Summary
HubSpot's FY2026 Q1 revenue was $881.0 million, up 23.4% from the prior-year quarter. Gross profit was $735.3 million, up 22.7%. Gross margin was 83.5%, down 0.4 percentage points. The company swung to a GAAP operating profit of $27.9 million from a prior-year operating loss, and operating margin was 3.2%, up 7.0 percentage points. Net income was $32.6 million, up from a prior-year net loss, and diluted EPS was $0.62, up from a prior-year loss per share. On a non-GAAP basis, operating income was $156.8 million, operating margin was 17.8%, net income was $143.0 million, and diluted EPS was $2.72. The quarter marked a clear shift to profitability on both GAAP and non-GAAP measures.
Cash generation remained solid. GAAP operating cash flow was $198.8 million, up 23.1% from the prior-year quarter. Capital expenditures were $15.4 million, up 15.6%. Non-GAAP operating cash flow was $203.5 million, and non-GAAP free cash flow was $153.7 million. Current deferred revenue was $1.04 billion, up 24.1%, while remaining performance obligations were $1.70 billion, up 49.6%. The company repurchased $211.0 million of common stock during the quarter, leaving $789.0 million available under its $1 billion repurchase program. These figures suggest healthy billings and backlog, though deferred revenue growth can vary with billing terms.
Operational momentum was broad. Customers reached 299,458 as of March 31, 2026, up 16% from March 31, 2025. Average Subscription Revenue Per Customer was $11,722 in the quarter, up 6% as-reported. Calculated billings were $912.3 million, up 19% as-reported and 17% in constant currency. Management attributed customer growth to demand for lower-priced Starter products, while average subscription revenue per customer rose on demand for Professional and Enterprise products and foreign currency translation. The company also highlighted AI innovations launched at Spring Spotlight, including Customer Agent, Prospecting Agent, and Data Agent.
Guidance points to continued growth. For the second quarter of 2026, HubSpot expects total revenue growth of 18% as-reported and 16% in constant currency. Second-quarter non-GAAP operating income is guided to $173.0 million to $174.0 million, a 19% margin, and non-GAAP net income per diluted share is guided to $3.00 to $3.02. For the full year 2026, revenue growth is expected at 18% as-reported and 17% in constant currency. Full-year non-GAAP operating income is guided to $762.0 million to $766.0 million, a 21% margin, and non-GAAP net income per diluted share is guided to $13.04 to $13.12. The full-year guidance assumes approximately 51.8 million weighted average diluted shares, while the second-quarter guidance assumes about 51.2 million.
Risks remain. HubSpot operates in a competitive market for customer platforms, and its growth depends on retaining existing customers and adding new ones. The company cites a history of losses, the need to develop new products and AI technologies, and regulatory developments around AI and machine learning. Macroeconomic conditions, foreign currency fluctuations, inflation, tariffs, geopolitical conflicts, and variability in intra-quarter linearity could affect results. Management also notes a full valuation allowance on deferred tax assets, with a reasonable possibility that some or all of it could be released within the next 12 months. The restructuring plan is expected to incur $6 million to $7 million in incremental charges and approximately $23 million in cash payments through 2027. Over time, the company expects gross margins to decline slightly, exclusive of stock-based compensation, while research and development and sales and marketing expenses decline as a percentage of revenue, also exclusive of stock-based compensation.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $881.0M | $846.7M | +4.0% | $714.1M | +23.4% |
| Gross profit | $735.3M | $709.0M | +3.7% | $599.0M | +22.7% |
| Gross margin | 83.5% | 83.7% | -0.3 pp | 83.9% | -0.4 pp |
| Research & development | $234.2M | $220.8M | +6.1% | $220.1M | +6.4% |
| Sales & marketing | $386.4M | $357.5M | +8.1% | $326.7M | +18.3% |
| General & administrative | $85.6M | $81.7M | +4.9% | $78.6M | +8.9% |
| Total operating expenses | $707.4M | $660.8M | +7.0% | $626.5M | +12.9% |
| Operating income (loss) | $27.9M | $48.2M | -42.1% | -$27.5M | +201.7% |
| Operating margin | 3.2% | 5.7% | -2.5 pp | -3.9% | +7.0 pp |
| Net income (loss) | $32.6M | $54.4M | -40.2% | -$21.8M | +249.4% |
| Net margin | 3.7% | 6.4% | -2.7 pp | -3.0% | +6.8 pp |
| Diluted EPS | $0.62 | $1.02 | -$0.40 | -$0.42 | +$1.04 |
| Customers | 299,458 | 288,706 | +3.7% | 258,258 | +16.0% |
Risks
HubSpot faces intensifying competition from rivals using evolving AI, generic large language models, generative AI and general-purpose agents, which could make its platform less competitive or obsolete and pressure pricing and margins. The MD&A also highlights continued AI investments, including Breeze and AI-enabled tools.
The company's scalable pricing model, including freemium and recent seats-based and consumption-based changes, is novel and evolving; consumption-based revenue may be less predictable and customers could use products at lower levels than expected. This could harm revenue and operating results.
The risk factors disclose a cybersecurity incident that affected HubSpot in 2024 and past attempts to exfiltrate customer data, and note that attacks are increasingly enhanced or facilitated by AI. A significant breach could cause liability, remediation costs, reputational harm and customer loss.
Substantially all subscriptions are one year or less, and customers may renew for lower tiers, fewer contacts or seats, or shorter contract lengths. A decline in renewal rates or spending could reduce future revenue, with deferred revenue timing potentially masking downturns.
Weak global economic conditions, inflation, tariffs, trade wars, higher interest rates and geopolitical conflicts, including in Europe, could reduce customer spending, delay purchasing decisions and harm renewal rates. MD&A states foreign exchange fluctuations and rising inflation have had and may continue to have an adverse impact.
HubSpot must attract and retain highly qualified personnel, especially engineers with AI and machine learning backgrounds, amid competition and a remote or hybrid model. Headcount grew to 9,021 full-time employees as of March 31, 2026 from 8,882 as of December 31, 2025, increasing management and integration demands.
In April 2026 HubSpot acquired Futurepedia, and it may pursue more acquisitions. Integration challenges, unanticipated costs, dilution, debt, and goodwill impairment could harm results if acquisitions do not meet expectations.
In February 2026 HubSpot entered a Revolving Credit Agreement secured by substantially all assets, with restrictive covenants and a consolidated leverage ratio requirement when not investment-grade. Default could accelerate debt and limit operational flexibility.
As of December 31, 2025, HubSpot had $1.1 billion of U.S. federal and $866.1 million of state net operating loss carryforwards; some state NOLs could expire unused as early as 2026, and ownership changes could limit utilization. MD&A notes a reasonable possibility that the valuation allowance may be released within the next 12 months.
Gross margin was 83.5% in FY2026 Q1, down 0.4 pp from FY2025 Q1, and MD&A expects gross margins to decline slightly over time due to data center, AI and software investments. AI computing costs and customer mix could further pressure margins.
HubSpot depends on third-party data center hosting, primarily AWS, and on third-party data and APIs from companies such as Meta, Google, LinkedIn and X. Service interruptions, cost increases, or changes to data-sharing policies could impair platform functionality and revenue.
Social and ethical issues, plus potential government regulation of AI, may increase R&D costs, slow adoption, and create reputational or legal liability for HubSpot's AI features, including Breeze.
The Board authorized a $1.0 billion 2026 Share Repurchase Program in February 2026, with $600.3 million remaining as of May 1, 2026. Repurchases could increase stock volatility, reduce cash reserves, and may be suspended or terminated at any time.
HubSpot holds strategic investments in privately held companies and funds, including $12.2 million in the National Strategic Investments Impact Fund and $7.5 million in Minority Depository Institutions as of March 31, 2026. These investments are subject to partial or total loss and fair value volatility.
SaaS KPIs
All quarters →Average Subscription Revenue Per Customer
Non-GAAP Operating Margin
Non-GAAP Subscription Margin
Total Customers
Non-GAAP Free Cash Flow
Calculated Billings
Summary, forecast, risks and KPIs are extracted from HUBSPOT INC's SEC filings for Q1 FY2026 (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.