HubSpot Stops Guiding New-Customer Adds And Says Net New ARR Will Fall This Year
The CFO said demand pressure will last into 2027, with fourth-quarter revenue growth guided to 12% from 17% in the third quarter.
HubSpot, which sells customer-relationship software to marketing, sales and service teams, will stop estimating how many customers it adds in the fourth quarter, and expects net new annual recurring revenue to decline in 2026, Chief Financial Officer Kate Bueker said on the company's earnings call Wednesday. Fourth-quarter revenue guidance of $945 million to $947 million reflects headwinds she said will run into 2027.
Customer adds go dark
HubSpot added 5,300 net customers in the third quarter, in line with the 5,000-to-6,000 range it gave earlier but down from 7,000 in the second quarter, Bueker said. Total customers passed 311,000, up 12% from a year earlier. She tied the slowdown to price-sensitive small customers, whose sign-ups come through an inbound, product-led channel.
For the fourth quarter, the company is "not providing a net ads estimate," though Bueker expects additions below 5,000. She said the company would rather build for long-term growth than chase the short-term metric, and will report actual fourth-quarter additions in February.
Full-year net revenue retention, which was 101% in the third quarter, should fall about two points, Bueker said. Customer dollar retention stays in the high 80s, but upgrades are pressured by customer budget cuts.
Growth steps down to 12%
Third-quarter revenue grew 17% in constant currency, and fourth-quarter guidance implies 12% growth. Bueker said the guide reflects a "more significant step down" and that the pressures will continue in the fourth quarter and into 2027. She gave no formal 2027 outlook, saying planning is early.
Profit held up better. Third-quarter adjusted operating margin was 23%, up three points, and free cash flow was $188 million. HubSpot bought back more than $237 million of stock in the quarter, nearly $1 billion so far this year. A reorganization announced October 6 will bring a $60 million to $70 million severance charge in the fourth quarter, and Bueker reiterated a 2027 adjusted operating margin target of 23% to 24%.
A deliberate squeeze from AI pricing
CEO Yamini Rangan said the pressures began in the second quarter and sharpened in the third as buyers weigh AI differently and committees grow larger. Free trials and value-tied pricing, introduced in the second quarter, lengthen buying cycles by design.
The company is piloting a mix of seats and credits. In the Nordics and Benelux, credit usage runs two to three times higher than elsewhere, while average selling price is lower. The pilot now covers all of EMEA for new customers, and results will set the pace of rollout.
Rangan pointed to a 64% quarter-over-quarter rise in agent trials as a "green shoot." The recovery, she said, "is not going to be a single quarter or a two-quarter transformation."
Management said it will return in February with fourth-quarter customer additions and what it learned from the EMEA pilot.
Sources
- HubSpot (NYSE:HUBS) posts better-than-expected sales in Q3 2026 but quarterly revenue guidance misses expectations — Yahoo Finance
- HubSpot Non-GAAP EPS of $3.81 beats by $0.54, revenue of $947.6M beats by $22.09M (NYSE:HUBS) | Seeking Alpha — seekingalpha.com
- HubSpot, Inc. (HUBS) stock price, news, quote and history - Yahoo Finance — Yahoo Finance
- HubSpot dips after Q4 guidance comes up short of market expectations | Seeking Alpha — seekingalpha.com
- HubSpot: Q3 Earnings Snapshot | khou.com — Associated Press
