0001193125-26-212122
SEC filingRevenue grew 23% YoY to $881.0M, net income turned positive to $32.6M, driven by customer expansion.
For the three months ended March 31, 2026, HubSpot reported total revenue of $881.0 million, a 23% increase compared to $714.1 million in the prior-year period. Subscription revenue, which accounts for 98% of total revenue, rose 23% to $862.3 million, driven by a 16% increase in customer count to 299,458 and a 6% rise in average subscription revenue per customer to $11,722. Professional services and other revenue grew 22% to $18.7 million, primarily due to higher Payments volume.
Gross profit increased 23% to $735.3 million, with gross margin slightly declining to 83.5% from 83.9%, as subscription hosting costs and amortization of capitalized software outpaced revenue growth. Operating income swung to a positive $27.9 million from a loss of $27.5 million, reflecting operating expense leverage—total operating expenses grew only 13% versus revenue growth of 23%. Net income was $32.6 million, compared to a net loss of $21.8 million, benefiting from higher operating income and lower interest expense due to debt conversions.
Subscription remains the core segment, with revenue growth fueled by both new customer acquisitions (particularly Starter products) and upselling to Professional and Enterprise tiers. The increase in average subscription revenue per customer was also aided by favorable foreign currency translation, partially offset by a mix shift toward lower-priced Starter products. Professional services growth, while smaller in magnitude, reflects increased adoption of Payments. Cost of subscription revenue rose 28%, driven by hosting costs (+$15.0M), amortization of software development costs (+$12.3M), and employee-related costs (+$0.7M). Gross margins for subscription declined slightly from 86% to 85% of subscription revenue.
Management did not provide explicit financial guidance but highlighted strategic priorities: continued investment in sales and marketing to grow the customer base, research and development for platform functionality (including AI capabilities), and maintaining high customer service. The company expects gross margins to decline slightly over time due to infrastructure and capitalized software investments. Operating expenses are expected to increase in absolute dollars but decline as a percentage of revenue, excluding stock-based compensation. The $1 billion share repurchase program announced in February 2026 reflects confidence in cash flow generation. The MD&A also noted a potential reversal of the valuation allowance on deferred tax assets within the next 12 months, which could benefit income tax expense.
HubSpot ended Q1 2026 with $943.9 million in cash and equivalents and $834.6 million in available-for-sale marketable securities, providing substantial liquidity. The company has no outstanding debt following the settlement of its 2025 convertible notes and no borrowings on its new $500 million revolving credit facility. Total deferred revenue stood at $1.04 billion, while remaining performance obligations totaled $1.7 billion, with 89% expected to be recognized over the next 24 months.
The company disclosed $415.1 million in non-cancelable vendor commitments, with $195.2 million due within the next year, $218.9 million in the 1–3 year range, and $1.0 million beyond. Operating lease commitments totaled $296.6 million, including $41.4 million for the remainder of 2026 and $95.7 million after 2030. If leases are extended past optional termination dates, commitments could increase by $89.1 million.
HubSpot's board authorized a new $1 billion share repurchase program in February 2026 (24-month period), in addition to the prior $500 million program. During Q1 2026, the company repurchased 845,000 shares for $211.0 million at an average price of $249.74. As of March 31, 2026, $789.0 million remained available. Subsequent to quarter end, an additional $188.7 million was deployed to repurchase 0.9 million shares, leaving $600.3 million remaining. No dividends were declared.
HubSpot operates as a single reporting segment. Geographic revenue for Q1 2026: Americas $516.5 million (58.6%), Europe $292.6 million (33.2%), Asia Pacific $71.8 million (8.2%). International revenue represented 49% of total revenue. Long-lived assets were concentrated in the Americas (71.5%), with Europe holding 26.1%.
The provided document does not contain the Consolidated Statement of Cash Flows. Instead, it includes notes on derivative instruments, restricted cash reconciliation, property and equipment, capitalized software, and debt. Without explicit cash flow line items (CFO, investing, financing, capex), a cash flow quality analysis is not possible. The only cash-related data is the change in cash and cash equivalents: from $884,945k (Dec 31, 2025) to $946,640k (Mar 31, 2026), a net increase of $61,695k. However, this increase is not decomposed by activity. Key non-cash charges disclosed include depreciation of $9.1M and capitalized software amortization of $36.0M, which would typically add back to CFO but cannot be confirmed. Capitalized software development costs (net) increased from $213,794k to $221,521k, suggesting ongoing investment, but no specific capex figure is given. The company also settled $225.6M of convertible notes in June 2025 (after the reporting period), but no cash outflows are reported for Q1 2026. In summary, no cash flow statement is present in the provided excerpt; therefore, all cash flow highlights are marked as not available.