HubSpot’s Q4 Results Exceed Expectations; Shares Rise 5.5%

Customer relationship management (CRM) platform HubSpot, Inc. (NYSE: HUBS) recently reported stronger-than-expected results for the fourth quarter ended December 31, 2021. The robust results were primarily on the back of strong growth witnessed in revenues.

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Following the upbeat earnings, shares of the company rose 5.5% to close at $563.75 in Thursday’s extended trading session.

Revenue & Earnings

HubSpot’s quarterly revenues of $369.3 million denotes a year-over-year rise of 47%. Moreover, the figure surpassed the consensus estimate of $357.47 million. Subscription revenues were up 46.8% year-over-year and accounted for over 97% of the total quarterly revenues.

The company’s earnings per share (EPS) for the quarter stood at $0.58, up 45% from the same quarter last year. Further, the figure surpassed the consensus estimate of $0.53 per share.

Other Operating Metrics

HubSpot’s quarterly operating margin improved to 10.3% from 9.8% in the previous year. The company generated an operating cash flow of $97.2 million in the fourth quarter, compared to $61.3 million a year ago. Free cash flow generation for the quarter was $78.3 million, compared to $45.8 million last year.

Outlook

For the first quarter, the company expects revenues to be in the range of $381 million to $383 million and earnings of $0.46 per share to $0.48 per share against the consensus estimate of $377 million and $0.46 per share, respectively.

For full-year 2022, the company anticipates revenues between $1.72 billion and $1.73 billion and earnings in the range of $2.34 per share to $2.42 per share against the consensus estimate $1.66 billion and $2.39, respectively.

Management’s Commentary

The CEO of HubSpot, Yamini Rangan, said, “I am incredibly proud of how the HubSpot team was able to adapt and execute in 2021 to deliver a truly exceptional year. We went into 2021 with the goal of becoming the #1 CRM platform for scaling companies, and we made significant progress by staying focused on our key strategic priorities. 2022 will be a year of sustained focus and consistency as we continue to invest in those priorities.”

Stock Rating

Consensus among analysts is a Strong Buy based on 10 Buys and 1 Hold. The average HubSpot price target of $752.55 implies upside potential of 40.8% from current levels. Shares have gained 23.8% over the past year.

Negative Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on HUBS, as 2.8% of portfolios tracked by TipRanks decreased their exposure to HUBS stock over the past 30 days.

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