We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
HubSpot (HUBS) Up 18.5% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for HubSpot (HUBS - Free Report) . Shares have added about 18.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is HubSpot due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
HubSpot Q3 Earnings Beat Estimates on Solid Revenues
HubSpot reported impressive third-quarter 2023 results, with the bottom and the top line beating the respective Zacks Consensus Estimate. Solid customer engagement across all market segments and growing adoption of the HubSpot AI-powered customer platform resulted in a top-line expansion year over year.
Net Income
On a GAAP basis, the company recorded a net loss of $5.5 million or a loss of 11 cents per share compared with a loss of $31.4 million or a loss of 65 cents per share in the year-ago quarter. The narrower loss was primarily attributable to solid net sales growth.
Non-GAAP net income was $83.4 million or $1.59 per share, up from $35.1 million or 69 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 36 cents.
Revenues
Quarterly revenues improved to $557.6 million from $444 million reported in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $534 million. HubSpot is witnessing solid customer engagement, driven by its bi-modal strategy of targeting different market segments. In the premium market, customers continue to deploy multi-hub solutions to optimize their marketing, sales and service. Free sign-ups and growth optimization in the company’s starter edition led to solid customer addition in the lower end of the market.
The launch of HubSpot AI, which includes cutting-edge features such as AI assistance, AI agents, AI insights and ChatSpot, is driving more value to customers. Clients are leveraging this advance feature for multiple use cases, such as crafting marketing emails, blogs, social media publishing and more. HubSpot AI features are primarily getting solid traction among enterprise customers.
HubSpot added 9,100 net new customers during the quarter, which increased the total customer count to 194,098, up 22% year over year. The customer count fell short of our estimated figure of 196,071.
Subscription revenues rose to $545.8 million from $435 million in the year-ago quarter. The figure surpassed our estimate of $521.8 million. Average subscription revenues per customer rose 3% year over year to $11,520, driven by solid multi-hub adoption by enterprise and professional customers.
Professional services and other revenues totaled $11.7 million, up 31 % year over year. The top line marginally beat our revenue estimate of $10.9 million.
Other Details
Gross profit in the quarter was $470 million, up from $361.8 million in the year-ago quarter. Operating loss, on a GAAP basis, was $20.4 million against an operating loss of $32.2 million in the year-ago quarter. Non-GAAP operating income improved to $90.2 million from $40.7 million, with respective margins of 16.2% and 9.2%.
Cash Flow & Liquidity
In the third quarter of 2023, the company generated $89 million in cash from operating activities compared with $60.1 million cash generated in the year-ago quarter. As of Sep 30, 2023, HubSpot had $535.5 million in cash and cash equivalents with $455.7 million in convertible senior notes.
Outlook
HubSpot is increasingly focusing on collecting and enriching customers with extensive, unified data pulled from website visits, marketing e-mails, sales calls and more. The acquisition of Clearbit, a B2B data provider for marketing intelligence, will further accelerate HubSpot’s vision. The integration of Clearbit premier information pool with HubSpot AI will facilitate the development of more powerful, advance and accurate AI capabilities.
However, management expects that the macro environment will remain uncertain and customers will continue to have a cautious approach to their spending decisions. HubSpot will emphasize a combination of a flexible marketing policy and product innovation to successfully navigate through these macroeconomic headwinds.
For the fourth quarter of 2023, the company estimates revenues in the range of $556-$558 million. It expects non-GAAP operating income in the range of $85-$86 million. Non-GAAP net income is projected within the range of $1.53-$1.55.
For 2023, HubSpot raised its revenue guidance to $2.144-$2.146 billion from the previously estimated figure of $2.116-$2.122 billion. Non-GAAP operating income is expected to be within $317-$318 million, up from $293-$297 million expected earlier. Non-GAAP net income per share is likely to be in the range of $5.66-5.88 per share, up from $5.24-5.29 estimated previously.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, HubSpot has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, HubSpot has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
HubSpot belongs to the Zacks Internet - Software industry. Another stock from the same industry, BILL Holdings (BILL - Free Report) , has gained 23.8% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
BILL Holdings reported revenues of $304.99 million in the last reported quarter, representing a year-over-year change of +32.7%. EPS of $0.54 for the same period compares with $0.14 a year ago.
For the current quarter, BILL Holdings is expected to post earnings of $0.40 per share, indicating a change of -4.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.4% over the last 30 days.
BILL Holdings has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
HubSpot (HUBS) Up 18.5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for HubSpot (HUBS - Free Report) . Shares have added about 18.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is HubSpot due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
HubSpot Q3 Earnings Beat Estimates on Solid Revenues
HubSpot reported impressive third-quarter 2023 results, with the bottom and the top line beating the respective Zacks Consensus Estimate. Solid customer engagement across all market segments and growing adoption of the HubSpot AI-powered customer platform resulted in a top-line expansion year over year.
Net Income
On a GAAP basis, the company recorded a net loss of $5.5 million or a loss of 11 cents per share compared with a loss of $31.4 million or a loss of 65 cents per share in the year-ago quarter. The narrower loss was primarily attributable to solid net sales growth.
Non-GAAP net income was $83.4 million or $1.59 per share, up from $35.1 million or 69 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 36 cents.
Revenues
Quarterly revenues improved to $557.6 million from $444 million reported in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $534 million. HubSpot is witnessing solid customer engagement, driven by its bi-modal strategy of targeting different market segments. In the premium market, customers continue to deploy multi-hub solutions to optimize their marketing, sales and service. Free sign-ups and growth optimization in the company’s starter edition led to solid customer addition in the lower end of the market.
The launch of HubSpot AI, which includes cutting-edge features such as AI assistance, AI agents, AI insights and ChatSpot, is driving more value to customers. Clients are leveraging this advance feature for multiple use cases, such as crafting marketing emails, blogs, social media publishing and more. HubSpot AI features are primarily getting solid traction among enterprise customers.
HubSpot added 9,100 net new customers during the quarter, which increased the total customer count to 194,098, up 22% year over year. The customer count fell short of our estimated figure of 196,071.
Subscription revenues rose to $545.8 million from $435 million in the year-ago quarter. The figure surpassed our estimate of $521.8 million. Average subscription revenues per customer rose 3% year over year to $11,520, driven by solid multi-hub adoption by enterprise and professional customers.
Professional services and other revenues totaled $11.7 million, up 31 % year over year. The top line marginally beat our revenue estimate of $10.9 million.
Other Details
Gross profit in the quarter was $470 million, up from $361.8 million in the year-ago quarter. Operating loss, on a GAAP basis, was $20.4 million against an operating loss of $32.2 million in the year-ago quarter. Non-GAAP operating income improved to $90.2 million from $40.7 million, with respective margins of 16.2% and 9.2%.
Cash Flow & Liquidity
In the third quarter of 2023, the company generated $89 million in cash from operating activities compared with $60.1 million cash generated in the year-ago quarter. As of Sep 30, 2023, HubSpot had $535.5 million in cash and cash equivalents with $455.7 million in convertible senior notes.
Outlook
HubSpot is increasingly focusing on collecting and enriching customers with extensive, unified data pulled from website visits, marketing e-mails, sales calls and more. The acquisition of Clearbit, a B2B data provider for marketing intelligence, will further accelerate HubSpot’s vision. The integration of Clearbit premier information pool with HubSpot AI will facilitate the development of more powerful, advance and accurate AI capabilities.
However, management expects that the macro environment will remain uncertain and customers will continue to have a cautious approach to their spending decisions. HubSpot will emphasize a combination of a flexible marketing policy and product innovation to successfully navigate through these macroeconomic headwinds.
For the fourth quarter of 2023, the company estimates revenues in the range of $556-$558 million. It expects non-GAAP operating income in the range of $85-$86 million. Non-GAAP net income is projected within the range of $1.53-$1.55.
For 2023, HubSpot raised its revenue guidance to $2.144-$2.146 billion from the previously estimated figure of $2.116-$2.122 billion. Non-GAAP operating income is expected to be within $317-$318 million, up from $293-$297 million expected earlier. Non-GAAP net income per share is likely to be in the range of $5.66-5.88 per share, up from $5.24-5.29 estimated previously.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, HubSpot has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, HubSpot has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
HubSpot belongs to the Zacks Internet - Software industry. Another stock from the same industry, BILL Holdings (BILL - Free Report) , has gained 23.8% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
BILL Holdings reported revenues of $304.99 million in the last reported quarter, representing a year-over-year change of +32.7%. EPS of $0.54 for the same period compares with $0.14 a year ago.
For the current quarter, BILL Holdings is expected to post earnings of $0.40 per share, indicating a change of -4.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.4% over the last 30 days.
BILL Holdings has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.