Summary
HubSpot reported second quarter fiscal 2026 revenue of $911.7 million, up 19.8% from the prior-year quarter. Gross profit was $750.9 million, up 17.6%, while gross margin slipped to 82.4%, down 1.6 percentage points. The company swung to a GAAP operating profit of $43.3 million from an operating loss in the prior-year quarter, and operating margin reached 4.8%, up 8.0 percentage points. GAAP net income was $43.3 million, also a swing to profit, and diluted EPS was $0.86, up $0.92. On a non-GAAP basis, operating income was $185.3 million, up 44%, with a 20.3% operating margin. Non-GAAP net income was $164.8 million, up 40%, and non-GAAP diluted EPS was $3.26.
Cash generation remained a bright spot. Operating cash flow was $222.8 million, up 35.5% from the prior-year quarter. Capital expenditures were $19.65 million, up 22.6%. Non-GAAP free cash flow was $167.9 million, compared with $116.2 million in the prior-year quarter. Deferred revenue was $1.06 billion, up 18.9%, and remaining performance obligations were $1.70 billion, up 30.8%. The company ended the quarter with $1.4 billion in cash and investments. It repurchased $531.9 million of common stock during the quarter and announced a new $1.0 billion repurchase authorization in August 2026.
Operational metrics showed steady customer growth. HubSpot ended the quarter with 306,446 customers, up 14%. Average subscription revenue per customer was $11,800, up 4% as reported. Calculated billings were $929.7 million, up 14% as reported and 17% in constant currency. Management said it made deliberate choices to accelerate its AI transformation, with pricing and go-to-market changes aimed at helping scaling companies adopt AI. The company also added Jerry Dischler to its board, bringing AI product experience from Google.
Guidance points to continued growth but a slight deceleration. For the third quarter of fiscal 2026, HubSpot expects revenue of $924.0 million to $925.0 million, up 14% as reported and 15% in constant currency. Non-GAAP operating income is guided to $187.0 million to $188.0 million, a 20% margin, and non-GAAP diluted EPS to $3.25 to $3.27. For the full fiscal year 2026, revenue is expected to be $3.678 billion to $3.686 billion, up 18% as reported and 16% 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 diluted EPS to $13.23 to $13.31.
Risks remain familiar. HubSpot cites its history of losses, the need to retain and add customers, significant competition, and rapid technological change, including AI and machine learning. Macroeconomic conditions, foreign currency fluctuations, inflation, tariffs, and geopolitical conflicts could pressure results. The company expects gross margins to decline slightly over time as it invests in infrastructure and AI capabilities. It also expects $5 million to $6 million in incremental restructuring charges and about $20 million in cash payments for abandoned facilities through 2027. Management noted a reasonable possibility that the U.S. valuation allowance could be released within the next 12 months if profitability continues.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $911.7M | $881.0M | +3.5% | $760.9M | +19.8% |
| Gross profit | $750.9M | $735.3M | +2.1% | $638.7M | +17.6% |
| Gross margin | 82.3% | 83.5% | -1.1 pp | 83.9% | -1.6 pp |
| Research & development | $225.8M | $234.2M | -3.6% | $237.3M | -4.9% |
| Sales & marketing | $397.7M | $386.4M | +2.9% | $339.9M | +17.0% |
| General & administrative | $82.9M | $85.6M | -3.2% | $85.0M | -2.4% |
| Total operating expenses | $707.5M | $707.4M | +0.0% | $663.3M | +6.7% |
| Operating income (loss) | $43.3M | $27.9M | +55.0% | -$24.6M | +276.0% |
| Operating margin | 4.8% | 3.2% | +1.6 pp | -3.2% | +8.0 pp |
| Net income (loss) | $43.3M | $32.6M | +33.1% | -$3.3M | +1430.2% |
| Net margin | 4.8% | 3.7% | +1.0 pp | -0.4% | +5.2 pp |
| Diluted EPS | $0.86 | $0.62 | +$0.24 | -$0.06 | +$0.92 |
| Customers | 306,446 | 299,458 | +2.3% | 267,982 | +14.4% |
Risks
The filing expands competition risk to include AI-native companies, generic large language models, generative AI and vibe coding, and notes customers may defer purchasing decisions due to uncertainty about their AI investment priorities. Competitors may develop AI technologies that render HubSpot's products less competitive or obsolete.
Gross margin declined to 82.4% in FY2026 Q2 from 83.9% in FY2025 Q2, down 1.6 pp, and subscription cost of revenue rose 37% in the quarter, driven by subscription and hosting costs and AI inferencing costs. MD&A states it expects gross margins to decline slightly over time as it invests in AI capabilities.
HubSpot relies on third-party AI models, datasets and cloud infrastructure to develop and deliver AI features. Vendors may modify, deprecate, suspend or discontinue access, change terms, increase pricing, or face litigation or security incidents, which could impair HubSpot's AI features and require costly alternatives.
HubSpot's scalable pricing model includes freemium, seats-based and consumption-based changes, and HubSpot Credits consumed by AI agent products. The filing states consumption-based pricing strategies are novel and evolving, with less predictability and risk customers use them at lower levels than expected.
Impairments of strategic investments increased to $2.4 million in FY2026 Q2 from no impairment in FY2025 Q2, and to $3.0 million for the six months ended June 30, 2026 from $1.6 million in the prior-year period. The filing warns of partial or total loss of invested capital and volatility in results.
HubSpot competes for software developers with AI and machine learning backgrounds and expects continued difficulty hiring and retaining highly skilled employees worldwide. The filing notes equity incentives and stock price volatility affect retention, and headcount grew to 9,016 full-time employees as of June 30, 2026 from 8,882 as of December 31, 2025.
In February 2026 HubSpot entered a Revolving Credit Agreement secured by substantially all assets, with a consolidated leverage ratio covenant when it lacks investment-grade ratings. Failure to comply could accelerate debt and give lenders rights to collateral.
Customer growth was primarily driven by increased demand for lower-priced Starter products, which partially offset average subscription revenue per customer gains. A continued shift to lower-priced products could pressure revenue and margins.
Social and ethical issues relating to AI in HubSpot's offerings may cause reputational harm and liability, and potential government regulation of AI use and ethics may increase R&D costs and slow adoption. The filing notes early-stage agentic and generative AI features.
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
Non-GAAP Operating Cash Flow
Non-GAAP Operating Income
Summary, forecast, risks and KPIs are extracted from HUBSPOT INC's SEC filings for Q2 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.