Latest news with #CustomerAgent
Yahoo
2 days ago
- Business
- Yahoo
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). Revenue: $714.1 million vs analyst estimates of $699.9 million (15.7% year-on-year growth, 2% beat) Adjusted EPS: $1.78 vs analyst estimates of $1.76 (1% beat) The company lifted its revenue guidance for the full year to $3.04 billion at the midpoint from $2.99 billion, a 1.7% increase Management raised its full-year Adjusted EPS guidance to $9.33 at the midpoint, a 2% increase Operating Margin: -3.8%, in line with the same quarter last year Customers: 258,258, up from 247,939 in the previous quarter Billings: $766.8 million at quarter end, up 19.6% year on year Market Capitalization: $31.96 billion 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. 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. 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. 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×. Should you double down or take your chips? The answer lies in our full research report (it's free). 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.
Yahoo
6 days ago
- Business
- Yahoo
HubSpot, Inc. (HUBS): A Bull Case Theory
We came across a bullish thesis on HubSpot, Inc. (HUBS) on Compouding Your Wealth's Substack. In this article, we will summarize the bulls' thesis on HUBS. HubSpot, Inc. (HUBS)'s share was trading at $578.25 as of 29th May. HUBS's forward P/E was 61.73 according to Yahoo Finance. A person using a laptop with a blue background showing the software platform's user inteface. HubSpot reported strong financial results for Q1 2025, with revenue reaching $714.1 million, a 15.7% increase year-over-year and 20.8% quarter-over-quarter growth, surpassing estimates by 2.3%. Subscription revenue, which makes up nearly 98% of total revenue, grew by the same rate, highlighting continued customer demand for its core offerings. While gross margin declined slightly by 0.7 percentage points to 83.9%, and operating margin dropped by 0.9 points to 14%, free cash flow margin improved modestly to 17.1%. Net margin was negative 3.1%, reflecting a 4-point decrease from the prior year, largely influenced by non-GAAP adjustments and timing of certain expenses. Earnings per share of $1.78 exceeded expectations by 1.7%. Key metrics such as deferred revenue and remaining performance obligations showed significant growth, up nearly 20% and 37% respectively, underscoring strong future revenue visibility. Billings rose by 19.6%, though average revenue per customer declined slightly by 3.6%, signaling some pressure on pricing or customer mix. Customer count increased by 19.1% to over 258,000. On the operational side, sales and marketing efficiency improved with S&M expense as a percentage of revenue falling by 1.6 points, while R&D and G&A expenses rose modestly as a share of revenue. The company highlighted its rapid product innovation with over 200 new features released, particularly embedding AI across its platform and expanding enterprise capabilities. AI-powered tools like Customer Agent have driven measurable improvements in sales and support efficiency. HubSpot raised its full-year revenue guidance to approximately $3.04 billion, projecting continued growth fueled by a combination of seat expansion and consumption-based AI monetization, while maintaining a cautious view on macroeconomic uncertainty. For a comprehensive analysis of another standout stock covered by the same author, we recommend reading our summary of this bullish thesis on Shopify Inc. (SHOP). HubSpot, Inc. (HUBS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held HUBS at the end of the first quarter which was 73 in the previous quarter. While we acknowledge the potential of HUBS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
6 days ago
- Business
- Yahoo
HubSpot, Inc. (HUBS): A Bull Case Theory
We came across a bullish thesis on HubSpot, Inc. (HUBS) on Compouding Your Wealth's Substack. In this article, we will summarize the bulls' thesis on HUBS. HubSpot, Inc. (HUBS)'s share was trading at $578.25 as of 29th May. HUBS's forward P/E was 61.73 according to Yahoo Finance. A person using a laptop with a blue background showing the software platform's user inteface. HubSpot reported strong financial results for Q1 2025, with revenue reaching $714.1 million, a 15.7% increase year-over-year and 20.8% quarter-over-quarter growth, surpassing estimates by 2.3%. Subscription revenue, which makes up nearly 98% of total revenue, grew by the same rate, highlighting continued customer demand for its core offerings. While gross margin declined slightly by 0.7 percentage points to 83.9%, and operating margin dropped by 0.9 points to 14%, free cash flow margin improved modestly to 17.1%. Net margin was negative 3.1%, reflecting a 4-point decrease from the prior year, largely influenced by non-GAAP adjustments and timing of certain expenses. Earnings per share of $1.78 exceeded expectations by 1.7%. Key metrics such as deferred revenue and remaining performance obligations showed significant growth, up nearly 20% and 37% respectively, underscoring strong future revenue visibility. Billings rose by 19.6%, though average revenue per customer declined slightly by 3.6%, signaling some pressure on pricing or customer mix. Customer count increased by 19.1% to over 258,000. On the operational side, sales and marketing efficiency improved with S&M expense as a percentage of revenue falling by 1.6 points, while R&D and G&A expenses rose modestly as a share of revenue. The company highlighted its rapid product innovation with over 200 new features released, particularly embedding AI across its platform and expanding enterprise capabilities. AI-powered tools like Customer Agent have driven measurable improvements in sales and support efficiency. HubSpot raised its full-year revenue guidance to approximately $3.04 billion, projecting continued growth fueled by a combination of seat expansion and consumption-based AI monetization, while maintaining a cautious view on macroeconomic uncertainty. For a comprehensive analysis of another standout stock covered by the same author, we recommend reading our summary of this bullish thesis on Shopify Inc. (SHOP). HubSpot, Inc. (HUBS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held HUBS at the end of the first quarter which was 73 in the previous quarter. While we acknowledge the potential of HUBS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
