HubSpot Inc Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
HubSpot reported strong Q3 2025 financial results driven by platform consolidation, multi-hub adoption, and upmarket momentum, with a significant focus on its AI strategy and new monetization levers like Core Seats and Credits. The company provided an optimistic financial outlook for Q4 and full-year 2025, anticipating continued growth and improved net revenue retention.
Key financial results
Revenue grew 18.4% year-over-year in constant currency, reaching $810 million in Q3 2025.
Operating margin was 20% in Q3, up 1 point compared to the year-ago period and 3 points sequentially.
Total customers increased by 10,900 in the quarter, bringing the global customer base to nearly 279,000.
Subscription revenue grew 21% year-over-year on an as-reported basis.
Services and other revenue increased 19% on an as-reported basis.
Average subscription revenue per customer (ASRPC) was $11,600 in Q3, up 1 point year-over-year in constant currency.
Customer dollar retention remained in the high 80s in Q3.
Net revenue retention was flat sequentially at 103% as expected.
Calculated billings were $804 million in Q3, growing 19% year-over-year in constant currency.
Net income was $140 million in Q3 or $2.66 per fully diluted share.
Free cash flow was $147 million or 18% of revenue in Q3.
Business segment results
Domestic revenue grew 17% year-over-year in Q3.
International revenue growth was 20% in constant currency and 25% as reported, representing 49% of total revenue.
The legacy Clearbit business is a 0.5 point headwind to overall growth in 2025 and a 1 point headwind to domestic growth.
Capital allocation
Cash and marketable securities totaled $1.7 billion at the end of September.
The company repurchased 780,000 shares of common stock for $375 million under its share repurchase program in Q3.
CapEx as a percentage of revenue is expected to be 6% for the full year 2025, driven by higher capitalized software expenses.
Free cash flow is expected to be about $580 million for the full year 2025.
Industry trends and dynamics
The marketing landscape is changing fast, with search traffic declining globally as AI overviews provide answers.
AI is creating entirely new opportunities via LLMs like answer engine optimization (AEO).
HubSpot has been diversifying marketing channels and experimenting with AEO.
The Loop, HubSpot's new playbook for growth in the AI era, combines human creativity with AI efficiency.
The Loop has generated 270 million impressions on its content and over 100,000 views of its playbook experience.
HubSpot's AEO grader has been used by 70,000 customers.
Competitive landscape
HubSpot is winning as a truly unified customer platform, with companies consolidating their go-to-market stacks to reduce total cost of ownership, gain a unified view of customers, and accelerate AI innovation.
HubSpot became the first CRM to connect directly with the three leading LLMs: ChatGPT, Claude, and Gemini.
LLMs and HubSpot are powerful together because LLMs create insights (HubSpot provides context), LLMs generate ideas (HubSpot turns them into action), and LLMs are single-player tasks (HubSpot is built for multiplayer teams).
Platforms were sticky pre-AI and will be even stickier in the AI era.
Growth opportunities and strategies
Core growth drivers include platform consolidation, multi-hub adoption, and upmarket momentum.
Multi-hub adoption has become the norm, with 43% of Pro+ install base by ARR subscribing to three core hubs (up 4 points year-over-year) and 39% on four or more hubs (up 6 points).
Deals over $5,000 monthly recurring revenue grew 35% year-over-year in the upmarket segment.
HubSpot's AI strategy involves embedding AI into hubs, building agents that do work, and creating Breeze assistant and connectors that turn data into insights.
New features launched at INBOUND include AEO strategy tools in Content Hub, AI-powered email in Marketing Hub, AI meeting assistant in Sales Hub, and Data Hub.
Customer Agent now has over 6,200 customers (up 48% from last quarter) with an average resolution rate in the 60s.
Prospecting Agent has been activated by 6,400 customers (up 94% from last quarter) and used to engage over 1 million prospects.
Data Agent has 1,700 customers who have activated it.
Breeze assistant has seen weekly active usage increase by 56% in the past 6 months.
The ChatGPT Connector has been activated by more than 47,000 customers (with 55% being Pro+ customers), and the Claude Connector is used by over 6,000 customers.
Customers using embedded AI features in Marketing Hub get higher click-through rates and over 50% higher lead conversion.
Customers using AI features in Sales Hub are winning almost 10% more deals.
HubSpot announced an agreement to acquire XFunnel, a platform for tracking and improving brand appearance across LLMs.
Emerging growth levers include seats pricing change, Core Seats, and Credits.
The Core Seat has been made more valuable by adding AI and data capabilities like Breeze Assistant, smart starts, projects, and enrichment data, and by unbundling the Smart CRM.
Credits are HubSpot's universal usage-based pricing system covering AI agent actions and Data Hub syncs, with plans to extend across the entire platform.
HubSpot is investing in sales capacity and sales productivity through AI to transform its go-to-market strategy.
Financial Guidance and Outlook
For Q4 2025, total as-reported revenue is expected to be in the range of $828 million to $830 million, up 16% year-over-year in constant currency and 18% on an as-reported basis.
Non-GAAP operating profit for Q4 is expected to be between $183 million and $184 million, representing a 22% operating profit margin.
Non-GAAP diluted net income per share for Q4 is expected to be between $2.97 and $2.99.
For the full year 2025, total as-reported revenue is now expected to be in the range of $3.113 billion to $3.115 billion, up 18% year-over-year in constant currency and 19% on an as-reported basis.
Non-GAAP operating profit for the full year is now expected to be in the range of $574 million to $575 million, representing an 18% operating profit margin.
Non-GAAP diluted net income per share for the full year is now expected to be between $9.60 and $9.62.
Net additions are expected to be in the range of 9,000 to 10,000 in Q4.
ASRPC growth in constant currency is expected to be up roughly 1 point in Q4.
Net revenue retention is expected to see a step up in Q4, resulting in a couple point improvement for the full year 2025.
Net new ARR growth remained above constant currency revenue growth in Q3.
The company believes there is a path for further improvement on net revenue retention over the longer term.
Core Seats and Credits are expected to contribute in a more meaningful way to growth in 2026.
