Welcome to our next session. Really happy to have Yamini from HubSpot here with us. Good to be here, Raimo. It's nice. Sorry, I've been working with cash flow for like 20 years, and it's the first time I met Yamini in person, which is kind of for me, it's very special actually. I know. Thank you so much. Let's start bigger picture. So 2025 was a year of, like, a lot of AI-supported product announcements, and that was across the market. Yes. How do you think the industry is going to change? Like, because, like, it's more bigger picture question now, but like, yeah, it feels like we're in the middle of a big storm. It is, it is massive. You talk about 20 years. I mean, every 20 years there is a fairly big technology shift, and I think the difference is that AI has an even bigger transformative impact, and it's just moving faster in terms of the market, and so I think big implications for almost every layer of the tech stack, but for us, we look at just the potential of AI, and our focus is simple. How do we take that, and how do we apply AI to help our small and medium businesses grow? That really is the focus because, you know, you can imagine the market that we serve, you know, two to 2,000 employee company, they are not really focused on, is it, you know, Sonnet 3.7, Gemini 3, you know, they can't keep up with every model change that is happening. Yeah. But they clearly understand that the playbook for growth, whether it is marketing or sales or customer success, is changing. And so for us, you know, as the landscape transforms pretty significantly, we look at the opportunity to apply this technology, democratize it for the segment that we serve, and help them grow. Do you think we will see like, that's the opportunity and the fear that we have in the market at the moment? Yes. Do you think it will change the competitive landscape? And there's these big tectonic shifts where, you know, we had the mainFrame AI guys, and they're no longer there, and now we have the new guys. Do you think this is going to play out here? Absolutely. Any new technology wave is going to change the competitive landscape. Yeah, yeah. The value that LLMs provide, let's just assume that it is going to continue to increase, which means the value that we provide on top of LLM has to continue to increase. Yeah. It will attract, you know, new entrants, and you know, when I look at like HubSpot and how we plan to compete, from the product perspective, our strategy is to ensure that we are delivering value on top of what AI can do. We really look at AI and LLMs being complementary to what the capabilities of HubSpot are, and so our strategy is to provide value on top of what LLMs provide and be exceptionally complementary. We do have distribution capacity, which means when we build a new AI feature, the next day we can get it into the hands of thousands of users, get feedback immediately, use that as reinforcement learning, and improve the ability of our models to deliver value, and so we have distribution capacity. Mm-hmm. As well as, you know, the partner ecosystem. I think when an early stage technology like this, you know, comes in, I do think customers need a bit more handholding to where do they get started, how do you get going, what are the use cases you need to look at. And we have the benefit of a very large ecosystem of both application and partners that can drive this. So yes, the landscape is shifting, and for us, the strategy is adding value to our customers beyond what we did before. Can you put some more concrete stuff on there? It's like. Yeah. There's a lot of, you know, AI stuff that went GA, sorry, for you guys. Like, where are you most excited about? Exactly. In terms of our AI strategy. So let me start with our AI strategy. It is threefold. The first one is that we decided to embed AI into every part of our hub as well as the platform. The reason is we want to lower the friction. If someone is already using our product today, they should be able to take an AI feature tomorrow that is released and be able to use it in the flow of their work. And so strategy number one is embed AI across all of the hubs and platform. I'll come back to how that's going. The second part of the strategy is deliver agents. We know that one of the biggest capability is the ability of agents to do work on behalf of humans, with humans in the loop. And so we've launched three that have now in the process of going to GA. The first one is Customer Agent that resolves tickets. We have over 6,200 customers on that Customer Agent resolving more than 60% of tickets through that. We have a Prospecting Agent that can do account research and can reach out to customers on behalf of the end customer. And we have 6,400 customers on Prospecting Agent and growing. And we have a Data Agent that we just launched. So there's a set of agents that we've launched, and we also deliver capabilities to help our customers create and customize their own agents. So that's the second part of the strategy. And the third is to deliver a Breeze Assistant, something that acts like a copilot that helps every go-to-market employee get better insights from the data in a very conversational manner. That is our AI strategy, and a lot of this has gone into AI, into GA over the past year, and we're seeing traction. In the embedded, you know, AI, which people are beginning to use, we can see direct improvements in terms of the leads generated, deals closed, which is a pretty big, you know, area to move, as well as service tickets that are being resolved and agents I kind of mentioned, so it's early stages of a fairly massive change in terms of our product architecture and how we deliver value, and we are very, very encouraged by both the adoption as well as the beginning of traction. And how do you, like, since we do financial guys, like we kind of care about the money all the time. How do you think? Do you? Yeah, yeah, we do. How do you, how does it play out from a monetization perspective? Yeah. There's kind of what you can do now, but there's question about the industry overall in terms of, is it going to be table stakes? You need to have it and it's part of the product, or can you kind of do higher value add skews? Like, how do you think about that? Yeah. So multiple parts of the question. How do we plan to monetize AI? How is that going? And broadly in the industry, as the industry is trying to figure out value-based, outcome-based, you know, kind of pricing metrics, how do we think about it? Great question. So I think I'll start from our monetization philosophy, which is that we always start with delivering value before we monetize anything. Why? Because there's something called churn. You know, if you do not deliver value, if you do not make sure that customers are using it and getting repeated value out of something that you deliver, then you're going to see growth, and then in the next 12 months, you're going to see churn. And it's really important for us from a monetization philosophy to deliver value consistently and then drive monetization. That is the philosophy, and we are strategically very patient in terms of how we approach monetization, then in terms of our pricing model, our pricing model is hybrid. We believe that the future will have some seat-based monetization and some usage or outcome-based monetization. Yeah. We don't think that, you know, the industry is going to turn all the way to just, you know, credits and tokens and, you know, that's, and especially when you think about the segment that we serve, which is two to 2,000 employees, small and mid-market customers. They want a level of predictability in terms of the budget, and just having consumption or outcome-based is not going to work, and so we are very thoughtful in terms of having a hybrid monetization model with both seats as well as, what we call credits or usage-based pricing, so how is that going? Mm-hmm. And how is the monetization working? I think I'll go back to the strategy. The strategy is threefold: embedded AI, agents, as well as assistant, Breeze Assistant. So the embedded AI also has monetization. What happens is that when customers use features, they are much more sticky, and they also see value, and they continue to upgrade. We've seen that this year in terms of Sales Hub seat upgrades. We've seen that this year in terms of Service Hub seat upgrades. They're using it more, they're getting value, and they continue to buy more seats. Now, this is interesting. There's a whole, you know, whole conversation about seat compression. This year we've seen seat upgrades in terms of Sales Hub seats and Service Hub seats. Yeah. In terms of, I'll finish the monetization thought. In terms of agents, agents are what we will monetize through credits, which means if we are resolving tickets, if we are doing outreach, if we are writing a blog, or if we are managing data for our customers, that will consume credits. Credits are included within the tiers, and then they can buy more than that, and what we have seen, it's been, you know, pretty early days in terms of credit consumption, but half of our credit consumption is coming through our Customer Agent, and the other half is coming from Prospecting Agent, Data Agent, data syncs, and so on. Yeah. So that is the way we're doing. And then finally, in terms of the value of our Breeze Assistant, we've embedded that into Core Seats, and we'll talk a little bit more about this. And so we are also seeing the level of uptake and usage in terms of Core Seats expand. So our monetization philosophy is hybrid, and we do it through our Core Hubs as well as credits, as well as the Core Seats. And you know, again, this is one of those where I would say that we're pretty early days in terms of this massive shift that's happening within our customer base, and we're very thoughtful in terms of how we monetize, and create a tailwind for ourselves and our business over the many years to come. Yeah. And then should we see that in the NRR number in theory? If you know, if you upsell, if you have credits, et cetera. In theory and in practice. Yeah, yeah, yeah. Okay. You have to. You should see that. I mean, you know, like if you break down NRR, it is how do we retain customers? How do we upgrade customers? That's really the basis. Yeah. Of that, and the more we retain customers by delivering value, and the more customers upgrade, you know, either in terms of seats, you know, or additions, then it'll show up in NRR, and that is, you know, the tailwind that we have. Yeah. Okay. Perfect. And then the other part of the story, and it's not AI actually, is multi-hub. Correct. Like, where are we on that journey? exciting journey. Yeah. I think, you know, if we step back all the way, Raimo, like, you know, we went from a single product marketing automation company. Yeah. To a multi-product company to a whole platform, and as we have gone on that journey, what we have recognized is that customers really want visibility across multiple go-to-market functions. The biggest drain for go-to-market functions is that, you know, if you have a great, you know, marketing solution, but you are not connected to sales, or if you have a great sales solution, but you don't know what support is asking for, then you cannot grow, and so our customers within the segment really focus on wanting better visibility across marketing, sales, service, so they look to us for multi-hub. In addition, I would say that, you know, through the pandemic, post the pandemic, there were a lot of point solutions, and, you know, it was easy to kind of deploy these point solutions, but it was exceptionally complex, both from a cost as well as the ability to maintain, and so when I talk to customers and as I look at like our pipeline, most of the conversations are, how can I drive better visibility across my go-to-market functions? How can I lower my total cost of ownership? And how can I drive growth? Mm-hmm. That in combination to how we've built our product over the past few years have really driven a multi-hub adoption to the point that, you know, I think the number of customers that buy single hubs is now about 10%-11%. Oh, wow. That means more than the majority are basically using multi-hubs within HubSpot. Yeah, yeah, yeah, yeah. And then as part of that, it's actually not part of it. It's like another side story is also like you're slightly moving up market or you're moving up market. Correct. Talk about the journey there a little bit in terms of. Correct. Also, like you worked in organizations that were selling really enterprise. Yes. Like when you say up market, like how do you define that? Exactly. That's a great question, Raimo, so I'll say that, you know, I've been talking about the segment that we serve, which is customers with two to 2,000 employees, and we typically call 500 to 2,000 as really upmarket customers, so think about the difference between a 20-person company that we serve and maybe a 2,000-person company that we serve. Mm-hmm. So I would say like 500-2,000 is really where we consider as upmarket. Now, you know, you said that the journey that we've been on, maybe taking it like maybe three to five years ago, we set on this journey of focusing on the segment of 500-2,000-person companies and really driving market share, so sometimes people say you're going upmarket. It's not like we're going to go to enterprise. I've certainly worked in companies that serve 100,000 employees or 200,000 employees. That's not what we mean. We really mean that 500-2,000-person company, and we really want to drive market share acceleration within that segment, and we've done three things in order to do that. The first is really building a product that is very powerful but super easy to use. You think about a typical 500 or 1,000 person company. They do two things. They either have a whole bunch of point solutions that they're trying to kind of, you know, stitch together, which is super complex, or they take an enterprise class solution and try to make it work for their team, and they mostly find it's not usable or it's super hard to make changes. Mm-hmm. And it doesn't serve the needs of the business. And so what we focused on is really making our product easy to use, super intuitive, at the same time meeting the level of sophistication that is required by a 1,000-person company. And our product-market fit has gotten really better over the last five years. It's not one feature. It's not one product. We've just consistently focused on making the product better for that segment. The second thing that we did is really we took the point partner ecosystem. We have about 7,000 partners that work within the solution partner ecosystem, and we pointed them upmarket. And we said, this is the segment that you should target. Here is where we can drive joint customer wins. Those partners who way back used to be marketing agencies have really transformed now into CRM implementers, full, you know, customer platform implementers, and they've done a really good job of helping our customers see the value. Yeah. Of HubSpot. And then third is brand and driving brand awareness within upmarket, you know, customer segment, and we have consistently invested. And so the combination of those three, but also the consistency with which we have focused on that segment. Mm-hmm. Has helped us drive, you know, value into the up market customers, and I think we have a lot more room to increase market share within that segment. Talk a little bit about go-to-market. So if. Yes. If I can give you feedback, when I talk to partners, they're like, okay, HubSpot as a product up there is actually very well suited. Yeah. But if I think about sales, you know, maturity. Sure. There's still a long, long way to go compared to like the guy that sits above you. Yeah. Like what are you doing there? Yeah. I think, and you know, it's fair. I think, you know, there'll always be like one side that kind of catches up. I think the product is absolutely there. From a go-to-market perspective, a couple of things. One is that we recognize the profile of a salesperson that is targeting a much larger company needs to be different. Mm-hmm. And so, for the past few years, we have hired people. We have spent a lot of, like, investment in terms of enablement of how do you do committee, you know, selling, right? Yeah. Like when most of the time the buyer is no longer a single decision maker, it is committee buying, and typically they have to present to their board or a PE firm or a VC firm's investment. How do you actually do that? And so there's just been a lot of emphasis on the profile of people that we have brought there. Mm-hmm. But also the level of enablement. And when do you bring partners, how do you communicate with, you know, the customer as a team of partner HubSpot and, you know, the teams that we bring together? Mm-hmm. So I think we've invested a lot there. And I also think that one of the things that we have done this year is leverage AI internally in go-to-market to help with all of this. Mm-hmm. You know, it's one thing to enable, you know, and drive material for our sales team. The other thing is like within the product to use AI to say what's the next best action or. Yeah. How do you kind of like have the right message for that customer? We are leveraging AI internally, but this is not a, you know, one and done thing. I think we have to constantly kind of like uplevel the people that we bring in and constantly uplevel the skills of the people that we currently have. Yeah. Yeah. Okay. Perfect. On that kind of more top-line featured kind of part of our discussion, like if we bring it together. Yes. Now, I had like a good few emails from the audience, then saying like, okay, well, you need to ask them at the end, like, okay, how do I have to think about your growth profile? Yes. If I'm listening to you now, it all sounds like there's a lot of things coming together. Yeah. It makes, you know, a lot of sense. How does that translate into growth for you? Yeah. Yeah. I think it's a great question. I think you've laid it out really well. If, if I look at the growth formula for HubSpot, the current set of levers that are working really well are the ones that you touched on, which is our multi-hub momentum as well as up market momentum. Mm-hmm. Both of these have been at play for multiple quarters in a row, and we feel confident that we can continue to execute with those current levers, and they have been able to drive growth. So those are the existing levers. The thing that we haven't talked about is that in 2024, we made a set of pricing changes, and we lowered the seat price. We removed seat minimums, and we said that we are going to add a Core Seat, and those were the changes that we made. Mm-hmm. It first, you know, went through for our new customers, and then this year in 2025, it's actually rolling through our installed base, and it'll continue to roll through our installed base next year. Yeah. That is a tailwind. That is a tailwind for multiple reasons. One, because we decreased the seat minimums last year, customers bought exactly what they needed, and this year they're coming in and upgrading and buying more seats. And so it creates a very healthy customer base, and so that impact has been good. The second is as it rolls through our installed base, we first migrate them to this new pricing, the new seat pricing, and once they do that, the next renewal is when they see a price increment, and that has been a tailwind. It was a tailwind this year, and it's going to continue to be a tailwind going into next year. So those are the levers. Now, the two additional levers that we feel are emerging and will play out over the next many quarters is AI monetization. Mm-hmm. We talked a little bit about credits. When we have agents, agents consume credits, and when we have data, data syncs consume credits, and the combination of those two today is super nascent, but we will see that flow through, and that will be an emerging lever for our growth. And so is Core Seat. We mentioned it briefly, but that is the platform seat. We've also embedded AI and data value into that Core Seat, and that becomes another lever. So if I put this all together, we have clear current levers that are working, which is Multi-hub, up market, and seat pricing, and we have emerging levers in terms of credits as well as Core Seat, which will play through for multiple quarters, and that gives us confidence that we can drive durable growth. Yeah. Yeah. Yeah. I mean, if I look, Net New ARR is getting better. Yep. But the overall growth hasn't kind of moved yet. Yes. So is that just the timing? Because like there's something that needs to build on top of each other. Yes. I love that you're, you know, talking about Net New ARR. We shared a slide, and we have gotten tons of questions about it. So. Yeah. Maybe I'll take a minute to clarify it. You know, at Analyst Day, we shared our trend in terms of Net New ARR. The rationale for sharing that is to say the underlying foundational levers have been consistent and have improved over the past few quarters. Yeah. The lowest point of our Net New ARR was Q1 2023, and since then, we have seen Net New ARR improve. Yeah. It went over our revenue in second half of 2024. Now, that is good news. You should take that as like, you know, the trend line for Net New ARR is improving. Having said that, you know, revenue base is much larger than Net New ARR. Mm-hmm. It will take a bit of time for that Net New ARR. To drive. Acceleration to drive up revenue growth, but our focus was to kind of show what changed in terms of the underlying levers, and it's, you know, it's a question of time, you know, in terms of where that impacts revenue because the base is like much broader. Yeah. Yeah. Yeah. Is it? I mean, it's funny if I talk to some of your peers, larger and smaller. Yes. That the discussion comes up. They might not call it net new ARR. Yeah. Et cetera, but that kind of you, and maybe the question is actually then 2020, 2021, did you have like this crazy cohort as well? Yeah. That kind of was a headwind, and now you kind of everyone in the industry had to work themselves out of it. Absolutely. Absolutely. I mean, if you zoom out and look at like what has happened within the software and application space for the last few years, you know, 2020, massive pandemic, everybody didn't know what to do. Second half of 2020 and 2021, everybody bought digital tools, and we had like massive acceleration within our install base in terms of as well as new, and we all saw massive growth. Now, you can look back in hindsight and say that that growth was like pull forward growth, but we saw massive growth. Mm-hmm. And then starting second half of 2022, we saw customers do a lot of budget optimization and consolidation. And we talked about this during those years and those quarters, and we saw a massive, you know, decrease in terms of net new ARR because of that level of consolidation. Mm-hmm. After that, acceleration that happened in the market. And then since, you know, 2023 Q1, we have seen Net New ARR continue to improve. And so I think we've, you know, we've been through a rollercoaster. It certainly feels like that. Mm-hmm. But you can look back and see what happened during the massive acceleration followed by the budget optimization to now kind of like more sustainable growth. Mm-hmm. and that's the dynamic that we're all kind of seeing through, and I'm sure you're hearing it from other companies as well. Yeah. Yeah, so some of that is mechanical in a way. It shows up as mechanics. Yeah. Sure. Yeah. Mm-hmm. Yeah. Okay. Last couple of minutes, I wanted to talk a little bit about profitability, margins, et cetera. Sure. Like, there's so much new innovation coming out. There's so much you could do, like especially for you that has so many growth vectors that you potentially could go against it. Like how do you think about that Frame AIwork, growth versus margins? Yeah. We've always, you know, looked at it as balancing growth as well as profitability. Again, if you zoom out over the last five years, we've gone from 10% operating margin to this year where we are close to 18% plus in terms of operating margin, and that has been a very intentional strategy. And part of that strategy is that we have continued to invest in R&D, we've continued to improve gross margins, and we have continued to find efficiencies in terms of sales and marketing, and we put a short-term target as well as a medium-term target. The medium-term target is to get to 25% operating margin, and we are committed to driving balanced growth as well as profitability. Mm-hmm. And then, you mentioned gross margin. There's today, I got quite a few that talked about, oh, there were some industry guys that talked about gross margin, for the SaaS world. Yep. Et cetera. How do you, from your perspective, like how do you think gross margins will evolve for you? I mean, look, we're not going to talk about 2026, but at least this year, the dynamic for us in gross margin has been that we invested pretty heavily in terms of our up-market customers, and we actually rolled out three new data centers, and that obviously consumes, you know. Gross margin, yeah. A little bit of capital, and that has been a little bit of a headwind, but the right kind of headwind in terms of gross margin. Yeah. As we've continued to invest for up-market customers, and I think, you know, more broadly, we'll see. I think there is a lot that is changing in terms of AI, both in terms of cost, you know, compression, and new innovation that is coming up, and there's just a lot of, you know, ability to switch across LLMs that provide the best, you know, most efficient kind of, you know, inference costs, and so I think we'll be exploring that as we go, but it's a very dynamic time within the industry. Yeah. Yeah. No. Perfect. Last question I wanted to ask is capital allocation. Yep. How do we have to think about M&A, share buyback? Yes. Et cetera? Yeah. We've been thinking about all of those. Yeah. As you can see, you know, over the last few quarters, we've done a number of tuck-in acquisitions, and our M&A philosophy has remained very consistent, which is we want to keep the customer experience very pristine. The value proposition of HubSpot is that we are easy to use, we are pretty fast time to value, and we have a unified, you know, customer way of providing information back to customers, and we wanna keep that and maintain that integrity of that. Mm-hmm. So we've always looked at tuck-in acquisitions where we can acquire teams or talent to accelerate the roadmap. This year, you know, we acquired this company called Frame AI that actually improves unstructured data processing. We acquired this company called Dashworks that brings in information across multiple sources into HubSpot. Last year, we acquired this company called cash flow that really accelerated our CPQ and commerce roadmap. And so I think we'll continue to do those. And as you know, Raimo, we also did a $500 million buyback, which we completed faster than, you know, we. Yeah. We originally set out, and so we will use the capital responsibly across, you know, internal expansion, M&A, as well as buybacks. Perfect. Hey, and look, perfect timing. Perfect timing. Thanks so much. Yeah. Thank you so much. Love it. Such a pleasure. Thank you, huh? Yep. Hey, nice to meet you. Thanks a lot. Thank you.