HubSpot (NYSE:HUBS) beat Wall Street's Q2 revenue and profit estimates but trimmed its full-year revenue guidance, as customers took longer to buy its AI-driven products. Revenue rose 19.8% year over year to $911.7 million, and adjusted earnings of $3.26 per share came in 8.1% above analyst forecasts. The stock fell anyway, after management said slower decision-making would persist.
The company now expects $3.68 billion in full-year revenue at the midpoint, down from its previous $3.70 billion outlook. Its Q3 revenue forecast of $924.5 million landed about 1.8% below analyst estimates. HubSpot raised its full-year adjusted EPS guidance to $13.27.
Customer count reached 306,446, up from 299,458 in the prior quarter. Annual recurring revenue hit $3.58 billion, up 20.1% year over year, and billings rose 14.2% to $929.7 million.
Why customers are buying slower
Management attributed the quarter to deliberate product and pricing changes and a more cautious customer base. HubSpot introduced trials for its AI agents and AEO (AI Engine Optimization) products, letting customers test features with their own data before committing. It also launched outcome-based pricing that ties costs to customer value, with spend thresholds customers can set - a response to demand for predictable AI spending over usage-based token models.
"April got off to a slow start and the quarter we expected did not fully materialize," CEO Yamini Rangan said.
Enterprise customers are forming larger buying committees that often require C-suite or board approval. Downmarket, customers are scrutinizing budgets more closely and demanding clarity on costs and value. CFO Kathryn Bueker said the headwinds would continue: "We now expect that the headwinds we saw in Q2 will persist throughout the remainder of the year."
AI adoption is still growing
Despite the slower sales cycle, adoption of HubSpot's AI agents accelerated. More than 16,000 customers use Data Agent and nearly 17,000 use Prospecting Agent. Upmarket deals grew 38% year over year for contracts worth $120,000 or more in annual recurring revenue.
The company also reorganized into smaller teams working in six-week sprints, a shift management credits for operating margin improvement. Operating margin rose to 4.8% from -3.2% a year earlier.
What HubSpot expects next
Management expects budget caution and longer decision timelines to continue weighing on customer additions and net new annual recurring revenue in the near term. The strategy is to drive broader use of its AI agents and newly launched Agent Builder, making adoption easier and demonstrating real business outcomes. Despite slower top-line growth, HubSpot plans to keep investing in AI while holding expenses in check, and expects operating margin to expand by 2 to 3 points next year.
Why this matters for sales teams
HubSpot's quarter is a signal for anyone selling software or AI tools: buyers want proof before they pay. Larger buying committees, budget scrutiny, and trial-based evaluation are becoming the norm. Sales reps who can show measurable AI outcomes - not just product features - will close deals faster. Anyone looking to build those skills can start with AI for Sales training and the AI for Sales Representatives learning path.
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