HUBSPOT, INC. 2026 Q2 Earnings Call

Please go ahead. Thanks, operator.

Good afternoon and welcome to HubSpot's second quarter 2026 earnings conference call. Today we'll be discussing the results announced in the press release we issued this afternoon. With me on the call this afternoon is Yamini Rangan, our Chief Executive Officer, Dharmesh Shah, our Co-founder and CTO, and Kate Bueker, our Chief Financial Officer. Before we start, I'd like to draw your attention to the Safe Harbor statement included in today's press release. During this call, we'll make forward-looking statements within the meaning of the Federal Securities laws that are subject to risks and uncertainties, including statements regarding our financial guidance for the third fiscal quarter and full year 2026, future financial performance, business outlook and strategy. These statements reflect our views only as of today, and except as required by law, we undertake no obligation to update or revise them.

Please refer to the cautionary language in today's press release, our Form 10-Q, and our other SEC filings for a discussion of the risks and uncertainties that could cause actual results to differ materially from expectations. During the course of today's call, we'll refer to certain non-GAAP financial measures as defined by Regulation G. Reconciliations to the most directly comparable GAAP measures can be found in today's press release. Now, it's my pleasure to turn the call over to HubSpot's Chief Executive Officer, Yamini Rangan.

Yamini? Thank you, Jeff, and welcome everyone.

I'll start with our Q2 results and what drove them. I'll walk through what we learned in the first half, the deliberate choices we're making as a company in response, and how we are accelerating our AI transformation across the company. Let's dive in. Q2 revenue grew 17.5% year-over-year in constant currency. We delivered three points of non-GAAP operating margin expansion year-over-year, bringing our operating margin to 20.3%. Our total customer count reached over 306,000 globally, with 7,000 net additions in the quarter. I'm pleased to announce that our board of directors have authorized an additional share repurchase program of up to $1 billion, a clear signal of the confidence we have in our business and the growth opportunity ahead. We are still in the early stages of a massive shift with AI. This quarter reflected that reality.

Let me be direct about what happened. April got off to a slow start and the quarter we expected did not fully materialize. Two factors drove the headwinds. The first was deliberate. As we discussed last quarter, customers adopting AI want proof of value before they commit and predictability in what it costs. In April, we leaned into those trends and made changes across product, pricing, and go to market. On the product side, we introduced trials so customers can turn on agents and AEO in their own environment with their data for their workflows. The goal was simple: let customers experience real outcomes before they buy. We knew this would create some near-term headwinds by extending the buying process, but we believe it's the right long-term trade-off. Lowering the barrier to adoption and building customer confidence in outcomes will ultimately accelerate AI adoption.

So far, this approach has worked best with up-market customers, where our teams and partners provide the support needed to make the trial successful. Our focus is to scale that experience so every customer can adopt AI with the same confidence. On pricing, predictability has become a defining theme in AI adoption. Businesses have been hit with unpredictable token costs, and they want pricing that is transparent and tied to value. In response, we introduced outcome-based pricing for several of our HubSpot agents, lowered entry price points, and are providing customers clear visibility and control over usage and spend, including the ability to set thresholds that fit their budget. The second factor was a shift in the demand environment in Q2 with increased budget sensitivity. Businesses want greater confidence that their investments will position them for the AI platform shift.

As a result, purchase decisions are facing greater scrutiny, buying committees are larger, and more deals require C-suite and board approval, leading to longer sales cycles. For existing customers, unpredictable AI costs across the broader landscape are impacting budgets, leading to budget optimization and downgrade pressure. In response, we've evolved our execution playbook by engaging the C-suite earlier, accelerating time to value with our partner ecosystem, and demonstrating our pace of innovation that future-proofs their investments. Despite the headwinds in Q2, we continue to see real momentum in AI adoption, up-market wins, and multi-hub growth. On AI, customer adoption is accelerating. Data Agent has over 16,000 customers activated, up 80% quarter-over-quarter. Prospecting Agent has almost 17,000 customers activated, up 28%, and Customer Agent reached over 10,000 customers.

We launched HubSpot AEO in April, both within Marketing Hub and as a standalone product. Since then, 32% of Marketing Hub Pro Plus customers have activated AEO and nearly 16,000 customers have activated a standalone AEO trial in Q2. More importantly, customers are seeing real business outcomes. Sesame HR, a 400-person HR software platform, could only respond to 70% of incoming support tickets before deploying Customer Agent. They cover all tickets received with 60% fully resolved without human escalation. After their initial trial, they have now purchased more than 1 million credits and are expanding into other agents. RevenueWell, a 250-person dental software company, combined HubSpot's buyer intent with Prospecting Agent to identify high-intent buyers and reach them with personalized outreach. Meetings booked increased from 8%-28%, and conversion rates climbed to nearly 10%, well above industry benchmarks.

They have since grown their usage to more than 350,000 credits across six HubSpot agents. Up-market momentum continued to be strong. Deals over $120,000 ARR grew 38% year-over-year, reflecting continued demand from larger customers for a unified AI-powered customer platform. Multi-hub momentum continued. 64% of new Pro Plus customers landed with multiple hubs, up three points year-over-year. Taken together, these results reinforce our conviction that we're making the right strategic choices. Let me step back from the quarter and talk about the bigger opportunity. The last 20 years were about helping teams do more work with software. The next 20 will be about helping them achieve better outcomes with AI. That's the opportunity we're building for, and that's why we are evolving every part of HubSpot, from our products, to our go-to-market, to how we operate as a company.

Our AI strategy is simple: drive growth for scaling companies. That means delivering real outcomes across the full customer journey, and that is exactly what our HubSpot agents do. Customers don't want a chaotic agent sprawl. They want a controlled, cohesive way to build demand, win deals, and delight their customers. In Q2, we expanded our agent portfolio and added both breadth and depth in agent capabilities. We also added two new products, AEO, which shows marketers how their brand appears in AI search engines and tells them what to do about it, and Revenue Hub, which brings quoting, contracts, billing, and payments into one place. Beyond HubSpot agents, we want to make building easy. AI is democratizing the ability to build workflows, agents, and automation, and we want every go-to-market builder on our platform to take advantage of that. In July, we launched Agent Builder and Agent Hub.

Agent Builder lets anyone build custom agents, agentic workflows, or mix and match both. What makes it powerful is that it connects deeply to HubSpot CRM and context, but it can also automate anything outside HubSpot. Custom agents can take a rich set of actions, from sending a WhatsApp message to invoking an LLM, to calling a custom API. Agent Hub gives customers one place to manage all their agents, HubSpot-built, customer-built, and partner-built. Over 2,700 customers have already activated in beta, and partners are leading the way here. SmartBug Media, a HubSpot Elite Solutions partner, built a library of 20 custom agents on HubSpot spanning sales research, content creation, and proposal compliance. We've expanded partner incentives to encourage this motion and expect a significant portion of customers and partners to build on top of our platform given the trusted context we deliver.

The biggest adoption jump this quarter was in Breeze Assistant. Breeze is no longer just a chat interface. It is how customers interact with the entire HubSpot platform. They use it to build reports, create automations, invoke agents, and generate artifacts, all without writing a single line of code. More than half of our Pro Plus customers are using it, and weekly active usage has doubled since the start of the year. What makes it powerful is what's behind it. Every action and every artifact is grounded in real CRM data, growth context, and HubSpot's governance model. Customers get AI that actually knows their business. How will you know whether our AI strategy is working? We measure it through four lenses, reach, depth, quality, and growth. First, reach. Are customers adopting AI?