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    HUBS
    Earnings call· Jun 2026(Q2 FY26)

    HUBSPOT Q2 FY26 earnings call HUBS

    Aug 5, 2026 Source

    Executive summary

    HubSpot Q2 FY26 — AI Transformation Amidst Demand Headwinds

    HubSpot is actively navigating a significant AI transition, making deliberate product and pricing changes to align with evolving customer buying behaviors. While these strategic shifts and a cautious demand environment created near-term headwinds in Q2, particularly impacting customer acquisition and net new ARR, the company maintains strong conviction in its long-term AI-first strategy, evidenced by accelerating AI adoption and expanding operating margins.

    Highlights

    5

    • Revenue grew 17.5% year-over-year in constant currency.

    • Non-GAAP operating margin expanded 3 points year-over-year to 20.3%.

    • Deals over $120,000 ARR grew 38% year-over-year.

    • Total credit consumption grew in Q2 despite pricing changes.

    • Board authorized an additional $1 billion share repurchase program.

    Concerns

    4

    • Q2 customer net additions were 7,000, below 9,000-10,000 expectation due to weaker conversion and buyer hesitancy.

    • Net revenue retention was 102%, down 1 point year-over-year, impacted by customer budget optimization.

    • Calculated billings grew 17% in constant currency, below revenue growth.

    • Full-year 2026 net new ARR growth expected to be below constant currency revenue growth.

    Guidance & targets

    17
    CategoryTargetConfidence
    Total Revenue (as-reported)
    $924 million to $925 million
    high materiality
    High
    Total Revenue (constant currency)
    up 15% year-over-year
    high materiality
    High
    Non-GAAP operating income
    $187 million and $188 million
    high materiality
    High
    Non-GAAP operating margin
    20%
    high materiality
    High
    Non-GAAP diluted net income per share
    $3.25 and $3.27
    high materiality
    High
    Total Revenue (as-reported)
    $3.678 billion to $3.686 billion
    high materiality
    High
    Total Revenue (constant currency)
    up 16% 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
    $13.23 and $13.31
    high materiality
    High
    Quarterly net additions
    approximately 5,000 to 6,000
    medium materiality
    Medium
    ASRPC growth (constant currency)
    low to mid-single digits
    medium materiality
    Medium
    Net revenue retention
    roughly flat year-over-year
    medium materiality
    Medium
    Net new ARR growth
    below constant currency revenue growth
    medium materiality
    Medium
    CapEx as a percentage of revenue
    5% to 6%
    low materiality
    High
    Free cash flow
    about $750 million
    medium materiality
    High
    Non-GAAP operating margin leverage
    2 to 3 points
    high materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Domestic
    Domestic revenue growth year-over-year.
    		—17%——
    International
    International revenue growth year-over-year, both as reported and in constant currency, representing a significant portion of total revenue.
    % of total revenue: 49%
    		—23% as reported; 18% in constant currency——

    Operational metrics

    27
    Non-GAAP operating margin
    20.3%up 3 points YoY
    Q2 FY26

    Non-GAAP operating margin expansion.

    GAAP operating margin
    5%up 8 points YoY
    Q2 FY26

    GAAP operating margin expansion, reflecting non-GAAP expansion and reduced stock-based compensation.

    Non-GAAP net income
    $165M
    Q2 FY26

    Total non-GAAP net income for the quarter.

    Non-GAAP diluted net income per share
    $3.26up 49% YoY
    Q2 FY26

    Non-GAAP diluted earnings per share.

    GAAP net income
    $43M
    Q2 FY26

    Total GAAP net income for the quarter.

    GAAP net income per diluted share
    $0.86
    Q2 FY26

    GAAP diluted earnings per share.

    Free cash flow margin
    18%
    Q2 FY26

    Free cash flow as a percentage of revenue.

    Cash and marketable securities balance
    $1.4B
    Q2 FY26

    Cash and marketable securities balance at the end of the quarter.

    Share repurchase program executed
    $500M
    Q2 FY26

    Amount of stock bought back under the current $1 billion program.

    Share repurchase program authorization
    $1Badditional authorization
    Q2 FY26

    Additional share repurchase program authorized by the Board of Directors.

    Stock-based compensation as percentage of revenue
    >4 pointsreduction YoY
    Q2 FY26

    Reduction in stock-based compensation as a percentage of revenue.

    Operating margin leverage
    2 points
    FY26

    Expected non-GAAP operating margin leverage for the full year.

    Data agent activated customers
    16,000up 80% QoQ
    Q2 FY26

    Number of customers who have activated the Data agent.

    Prospecting agent activated customers
    17,000up 28% QoQ
    Q2 FY26

    Number of customers who have activated the Prospecting agent.

    Customer agent activated customers
    10,000
    Q2 FY26

    Number of customers who have activated the Customer agent.

    Marketing Hub Pro+ customers activated AEO
    32%
    Q2 FY26

    Percentage of Marketing Hub Pro+ customers who have activated AEO.

    Stand-alone AEO trial activations
    16,000
    Q2 FY26

    Number of customers who have activated a stand-alone AEO trial.

    Deals over $120,000 ARR growth
    38%YoY
    Q2 FY26

    Growth in the number of large ARR deals.

    New Pro+ customers landing with multiple hubs
    64%up 3 points YoY
    Q2 FY26

    Percentage of new Pro+ customers adopting multiple hubs at initial purchase.

    Pro+ customers using agents or Breeze Assistant
    55%up by double-digit percentage points since start of year
    Q2 FY26

    Percentage of Pro+ customers actively using AI features.

    HubSpot agent adoption among Pro+ customers
    mid-teensup from high single digits this year
    Q2 FY26

    Percentage of Pro+ customers adopting HubSpot agents.

    Monthly agentic actions
    increased >3x
    this year

    Total number of agentic actions taken across the customer base.

    Customer agent support ticket resolution
    72%
    Q2 FY26

    Percentage of support tickets resolved by Customer agent without human escalation.

    Agent Builder beta activations
    2,700
    Q2 FY26

    Number of customers who have activated Agent Builder in beta.

    Agent Builder agents adopted
    1,000
    Q2 FY26

    Number of agents already adopted through Agent Builder.

    Breeze Assistant weekly active usage
    doubled
    since start of year

    Growth in weekly active usage of Breeze Assistant.

    Total credit consumption
    grew
    Q2 FY26

    Overall credit consumption increased despite pricing changes.

    Industry KPIs

    11
    MetricValueDetails
    Capacity CAPEX5%-6%% of revenue
    Revenue growth17.5%%
    Arr net new arrbelow constant currency revenue growth
    Bookings billings$930MUSD
    Customer account count306,000customers
    Large deal new logo metrics38%%
    Gross retention renewal ratehigh 80s%
    Multi product platform attach64%%
    Operating FCF margin rule of 4020.3%%
    Ai product adoption monetization>55%%
    Net revenue net dollar retention102%%

    Orderbook & backlog

    1
    Calculated billings$930MQ2 FY26

    up 14% YoY as reported; up 17% YoY in constant currency

    Product announcements

    4
    ProductTypeDetails
    HubSpot AEOlaunch
    Revenue Hublaunch
    Agent Builderlaunch
    Agent Hublaunch

    Risks & headwinds

    5
    Deliberate changes across product, pricing, go-to-marketNear-term

    Created near-term headwinds by extending the buying process.

    Mitigation: Believed to be the right long-term trade-off for accelerating AI adoption and building customer confidence.

    Shift in demand environment with increased budget sensitivityQ2 FY26, expected to persist throughout remainder of FY26

    Purchase decisions facing greater scrutiny, larger buying committees, C-suite/Board approval needed, leading to longer sales cycles.

    Mitigation: Evolved execution playbook: engaging C-suite earlier, accelerating time to value with partners, demonstrating pace of innovation.

    Unpredictable AI costs impacting existing customer budgetsQ2 FY26, expected to persist throughout remainder of FY26

    Leading to budget optimization and downgrade pressure.

    Mitigation: Introduced outcome-based pricing, lowered entry price points, provided clear visibility and control over usage/spend, ability to set thresholds.

    Slower customer acquisitionQ2 FY26, expected to continue with quarterly net additions of 5,000-6,000.

    7,000 net additions in Q2, below 9,000-10,000 expectation.

    Mitigation: Deliberate product/pricing changes to remove friction and build confidence for AI adoption.

    Net new ARR headwindsFY26

    Expected to be below constant currency revenue growth for FY26.

    Mitigation: Strategic choices to better assist customers through AI transition.

    What to watch in Q3 FY26

    5

    Quarterly net additions

    Q3 FY26
    Current7,000 (Q2 FY26)
    Target5,000-6,000

    Why it matters

    Indicates customer acquisition health amidst AI transition and budget scrutiny.

    We now expect quarterly net additions to be approximately 5,000 to 6,000, and ASRPC growth to be in the low to mid-single digits in constant currency.

    Q&A highlights

    7

    Were there additional disruptive choices beyond what's known that influenced results, and are more aggressive moves needed given the fast-moving AI environment?

    Yamini explained that customers are cautious due to platform shift and budget pressure. Deliberate changes (trials, outcome-based pricing, lower entry points for agents) were made to build confidence in AI adoption, accepting near-term headwinds for long-term gain. She also detailed demand environment shifts (longer sales cycles, C-suite involvement) and HubSpot's response to meet customers where they are.

    “We knew that evaluations will slow deal cycles, but we would provide higher confidence for customers as they adopt AI.”

    asked by Samad Samana · answered by Yamini Rangan

    2 min read6 chapters

    Detailed Narrative

    01

    AI Transformation & Strategy

    HubSpot is undergoing a company-wide AI transformation, evolving products, pricing, and go-to-market strategies to lead in the AI era. The core strategy focuses on driving growth for scaling companies by delivering real outcomes across the full customer journey through HubSpot agents and enabling custom agent building. The company aims to provide a controlled, cohesive way for customers to build demand, win deals, and delight customers, avoiding 'agent sprawl'.

    02

    Q2 Headwinds & Responses

    The quarter experienced headwinds from deliberate product and pricing changes, including introducing trials for agents and AEO, outcome-based pricing, and lower entry points for agents, which extended the buying process. Additionally, a shift in the demand environment led to increased budget sensitivity, greater scrutiny for purchases, larger buying committees, and longer sales cycles. HubSpot is responding by engaging C-suite earlier, accelerating time-to-value with partners, and demonstrating its pace of innovation to future-proof investments.

    03

    AI Adoption & Outcomes

    Despite headwinds, AI adoption is accelerating across HubSpot's customer base. Data agent has over 16,000 activated customers (up 80% QoQ), Prospecting agent 17,000 (up 28%), and Customer agent over 10,000. HubSpot AEO saw 32% activation among Marketing Hub Pro+ customers, with nearly 16,000 stand-alone AEO trial activations. Customer examples like Sesame HR (72% support ticket resolution) and RevenueWell (meetings booked up from 8% to 28%) demonstrate tangible business outcomes and credit consumption growth.

    04

    Product Innovation & Agent Ecosystem

    HubSpot expanded its agent portfolio and launched Agent Builder and Agent Hub in July. Agent Builder allows customers and partners to create custom agents and workflows connected to HubSpot CRM, with over 2,700 beta activations and 1,000 agents already adopted. Breeze Assistant, now a primary interaction interface for the platform, is used by over 55% of Pro+ customers, with weekly active usage doubling since the start of the year, leveraging CRM data and governance.

    05

    Operating Leverage & Margin Expansion

    Internal transformation, including reorganization into smaller, focused teams operating in 6-week sprints, is driving operating leverage. The company expects 2 points of non-GAAP operating margin leverage in FY26 and an additional 2-3 points in FY27. This reflects the operating efficiency being built as an AI-first company, alongside a commitment to reduce stock-based compensation as a percentage of revenue year-over-year.

    06

    Upmarket & Multi-Hub Momentum

    Upmarket momentum remains strong, with deals over $120,000 ARR growing 38% year-over-year, indicating continued demand from larger customers for a unified AI-powered customer platform. Multi-hub adoption also continued its positive trend, with 64% of new Pro+ customers landing with multiple hubs, representing a 3-point increase year-over-year, reinforcing the strategic choices being made.

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