HubSpot — Q3 2026 Earnings Summary

Financial Performance:

• Total revenue was $947.6 million, up 17% on an as-reported basis and in constant currency compared to Q3 2025.
• Subscription revenue was $930.2 million, up 18% on an as-reported basis.
• Professional services and other revenue was $17.3 million, down 3% on an as-reported basis.
• GAAP operating income was $71.9 million, compared to $11.2 million in the prior year period.
• Non-GAAP operating income was $214.2 million, up 33% year-over-year.
• GAAP operating margin was 7.6%, compared to 1.4% in the prior year period.
• Non-GAAP operating margin was 22.6%, compared to 19.9% in the prior year period.
• GAAP net income was $83.0 million ($1.68 per basic and $1.67 per diluted share), compared to $16.5 million ($0.31 per basic and diluted share).
• Non-GAAP net income was $188.9 million ($3.82 per basic and $3.81 per diluted share), up 35% in total and 43% per share compared to the prior year period.
• Operating cash flow was $238.0 million, compared to $187.4 million in the prior year period.
• Non-GAAP operating cash flow was $242.7 million, compared to $191.8 million in the prior year period.
• Non-GAAP free cash flow was $188.0 million, compared to $146.9 million in the prior year period.
• Cash and cash equivalents, short-term, and long-term investments totaled $1.3 billion as of September 30, 2026.
• Deferred revenue increased to $1.04 billion from $1.00 billion as of December 31, 2025.

Guidance and Future Outlook:

• Q4 2026 total revenue is expected to be $945.0 million to $947.0 million, up 12% year-over-year on an as-reported basis and in constant currency.
• Q4 2026 non-GAAP operating income is expected to be $216.0 million to $217.0 million, representing a 23% operating income margin.
• Q4 2026 non-GAAP net income per share is expected to be $3.85 to $3.87, assuming approximately 48.9 million weighted average diluted shares outstanding.
• Full Year 2026 total revenue is expected to be $3.685 billion to $3.687 billion, up 18% year-over-year on an as-reported basis and 16% in constant currency.
• Full Year 2026 non-GAAP operating income is expected to be $772.0 million to $773.0 million, representing a 21% operating income margin.
• Full Year 2026 non-GAAP net income per share is expected to be $13.59 to $13.61, assuming approximately 50.4 million weighted average diluted shares outstanding.
• Management expects to incur $65-75 million in restructuring charges related to the 2026 Restructuring Plan, the majority of which will be incurred in Q4 2026.
• Management expects to incur incremental restructuring charges of approximately $4-5 million for continuing costs for abandoned facilities through 2027.
• Management expects to make cash payments of approximately $16 million in fixed rent payments for abandoned facilities through 2027.

Business Segments and Product Lines:

• Customer count grew to 311,704 as of September 30, 2026, up 12% year-over-year.
• Average Subscription Revenue Per Customer was $12,038 during Q3 2026, up 4% on an as-reported basis.
• Calculated billings were $924.9 million in Q3 2026, up 15% on an as-reported basis and in constant currency.
• HubSpot is transforming its product, pricing, go-to-market, and operations to lead in the "Outcomes Era" driven by AI agents.
• The platform includes AI-powered engagement hubs, a Smart CRM, and a connected ecosystem with over 2,000 App Marketplace integrations.

Market and Competitive Landscape:

• Management describes the current environment as an early stage of a massive shift with AI, transforming software from tools that help people do work to agents that do the work and deliver outcomes.
• The company is positioning its agentic customer platform to capture the opportunity of this AI shift.

Risks and Challenges:

• Forward-looking statements are subject to risks including the ability to retain existing customers, add new customers, and sustain profitability.
• Risks include the potential for restructuring charges to be greater than anticipated, restructuring efforts not generating intended benefits, or causing operational disruptions.
• Risks include changes in customer buying behavior for AI solutions, pricing headwinds, and macroeconomic instability.
• Risks include regulatory and legislative developments on the use of artificial intelligence and machine learning.
• Risks include the impact of geopolitical conflicts, inflation, foreign currency movement, and variability in intra-quarter linearity of the business.

Management Commentary and Tone:

• Yamini Rangan, CEO, stated the company is transforming HubSpot to lead in the Outcomes Era as AI fundamentally changes software.
• Management expressed confidence in capturing the AI opportunity by transforming product, pricing, go-to-market, and operations.
• Management noted meaningful progress was made across these transformation areas during the quarter.

Other Key Points:

• HubSpot repurchased $237.2 million of its common stock during the third quarter.
• The company updated its fixed long-term projected non-GAAP tax rate from 20% to 15% to reflect regulatory changes from the One Big Beautiful Bill signed into law on July 4, 2025.
• The 2025 Convertible Notes matured in June 2025, and no additional expense for amortization of one-time upfront debt issuance costs has been recognized thereafter.
• The 2026 Restructuring Plan includes charges expected to be incurred primarily in Q4 2026.
• Non-GAAP measures exclude stock-based compensation, amortization of acquired intangible assets, acquisition-related expenses, restructuring charges, and gains/impairments on strategic investments.