Marketing and sales software giant HubSpot Inc. delivered solid financial results today, breezing past Wall Street’s expectations on earnings and revenue, but its stock went into freefall after-hours on the back of tepid guidance for the current quarter.

The company reported adjusted third-quarter earnings per share of $2.67, comfortably ahead of the Street’s target of $2.59 per share. Revenue for the period rose 21% from a year earlier, to $809.5 million, blowing past the analyst consensus estimate of $786.9 million. Subscription revenue, which accounts for the majority of HubSpot’s sales, also rose 21%, to $791.7 million.

All told, the company delivered net income of $16.5 million in the quarter, up from $8.1 million in the year-ago period.

The numbers were pretty solid, but unfortunately it appears HubSpot is about to hit a bump in the road, for its fourth-quarter guidance indicates an imminent slowdown in revenue growth. The company is forecasting constant currency revenue growth of 16%, down from 18% in the previous quarter, while its billings growth also showed signs of deceleration, down to 19% from 20% in the prior quarter.

Chief Executive Yamini Rangan (pictured) chose to focus on the highlights, saying that the company delivered impressive customer expansion and sales growth. “We’re innovating rapidly and reimagining our platform to be AI-first, and we’re laser focused on execution,” she said. “Heading into quarter four, we’re well-positioned to deliver durable, long-term growth.”

HubSpot sells software tools that are focused on inbound marketing, sales and customer service, and aims to help businesses manage their customer relationships and marketing campaigns more effectively. It breaks down the features of its platform into six main “Hubs,” which span marketing, sales, customer service, content management, business-to-business commerce and business operations.

For the fourth quarter, the company said it’s guiding for revenue of between $828 million and $830 million, with adjusted operating income of $183 million to $184 million. That’s some way short of Wall Street’s forecasts, with analysts looking for sales of $836.3 million in the current period.

The company did at least raise its full-year revenue guidance, and now projects a range of $3.113 billion to $3.115 billion. That’s ahead of the Street’s consensus estimate of $3.09 billion. It’s also forecasting full-year earnings of between $9.60 and $9.62 per share versus the Street’s target of $9.52.

It was a bit of a mixed forecast, though, and not surprisingly, investors reacted badly. HubSpot’s stock plummeted more than 13% in extended trading, adding to a slight decline during the regular trading session. As a result, the stock is now down more than 33% in the year to date, way behind the broader S&P 500 index, which has risen 15% this year.

In order to fix things and return to higher growth, HubSpot is looking to revamp its platforms with artificial intelligence. During the quarter it announced a sweeping set of updates focused on enabling AI agents that can automate marketing and customer support work. The updates, billed as the most extensive product overhaul in the company’s history, spanned both data infrastructure and agentic AI deployment. They included a new Data Hub that centralizes structured and unstructured data from multiple sources to support unified context for AI automation, customer segmenting and reporting.

In addition, the company also expanded its suite of “Breeze” copilots, which are AI agents that can now automate more than 20 different tasks. There’s a new Data Agent for answering customer-specific questions, a Customer Agent that acts as a customer support concierge for dealing with inquiries autonomously, and a Prospecting Agent designed to identify new sales opportunities in real time.

“Our AI strategy is working, and customers are seeing value,” Rangan said. “Customer Agent and Prospecting Agent are delivering results, while our embedded AI features are helping teams work smarter. Customers are turning to HubSpot to drive AI innovation, consolidate tech stacks, and reduce their total cost of ownership.”

HubSpot’s AI offerings are certainly getting some attention, with the company increasing its customer base by 17% year-over-year to end the quarter with 278,880 paying subscribers. Its average subscription revenue per customer also increased, by 3%, to $11,578 during the quarter.

Photo: HubSpot/YouTube