HubSpot Stock Soars 7% on Earnings Beat and Strong FY Guidance
HubSpot, Inc. shares jumped 7% in after-hours trading Wednesday following the release of second-quarter results that significantly outperformed analyst expectations and a raised full-year outlook. The customer relationship management (CRM) software company reported adjusted earnings per share (EPS) of $1.94, surpassing the consensus estimate of $1.64.
Quarterly Performance Highlights
Revenue for the quarter grew 20% year-over-year (YoY) to $637.2 million, comfortably exceeding analyst projections of $619.28 million. Yamini Rangan, HubSpot's Chief Executive Officer, noted, "Q2 was another solid quarter of revenue growth and profitability driven by our rapid pace of innovation and consistent execution."
Future Projections and Guidance
For the third quarter, HubSpot forecasted an adjusted EPS of $1.89-$1.91 on revenue of $646-$647 million, aligning with Wall Street estimates. More notably, HubSpot raised its full-year 2024 guidance, now expecting adjusted EPS of $7.64-$7.70 on revenue of $2.567-$2.573 billion, surpassing the consensus estimates of $7.36 and $2.56 billion, respectively.
Customer Base and Revenue Metrics
HubSpot's customer base expanded by 23% YoY to 228,054 at the end of the second quarter. However, the average subscription revenue per customer slightly declined by 2% to $11,215. Despite this minor dip, the overall strong results and optimistic outlook underscore HubSpot's momentum in becoming the go-to customer platform for scaling companies.
Understanding the Terminology
- Adjusted Earnings Per Share (EPS): This is a company's earnings per share after excluding one-time items or non-recurring costs, providing a clearer picture of the company's profitability. For example, if HubSpot had some unexpected legal costs due to a lawsuit, these would be excluded in the adjusted EPS calculation.
- Customer Relationship Management (CRM): This refers to software that helps businesses manage interactions with current and potential customers, streamlining processes and improving profitability. HubSpot is known for its CRM software that helps businesses keep track of customer interactions, sales, and marketing efforts.
The robust earnings report and enhanced guidance reflect HubSpot's strategic focus on innovation and execution, positioning the company favorably for sustained growth in the competitive CRM market.
