to adapt.

Reduced sales capacity due to training April

Sales capacity reduced during April.

Mitigation:A deliberate investment to train sales reps on new innovations and credit shift. Expected to be a short-term impact, with reps now fully trained.

Slow start to Q2 FY26 Q2 FY26

Q2 got off to a slow start.

Mitigation:Reflected in guidance, management is confident in the product and pricing strategy for durable long-term growth.

Q1 net new ARR growth below constant currency revenue growth Q1 FY26

Q1 net new ARR growth was below constant currency revenue growth.

Mitigation:Management expects net new ARR growth to be above constant currency revenue growth for the full year 2026, driven by core growth drivers and increasing AI monetization.

Legacy Clearbit business headwind FY26

40 basis point headwind to full year 2026 revenue growth.

Mitigation:This is an expected and accounted-for headwind in the full year guidance.

What to watch in Q2 FY26

Net new ARR growth

H2 FY26

Current Below constant currency revenue growth in Q1 FY26

Target Acceleration towards exceeding constant currency revenue growth

Why it matters

Net new ARR is a key indicator of future revenue growth and the effectiveness of sales and marketing efforts, especially with new AI monetization levers.

All that said, we think that the combination of our core growth drivers, great upmarket momentum, multi-hub adoption and pricing in combination with the increasing contribution throughout the year of core seats and credits are the ingredients that we need to deliver net new ARR growth in excess of constant currency revenue growth this year.

Find out whether HUBS delivers this. Inve re-checks your case every morning.

Q&A highlights

How have the April AI pricing changes impacted customer adoption and utilization, and what does the NRR look like for customers consuming credits?

Management stated the pricing changes (outcome-based pricing, 28-day trials) are in response to customer feedback and are expected to accelerate adoption by removing blockers. Early feedback (3 weeks) is positive. They are not disclosing cohort-specific NRR but expect overall NRR to expand 1-2 points in 2026, driven by core seats and credit consumption.

“Look, what we are doing is methodically removing every blocker in terms of AI adoption so that our customers have confidence in terms of adopting AI and driving outcomes.”

asked by Samad Samana · answered by Yamini Rangan

2 min read 6 chapters

Detailed narrative

AI-First Transformation and Product Strategy

HubSpot is undergoing an AI-first transformation, focusing on building, growing, and operating with AI. The company's AI strategy aims to make AI work for growth companies by leveraging its 'growth context' foundation. This context, derived from nearly 300,000 businesses, enables agents to drive real outcomes.

HubSpot is building an agentic customer platform where agents can run on and run HubSpot, emphasizing an open ecosystem strategy where first-party and third-party agents can plug into HubSpot's data and capabilities.

AI Monetization and Adoption

AI monetization is gaining traction through core seats and credits. Active core seat users grew 90% year-over-year, with over 25% of Pro+ customers purchasing additional core seats. Total credits consumed increased 67% quarter-over-quarter, with Customer Agent (53%), Prospecting Agent (17%), Data Agent (16%), and intent monitoring (12%) being top use cases.

The company is seeing real usage beyond included credits as customers achieve measurable value and outcomes.

Pricing and Go-to-Market Evolution

HubSpot recently updated its pricing for agents to align with outcome-based value, introducing free 28-day trials for key agents like AEO, Prospecting, and Customer Agent. Customer Agents now consume credits based on resolved tickets, and Prospecting Agents based on qualified leads.

These changes, while potentially extending sales cycles in the near term, are intended to accelerate adoption by making value easier to observe and commit to. A deliberate investment was made in April to train sales reps on these innovations and the shift to credit-based selling.

Upmarket Momentum and Multi-Hub Adoption

Upmarket momentum remains strong, with deals over $60,000 ARR growing 37% year-over-year and deals over $120,000 ARR growing 64% year-over-year. Customers are consolidating on HubSpot for AI innovation and reduced total cost of ownership. Multi-hub adoption is also robust, with 63% of new Pro+ customers landing with multiple hubs (up 3 points YoY) and 42% of the Pro+ installed base by ARR owning four or more hubs (up 6 points YoY).

Operational Efficiency and Margin Expansion

The company is demonstrating significant operating leverage as an AI-first company. Non-GAAP operating margin expanded 4 points year-over-year to 17.8% in Q1. For FY26, non-GAAP operating margin is guided to 21%, reaching 2027 targets a year early. This is supported by 100% of engineers using AI tools, leading to a 73% increase in lines of code updated per engineer, and a focus on 'institutional productivity'.

Customer Acquisition and Demand Generation

HubSpot added 10,800 net new customers in Q1, bringing the total to nearly 300,000, a 16% YoY increase. This strength, particularly in starter customer additions, is attributed to long-term investments in diversifying the top of the funnel, including acquisitions like The Hustle, Mindstream, Starter Story, and Futurepedia.

AEO (AI Engine Optimization) is also emerging as a highly effective demand channel, converting 3x higher than other leads, with over 15,000 Pro+ customers activating it in trials.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.