HubSpot, Inc.

Operator: Good afternoon, and welcome to HubSpot, Inc.'s first quarter 2026 earnings call. My name is Liz, and I will be your operator today. At this time, participant lines are in listen-only mode, and there will be an opportunity for questions and answers after management's prepared remarks. If you would like to enter the queue for questions, you may do so by dialing star followed by 11 on your telephone keypad. I would now like to hand the conference over to Head Director of Investor Relations, Charles MacGlashing. Please go ahead. Charles MacGlashing: Good afternoon, and welcome to HubSpot, Inc.'s first quarter 2026 earnings conference call. Today, we will be discussing the results announced in the press release that we issued this afternoon. With me on the call this afternoon are Yamini Rangan, our Chief Executive Officer; Dharmesh Shah, our Co-Founder and CTO; and Kathryn Bueker, our Chief Financial Officer. Before we start, I would like to draw your attention to the safe harbor statement included in today's press release. During this call, we will make forward-looking statements within the meaning of the federal securities laws, including statements regarding our financial guidance for the second 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 other SEC filings for discussion of the risks and uncertainties that could cause actual results to differ materially from expectations. During the course of today's call, we will 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 is my pleasure to turn the call over to HubSpot, Inc.'s Chief Executive Officer, Yamini Rangan. Yamini? Yamini Rangan: Thank you, Chuck, and welcome to everyone joining us today. I will start with our Q1 2026 results and share what is driving our performance. Then I will walk through our strategy and the progress we made with our Spring Spotlight product update, and how they are delivering real outcomes for our customers. I will close with how we are balancing growth and profitability as we transform as an AI-first company. Let us dive in. Q1 was a solid quarter for HubSpot, Inc., with revenue growing 18.2% year over year in constant currency. We delivered 4 points of non-GAAP operating margin expansion year over year, bringing our operating margin to 17.8%. Q1 marked a meaningful milestone for HubSpot, Inc., as our total customer count reached nearly 300,000 globally, driven by 10,800 net customer additions in the quarter. I am pleased with how our AI strategy is translating into measurable growth outcomes for our customers. We came into this year with clear levers to drive growth, and they are working. Our core growth levers of upmarket, multi-hub and platform consolidation, and pricing tailwinds remain solid. At the same time, our emerging AI monetization levers of core seats and credits are gaining traction. Let me walk you through each one and how they drove Q1 performance. Upmarket momentum continues to be strong. Larger customers are consolidating on HubSpot, Inc. to drive AI innovation and reduce total cost of ownership. In Q1, deals over $60,000 in annual recurring revenue grew 37% year over year, and deals over $120,000 ARR grew 64% year over year. Our partner ecosystem remains a core competitive moat, with partners sourcing and co-selling many of our largest deals. AI adoption in B2B starts with clean data and unified context. That is what is driving our multi-hub and platform momentum. Customers who bring together Marketing, Sales, and Service on HubSpot, Inc. get a single, connected view of their customers and unified growth context that AI can act on. That value proposition is resonating. In Q1, 63% of new Pro Plus customers landed with multiple hubs, up 3 points year over year, and 42% of our Pro Plus installed base by ARR now owns four or more hubs, up 6 points year over year. Bottom line is this: customers are choosing HubSpot, Inc. as the data and AI foundation for their go-to-market. In addition, our pricing model changes from 2024 continue to benefit overall growth. We lowered the price to get started and removed seat minimums to give customers a frictionless path to upgrade as they see value. That shift is largely complete. About 90% of our installed base customers have migrated to the new pricing models, and more than 50% of our ARR has gone through their first renewal. We expect this pricing tailwind to continue as remaining customers come up for renewal and new customers upgrade based on the value we deliver. Now beyond our proven core levers, our AI monetization with core seats and credits is picking up pace. In 2025, we added significant AI data and platform value to the core seat. Brief Assistant, Smart Starts, Projects, and company enrichment data are all now included. We also unbundled the Smart CRM so customers can start with just a core seat. Our vision is to make core seat an essential foundation for every go-to-market employee, and the momentum backs up that strategy. Active core seat users grew 90% year over year, and over 25% of Pro Plus customers have now purchased additional core seats, up over 12 points year over year. Credit consumption is accelerating. Total credits consumed grew 67% quarter over quarter. The top use cases in Q1 were Customer Agent at 53% of credits consumed, Prospecting Agent at 17%, Data Agent at 16%, and 12% [inaudible]. Customer Agent has found clear product-market fit, and now Prospecting Agent and Data Agent are gaining momentum, broadening the base of how customers get value. Customers are not just trying AI; they are building it into how they work. Core seats and credits are becoming real growth levers, and as more use cases mature, we expect both to compound. Now let me shift to the momentum from Spring and the progress on our strategy. Our AI strategy is simple: make AI work for growth companies. We have always won by deeply understanding the customer segment we serve and democratizing sophisticated technology for them, and that is exactly what we are doing with AI. Today, companies are not struggling to find new AI tools; they are struggling to drive real growth outcomes. The difference comes down to context. AI without the right context produces output; AI with the right context produces outcome. That is the gap HubSpot, Inc. is built to close. The foundation of our platform is growth context—the specific knowledge that makes AI useful for go-to-market teams. It knows who the best customers are and why they buy. It knows how the best reps work and how deals close. It knows what progress pipeline looks like and where deals get stopped. HubSpot, Inc. captures all of this business, team, process, and customer context across nearly 300,000 businesses in every industry. This becomes the shared foundation for agents to do real work and drive growth outcomes, as many of you saw at our investor webinar last month. We are not building AI features on top of CRM. We are building an agentic customer platform where growth context is the engine—agents can run on HubSpot, Inc., and agents can run HubSpot, Inc. Running on HubSpot, Inc. means any agent—ours or anyone else’s—can plug into HubSpot, Inc.’s data, context, and capabilities as a building block. Running HubSpot, Inc. means agents can operate the platform end to end through our APIs, MCP server, and whatever access methods come next. This openness is a strategic choice. The more agents that run on HubSpot, Inc., the more valuable our context becomes. And the more valuable our context, the stronger our platform gets. At Spring Spotlight, we launched key innovations to help customers drive outcomes with AI. Let me share the momentum we are seeing with our top agents. Prospecting Agent handles the full prospecting life cycle—monitoring buying signals, identifying high-intent prospects, and crafting personalized outreach. Nearly 14,000 customers have activated it, up 33% quarter over quarter. Jotform, an online form builder used by over 35 million people worldwide, trained Prospecting Agent on their brand positioning and messaging and moved to a fully automated setup, purchasing 625,000 credits per month to power it. In a direct test at Jotform, Prospecting Agent qualified leads on par with human reps, freeing the team to focus on customer meetings and closing deals. Next, Smart Deal Progression brings to life our vision of self-updating CRM. It listens to conversations, suggests CRM updates, drafts follow-up emails, and recommends next steps so sales reps can focus on closing deals, not updating records. Customers are seeing a 10x improvement in CRM update accuracy, and we are seeing 75% repeat weekly usage. Data Agent, which we launched last fall and updated at Spring Spotlight, is gaining significant traction. It enriches customer records, surfaces buying-intent signals, and prioritizes best-fit accounts, giving marketing a better foundation for campaigns and sales a clearer view of prospects. We are seeing significant growth in adoption—over 9,000 customers have activated Data Agent, up 122% since last quarter—and weekly usage is also up. We also enhanced Customer Agent and expanded it to email to help customers scale support with AI. We now have over 9,000 customers, and the average resolution rate has climbed to 70%, up 5 points from last quarter, with some customers exceeding 90% resolution rates. At the same time, we are reimagining marketing for the AI era. We launched HubSpot AEO at Spring Spotlight to help marketers see how their brand appears in AI tools like ChatGPT, Gemini, and Perplexity, and take actions to improve it. Early momentum is strong across paid, earned, and owned, with campaign activities earning millions of impressions. This is beginning to drive trials and purchases of both standalone AEO and Marketing Hub Pro. Customer outcomes across all of our updates this year speak for themselves. Limelight is booking meetings with Prospecting Agent at the same rate as their SDRs. Synergent is resolving 85% of support conversations autonomously. And Sandler grew leads 160% with our new AEO tools. Across Sales, Service, and Marketing, our agents are doing real work and driving outcomes—exactly what we want to see. The confidence we have in our product strategy is also reflected in how we are evolving pricing. We believe AI value should be measured on outcomes, so we recently updated our pricing for agents to match. Customer Agent has moved to consuming credits based on resolved tickets, and Prospecting Agent has moved to qualified leads recommended for outreach. Both agents now come with free 28-day trials so customers can see the value before they commit. This is outcome-based pricing in its simplest form—customers pay when the agent works. We expect both our product updates at Spring Spotlight and pricing changes to accelerate adoption, because when value is easy to observe, the decision to expand is easy to make. Let me close with how we are balancing growth and profitability as we transform as an AI-first company. We are transforming how we build, how we grow, and how we operate, and that transformation is showing up in our results. On how we build, 100% of our engineers now use AI tools, and we have seen a 73% increase in lines of code updated per engineer. We are shipping better products faster because we built the shared platform underneath our agents. Every new capability or skill we add makes the whole platform more powerful and our advantage compounds. On how we grow, we now have an agent-first go-to-market motion—from demand generation to prospecting to customer success—and it is working. On how we operate, we are moving from individual productivity to team-level transformation to what we call institutional productivity, where the context and processes of the company are encoded and available to everyone when they need it. We are investing aggressively in AI innovation while expanding operating margins at the same time. We not only beat our Q1 operating margin target, but also expect to deliver 2 points of operating margin expansion in 2026. That is a meaningful step up, and it reflects the operating leverage we are building as an AI-first company. In closing, our core growth drivers of upmarket momentum, multi-hub adoption, and pricing remain strong and durable. AI is adding two incremental levers—core seat and credit monetization. Together, they give us confidence in our ability to deliver durable growth while expanding profitability. With that, I will hand it over to our CFO, Kathryn Bueker, to walk you through our financial and operating results. Kathryn Bueker: Thanks, Yamini. Let us turn to our first quarter 2026 financial results. Q1 revenue grew 23% year over year as reported and 18% in constant currency. Q1 subscription revenue grew 23% year over year, while services and other revenue increased by 22%, both on an as-reported basis. Domestic revenue grew 18% year over year in Q1. International revenue growth was 29% as reported and 18% in constant currency, representing 49% of total revenue. As Yamini mentioned, Q1 marked a major milestone for HubSpot, Inc., as our total customer count climbed to nearly 300,000, a 16% year-over-year increase. This was fueled by the nearly 10,800 net new customers we added during the quarter, with particular strength in Starter customer additions, up 6 points year over year as reported. Average subscription revenue per customer was $11,700 in Q1, up 2 points in constant currency. We continue to expect quarterly net additions in the 9,000 to 10,000 range along with low- to mid-single-digit ASRPC growth in constant currency, with growth ramping throughout 2026. Customer dollar retention remained healthy in the high eighties, while net revenue retention was 103%, down sequentially as expected but up over half a point year over year. As a reminder, we typically see a seasonal step down in net revenue retention in Q1 following peak upgrade activity in Q4. For the full year 2026, we continue to expect net revenue retention to expand by 1 to 2 points year over year, driven by a combination of seat expansion and increasing consumption of credits. Q1 calculated billings were $912 million, growing 19% year over year as reported and 17% in constant currency. Non-GAAP operating margin was 18%, up 4 points compared to the year-ago period. This expansion reflects our disciplined approach to hiring and the benefit from FX movements and our partner commissions program change, partially offset by strategic investments in AI initiatives to drive both customer value and internal operating efficiencies. GAAP operating margin was 3% in Q1 compared to a negative operating margin of 4% in the year-ago period. This 7 points of expansion reflects our non-GAAP operating income expansion and a 3-point reduction in stock-based compensation expense as a percentage of revenue. Non-GAAP net income was $143 million, and non-GAAP net income per diluted share was $2.72, up [inaudible] year over year, respectively. GAAP net income was $33 million in Q1, and GAAP net income per diluted share was $0.62. In the first quarter, the company generated $154 million of free cash flow, or 17% of revenue. Our cash and marketable securities totaled $1.8 billion at the end of March. During the quarter, we bought back $211 million of stock under our current $1 billion share repurchase program. Our continued strong cash position provides us with the flexibility to return capital to shareholders while maintaining our focus on investing in organic innovation and opportunistic M&A, underscoring our conviction in our long-term opportunity. Before turning to guidance, I want to share a bit more color on a couple of shifts we are seeing in our business. First, as we continue to move upmarket, we have seen a shift in linearity in our quarters to a more back-end-loaded bookings cadence. We saw this dynamic again in Q1, and expect it will continue. Second, AI is transforming our selling motion. Customers want pricing more directly tied to outcomes, and they are increasingly looking for proof of value earlier in the sales process. In April, we made several pricing and packaging changes that are aligned with these customer expectations. We believe these are the right actions to drive adoption and usage of our platform and ultimately long-term growth. These include lowering the price of Customer Agent, moving to outcome-based pricing for Customer and Prospecting Agents, and introducing 28-day free trials for our agents and HubSpot AEO. In the near term, these changes may extend sales cycles as customers evaluate our agents and AEO as part of broader purchases. In addition, we made a deliberate investment in April to train our sales reps on the Spring Spotlight innovations and the shift to credits, which reduced sales capacity during the month. As a result, Q2 got off to a slow start, and we have reflected these dynamics in our guidance. We are confident that we have the right product and pricing strategy to drive durable growth and margin expansion over time as we transform as an AI-first company. With that, let us dive into guidance for the second quarter and full year of 2026. For the second quarter, total as-reported revenue is expected to be in the range of $897 million to $898 million, up 18% year over year on an as-reported basis and 16% in constant currency. Non-GAAP operating income is expected to be between $173 million and $174 million, representing a 19% margin. Non-GAAP diluted net income per share is expected to be between $3.00 and $3.02. This assumes 51.2 million fully diluted shares outstanding. For the full year of 2026, total as-reported revenue is now expected to be in the range of $3.70 billion to $3.708 billion, up 18% year over year on an as-reported basis and 17% in constant currency, up 40 basis points from our previous guide. Non-GAAP operating income is now expected to be in the range of $762 million to $766 million, representing a 21% margin. Non-GAAP diluted net income per share is now expected to be between $13.04 and $13.12. This assumes 51.8 million fully diluted shares outstanding. Before we turn to some modeling notes, I would like to provide context on our margin expansion trajectory. As Yamini shared, we are balancing growth and profitability as we transform as an AI-first company. We are transforming how we build, grow, and operate, and this creates the opportunity for more meaningful margin expansion going forward. This is reflected in our updated 2026 guidance, which now places us firmly within our 20% to 22% non-GAAP operating margin range, reaching our 2027 targets a year ahead of schedule. This progress gives us even greater conviction in our ability to meet or exceed the targets we laid out at Analyst Day at an even faster pace. We will have more to share on our margin expansion expectations at our Analyst Day this fall. We are also focused on driving GAAP operating margin expansion over time as we drive stock-based compensation as a percentage of revenue down. In 2026, we expect SBC as a percentage of revenue to decline approximately 3 points to 14%, and we see the opportunity to bring this down further over time. As you adjust your models, please keep in mind the following. We continue to expect our legacy Clearbit business to be a 40 basis point headwind to full-year 2026 revenue growth. Finally, we continue to expect CapEx as a percentage of revenue to be 5% to 6% for the full year of 2026, and now expect free cash flow to be about $750 million. With that, I will turn the call back over to the operator for questions. Operator: Thank you. If you would like to ask a question, please dial star followed by 11 on your telephone keypad now. If you change your mind, please dial star followed by 11 again to exit the queue. When preparing to ask your question, please ensure your phone is unmuted and limit yourself to one question per person. First question today is from Samad Samana with Jefferies. Hi, good evening, and thanks for taking my questions. Samad Samana: Yamini, I wanted to pull on the thread around the pricing model change for AI credits that you did in April. Completely makes sense, driving better ROI for customers. I was wondering—at the Spring Spotlight, you hosted the webinar that gave some usage statistics—but if you tie it to the change, how has the pricing change impacted customer adoption and utilization? And then maybe I will incorporate a component to the question as well where customer feedback suggests there is some meaningful spend growth coming from those that are consuming credits already. Any color that you can share on what the NRR for that cohort of customers looks like as well, just as we think about how the model evolves over time? Thank you so much. Yamini Rangan: Yeah, thanks a lot, Samad, for that question. You are absolutely right—at Spring Spotlight we launched a number of product innovations that showcase the agent capabilities as well as how growth context is driving the outcome for our customers. The way we think about it is pricing is one of the clearest signals that we can send about how much we believe in our product. With all of the announcements, agent quality improved, growth context improved, outcomes are clear, and we have high confidence. We did two things coming into the quarter to drive agent adoption. First, customers want proof of value earlier in the process before turning on agents. That is understandable because we are no longer just providing applications that can drive adoption that can then drive growth—we are actually delivering work outcomes. So we added a 28-day trial for key use cases like AEO, Prospecting, and Customer Agent. Second, customers really want to see pricing that is clearly tied to the outcome, and they want predictability of that spend. We dropped the price of Customer Agent and moved it to per resolved conversation so that when customers pay, it is actually based on what we have delivered as an outcome. Similarly, for Prospecting Agent, we are tying it to the qualified leads that we are delivering. Both of these are in response to customer feedback—both in terms of proving value and in terms of understanding how that is tied to the pricing. They are the right decisions that we have intentionally made and will have a clear impact in terms of adoption. The feedback is very early days—only about three weeks—but it has been clearly positive. We are methodically removing every blocker in terms of AI adoption so that our customers have confidence in adopting AI and driving outcomes. Kathryn, maybe you want to answer the NRR question. Kathryn Bueker: Yeah, sure thing. Samad, we are not going to talk about cohortized net revenue retention, but what I would share is that we continue to believe that we can expand net revenue retention 1 to 2 points in 2026, and if you think about the drivers of that expansion, they are very much tied to our emerging growth levers of core seats and credits. We are looking at credit adoption as a key driver of net revenue retention, especially in 2026. Operator: Next question comes from Mark Murphy with JPMorgan. Mark Murphy: Thank you so much. Yamini, I am wondering how commonly you are seeing a scenario in which a customer would elect to use the Customer Agent rather than having to go out and hire more people, and where the credit consumption for that Customer Agent ends up meaningfully above what the, you know, Service Hub subscription would have cost—say a $1,000 or $2,000 type of level. I am just trying to get at whether it is clear to you how often you will net out quite positively by selling an agent rather than that traditional subscription. Yamini Rangan: Mark, thank you so much for that question. Our thesis—and what we are seeing in early adoption—is clearly that not only are we delivering great software that humans can use to drive productivity within go-to-market, but agents can deliver work. On Customer Agent, we are seeing two or three common use cases. First, customers use it for after-hours or weekend augmentation to their support team. Second, they are using it for tier-one support tickets so that their teams can spend time on much more complex customer resolution and leave the tier-one support to our Customer Agent. I gave a couple of examples at the investor webinar. In one case, the customer turned on Customer Agent, used up the included 5,000 credits pretty quickly in the first couple of days, and then turned it on for more of the augmentation use case. They are now on the path of going from 100,000 credits to 300,000 credits on a monthly basis. That is clearly above and beyond what we would have gotten from a Service Hub seat, and we are seeing this pattern over and over again—customers going beyond included credits and using it to resolve tickets—which then increases our TAM. That is what we are leaning into, and that is exactly why we are making the set of pricing changes, because we are so confident in the resolution of tickets that we are ready to put our product strategy to work. That increases our ability to drive adoption of these agents as customers get comfortable with it. Dharmesh Shah: And just one quick add to Yamini’s comments—this is one of those examples where, as the frontier model companies make the models better and better, Customer Agent and other AI features within HubSpot, Inc. get better and better as well. As the models improve, we will see Customer Agent move from just tier-one support to higher-level support, with increased resolution rates. As the tide lifts what the frontier models are capable of, HubSpot, Inc. gets increased leverage, and our customers get increased value. We are super excited about that. Operator: Next question is from Analyst with Barclays. Analyst: Thank you. Can you talk a little bit about the retraining for the sales organization? Doing that in April seems a little bit off because usually that is what you do in the January–February time frame when you have the sales kickoff. It does feel like the product got ready later, but can you speak to the timing there and also the impact a bit more? You mentioned it a little bit, but a bit more detail. Thank you. Yamini Rangan: Yeah, absolutely. This was really tied to our Spring Spotlight innovation. At Spring Spotlight, we launched a number of agents and we also changed our pricing mechanism as we just talked about. We had the planned time to get the sales team enabled on both the innovation and the pricing model change. Typically, yes, we would do it at kickoff, which happened earlier in Q1, but we are really taking the time to get the whole organization behind the new selling motion. We are helping our customers adopt and transform with AI. Specifically, we trained the entire sales organization to drive proof of value earlier within the sales process, because that is what customers need. They want confidence that our AI capabilities and agents will work in their environment, and that requires our sales teams to be clear and articulate with proof of value earlier in the process. Second, we want them to establish agentic use cases and set them up for expansion. This is a learning curve as we get our entire organization to land with the right value and set it up for expansion, and that is exactly what we took the time to do. We are changing a lot. We have high confidence in our product strategy—it is showing up in early adoption of agents—and we are evolving the pricing and go-to-market model to reflect customer feedback. We know there is a huge opportunity to be the trusted AI partner for our customers, and that is what we are leaning into. Operator: Next question is from Analyst with Truist. Analyst: Thanks for taking my question. I wanted to talk about the credit growth and how to think about that. I think Kate talked about potentially it is the second half where it really picks up, but it was 67% quarter-over-quarter growth in Q1. That seems strong. How do we think about the ramp of that growth into Q2 and beyond? And what do you all see as maybe the next big breakout agent beyond Customer Agent at a 53% attach or adoption rate? Thank you. Yamini Rangan: Thank you for the question. We are definitely starting to see real usage beyond included credits, happening because customers are getting clear, measurable value and outcomes. We were pleased to see total credits consumed up 67% quarter over quarter, but more importantly, consumption is becoming much more balanced across use cases. Customer Agent, Prospecting Agent, and Data Agent are all growing, which we like. In the current set of agents, we are focused on improving the quality of outcomes. For Customer Agent, a proven use case, the focus is to improve the quality of resolution as well as expand the number of channels. Resolution rate has gone up from 20% last year to 70% now—one of the highest in the industry—and some customers are even higher. We are working to expand the email channel and increase volume over time. Similarly, for Prospecting and Data Agents, it is about the quality of what these agents deliver and the outcomes they can drive. Beyond this, there are a handful of other agents we will continue to work on, but we have high confidence in the set we are driving. One word on AEO, which was part of Spring Spotlight and will begin consuming credits: AEO is a big opportunity, and we are leaning hard into it. Organic traffic for our customers is down 27% this year, so almost every B2B marketer is looking for additional sources of leads, and AEO is an effective, nascent, but fast-growing one. We launched AEO at Spring Spotlight and now have over 15,000 Pro Plus customers who activated it in trials. Trials are a month, so it will take a little time to convert, but activity is great. We are innovating at an accelerated pace with our first-party agents, we are seeing adoption beyond included credits, and we are delivering even more as an open platform. We are pretty excited about what we are seeing. Operator: Next question is from Jackson Ader with KeyBanc Capital Markets. Jackson Ader: Great, thanks for taking our questions. The one I had was about what sounds like a message shifting more toward margin delivery and away from top-line growth. You have talked about net new ARR growing above revenue for six quarters coming into this quarter. I am curious where that metric fell this quarter. And do we still expect to see acceleration in the subscription revenue line this year, or are the go-to-market and pricing changes or some of these April disruptions going to shift some of the growth trajectories out this year? Kathryn Bueker: Thanks, Jackson. First, you should not note this as a shift away from a focus on growth to a focus on margins. We have always been committed to balancing growth and profitability, and we remain committed to balancing growth and profitability. On net new ARR, what we shared last quarter was that we expected net new ARR growth to be above constant currency revenue growth for the full year of 2026, and we continue to believe that we have all the ingredients to deliver net new ARR in excess of constant currency revenue growth for 2026. Q1 net new ARR growth was a bit below constant currency revenue growth—against a more difficult comp than Q4—and the sales enablement and sales motion changes we discussed do challenge net new ARR growth in the short term. But they are the right things to seed and grow those agent use cases. We think the combination of our core growth drivers—upmarket momentum, multi-hub adoption, and pricing—along with the increasing contribution throughout the year of core seats and credits, are the ingredients we need to deliver net new ARR growth in excess of constant currency revenue growth this year. Operator: Next question is from Alex Zukin with Wolfe Research. Alex Zukin: Hey, thanks for taking the question. Yamini, at a high level, you are seeing some of your peers do things around headless and make motions around becoming an agent-first platform, plugging into third-party agents that want that rich context to accomplish tasks across front-office workflows. How are you thinking there? How did the new pricing model touch on that dynamic? And then, Kate, I have a quick follow-up for you. Dharmesh Shah: Hi, thanks for the question. This is Dharmesh. I will take this one. We are big believers in the idea of headless—not big believers in the notion of humanless. The right platform for go-to-market for our customer base is going to be a combination of serving humans with a very personalized modern experience, and supplementing that with a really good agentic experience—opening up APIs, opening up MCP, opening up CLIs. We were the first company to launch MCP last year, first to build connectors for ChatGPT and Claude, the major AI apps. As usage shifts, we see increased adoption of these agentic-based consumer use cases. The platform will be open. We are essentially ambivalent as usage shifts from human usage to agentic usage—whether it runs on our runtime agents that we have built or if there are third-party apps and agents that have been built. All of those agents are going to need a common foundation and the growth context we talk about on this common platform. We think this is a massive opportunity for us in the agentic era because there is going to be a need for an agentic customer platform—exactly what HubSpot, Inc. is building. Operator: Next question is from Arjun Bhatia with William Blair. Arjun Bhatia: Thank you. Following up on headless and how credit consumption evolves as HubSpot, Inc. provides context to third-party agents: do you have a preference whether a dollar of credit consumption is used for a third-party agent versus your own proprietary agents? Does that make a difference for the feedback loop back into HubSpot, Inc.’s data and future improvements in the context you can provide, depending on which agent you are powering? Yamini Rangan: Hey, Arjun. I really like that follow-up. Our vision is simple: agents run on HubSpot, Inc., and agents run HubSpot, Inc. For us, any agent—first-party, second-party, or third-party—can plug into HubSpot, Inc. data and intelligence as a building block, and we welcome that. That is our ecosystem strategy. This week, we shared our complete API strategy—how we want to be open and what our API will deliver to first-, second-, and third-party agents. We think about the API as two layers. First is the data layer—this has always been there. You can get contacts, companies, deals, activities; they are open and accessible and already power thousands of integrations. We have a very open ecosystem stance—bringing data into HubSpot, Inc. is free, and the customer should have full confidence and trust that their data is theirs. What is exciting is we are adding an intelligence layer, bringing our growth context into that layer. Practically, today a sales manager can go to an LLM and say “pull pipeline information from HubSpot” and stage/amount data will go in. They can ask, “what is the risk?” but the LLM has no sense of what is normal in the last 30 days, what is normal across the industry, or whether something is changing with the champion and the conversations. That is the intelligence from our growth context. To make it tangible, you can now make a single API call that returns a precomputed risk score. Over time, people can continue to get the data, but more and more, both second- and third-party agents will pull on this intelligence layer. The way we monetize that intelligence layer will be commensurate with the value we deliver, because it will be valuable. So it is a two-part API strategy: continue to take data; when you need more intelligence, take the growth context. That is the vision, and we are excited about what this means for a thriving ecosystem. Operator: Next question is from Brian Peterson with Raymond James. Brian Peterson: Thanks for taking the question. I appreciate all your comments on capacity and margins, but as we think about the rest of the year, any help on unpacking some of the moving parts or assumptions that are underpinning the outlook? Thank you. Kathryn Bueker: I appreciate the question. Let me take you through the math and assumptions underlying our guidance. In Q1, we beat our guidance by $18 million, and we raised our full-year guidance by $9 million. In addition, we anticipate about $4 million of lower benefit from FX versus when we guided the full year in February. All this implies an organic raise of about $13 million, so we have passed through roughly two-thirds of the beat to our full-year revenue guidance. Overall, Q1 was a solid quarter. We had strong business results that were supported by our consistent core growth drivers—upmarket, multi-hub, and pricing—and that gives us the confidence to raise the full-year guide. As a result, we raised our constant currency revenue growth by 40 basis points from 16.2% to 16.6%. You also heard that we are seeing early traction from agents and AEO, and we made an intentional choice to better align our pricing and packaging with customer expectations. That will help us seed and grow those important agent use cases. Those decisions will have a near-term impact to net new ARR, but will drive durable growth in the future. Our updated guidance implies a step down in constant currency revenue growth to 16% in Q2 and then a modest acceleration for the remainder of the year. This reflects momentum across our core growth drivers, while taking into account the offset from pricing and packaging dynamics and the slow start to Q2. We approach guidance consistently and want to put forward guidance that we feel good about across a variety of scenarios. Our guidance for 2026 does not mandate that we see a re-acceleration in net new ARR in the back half of the year to hit this. Operator: Next question is from Keith Bachman with BMO. Keith Bachman: Thanks very much. You are assuming pricing and packaging contribute in the second half of the year, though expectations are modest. You have only had a couple weeks to synthesize data. What is the risk profile on not being able to meet the improvement in growth rate associated with the second half? And you said you are not assuming net new increases in the second half to meet the targets—could you speak to your confidence interval there, as presumably that would impact the following year if you cannot meet net new growing in the second half? Kathryn Bueker: Thank you for the question. There is a lot going on. I will start by reiterating that there is a set of core growth drivers that have been delivering consistently over the last six to eight quarters. We have talked about them every quarter: strong and consistent upmarket momentum, a consistent trend toward multi-hub adoption, and the benefit from the pricing change we made in 2024. We also expect an increasing impact of seats and credits over time, but that is just one piece of the overall growth equation. When you think about our guidance, we want to put forward guidance we feel great about across a variety of scenarios. Our guidance does not assume that we must see net new ARR acceleration from where we are in the back half of the year in order to deliver the 16.6% full-year constant currency revenue guide. Operator: Next question is from Tyler Radke with Citi. Tyler Radke: Hi, thanks for taking the question. Can you give us an updated view of whether the stack ranking of growth drivers has changed this year? One area you called out that has not been asked as much about is the core seat, which I think grew over 90% this quarter. Can you give some color on how you expect that trend to play out amid a greater focus on agents as well? Thank you. Yamini Rangan: Absolutely. Let me walk through each of the drivers and how we are setting up for durable growth. On core drivers, upmarket momentum and multi-hub are at the top. We have seen this consistently. The number of customers with 500 or more seats has grown over 450% year over year. Product meets the needs of upmarket customers, brand awareness is great, and the ecosystem is tuned in. Multi-hub adoption is really solid. Another core driver we have seen in operation for the last couple of years is pricing. We lowered pricing, removed seat minimums, and we have seen that dynamic play out—we know how this trends, and it remains a driver. On emerging growth drivers, as you pointed out, it is core seats and credits—that is how we think about AI monetization. We have consistently added value into core seats: Brief Assistant, which is consistently rated highly, and adding company enrichment data into core. Over 25% of Pro Plus customers upgraded to more core seats. Why? Because it is the gateway for all of our AI features—the foundation to get started. It includes credits and is the gateway by which customers begin to turn agents on. From that foundation, we build on agents. We are listening to customers and removing friction—giving proof of value, trial periods, and outcome-based consumption. The growth formula is intact. The stack rank is upmarket and multi-hub, followed by pricing, then core seats and credits. Combine that with product quality, pace of innovation, and how quickly we are driving adoption—that is the story. We are just getting started with this big transformation. Customers are asking us to be the data and AI platform for their transformation, and we are leaning into this moment to be the partner of choice. Operator: Next question is from Analyst with Cantor. Analyst: Good afternoon, thanks for taking the questions. I wanted to dive deeper on some of the longer sales cycles you are talking about. How much of that is driven by the longer trial period with agents, second by understanding price and packaging and total cost of ownership, and third by sales folks being out for training and partners needing more training? How short-lived might this be as training happens versus customers continuing to take longer to evaluate what the platform brings? Yamini Rangan: That is a really good question. It is a combination of three things. First, as customers look at AI, they want to see how AI and agents in their environment will drive outcomes—that is proof of value. The best way to show proof is to turn it on and give them a trial period, which is exactly what we have done with AEO, Customer Agent, and Prospecting Agent. We are confident in our product strategy; as they see value, timing will moderate. Second, on sales enablement—the folks are back in seat and fully trained. We are moving fast, and there is a slightly different sales motion that people will adapt to. The pricing changes help them because it is now easy to say, “we deliver outcomes, and our pricing is tied to that value.” All of this is reflected in the guidance. We had a solid Q1, and we have made changes that lean into customer feedback. This gives us confidence that we have the right seed-and-expand motion for agentic use cases. We are leaning into the AI adoption motion. Operator: Next question is from Analyst with Piper Sandler. Analyst: Perfect, thank you for fitting me in. The net customer adds were nicely above the directional range provided last quarter. It was the second-best quarter for customer adds in seven quarters, and there is a narrative that it has become harder to add net new customers in software broadly. What are you seeing in real time around adds? Is this better execution from HubSpot, Inc., or timing of lands and customer adds? Kathryn Bueker: I appreciate the question. Two comments. We are pleased with net adds in Q1. Q1 tends to be our highest Starter-add quarter, and we saw that again. We expect that to moderate back to the 9,000 to 10,000 range in Q2 and beyond. Your observation is right—many companies are finding it harder to add new customers. Our ability to consistently add new customers and retain top of funnel is the result of investing to diversify our top of funnel for a number of years. In 2022, we bought The Hustle. We bought Mindstream, which has an AI-focused newsletter driving lots of demand for us, along with YouTube and other media outlets. We made two incremental acquisitions in Q1—Starter Story and Futurepedia. We keep leaning into diversification of top of funnel, which helps retain our customer acquisition motion. We were early in experimenting with AEO internally; the team continues to grow AEO as a contributor to top-of-funnel demand. It is still relatively smaller in our overall demand equation, but it is highly effective and converts about 3x higher than other leads for HubSpot, Inc. We continue to focus on building a durable demand engine as part of the overall HubSpot, Inc. equation. Yamini Rangan: Thank you. Operator: This concludes the HubSpot, Inc. first quarter 2026 earnings call. Thank you to everyone who was able to join us today. You may now disconnect your lines.