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HubSpot (HUBS) Surpasses Q4 Earnings and Revenue Estimates
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HubSpot, Inc. (HUBS - Free Report) reported healthy fourth-quarter 2023 results, with the bottom line and the top line surpassing the respective Zacks Consensus Estimate. Despite exchange rate volatility and macroeconomic headwinds, the company recorded higher revenues year over year, driven by a strong subscription base, expansion to an underpenetrated market and innovative cross-selling products.
Net Income
GAAP net loss was $13.6 million, or a loss of 27 cents per share compared with $15.6 million or a loss of 32 cents per share in the prior-year quarter. Despite higher operating expenses and cost of revenues, significant revenue growth led to a narrower net loss in the fourth quarter.
Non-GAAP net income in the fourth quarter was $92.4 million or $1.76 per share compared with $56.8 million or $1.11 per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 22 cents.
For 2023, GAAP net loss totaled $176.3 million or a loss of $3.53 per share compared with a net loss of $112.7 million or a loss of $2.35 per share in 2022. On a non-GAAP basis, net income was $307.4 million or $5.89 per share compared to respective tallies of $141.8 million or 2.78 per share in the previous year.
For full-year 2023, total revenues were $2.17 billion, up 25% from $1.7 billion in 2022.
Revenues during the reported quarter were $581.9 million compared with $469.7 million in the prior-year quarter, reflecting growth of 24% and beating the Zacks Consensus Estimate of $557.5 million. The top-line performance gained from solid demand trends and an expanding user base, which increased 23% year over year to a total of 205,091.
Subscription revenues in the quarter were $570.2 million, up 24% from $458.2 million in the year-ago quarter. Professional services and other revenues were $11.7 million compared with $11.5 million in the prior-year quarter. Average subscription revenue per customer was $11,365 in the quarter, up 1%.
Other Details
Gross profit reported during the quarter was $493.3 million compared with $389.4 million in the prior-year quarter. GAAP operating loss during the quarter was $24.3 million compared with a loss of $13.5 million in the prior-year quarter. Non-GAAP operating income during the quarter was $98.1 million compared with $64 million in the prior-year quarter. The fourth-quarter non-GAAP operating margin was 16.9% compared to 13.6% in the prior-year quarter.
Cash Flow & Liquidity
During the fourth quarter, HubSpot generated $104.3 million of cash from operating cash flow compared with $90 million a year ago. For 2023, the company generated $351 million from operating activities compared with $273.2 million in the previous year. As of Dec 31, 2023, the company’s cash, cash equivalents, and short-term and long-term investments balance was $1.7 billion.
Outlook
For first-quarter 2024, HubSpot forecasts revenues to be in the range of $596 million to $598 million. The company expects non-GAAP net income per share to be in the band of $1.48 to $1.50. The anticipated range for non-GAAP operating income is $83-$84 million. Foreign exchange rates are expected to have no impact on first-quarter revenue growth.
For 2024, management estimates the revenues between $2.55 billion and $2.56 billion. Non-GAAP operating income is expected to be in the range of $408-$412 million. Non-GAAP net income per share is likely to be in the range of $6.86-$6.94.
Headquartered in Wilmington, DE, InterDigital, Inc. (IDCC - Free Report) is a pioneer in advanced mobile technologies that enable 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.
This Zacks Rank #2 (Buy) stock has a long-term earnings growth expectation of 17.4% and has surged 75.3% in the past year. A well-established global footprint, diversified product portfolio and ability to penetrate different markets are key growth drivers for InterDigital. The addition of technologies related to sensors, user interface and video to its already strong portfolio of wireless technology solutions is likely to drive considerable value, given the massive size of the market it offers licensing technologies to.
Ubiquiti Inc. (UI - Free Report) , carrying a Zacks Rank #2 at present, is a key pick in the broader industry. Headquartered in New York, it offers a comprehensive portfolio of networking products and solutions for service providers and enterprises at disruptive prices.
It boasts a proprietary network communication platform that is well-equipped to meet end-market customer needs. In addition, it is committed to reducing operational costs by using a self-sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of the Ubiquiti Community.
AudioCodes Ltd. (AUDC - Free Report) currently carries a Zacks Rank #2. It has a long-term earnings growth expectation of 24.8% and delivered an earnings surprise of 20.1%, on average, in the trailing four quarters.
AudioCodes offers advanced communications software, products, and productivity solutions for the digital workplace. It provides a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world. The company is headquartered in Lod, Israel.
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HubSpot (HUBS) Surpasses Q4 Earnings and Revenue Estimates
HubSpot, Inc. (HUBS - Free Report) reported healthy fourth-quarter 2023 results, with the bottom line and the top line surpassing the respective Zacks Consensus Estimate. Despite exchange rate volatility and macroeconomic headwinds, the company recorded higher revenues year over year, driven by a strong subscription base, expansion to an underpenetrated market and innovative cross-selling products.
Net Income
GAAP net loss was $13.6 million, or a loss of 27 cents per share compared with $15.6 million or a loss of 32 cents per share in the prior-year quarter. Despite higher operating expenses and cost of revenues, significant revenue growth led to a narrower net loss in the fourth quarter.
Non-GAAP net income in the fourth quarter was $92.4 million or $1.76 per share compared with $56.8 million or $1.11 per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 22 cents.
For 2023, GAAP net loss totaled $176.3 million or a loss of $3.53 per share compared with a net loss of $112.7 million or a loss of $2.35 per share in 2022. On a non-GAAP basis, net income was $307.4 million or $5.89 per share compared to respective tallies of $141.8 million or 2.78 per share in the previous year.
HubSpot, Inc. Price, Consensus and EPS Surprise
HubSpot, Inc. price-consensus-eps-surprise-chart | HubSpot, Inc. Quote
Revenues
For full-year 2023, total revenues were $2.17 billion, up 25% from $1.7 billion in 2022.
Revenues during the reported quarter were $581.9 million compared with $469.7 million in the prior-year quarter, reflecting growth of 24% and beating the Zacks Consensus Estimate of $557.5 million. The top-line performance gained from solid demand trends and an expanding user base, which increased 23% year over year to a total of 205,091.
Subscription revenues in the quarter were $570.2 million, up 24% from $458.2 million in the year-ago quarter. Professional services and other revenues were $11.7 million compared with $11.5 million in the prior-year quarter. Average subscription revenue per customer was $11,365 in the quarter, up 1%.
Other Details
Gross profit reported during the quarter was $493.3 million compared with $389.4 million in the prior-year quarter. GAAP operating loss during the quarter was $24.3 million compared with a loss of $13.5 million in the prior-year quarter. Non-GAAP operating income during the quarter was $98.1 million compared with $64 million in the prior-year quarter. The fourth-quarter non-GAAP operating margin was 16.9% compared to 13.6% in the prior-year quarter.
Cash Flow & Liquidity
During the fourth quarter, HubSpot generated $104.3 million of cash from operating cash flow compared with $90 million a year ago. For 2023, the company generated $351 million from operating activities compared with $273.2 million in the previous year. As of Dec 31, 2023, the company’s cash, cash equivalents, and short-term and long-term investments balance was $1.7 billion.
Outlook
For first-quarter 2024, HubSpot forecasts revenues to be in the range of $596 million to $598 million. The company expects non-GAAP net income per share to be in the band of $1.48 to $1.50. The anticipated range for non-GAAP operating income is $83-$84 million. Foreign exchange rates are expected to have no impact on first-quarter revenue growth.
For 2024, management estimates the revenues between $2.55 billion and $2.56 billion. Non-GAAP operating income is expected to be in the range of $408-$412 million. Non-GAAP net income per share is likely to be in the range of $6.86-$6.94.
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
Headquartered in Wilmington, DE, InterDigital, Inc. (IDCC - Free Report) is a pioneer in advanced mobile technologies that enable 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.
This Zacks Rank #2 (Buy) stock has a long-term earnings growth expectation of 17.4% and has surged 75.3% in the past year. A well-established global footprint, diversified product portfolio and ability to penetrate different markets are key growth drivers for InterDigital. The addition of technologies related to sensors, user interface and video to its already strong portfolio of wireless technology solutions is likely to drive considerable value, given the massive size of the market it offers licensing technologies to.
Ubiquiti Inc. (UI - Free Report) , carrying a Zacks Rank #2 at present, is a key pick in the broader industry. Headquartered in New York, it offers a comprehensive portfolio of networking products and solutions for service providers and enterprises at disruptive prices.
It boasts a proprietary network communication platform that is well-equipped to meet end-market customer needs. In addition, it is committed to reducing operational costs by using a self-sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of the Ubiquiti Community.
AudioCodes Ltd. (AUDC - Free Report) currently carries a Zacks Rank #2. It has a long-term earnings growth expectation of 24.8% and delivered an earnings surprise of 20.1%, on average, in the trailing four quarters.
AudioCodes offers advanced communications software, products, and productivity solutions for the digital workplace. It provides a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world. The company is headquartered in Lod, Israel.