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HubSpot’s Q1 2026 revenue rose 23% year over year, with non-GAAP operating margin improving to 18% and free cash flow reaching $154 million. The company also ended the quarter with $1.8 billion in cash and repurchased $211 million of stock.
Customer growth and larger deals remained strong, as HubSpot added 10,800 net new customers and approached 300,000 total customers globally. Upmarket adoption continued to accelerate, with deals over $60,000 ARR up 37% and deals over $120,000 ARR up 64%.
AI monetization is gaining traction, with active core seat users up 90% and total credits consumed up 67% quarter over quarter. Management said outcome-based pricing and free trials may extend sales cycles in the near term, but the company still raised full-year 2026 revenue and margin guidance.
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HubSpot (NYSE:HUBS) reported first-quarter 2026 revenue growth of 23% year over year, or 18% in constant currency, as executives said the company’s core growth initiatives and newer AI monetization efforts are gaining traction.
Chief Executive Officer Yamini Rangan said the quarter marked “a meaningful milestone” as HubSpot’s total customer count reached nearly 300,000 globally. The company added 10,800 net new customers during the period, with Chief Financial Officer Kate Bueker noting particular strength in starter customer additions.
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Rangan said HubSpot’s “core growth levers of upmarket, multi-hub, and platform consolidation and pricing tailwind remain solid,” while its emerging AI monetization levers tied to core seats and credits are “gaining traction.”
Bueker said first-quarter subscription revenue grew 23% year over year, while services and other revenue rose 22%, both on an as-reported basis. Domestic revenue increased 18%, while international revenue grew 29% as reported and 18% in constant currency. International revenue represented 49% of total revenue.
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Average subscription revenue per customer was $11,700 in the quarter, up 6% year over year as reported and 2% in constant currency. Customer dollar retention remained in the high 80s, while net revenue retention was 103%. Bueker said the sequential decline in net revenue retention was expected due to normal first-quarter seasonality following peak upgrade activity in the fourth quarter.
Calculated billings were $912 million, up 19% year over year as reported and 17% in constant currency. Non-GAAP operating margin was 18%, up 4 percentage points from the year-earlier period. GAAP operating margin was 3%, compared with negative 4% a year earlier.
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HubSpot reported non-GAAP net income of $143 million, or $2.72 per diluted share, up 49% and 53% year over year, respectively. GAAP net income was $33 million, or $0.62 per diluted share. Free cash flow was $154 million, representing 17% of revenue. The company ended March with $1.8 billion in cash and marketable securities and repurchased $211 million of stock during the quarter under its $1 billion share repurchase program.
Rangan said HubSpot continued to see strong momentum among larger customers, with deals over $60,000 in annual recurring revenue growing 37% year over year and deals over $120,000 in ARR growing 64%.
She said larger customers are consolidating on HubSpot “to drive AI innovation and reduce total cost of ownership,” and added that the company’s partner ecosystem remains a competitive strength, with partners sourcing and cross-selling many of HubSpot’s largest deals.
HubSpot also reported continued progress in multi-hub adoption. Rangan said 63% of new Pro Plus customers landed with multiple hubs in the first quarter, up 3 percentage points year over year. Among the Pro Plus installed base, 42% of ARR now comes from customers owning four or more hubs, up 6 points from a year ago.
“Customers are choosing HubSpot as the data and AI foundation for their go-to-market,” Rangan said.
The company’s 2024 pricing changes also remain a tailwind, according to management. Rangan said HubSpot lowered the price to get started and removed seat minimums, giving customers “a frictionless path to upgrade as they see value.” About 90% of installed-base customers have migrated to the new pricing model, and more than 50% of ARR has gone through a first renewal under the model.
Rangan said HubSpot’s AI strategy is to “make AI work for growth companies,” emphasizing what the company calls “growth context” — customer, process and team data that AI agents can use to drive go-to-market outcomes.
The company highlighted several AI-related adoption metrics:
Active core seat users grew 90% year over year.
More than 25% of Pro Plus customers have purchased additional core seats, up more than 12 percentage points year over year.
Total credits consumed grew 67% quarter over quarter.
Customer Agent represented 53% of credits consumed in the first quarter, followed by Prospecting Agent at 17%, Data Agent at 16% and intent monitoring at 12%.
Rangan said Customer Agent has found “true product-market fit,” while Prospecting Agent and Data Agent are broadening the ways customers use HubSpot’s AI tools.
HubSpot said nearly 14,000 customers have activated Prospecting Agent, up 33% quarter over quarter. Rangan cited Jotform, an online form builder, as a customer using 625,000 credits per month for Prospecting Agent. She said Jotform found in a direct test that the agent qualified leads “on par with human reps,” allowing employees to focus on customer meetings and closing deals.
Data Agent has been activated by more than 9,000 customers, up 122% since the prior quarter. Customer Agent also has more than 9,000 customers, with the average resolution rate rising to 70%, up 5 percentage points from the prior quarter. Rangan said some customers are seeing resolution rates above 90%.
The company also discussed HubSpot AEO, a tool launched at Spring Spotlight to help marketers understand how their brands appear in AI tools such as ChatGPT, Gemini and Perplexity. Rangan said AEO is beginning to drive trials and purchases of standalone AEO and Marketing Hub Pro.
Management said HubSpot recently adjusted pricing for its AI agents to align more directly with outcomes. Customer Agent now consumes credits based on resolved tickets, while Prospecting Agent is tied to qualified leads recommended for outreach. Both agents now include a free 28-day trial.
“Customers pay when the agent works,” Rangan said.
Bueker said customers increasingly want pricing tied to outcomes and proof of value earlier in the sales process. In April, HubSpot lowered the price of Customer Agent, moved Customer Agent and Prospecting Agent to outcome-based pricing, and introduced 28-day free trials for agents and HubSpot AEO.
However, Bueker said these changes may extend sales cycles in the near term as customers evaluate agents and AEO as part of broader purchases. She also said the company made a deliberate investment in April to train sales representatives on Spring Spotlight innovations and the shift to credits, which reduced sales capacity during the month.
“As a result, Q2 got off to a slow start, and we’ve reflected these dynamics in our guidance,” Bueker said.
For the second quarter, HubSpot expects total revenue of $897 million to $898 million, up 18% year over year as reported and 16% in constant currency. The company expects non-GAAP operating income of $173 million to $174 million, representing a 19% margin, and non-GAAP diluted earnings per share of $3.00 to $3.02.
For full-year 2026, HubSpot now expects revenue of $3.7 billion to $3.708 billion, up 18% as reported and 17% in constant currency. Bueker said the constant-currency growth outlook is up 40 basis points from the company’s prior guide. Non-GAAP operating income is expected to be $762 million to $766 million, representing a 21% margin, with non-GAAP diluted EPS of $13.04 to $13.12.
Bueker said the updated 2026 margin guidance places HubSpot “firmly within” its 20% to 22% non-GAAP operating margin target range, reaching 2027 targets a year ahead of schedule. The company expects stock-based compensation as a percentage of revenue to decline by about 3 percentage points to 14% in 2026.
HubSpot continues to expect its legacy Clearbit business to be a 40-basis-point headwind to full-year 2026 revenue growth. The company also expects capital expenditures to be 5% to 6% of revenue and now expects free cash flow of about $750 million for the year.
In response to analyst questions, Bueker said HubSpot remains committed to balancing growth and profitability, not shifting away from growth. She said the company continues to believe net new ARR can grow faster than constant-currency revenue for the full year, supported by upmarket momentum, multi-hub adoption, pricing, core seats and credits.
HubSpot, Inc is a software company that develops a cloud-based customer relationship management (CRM) platform designed to help organizations attract, engage and delight customers. Its primary business activities center on providing integrated marketing, sales and customer service tools that support inbound marketing strategies, content management, lead nurturing, sales automation and customer support workflows.
The company's product suite is organized around modular “hubs” built on a central CRM: Marketing Hub, Sales Hub, Service Hub, CMS Hub and Operations Hub.
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The article "HubSpot Q1 Earnings Call Highlights" was originally published by MarketBeat.
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