HubSpot, Inc. Q2 FY2025 earnings call

• Platform strength: New and existing customers are consolidating on HubSpot to lower cost, unify customer view, and drive AI innovation. 61% of new Pro+ customers use multiple hubs, and 42% of ARR-based installed base use all 3 core hubs.
• Upmarket momentum: Large deals are increasing, product innovation is resonating, and partner motion (co-selling up 29% year-over-year) is fueling growth.
• Downmarket velocity: Free to starter conversions are up due to faster time to value and smarter AI-powered onboarding, with pricing changes delivering results.
• Marketing shifts: Organic search traffic is declining while AI search is rising. HubSpot has diversified channels (e.g., 10 YouTube channels with 1.8 million subscribers, leads from newsletters up 50% year-over-year) and is cited in LLMs more than any other CRM.
• AI innovation: AI is embedded across the platform. Customer Agent has over 4,000 customers with 55% average resolution rates, Prospecting Agent has over 3,700 customers, Content Agent has helped over 12,000 customers create content. AI is also used internally for support chat, meeting booking, and engineering productivity.

In Q2 2025, HubSpot's revenue grew 18% year-over-year in constant currency. Total customers globally reached 268,000 with over 9,700 net customer additions. The platform is a major driver: 61% of new Pro+ customers now land with multiple hubs, and 42% of the installed base by ARR use all 3 core hubs (marketing, sales, service). Sales Hub seat upgrades were up 71% year-over-year, and Service Hub seat upgrades were up 110% year-over-year. International revenue growth was 19% in constant currency and 21% as reported, representing 48% of total revenue. Average subscription revenue per customer was $11,300 in Q2, flat year-over-year in constant currency and up 1 point on an as-reported basis.

For the third quarter, total as-reported revenue is expected to be in the range of $785 million to $787 million, up 16% year-over-year in constant currency and 17% on an as-reported basis. Non-GAAP operating profit is expected to be between $156 million and $157 million representing a 20% operating profit margin. Non-GAAP diluted net income per share is expected to be between $2.56 and $2.58. For the full year of 2025, total as-reported revenue is now expected to be in the range of $3.08 billion to $3.088 billion, up 17% year-over-year in both constant currency and on an as-reported basis. Non-GAAP operating profit is now expected to be between $568 million and $572 million, representing an 18% operating profit margin. Non-GAAP diluted net income per share is now expected to be between $9.47 and $9.53. CapEx as a percentage of revenue is expected to be 5% to 6% for the full year, and free cash flow is expected to be about $580 million with seasonally stronger free cash flow in Q4.

The macro environment remains uncertain, which could cause actual results to differ materially from expectations. Volatile conditions in the remainder of the year pose risks, as do potential FX movements that may impact financial performance.

Q: Samad Samana from Jefferies asked about how the changing nature of INBOUND is affected by the agentic AI world and how hubs are pushing the agenda for the next phase shift.

A: Yamini Rangan responded that organic search is disrupted and people are asking questions of LLMs. HubSpot has diversified lead sources (e.g., 10% of leads from blog traffic, 90% from diversified channels like social, YouTube, newsletters) and is leaning into AI engine optimization (AEO/GEO) where companies need to show up in LLM answers.

Q: Elizabeth Porter from Morgan Stanley asked about the types of personas getting access to core seats.

A: Yamini Rangan said the core seat provides powerful edit capabilities and automation, and 25% of Pro+ customers are adding more core seats, with core seat being a platform opportunity and persona seats being functional opportunities.

Q: Mark Murphy from JPMorgan asked about billings growth outpacing revenue growth.

A: Kathryn A. Bueker said constant currency billings growth of 20% is due to strength in upmarket with larger deals and multi-hub deals having higher billing terms, creating a positive gap relative to revenue growth, and revenue and billings growth will track each other but still see a small benefit from duration in the next couple of quarters