HubSpot, Inc. ((HUBS)) has held its Q1 earnings call. Read on for the main highlights of the call.
HubSpot’s recent earnings call conveyed a predominantly positive sentiment, underscored by robust revenue and customer growth, significant strides in AI adoption, and a new share repurchase program that signals strong confidence in the company’s future. However, challenges such as macroeconomic uncertainty and a decline in average subscription revenue per customer were also acknowledged.
Revenue Growth
HubSpot reported an impressive 18% year-over-year revenue growth in constant currency for Q1 2025, showcasing strong financial performance. This growth highlights the company’s ability to expand its market presence and deliver value to its stakeholders.
Customer Growth
The company experienced a 19% increase in total customers, surpassing 258,000 globally. This growth was driven by over 10,000 net customer additions during the quarter, indicating successful customer acquisition strategies.
AI Adoption and Innovation
HubSpot’s AI initiatives are gaining traction, with Copilot adoption more than doubling to over 660,000 users. Additionally, Customer Agent adoption has doubled in three months, now serving over 2,500 customers with high resolution rates, reflecting the company’s commitment to innovation.
Share Repurchase Program
The Board of Directors authorized a $500 million share repurchase program, demonstrating confidence in HubSpot’s business outlook and long-term growth potential.
Upmarket and Downmarket Expansion
HubSpot reported strong growth in large deals, up 23% year-over-year, with partners playing a significant role, as co-selling increased by 41%. This expansion strategy is crucial for capturing diverse market segments.
Macroeconomic Uncertainty
Despite the positive developments, macroeconomic uncertainty remains a concern, with a heightened focus on delivering value to customers impacting business trends.
Average Subscription Revenue Per Customer Decline
The average subscription revenue per customer decreased to $11,000 in Q1, down 2% year-over-year in constant currency and 4% on an as-reported basis, highlighting a challenge in maintaining revenue per customer.
Net Revenue Retention
Net revenue retention was reported at 102% in Q1, down two points sequentially as expected, indicating a slight decline in customer retention metrics.
Forward-Looking Guidance
For Q2 2025, HubSpot anticipates revenue between $738 million and $740 million, representing a 16% year-over-year growth. The non-GAAP operating profit is expected to be between $124 million and $125 million, with a 17% operating margin. For the full fiscal year, the company forecasts revenue between $3.036 billion and $3.044 billion, marking a 16% growth. HubSpot plans to repurchase up to $500 million of shares, reflecting confidence in its growth opportunities.
In summary, HubSpot’s earnings call highlighted a positive outlook with strong growth in revenue and customer base, significant advancements in AI, and strategic financial maneuvers like the share repurchase program. Despite facing macroeconomic challenges and a decline in average subscription revenue per customer, the company’s forward-looking guidance suggests continued optimism and strategic growth plans.