HUBS Gains From Strong Subscription Growth: Can the Momentum Continue?

HubSpot, Inc. HUBS is seeing growing user engagement in its customer relationship management platform, which is propelling subscription-based revenues. In the second quarter, Subscription revenues rose to $894 million, up 20% year over year. The figure surpassed the Zacks Consensus Estimate of $878.85 million.

Strong growth of its customer base is the main growth driver. The company had 306,446 customers at the end of June 2026, implying a 14% year-over-year increase. Improved monetization of existing customers is also supporting the top line. HubSpot’s average subscription revenue per customer rose 4% year over year to $11,800 in the second quarter.

The company continued to see customers opting for several HubSpot products instead of relying on a single Hub. In the second quarter, 64% of new Pro+ customers purchased multiple Hubs. It continued to gain traction with larger businesses. Large enterprise customers usually bring higher subscription values. The company reported that deals generating more than $120,000 in annual recurring revenue increased 38% year over year.

Growing customer engagement with HubSpot’s AI products is also driving net sales. More than 16,000 customers had activated Data Agent, nearly 17,000 had activated Prospecting Agent, and more than 10,000 had adopted Customer Agent by the end of the quarter. The company is also steadily expanding the range of capabilities customers can adopt within the platform. It has recently introduced products like Revenue Hub. Management stated upmarket demand for a unified AI-powered customer platform remains evident and expects platform consolidation and AI adoption to support the longer-term opportunity.

How are Competitors Faring?

In the CRM space, HubSpot faces competition from Salesforce, Inc. CRM, one of the world’s leading Customer Relationship Management companies. Salesforce continues to benefit as enterprises modernize customer-facing processes and reduce vendor sprawl. In the first quarter of fiscal 2027, subscription and support revenues increased 14% year over year to $10.6 billion, and the current remaining performance obligation grew 14%, signaling continued multi-year commitments. For fiscal 2027, Salesforce maintained subscription and support growth guidance of slightly under 12% year over year in nominal terms and about 11% in constant currency, which implies continued reliance on renewals and expansion within the installed base.

Microsoft Corporation MSFT is also witnessing strong traction in the Productivity & Business Processes segment, which includes the Office and Dynamics CRM businesses. In the June quarter, revenues from Microsoft’s Dynamic 365 surged 13% year over year. The Dynamic 365 is powered by Microsoft Copilot, which facilitates the generation of engaging content, key insights and summarizes customer experience.

HUBS’ Price Performance, Valuation and Estimates

HubSpot has declined 50.3% over the past year compared to the industry’s decline of 13.4%.

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Going by the price/book ratio, the company's shares currently trade at 7.35 book value, higher than 4.57 of the industry average.

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HUBS’ earnings estimates for 2026 and 2027 have improved, over the past 60 days.

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HubSpot currently sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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