HubSpot Q4 outlook reflects bumpy transition to outcome-based AI

HubSpot’s road to outcome-based pricing for AI agents remains bumpy. Large customers want proof AI agents can deliver outcomes as buying cycles elongate and smaller enterprises are worried about budgets.

CEO Yamini Rangan laid out the situation on the company's third quarter earnings call:

"We're still in the early stages of a massive shift with AI and Q3 reflected that reality. The headwinds we saw in Q2 continued and became more pronounced in Q3.

Customers are evaluating AI differently. They want to see AI work with their data in their environment. They want proof before they buy. We saw the shift early and leaned into it in Q2. We introduced free trials and pricing tied to value and outcomes. We knew this would extend buying cycles and create near-term headwinds, but we believe it's the right long-term trade-off."

• Outcome based pricing: Pros, cons and nuances

Rangan noted that agent trials grew 64% sequentially in the third quarter, but customers need hands on support to turn them into real outcomes. HubSpot is relying on partners and consultants to bridge the gap.

HubSpot is also seeing budget pressure. Rangan said:

"We are seeing a shift in demand with increased budget sensitivity. AI is changing how customers discover HubSpot and how they make purchasing decisions. Inbound demand remains under pressure, and we are diversifying to new sources of demand through intent-based marketing, LLM connectors and AEO. At the same time, tighter budgets are making buying decisions more complex. Upmarket, we're seeing larger buying committees, more CEO, CTO and Board involvement and therefore, longer sales cycles. Down market, customers are more price-sensitive and focused on optimizing costs. We are adapting our playbooks to these new buying patterns."

Rangan emphasized that the transition to outcome based pricing is a good strategy and HubSpot is adjusting its go-to-market efforts. Consumption revenue as well as headless options will benefit HubSpot over time.

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• HubSpot sees turbulence ahead due to outcome-based pricing shift, AI budget scrutiny

For now, HubSpot's results are going to be lumpy.

HubSpot's third quarter results handily topped expectations, but the fourth quarter outlook fell short. In other words, the worries from the second quarter extended into the third quarter.

The company reported third quarter net income of $83 million, or $1.67 a share, on revenue of $947.6 million, up 17% from a year ago. Non-GAAP earnings were $3.81 a share, 54 cents a share ahead of estimates.

However, HubSpot said its fourth quarter revenue will be between $945 million and $947 million, up 12% from a year ago. Non-GAAP earnings will be $3.85 a share to $3.87 a share. Wall Street was looking for non-GAAP fourth quarter earnings of $4.09 a share on revenue of $965 million.

For 2026, HubSpot is projecting revenue between $3.685 billion and $3.687 billion, up about 18% from the previous year, with non-GAAP earnings between $13.59 a share to $13.61 a share. That outlook was ahead of estimates.