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HubSpot (HUBS) Surpasses Q4 Earnings and Revenue Estimates
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HubSpot, Inc. (HUBS - Free Report) reported relatively healthy fourth-quarter 2022 results, with the bottom line and the top line surpassing the respective Zacks Consensus Estimate. The leading CRM platform provider’s ongoing innovation initiatives and essential business restructuring in the face of unfavorable macroeconomic conditions helped it expand its customer base, which led to top line expansion year over year.
Net Income
GAAP net loss in the quarter was $15.6 million or a loss of 32 cents per share compared with a net loss of $16.4 million or a loss of 35 cents per share in the prior-year quarter. Despite greater operating expenses and cost of revenues, a significant top-line improvement and higher interest income led to a narrower net loss in the fourth quarter.
Non-GAAP net income in the fourth quarter was $56.8 million or $1.11 per share compared with $29.6 million or 58 cents per share in the prior-year quarter. It beat the Zacks Consensus Estimate by 28 cents.
For 2022, GAAP net loss totaled at $112.7 million or a loss of $2.35 per share compared with net loss of $77.8 million or a loss of $1.66 per share in 2021. On a non-GAAP basis net income was $141.8 million or $2.78 per share compared to respective tallies of $92.5 million or 1.82 per share in the previous year.
Revenues during the reported quarter were $469.7 million compared with $369.3 million in the prior-year quarter, reflecting growth of 27% and beating the Zacks Consensus Estimate of $445 million. The top-line performance is enhanced by strong demand trends and an expanding client base, which increased by 24% year over year to a total count of 167,000.
Subscription revenues in the quarter were $458.2 million, up 28% from $358.7 million in the year-ago quarter. Continuous adoption of multiple hubs by professional and enterprise customers are primary drivers for this improvement. Professional services and other revenues were $11.5 million compared with $10.7 million in the prior-year quarter. Average subscription revenue per customer was $11,231, up 3% from the year ago quarter’s levels.
For full year 2022, total revenues were $1.731 billion, up 33% from $1.3 billion in 2021.
Other Details
Gross profit reported during the quarter was $389.4 million compared with $297.7 million in the prior-year quarter. GAAP operating loss during the quarter was $13.5 million compared with a loss of $8.2 million in the prior-year quarter. Non-GAAP operating income during the quarter was $64 million compared with $38.2 million in the prior-year quarter. The fourth-quarter non-GAAP operating margin was 13.6% compared to 10.3% in the prior year quarter. A slower hiring process and reduced discretionary had a favorable effect on the operating margin.
Cash Flow & Liquidity
For 2022, HubSpot generated $273.2 million from operating activities compared with $238.7 million in previous year. As of Dec 31, 2022, the company had $331 million in cash and cash equivalents with $316.2 million of operating lease liabilities, net of current portion compared with respective tallies of $377 million and $283.9 million in 2021.
Outlook
For first-quarter 2023, HubSpot forecasts revenues to be in the range of $473 million to $475 million. The company expects non-GAAP net income per share to be in the band of 82 cents to 84 cents. The anticipated range for non-GAAP operating income is $45–$47 million. Foreign exchange headwinds are expected to dent first quarter revenues.
For 2023, management estimates the revenues between $2.050 billion and $2.060 billion. Non-GAAP operating income is expected to be in the range of $248-$252 million. Non-GAAP net income per share is likely to be in the range of $4.24-$4.32.
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 14.17%, on average, in the trailing four quarters. Earnings estimates for ANET for the current year stands at $5.6 per share.
Arista Networks, Inc. is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next generation data center networks.
InterDigital, Inc. (IDCC - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 40.33%, on average, in the trailing four quarters. Earnings estimates for IDCC for the current year stands at $2.63 per share.
InterDigital, Inc. is a pioneer in advanced mobile technologies that enables wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2 (Buy) , delivered an earnings surprise of 9.10%, on average, in the trailing four quarters. In the last reported quarter, it delivered an earnings surprise of 27.27%.
Viavi Solutions Inc. is a leading provider of network test, monitoring and service enablement solutions to diverse sectors across the globe. The product portfolio of the company offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks.
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HubSpot (HUBS) Surpasses Q4 Earnings and Revenue Estimates
HubSpot, Inc. (HUBS - Free Report) reported relatively healthy fourth-quarter 2022 results, with the bottom line and the top line surpassing the respective Zacks Consensus Estimate. The leading CRM platform provider’s ongoing innovation initiatives and essential business restructuring in the face of unfavorable macroeconomic conditions helped it expand its customer base, which led to top line expansion year over year.
Net Income
GAAP net loss in the quarter was $15.6 million or a loss of 32 cents per share compared with a net loss of $16.4 million or a loss of 35 cents per share in the prior-year quarter. Despite greater operating expenses and cost of revenues, a significant top-line improvement and higher interest income led to a narrower net loss in the fourth quarter.
Non-GAAP net income in the fourth quarter was $56.8 million or $1.11 per share compared with $29.6 million or 58 cents per share in the prior-year quarter. It beat the Zacks Consensus Estimate by 28 cents.
For 2022, GAAP net loss totaled at $112.7 million or a loss of $2.35 per share compared with net loss of $77.8 million or a loss of $1.66 per share in 2021. On a non-GAAP basis net income was $141.8 million or $2.78 per share compared to respective tallies of $92.5 million or 1.82 per share in the previous year.
HubSpot, Inc. Price, Consensus and EPS Surprise
HubSpot, Inc. price-consensus-eps-surprise-chart | HubSpot, Inc. Quote
Revenues
Revenues during the reported quarter were $469.7 million compared with $369.3 million in the prior-year quarter, reflecting growth of 27% and beating the Zacks Consensus Estimate of $445 million. The top-line performance is enhanced by strong demand trends and an expanding client base, which increased by 24% year over year to a total count of 167,000.
Subscription revenues in the quarter were $458.2 million, up 28% from $358.7 million in the year-ago quarter. Continuous adoption of multiple hubs by professional and enterprise customers are primary drivers for this improvement. Professional services and other revenues were $11.5 million compared with $10.7 million in the prior-year quarter. Average subscription revenue per customer was $11,231, up 3% from the year ago quarter’s levels.
For full year 2022, total revenues were $1.731 billion, up 33% from $1.3 billion in 2021.
Other Details
Gross profit reported during the quarter was $389.4 million compared with $297.7 million in the prior-year quarter. GAAP operating loss during the quarter was $13.5 million compared with a loss of $8.2 million in the prior-year quarter. Non-GAAP operating income during the quarter was $64 million compared with $38.2 million in the prior-year quarter. The fourth-quarter non-GAAP operating margin was 13.6% compared to 10.3% in the prior year quarter. A slower hiring process and reduced discretionary had a favorable effect on the operating margin.
Cash Flow & Liquidity
For 2022, HubSpot generated $273.2 million from operating activities compared with $238.7 million in previous year. As of Dec 31, 2022, the company had $331 million in cash and cash equivalents with $316.2 million of operating lease liabilities, net of current portion compared with respective tallies of $377 million and $283.9 million in 2021.
Outlook
For first-quarter 2023, HubSpot forecasts revenues to be in the range of $473 million to $475 million. The company expects non-GAAP net income per share to be in the band of 82 cents to 84 cents. The anticipated range for non-GAAP operating income is $45–$47 million. Foreign exchange headwinds are expected to dent first quarter revenues.
For 2023, management estimates the revenues between $2.050 billion and $2.060 billion. Non-GAAP operating income is expected to be in the range of $248-$252 million. Non-GAAP net income per share is likely to be in the range of $4.24-$4.32.
Zacks Rank & Stocks to Consider
HubSpot currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 14.17%, on average, in the trailing four quarters. Earnings estimates for ANET for the current year stands at $5.6 per share.
Arista Networks, Inc. is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next generation data center networks.
InterDigital, Inc. (IDCC - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 40.33%, on average, in the trailing four quarters. Earnings estimates for IDCC for the current year stands at $2.63 per share.
InterDigital, Inc. is a pioneer in advanced mobile technologies that enables wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks
Viavi Solutions Inc. (VIAV - Free Report) , carrying a Zacks Rank #2 (Buy) , delivered an earnings surprise of 9.10%, on average, in the trailing four quarters. In the last reported quarter, it delivered an earnings surprise of 27.27%.
Viavi Solutions Inc. is a leading provider of network test, monitoring and service enablement solutions to diverse sectors across the globe. The product portfolio of the company offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks.