Summary
HubSpot's first quarter of 2025 showed steady top-line growth but a wider GAAP loss. Revenue rose 15.7% to $714.1 million. Gross profit was $599.0 million, up 14.7%. Gross margin slipped to 83.9%, down 0.7 percentage points. The GAAP operating loss widened to $27.5 million. GAAP net loss was $21.8 million, a swing from prior-year net income. GAAP diluted loss per share was $0.42. Operating margin was -3.8%, flat with the prior-year quarter. On a non-GAAP basis, operating income was $100.3 million and operating margin was 14.0%, down from 15.0%. Non-GAAP net income was $95.9 million, or $1.78 per diluted share. The gap between GAAP and non-GAAP results remains large, mostly because of stock-based compensation and acquisition-related costs.
Cash generation stayed strong. GAAP operating cash flow was $161.6 million, up 27.1%. Capital expenditures were $13.3 million, up 126.9%. Non-GAAP free cash flow was $122.3 million, and non-GAAP operating cash flow was $166.1 million. Deferred revenue was $836.3 million, up 20.0%. Remaining performance obligations were $1.14 billion, up 37.3%. Customers reached 258,258 at March 31, 2025, up 19% from a year earlier. Average Subscription Revenue Per Customer was $11,038, down 4% as reported. Calculated billings were $766.8 million, up 20% as reported and 18% in constant currency. The customer mix shifted toward lower-priced Starter products, which weighed on average subscription revenue per customer. The board also authorized a share repurchase program of up to $500.0 million over up to 12 months.
Guidance points to continued growth. For the second quarter of 2025, total revenue is expected to be $738.0 million to $740.0 million, up 16% year over year on an as-reported basis and in constant currency. Non-GAAP operating income is expected to be $124.0 million to $125.0 million, a 17% operating profit margin. Non-GAAP net income per common share is expected to be $2.10 to $2.12. For the full year 2025, total revenue is expected to be $3.036 billion to $3.044 billion, up 16% year over year on an as-reported basis and in constant currency. Non-GAAP operating income is expected to be $558.0 million to $562.0 million, an 18% operating profit margin. Non-GAAP net income per common share is expected to be $9.29 to $9.37. Management says it expects to use cash flow from operations to fund growth strategies and may break even from a profitability perspective in the next 12 months. The 2025 convertible notes are due June 1, 2025, and the company settled a portion of the principal after the quarter ended.
Risks remain familiar. HubSpot has a history of losses, and it must retain existing customers and add new ones to keep growing. Competition in customer platforms is intense, and the company must keep developing new products and technologies, including artificial intelligence and machine learning. Macroeconomic conditions, foreign currency fluctuations, inflation, tariffs, and geopolitical conflicts could hurt results. Regulatory and legislative developments on AI and machine learning add uncertainty. The restructuring plan from January 2023 continues to produce variable facilities costs and lease consolidation charges. Income tax expense increased because of an uneven mix in U.S. pre-tax earnings and losses. The quarter's GAAP loss and the pressure on average subscription revenue per customer show that growth is not translating into GAAP profitability yet.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $714.1M | $703.2M | +1.6% | $617.4M | +15.7% |
| Gross profit | $599.0M | $599.8M | -0.1% | $522.3M | +14.7% |
| Gross margin | 83.9% | 85.3% | -1.4 pp | 84.6% | -0.7 pp |
| Research & development | $220.1M | $213.7M | +3.0% | $175.6M | +25.3% |
| Sales & marketing | $326.7M | $314.8M | +3.8% | $300.3M | +8.8% |
| General & administrative | $78.6M | $81.0M | -2.9% | $68.9M | +14.2% |
| Total operating expenses | $626.5M | $610.6M | +2.6% | $545.6M | +14.8% |
| Operating income (loss) | -$27.5M | -$10.8M | -154.4% | -$23.2M | -18.3% |
| Operating margin | -3.9% | -1.5% | -2.3 pp | -3.8% | -0.1 pp |
| Net income (loss) | -$21.8M | $5.0M | -537.3% | $5.9M | -467.3% |
| Net margin | -3.0% | 0.7% | -3.8 pp | 1.0% | -4.0 pp |
| Diluted EPS | -$0.42 | $0.10 | -$0.52 | $0.12 | -$0.54 |
| Customers | 258,258 | 247,939 | +4.2% | 216,060 | +19.5% |
Risks
The filing materially expands AI-related risks around Breeze and generative AI, including costly investment in proprietary datasets and models, potential factual inaccuracies or copyrighted content, and higher computing costs that could pressure margins. MD&A also highlights Breeze as the AI powering the customer platform, making AI execution central to competitive position.
Risk factors disclose that a cybersecurity incident affected the company in 2024 and that attempts to exfiltrate customer data have been experienced in the past, with ongoing risks from phishing, ransomware, supply chain attacks, and remote-work exposure. A significant compromise could lead to customer loss, regulatory fines, remediation costs, and reputational harm.
Risk factors emphasize intense competition from cloud marketing automation, CRM, enterprise suites, and new AI-enabled entrants, some with greater resources or bundling ability. Competitive pressure could force price reductions, reduce margins, and impede customer acquisition and renewals.
MD&A reports Customers grew from 216,060 as of March 31, 2024 to 258,258 as of March 31, 2025, but Average Subscription Revenue per Customer decreased from $11,447 to $11,038 for the three months ended March 31, 2025, driven by increased demand for lower-priced Starter products and foreign currency translation. This mix shift could limit revenue expansion and pressure margins even as customer count rises.
MD&A states fluctuations in foreign exchange rates and rising inflation have had, and may continue to have, an adverse impact on financial condition and operating results, and risk factors add tariffs, trade wars, and interest-rate uncertainty. The company also notes Average Subscription Revenue per Customer was hurt by the stronger U.S. Dollar relative to the Euro and British Pound Sterling.
The company had $368.9 million carrying value of 2025 Notes due June 1, 2025, settled $89.8 million of principal in Q1 2025, and settled an additional $143.6 million after March 31, 2025. Risk factors note that servicing or repurchasing the Notes may require significant cash and could strain liquidity if cash flow or capital markets deteriorate.
Risk factors warn of partial or total loss on strategic investments and volatility in consolidated statements of operations. MD&A shows other income (expense) swung to a $2.3 million expense from $13.2 million income, driven by a $16.2 million decrease in gains on strategic investments and a $2.0 million change in impairment.
The company acquired Frame AI in January 2025 and previously acquired Cacheflow and Clearbit, and risk factors highlight integration, dilution, unforeseen liabilities, and failure to realize anticipated benefits. MD&A notes amortization of acquired technology increased due to Frame AI.
SaaS KPIs
All quarters →Average Subscription Revenue Per Customer
Non-GAAP Operating Margin
Non-GAAP Subscription Margin
Customers
Non-GAAP Free Cash Flow
Calculated Billings
Summary, forecast, risks and KPIs are extracted from HUBSPOT INC's SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.