Second-quarter revenue rose 20% to $911.7 million and adjusted EPS beat estimates, but softer third-quarter and lower full-year revenue guidance weighed on shares.
HubSpot shares fell 19.2% to $202.16 in after-hours trading Wednesday after the software company issued third-quarter guidance that came in below Wall Street expectations, overshadowing a second-quarter earnings and revenue beat. Revenue for the quarter rose 20% year over year to $911.7 million, ahead of the $898.3 million consensus estimate, while adjusted earnings per share of $3.26 topped the $3.02 consensus. Subscription revenue reached $894 million, up 20%, and professional services and other revenue increased 8% to $17.7 million. The company said customer count grew 14% to 306,446 and average subscription revenue per customer rose 4% on an as-reported basis to $11,800. HubSpot ended the quarter with $1.4 billion in cash and cash equivalents, repurchased $531.9 million of stock in the period, and on Monday authorized an additional $1 billion share repurchase program over the next 24 months. CEO Yamini Rangan said the company made deliberate choices in the second quarter to accelerate its AI transformation, arguing that scaling companies want real outcomes and predictable pricing when adopting AI. For the third quarter, HubSpot forecast revenue of $924 million to $925 million and adjusted EPS of $3.25 to $3.27, both below Street expectations of $942.3 million in revenue and $3.45 in EPS. For the full fiscal year, the company projected revenue of $3.678 billion to $3.686 billion and adjusted EPS of $13.23 to $13.31. That outlook raised the earnings forecast from previous guidance but lowered the revenue range from $3.70 billion to $3.708 billion, helping drive the sharp stock reaction.