How did the constant currency growth of 18% affect the interpretation of the reported 19% increase? | HUBS (Aug 06, 2025) | Candlesense
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How did the constant currency growth of 18% affect the interpretation of the reported 19% increase?

Answer

HubSpot’s press release shows two different growth rates for Q2 2025 revenue:

Metric Reported (as‑reported) growth Constant‑currency growth
Total revenue +19 % +18 %
Subscription revenue +19 % +18 %
Professional‑services & other revenue +21 % (as‑reported) (not disclosed)

What “as‑reported” (19 %) means

  • The 19 % increase is the headline, headline‑level growth that includes all factors that contributed to the change in revenue between Q2 2024 and Q2 2025.
  • Those factors are:
    1. Core business performance – more customers, higher usage, price increases, upsells, etc.
    2. Currency effects – the impact of changes in foreign‑exchange rates on the value of revenue earned in non‑USD currencies (e.g., euros, pounds, yen).

What “constant‑currency” (18 %) means

  • Constant‑currency (CC) growth removes the influence of foreign‑exchange fluctuations. It translates all foreign‑currency‑denominated revenue into U.S. dollars at a fixed exchange rate (usually the rate at the start of the prior period) so that the only driver of the change is the underlying business activity.
  • The 18 % CC growth therefore reflects HubSpot’s real, organic expansion of its customer base, product usage, and pricing, independent of any “head‑room” that a weaker U.S. dollar may have provided in the prior year.

How the 18 % constant‑currency growth reshapes the interpretation of the 19 % reported increase

Interpretation aspect “19 % as‑reported” view “18 % constant‑currency” view
Source of growth 19 % = core growth + favorable FX. The 1 % difference is attributable to currency movements that made foreign‑currency revenue worth more in USD terms. 18 % = pure core growth. No contribution from FX; the company’s operations alone drove this increase.
Underlying business health Appears slightly stronger because the headline number is higher. However, part of the lift is external (FX). Gives a cleaner signal of operational performance. An 18 % CC rise still indicates robust, double‑digit organic growth, even after stripping out FX.
Investor comparison When benchmarking against peers that report only CC growth, the 19 % figure can be misleading if the FX effect is not disclosed. CC growth is the standard metric used in earnings analysis; it allows apples‑to‑apples comparison across companies and periods.
Future expectations If the U.S. dollar were to strengthen in the next quarter, the “as‑reported” growth could fall below the CC rate, even if the business continues to expand at the same pace. CC growth is stable across currency swings, so it is a more reliable basis for forecasting future revenue trends.
Management commentary Management may highlight the 19 % headline to showcase “strong top‑line momentum.” They will also point to the 18 % CC growth to reassure analysts that the momentum is driven by real demand and not just a currency tailwind.

Bottom‑line take‑aways

  1. The 19 % increase is the headline number that includes both real business expansion and the benefit of a weaker U.S. dollar (or other favorable FX moves) on HubSpot’s foreign‑currency revenue.
  2. The 18 % constant‑currency growth isolates the core operating performance and shows that, even after removing the FX boost, HubSpot’s revenue grew at a substantial, double‑digit rate.
  3. The 1 % gap (19 % – 18 %) quantifies the currency contribution—i.e., roughly a 1 % “currency premium” that helped lift the reported growth.
  4. For analysts and investors, the constant‑currency figure is the more meaningful metric for assessing the sustainability of HubSpot’s growth, while the as‑reported figure is useful for understanding the total impact on the company’s current financial statements.

In short, the constant‑currency growth of 18 % tells us that HubSpot’s underlying business is expanding at a very healthy pace, and the extra 1 % in the reported 19 % growth is simply the result of favorable foreign‑exchange movements rather than an intrinsic improvement in the company’s operations.

Other Questions About This News

How might the earnings results influence short‑term technical trends and momentum indicators for HUBS? Are there any notable changes in customer acquisition costs or net new logos that could affect future profitability? Will HubSpot's revenue growth meet market expectations and trigger a price reaction? What is the impact of this earnings release on the stock's valuation multiples relative to peers? What was the breakdown of the subscription revenue growth versus professional services revenue, and what does that imply for future margins? Did HubSpot provide revised guidance for Q3 or the full year, and how might that influence analyst forecasts? How does the 19% YoY revenue increase compare to the growth rates of key competitors in the SaaS space? What was the company's churn rate for the quarter, and does it suggest sustainable subscriber retention? Did the company report any shifts in geographic revenue distribution that could affect risk exposure?