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HubSpot (HUBS) Beats Q4 Earnings Estimates on Top-Line Growth
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HubSpot Inc. (HUBS - Free Report) reported relatively healthy fourth-quarter 2021 results driven by diligent execution of operational plans and healthy growth dynamics, with both the bottom line and the top line surpassing the respective Zacks Consensus Estimate. The company remains focused on achieving its goal of becoming a leading CRM platform provider in the near future.
Quarter Details
GAAP net loss for the reported quarter was $16.4 million or a loss of 35 cents per share compared with a net loss of $15.4 million or a loss of 34 cents per share in the year-earlier quarter. Despite the top-line improvement, net loss widened due to significantly higher operating expenses.
Non-GAAP earnings in fourth-quarter 2021 were $29.6 million or 58 cents per share compared with $20.1 million or 40 cents per share in the year-ago quarter and exceeded the guided range of 52-54 cents per share. The bottom line beat the Zacks Consensus Estimate by 5 cents.
In 2021, HubSpot recorded a GAAP net loss of $77.8 million or a loss of $1.66 per share compared with a net loss of $85 million or a loss of $1.90 per share in 2020. Non-GAAP net income increased to $92.5 million or $1.82 per share from $64.5 million or $1.32 per share in 2020.
Quarterly revenues increased 46.5% year over year to $369.3 million and surpassed the consensus estimate of $357 million. The top line also exceeded the guidance range of $356-$358 million. The top line was driven by a solid improvement in subscription revenues. Growing customer base, which surged 30% year over year to 135,442, also contributed to the results. In 2021, HubSpot registered revenues of $1,300.7 million compared with $883 million in 2020.
Subscription revenues (97.1% of the total revenues) surged 46.8% from the year-ago quarter’s levels to $358.7 million. Professional services and other revenues (2.9%) were up 39% year over year to $10.7 million. Average subscription revenue per customer was up 11% year over year to $10,875.
The company reported a non-GAAP operating income of $38.2 million in fourth-quarter 2021, up from $24.6 million in the year-ago quarter with respective margins of 10.3% and 9.8%. Management had projected non-GAAP operating income to be in the range of $34-$36 million.
Balance Sheet & Cash Flow
As of Dec 31, 2021, HubSpot reported cash and cash equivalents of $377 million and operating lease liabilities (net of current portion) of $283.9 million with respective tallies of $378.1 million and $279.7 million in the prior-year period.
In 2021, the company generated an operating cash flow of $265.2 million compared with $138 million in 2020. Free cash flow in 2021 was $203.3 million compared with the prior-year figure of $79.1 million.
Guidance
For first-quarter 2022, HubSpot forecasts revenues in the range of $381 million to $383 million. Management expects non-GAAP operating income in the band of $30-31 million. The company anticipates non-GAAP net income per share to be 46-48 cents.
For 2022, the company anticipates revenues between $1.72 billion and $1.73 billion. Non-GAAP operating income is likely to be $155-$157 million, while non-GAAP net income is expected to be $2.34-$2.42 per share.
TWOU delivered an earnings surprise of 31.6%, on average, in the trailing four quarters. It has a long-term earnings growth expectation of 25%.
Clarivate Plc (CLVT - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 14.8%.
Clarivate is a global leader in providing trusted information and actionable insights to customers. The company aims to provide real-time insights to enable customers to successfully adapt to the evolving business conditions. Clarivate delivered an earnings surprise of 10.1%, on average, in the trailing four quarters.
CS Disco, Inc. (LAW - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 35.9%.
CS Disco delivered an earnings surprise of 16.9%, on average, in the trailing four quarters. The company offers a cloud-native, AI-powered legal solution for simplified legal document review and case management for enterprises, law firms, legal services providers and governments. CS Disco’s scalable, integrated solutions seamlessly collect, process and review enterprise data pertaining to legal matters.
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HubSpot (HUBS) Beats Q4 Earnings Estimates on Top-Line Growth
HubSpot Inc. (HUBS - Free Report) reported relatively healthy fourth-quarter 2021 results driven by diligent execution of operational plans and healthy growth dynamics, with both the bottom line and the top line surpassing the respective Zacks Consensus Estimate. The company remains focused on achieving its goal of becoming a leading CRM platform provider in the near future.
Quarter Details
GAAP net loss for the reported quarter was $16.4 million or a loss of 35 cents per share compared with a net loss of $15.4 million or a loss of 34 cents per share in the year-earlier quarter. Despite the top-line improvement, net loss widened due to significantly higher operating expenses.
Non-GAAP earnings in fourth-quarter 2021 were $29.6 million or 58 cents per share compared with $20.1 million or 40 cents per share in the year-ago quarter and exceeded the guided range of 52-54 cents per share. The bottom line beat the Zacks Consensus Estimate by 5 cents.
HubSpot, Inc. Price, Consensus and EPS Surprise
HubSpot, Inc. price-consensus-eps-surprise-chart | HubSpot, Inc. Quote
In 2021, HubSpot recorded a GAAP net loss of $77.8 million or a loss of $1.66 per share compared with a net loss of $85 million or a loss of $1.90 per share in 2020. Non-GAAP net income increased to $92.5 million or $1.82 per share from $64.5 million or $1.32 per share in 2020.
Quarterly revenues increased 46.5% year over year to $369.3 million and surpassed the consensus estimate of $357 million. The top line also exceeded the guidance range of $356-$358 million. The top line was driven by a solid improvement in subscription revenues. Growing customer base, which surged 30% year over year to 135,442, also contributed to the results. In 2021, HubSpot registered revenues of $1,300.7 million compared with $883 million in 2020.
Subscription revenues (97.1% of the total revenues) surged 46.8% from the year-ago quarter’s levels to $358.7 million. Professional services and other revenues (2.9%) were up 39% year over year to $10.7 million. Average subscription revenue per customer was up 11% year over year to $10,875.
The company reported a non-GAAP operating income of $38.2 million in fourth-quarter 2021, up from $24.6 million in the year-ago quarter with respective margins of 10.3% and 9.8%. Management had projected non-GAAP operating income to be in the range of $34-$36 million.
Balance Sheet & Cash Flow
As of Dec 31, 2021, HubSpot reported cash and cash equivalents of $377 million and operating lease liabilities (net of current portion) of $283.9 million with respective tallies of $378.1 million and $279.7 million in the prior-year period.
In 2021, the company generated an operating cash flow of $265.2 million compared with $138 million in 2020. Free cash flow in 2021 was $203.3 million compared with the prior-year figure of $79.1 million.
Guidance
For first-quarter 2022, HubSpot forecasts revenues in the range of $381 million to $383 million. Management expects non-GAAP operating income in the band of $30-31 million. The company anticipates non-GAAP net income per share to be 46-48 cents.
For 2022, the company anticipates revenues between $1.72 billion and $1.73 billion. Non-GAAP operating income is likely to be $155-$157 million, while non-GAAP net income is expected to be $2.34-$2.42 per share.
Zacks Rank & Stocks to Consider
HubSpot currently has a Zacks Rank #3 (Hold).
2U, Inc. (TWOU - Free Report) , carrying a Zacks Rank #2 (Buy) is a solid pick for investors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TWOU delivered an earnings surprise of 31.6%, on average, in the trailing four quarters. It has a long-term earnings growth expectation of 25%.
Clarivate Plc (CLVT - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 14.8%.
Clarivate is a global leader in providing trusted information and actionable insights to customers. The company aims to provide real-time insights to enable customers to successfully adapt to the evolving business conditions. Clarivate delivered an earnings surprise of 10.1%, on average, in the trailing four quarters.
CS Disco, Inc. (LAW - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 35.9%.
CS Disco delivered an earnings surprise of 16.9%, on average, in the trailing four quarters. The company offers a cloud-native, AI-powered legal solution for simplified legal document review and case management for enterprises, law firms, legal services providers and governments. CS Disco’s scalable, integrated solutions seamlessly collect, process and review enterprise data pertaining to legal matters.