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    HUBS
    Earnings call· Mar 2026(Q1 FY26)

    HUBSPOT Q1 FY26 earnings call HUBS

    May 7, 2026 Source

    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

    5

    • 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

    4

    • 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

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

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    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%——

    Operational metrics

    38
    Non-GAAP operating margin
    17.8%up 4 points year-over-year
    Q1 FY26

    Non-GAAP operating margin expansion in the quarter.

    Deals over $60,000 ARR growth
    37%year-over-year
    Q1 FY26

    Growth in larger deals, indicating upmarket momentum.

    Deals over $120,000 ARR growth
    64%year-over-year
    Q1 FY26

    Growth in largest deals, indicating strong upmarket momentum.

    New Pro+ customers landing with multiple hubs
    63%up 3 points year-over-year
    Q1 FY26

    Indicates platform consolidation and multi-hub adoption among new customers.

    Pro+ installed base with 4 or more hubs
    42%up 6 points year-over-year
    Q1 FY26

    Indicates platform consolidation and multi-hub adoption within the existing installed base.

    Installed base migrated to new pricing model
    90%
    Q1 FY26

    The shift to the new pricing model is largely complete.

    ARR through first renewal under new pricing
    >50%
    Q1 FY26

    More than half of ARR has gone through the first renewal under the new pricing model.

    Active core seat users growth
    90%year-over-year
    Q1 FY26

    Strong growth in core seat adoption, which is the foundation for AI features.

    Pro+ customers purchased additional core seats
    >25%up over 12 points year-over-year
    Q1 FY26

    Indicates increasing monetization of core seats as customers expand usage.

    Total credits consumed growth
    67%quarter-over-quarter
    Q1 FY26

    Accelerating consumption of AI credits.

    Credit consumption by use case
    53%
    Q1 FY26

    Breakdown of credit consumption by top use cases.

    Credit consumption by use case
    17%
    Q1 FY26

    Breakdown of credit consumption by top use cases.

    Credit consumption by use case
    16%
    Q1 FY26

    Breakdown of credit consumption by top use cases.

    Credit consumption by use case
    12%
    Q1 FY26

    Breakdown of credit consumption by top use cases.

    Prospecting Agent activated customers
    Nearly 14,000up 33% quarter-over-quarter
    Q1 FY26

    Adoption of Prospecting Agent.

    Jotform monthly credit consumption
    625,000
    monthly

    Example of a customer's high credit consumption for Prospecting Agent.

    CRM update accuracy improvement
    10x
    current

    Improvement seen by customers using Smart Deal Progression.

    Smart Deal Progression weekly usage
    75%
    weekly

    Repeat usage rate for Smart Deal Progression.

    Data Agent activated customers
    Over 9,000up 122% since last quarter
    Q1 FY26

    Significant growth in Data Agent adoption.

    Customer Agent customers
    Over 9,000
    Q1 FY26

    Number of customers using Customer Agent.

    Customer Agent average resolution rate
    70%up 5 points from last quarter
    Q1 FY26

    Resolution rate for Customer Agent, with some customers exceeding 90%.

    Engineer AI tools usage
    100%
    current

    All engineers now use AI tools in development.

    Lines of code updated per engineer increase
    73%
    current

    Increase in engineering productivity due to AI tools.

    Non-GAAP net income
    $143 million
    Q1 FY26

    Non-GAAP net income for the quarter.

    Non-GAAP diluted EPS
    $2.72up 53% year-over-year
    Q1 FY26

    Non-GAAP diluted earnings per share for the quarter.

    GAAP net income
    $33 million
    Q1 FY26

    GAAP net income for the quarter.

    GAAP diluted EPS
    $0.62
    Q1 FY26

    GAAP diluted earnings per share for the quarter.

    Cash and marketable securities balance
    $1.8 billion
    end of March

    Total cash and marketable securities at quarter end.

    Stock buyback executed
    $211 million
    Q1 FY26

    Amount of stock repurchased during the quarter.

    Organic traffic decline for customers
    27%
    this year

    Decline in organic traffic observed by HubSpot's customers, highlighting the need for new tools like AEO.

    Pro+ customers activated AEO
    Over 15,000
    current

    Number of Pro+ customers trialing HubSpot AEO.

    Customers with 500 or more seats growth
    450%
    year-over-year

    Growth in the number of larger customers.

    AEO lead conversion rate
    3x higherthan other leads
    current

    Effectiveness of AEO as a demand generation channel for HubSpot itself.

    Jotform users
    35 million
    current

    Number of users for Jotform, an online form builder that uses HubSpot's Prospecting Agents.

    Synegen support conversation resolution rate
    85%
    current

    Synegen's autonomous resolution rate using HubSpot's Customer Agents.

    Sandler leads growth with AEO tools
    160%
    current

    Growth in leads for Sandler using HubSpot's new AEO tools.

    Average subscription revenue per customer
    $11,700up 6 points year-over-year as reported and 2 points in constant currency
    Q1 FY26

    Average subscription revenue per customer in Q1.

    GAAP operating margin
    3%compared to a negative operating margin of 4% in the year ago period
    Q1 FY26

    GAAP operating margin for the quarter, showing 7 points of expansion.

    Industry KPIs

    12
    MetricValueDetails
    Capacity CAPEX5% to 6%% of revenue
    Revenue growth18.2%%
    Arr net new arr37%%
    Bookings billings$912 millionUSD
    Pricing model mix90%%
    Customer account countNearly 300,000customers
    Large deal new logo metrics64%%
    Gross retention renewal rateHigh 80s%
    Multi product platform attach63%%
    Operating FCF margin rule of 4017.8%%
    Ai product adoption monetization90%%
    Net revenue net dollar retention103%%

    Orderbook & backlog

    1
    Calculated billings$912 millionQ1 FY26

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

    Product announcements

    5
    ProductTypeDetails
    HubSpot AEO (AI Engine Optimization)launch
    Prospecting Agentupdate
    Smart Deal Progressionlaunch
    Data Agentupdate
    Customer Agentupdate

    Deals & partnerships

    4
    The HustleAcquisition to diversify top of funnel

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

    MindstreamAcquisition of an AI-focused newsletter

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

    Starter StoryAcquisition to diversify top of funnel

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

    FuturepediaAcquisition to diversify top of funnel

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

    Risks & headwinds

    6
    Back-end loaded bookings cadenceOngoing

    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 cyclesNear 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 trainingApril

    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 FY26Q2 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 growthQ1 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 headwindFY26

    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

    5

    Net new ARR growth

    H2 FY26
    CurrentBelow constant currency revenue growth in Q1 FY26
    TargetAcceleration 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.

    Q&A highlights

    5

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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).

    05

    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'.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.