HubSpot Reports 16% Revenue Growth, $500M Buyback

HubSpot Inc. reported solid first-quarter 2025 results Thursday, with total revenue increasing 16% year-over-year to $714 million, driven by continued customer growth and platform expansion. The company also announced its first-ever share repurchase program, authorizing up to $500 million over the next 12 months, signaling management’s confidence in the business despite macroeconomic uncertainties, according to Yahoo Finance.

While the results demonstrated HubSpot’s resilience in a challenging environment, the company reported a slight decline in average subscription revenue per customer, which fell 2% year-over-year in constant currency and 4% on an as-reported basis to $11,000. The company maintained its full-year revenue guidance of $3.036-$3.044 billion, representing 16% growth year-over-year.

Customer Growth Powers Performance

HubSpot’s global customer base expanded to over 258,000 in the first quarter, representing 19% growth year-over-year. The company added more than 10,000 net new customers during the quarter, maintaining its impressive customer acquisition momentum despite economic headwinds, according to Yahoo Finance.

“We had a solid start to 2025, with continued revenue growth and customer expansion,” noted the company’s CEO in the earnings announcement. HubSpot did indicate expectations for net customer additions to moderate to approximately 9,000 in coming quarters, suggesting a slight deceleration in new customer acquisition. Despite this moderation, the company’s continued double-digit customer growth demonstrates the strong market demand for its integrated CRM platform.

AI Adoption Accelerates Dramatically

HubSpot’s strategic investments in artificial intelligence are showing significant traction, with Copilot user engagement more than doubling from 270,000 in Q4 to over 660,000 in Q1. This rapid adoption highlights the value customers are finding in the company’s AI-powered tools, which are embedded throughout the platform to enhance productivity and effectiveness.

The company is expanding its AI offerings with customer agent adoption doubling in just three months. Starting June 2, HubSpot plans to extend its AI agent capabilities to all Pro and Enterprise customers across every hub, which could drive further platform engagement and potential monetization opportunities in the future. “We saw further proof that our AI-first strategy is working—customers are seeing results, and Customer Agent is a great example of the value we’re delivering,” according to the company’s statement in HubSpot’s earnings release.

Financial Metrics Show Mixed Results

HubSpot reported several key financial metrics that paint a nuanced picture of the company’s performance. Operating margin came in at 14%, down one percentage point compared to the year-ago period. Net income reached $96 million or $1.78 per fully diluted share, while free cash flow was $122 million, representing 17% of revenue.

Net revenue retention, a critical metric for software-as-a-service companies, was 102% in Q1, down 2 points sequentially. This slight decrease suggests some challenges in expanding revenue from existing customers, though the company expects improvement through 2025. Calculated billings, which provide insight into future revenue, grew 18% year-over-year in constant currency to $767 million, indicating continued momentum in the business despite economic headwinds.

Guidance and Strategic Focus

Looking ahead, HubSpot provided Q2 2025 revenue guidance of $738-$740 million, representing 16% growth year-over-year. For the full year, the company maintained its previous outlook of $3.036-$3.044 billion in revenue and approximately $570 million in free cash flow.

The newly announced $500 million share repurchase program reflects management’s confidence in the company’s financial position and future prospects. With $2.2 billion in cash and marketable securities at the end of March, HubSpot maintains a strong balance sheet that provides flexibility for both strategic investments and returning capital to shareholders.

Platform Evolution Continues

HubSpot emphasized its evolution from a marketing application to a comprehensive AI-powered Smart CRM platform. The company has structured its offering around six interconnected hubs (Marketing, Sales, Service, Content, Operations, and Commerce), all powered by unified data and embedded AI capabilities.

As businesses increasingly look to consolidate their technology stacks, HubSpot is positioning itself as “the clear choice for businesses that want to drive AI innovation while reducing total cost of ownership.” This value proposition appears to be resonating in the marketplace, as evidenced by the company’s continued strong customer growth despite economic uncertainties. With its robust ecosystem of over 1,700 app integrations and continued innovation across its platform, HubSpot appears well-positioned for sustained growth.

Fact-check complete. Event date: May 8, 2025