HUBS Q1 Earnings Call: AI Momentum, Platform Expansion, and New Monetization Models

Sales and marketing software maker HubSpot (NYSE:HUBS) beat Wall Street’s revenue expectations in Q1 CY2025, with sales up 15.7% year on year to $714.1 million. Guidance for next quarter’s revenue was better than expected at $739 million at the midpoint, 2% above analysts’ estimates. Its non-GAAP profit of $1.78 per share was 1% above analysts’ consensus estimates.

Is now the time to buy HUBS? Find out in our full research report (it’s free).

StockStory’s Take

HubSpot’s first quarter results reflected the company’s focus on platform consolidation, upmarket expansion, and customer acquisition in the small and mid-sized business segment. CEO Yamini Rangan attributed recent growth to more customers choosing HubSpot’s unified platform for cost savings and AI capabilities, with over 37% of Pro+ customers now using four or more hubs. Management also highlighted strong performance in landing large enterprise deals, aided by product innovation such as journey orchestration and enhanced sandbox features. The company’s ongoing shift to seat-based pricing and improvements in onboarding contributed to a notable increase in customer additions.

Looking forward, HubSpot’s updated guidance is underpinned by its AI-first strategy and the planned rollout of credit-based pricing for Customer Agent, a move designed to make AI adoption more predictable and accessible for customers. CFO Kate Bueker commented on the company’s approach to monetizing new AI features, stating, “Our philosophy is to deliver value, and once we see consistent repeat value, we begin to add monetization levers.” Management emphasized that while the broader macro environment remains uncertain, the company’s diversified customer base and embedded AI solutions are expected to sustain momentum across multiple segments. The expansion of Customer Agent across all hubs and the development of agent-to-agent orchestration are central to HubSpot’s growth outlook.

Key Insights from Management’s Remarks

Management pointed to several operational and strategic factors supporting HubSpot’s performance, including rapid AI feature adoption, expansion into new customer segments, and enhancements to its core platform.

• AI adoption accelerates: The rapid increase in usage of HubSpot’s Copilot and Customer Agent tools was a major highlight, with Copilot users more than doubling quarter-over-quarter and Customer Agent now serving over 2,500 clients. These AI features are integrated to support both marketing and sales teams, and are credited with speeding up ticket resolution and improving customer outcomes.
• Platform consolidation trend: Management noted that more customers are consolidating their tech stacks onto HubSpot’s platform, reducing complexity and cost. This trend was particularly evident among Pro+ customers, with a growing proportion adopting four or more modules (hubs) and more new customers starting with the full platform.
• Upmarket and enterprise traction: The company reported strong momentum in landing larger deals, supported by new enterprise-grade features such as journey orchestration, multi-account management, and enhanced security. These capabilities have helped HubSpot win business from larger organizations seeking unified solutions.
• Credit-based AI monetization: HubSpot is expanding its credit-based pricing model to Customer Agent, giving customers a monthly allotment of credits included in their subscription and the option to purchase more as needed. This approach is designed to provide flexibility and predictability for customers, aligning spend with usage and value delivered.
• Internal AI use for efficiency: Management shared that AI is being used internally to improve support, sales, and marketing productivity. For example, up to 41% of support tickets are now resolved using AI, and AI-driven prospecting booked nearly 11,000 meetings for the sales team in Q1, contributing to operational efficiency gains.

Drivers of Future Performance

HubSpot’s guidance emphasizes continued investment in AI capabilities, further adoption of its credit-based pricing model, and sustained customer acquisition across segments.

• AI feature expansion: Management plans to further embed AI into every hub, with Customer Agent set to be available across all Pro and Enterprise customers. This expansion is expected to drive additional customer engagement and provide new avenues for monetization, though significant revenue impact is anticipated over a longer time horizon.
• Platform and pricing model evolution: The shift to a seat-based and credit-based pricing structure is expected to support net revenue retention, as existing customers migrate and adopt more features. Management highlighted that these changes are designed to make adoption easier and better match customer needs, with seat upgrades and credit pack purchases contributing to predictable revenue streams.
• Macroeconomic uncertainty: While HubSpot has not seen significant demand changes across industries or regions, management acknowledged a continued focus on value among customers and higher economic uncertainty. The company’s broad customer base and recurring revenue model are cited as sources of resilience, but management remains cautious in its outlook given the external environment.

Catalysts in Upcoming Quarters

Over the coming quarters, the StockStory team will be monitoring (1) adoption rates of Customer Agent and other AI-driven features across various customer segments, (2) the impact of credit-based pricing on customer expansion and retention, and (3) the pace of migration to seat-based models. Continued progress in multi-agent orchestration and execution on product innovation will also be key indicators of HubSpot’s ability to sustain growth.

HubSpot currently trades at a forward price-to-sales ratio of 10×. In the wake of earnings, is it a buy or sell? The answer lies in our full research report (it’s free).

Stocks That Trumped Tariffs

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.