HubSpot, Inc.’s (HUBS - Free Report) fourth-quarter 2020 non-GAAP earnings of 40 cents per share beat the Zacks Consensus Estimate by 73.9%. The bottom line exceeded management’s guidance of 21-23 cents. The figure also surpassed non-GAAP earnings of 38 cents reported in the year-ago quarter.
Revenues of $252.1 million surpassed the Zacks Consensus Estimate by 6.6% and increased 35% (up 32% on a constant-currency basis) year over year. The top line was also above the higher end of management’s guidance of $235-$237 million.
The top line was driven by improvement in Subscription revenues. Further, growing customer base, which surged 42% year over year to 103,994, contributed to the results.
Following stellar fourth-quarter results, shares of HubSpot were up more than 18.12% in the pre-market trading on Feb 12.
Coming to the year-to-date price performance, shares of HubSpot have surged 118.8% compared with the industry’s rally of 104.7%.
Quarter Details
Subscription revenues (96.9% of the total revenues) surged 36% from the year-ago quarter’s levels to $244.3 million. Professional services and other revenues (3.1%) were up 9% year over year to $7.7 million.
Total average subscription revenue per customer was down 3% year over year to $9,758.
Deferred revenues (including current portion) increased 35% year over year to $317 million. Meanwhile, calculated billings, defined as revenues plus the change in deferred revenues, amounted to $309 million, surging 43% year over year (up 38% at cc).
International revenues climbed 47% from the year-ago quarter’s levels (up 40% at cc), contributing 44% to total revenues in the reported quarter.
Margins in Detail
Gross margin during the reported quarter were flat year over year at 82%.
Further, non-GAAP subscription margin of 85.3% also remained unchanged on a year-over-year basis.
Non-GAAP Research and development (R&D) expenses, as a percentage of revenues, contracted 70 basis points (bps) year over year to 17.8%. Non-GAAP General and administrative (G&A) expenses contracted 120 bps to 9.1% on a year-over-year basis. Meanwhile, non-GAAP Sales and marketing (S&M) expenses expanded 170 bps to 45.3% from the year-ago quarter’s levels.
The company reported non-GAAP operating income of $24.6 million, up 39% from the year-ago quarter’s figure. Management had projected non-GAAP operating income to be $13-$15 million for the fourth quarter.
Non-GAAP operating margin expanded 30 bps on a year-over-year basis to 9.8%.
Balance Sheet & Cash Flow
As of Dec 31, 2020, HubSpot reported cash and cash equivalents and short-term investments of $1.251 billion, up from $1.18 billion as of Sep 30, 2020.
Cash flow from operations during the reported quarter was $60.9 million compared with $47.9 million reported in the year-ago quarter.
Free cash flow was $45.8 million compared with the prior-quarter figure of $24.4 million reported in the year-ago quarter.
2020 Numbers in Details
HubSpot reported revenues of $883 million in 2020, up 31% (30% at cc) over 2019 tally. The Zacks Consensus Estimate was pegged at $867.3 million.
For the full year, subscription revenues rallied 32% to $853 million.
Non-GAAP earnings per share were $1.32, up 4.8% from $1.26 reported for 2019. The Zacks Consensus Estimate was pegged at $1.14.
For 2020, HubSpot’s non-GAAP operating margin expanded 40 bps to 8.5%.
In 2020, HubSpot generated cash flow from operations of $88.9 million compared with $119 million in the previous year. Free cash flow for full year was $79.1 million compared with $65.1 million reported in 2019.
Guidance
For first-quarter 2021, HubSpot forecast revenues in the range of $260-$265 million. The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $242.9 million.
Management expects non-GAAP operating income in the band of $17-$19 million.
Moreover, the company anticipates non-GAAP net income per share to be 28-30 cents. The Zacks Consensus Estimate is currently pegged at 26 cents per share.
For 2021, the company anticipates revenues between $1.16 billion and $1.17 billion. The Zacks Consensus Estimate for 2021 revenues is currently at $1.05 billion.
Management expects non-GAAP operating income in the band of $98-$102 million.
HubSpot anticipates non-GAAP net income per share to be $1.51-$1.59. The Zacks Consensus Estimate is currently pegged at $1.34 per share.
Zacks Rank & Key Picks
HubSpot currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Shopify (SHOP - Free Report) , CrowdStrike (CRWD - Free Report) and Workday (WDAY - Free Report) . Shopify flaunts a Zacks Rank #1 (Strong Buy), while CrowdStrike and Workday carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Shopify, Workday and CrowdStrike are scheduled to release earnings on Feb 17, Feb 25 and Mar 16, respectively.
Long-term earnings growth rate for Shopify, CrowdStrike and Workday are currently pegged at 32.5%, 25%, and 25.4%, respectively.
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HubSpot, Inc.’s (HUBS - Free Report) fourth-quarter 2020 non-GAAP earnings of 40 cents per share beat the Zacks Consensus Estimate by 73.9%. The bottom line exceeded management’s guidance of 21-23 cents. The figure also surpassed non-GAAP earnings of 38 cents reported in the year-ago quarter.
Revenues of $252.1 million surpassed the Zacks Consensus Estimate by 6.6% and increased 35% (up 32% on a constant-currency basis) year over year. The top line was also above the higher end of management’s guidance of $235-$237 million.
The top line was driven by improvement in Subscription revenues. Further, growing customer base, which surged 42% year over year to 103,994, contributed to the results.
Following stellar fourth-quarter results, shares of HubSpot were up more than 18.12% in the pre-market trading on Feb 12.
Coming to the year-to-date price performance, shares of HubSpot have surged 118.8% compared with the industry’s rally of 104.7%.
Quarter Details
Subscription revenues (96.9% of the total revenues) surged 36% from the year-ago quarter’s levels to $244.3 million. Professional services and other revenues (3.1%) were up 9% year over year to $7.7 million.
Total average subscription revenue per customer was down 3% year over year to $9,758.
Deferred revenues (including current portion) increased 35% year over year to $317 million. Meanwhile, calculated billings, defined as revenues plus the change in deferred revenues, amounted to $309 million, surging 43% year over year (up 38% at cc).
International revenues climbed 47% from the year-ago quarter’s levels (up 40% at cc), contributing 44% to total revenues in the reported quarter.
Margins in Detail
Gross margin during the reported quarter were flat year over year at 82%.
Further, non-GAAP subscription margin of 85.3% also remained unchanged on a year-over-year basis.
Non-GAAP Research and development (R&D) expenses, as a percentage of revenues, contracted 70 basis points (bps) year over year to 17.8%. Non-GAAP General and administrative (G&A) expenses contracted 120 bps to 9.1% on a year-over-year basis. Meanwhile, non-GAAP Sales and marketing (S&M) expenses expanded 170 bps to 45.3% from the year-ago quarter’s levels.
The company reported non-GAAP operating income of $24.6 million, up 39% from the year-ago quarter’s figure. Management had projected non-GAAP operating income to be $13-$15 million for the fourth quarter.
Non-GAAP operating margin expanded 30 bps on a year-over-year basis to 9.8%.
Balance Sheet & Cash Flow
As of Dec 31, 2020, HubSpot reported cash and cash equivalents and short-term investments of $1.251 billion, up from $1.18 billion as of Sep 30, 2020.
Cash flow from operations during the reported quarter was $60.9 million compared with $47.9 million reported in the year-ago quarter.
Free cash flow was $45.8 million compared with the prior-quarter figure of $24.4 million reported in the year-ago quarter.
2020 Numbers in Details
HubSpot reported revenues of $883 million in 2020, up 31% (30% at cc) over 2019 tally. The Zacks Consensus Estimate was pegged at $867.3 million.
For the full year, subscription revenues rallied 32% to $853 million.
Non-GAAP earnings per share were $1.32, up 4.8% from $1.26 reported for 2019. The Zacks Consensus Estimate was pegged at $1.14.
For 2020, HubSpot’s non-GAAP operating margin expanded 40 bps to 8.5%.
In 2020, HubSpot generated cash flow from operations of $88.9 million compared with $119 million in the previous year. Free cash flow for full year was $79.1 million compared with $65.1 million reported in 2019.
Guidance
For first-quarter 2021, HubSpot forecast revenues in the range of $260-$265 million. The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $242.9 million.
Management expects non-GAAP operating income in the band of $17-$19 million.
Moreover, the company anticipates non-GAAP net income per share to be 28-30 cents. The Zacks Consensus Estimate is currently pegged at 26 cents per share.
For 2021, the company anticipates revenues between $1.16 billion and $1.17 billion. The Zacks Consensus Estimate for 2021 revenues is currently at $1.05 billion.
Management expects non-GAAP operating income in the band of $98-$102 million.
HubSpot anticipates non-GAAP net income per share to be $1.51-$1.59. The Zacks Consensus Estimate is currently pegged at $1.34 per share.
Zacks Rank & Key Picks
HubSpot currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Shopify (SHOP - Free Report) , CrowdStrike (CRWD - Free Report) and Workday (WDAY - Free Report) . Shopify flaunts a Zacks Rank #1 (Strong Buy), while CrowdStrike and Workday carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Shopify, Workday and CrowdStrike are scheduled to release earnings on Feb 17, Feb 25 and Mar 16, respectively.
Long-term earnings growth rate for Shopify, CrowdStrike and Workday are currently pegged at 32.5%, 25%, and 25.4%, respectively.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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