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HubSpot Rises on Steller Q1 Performance
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HubSpot Rises on Steller Q1 Performance

HubSpot, Inc. (NYSE: HUBS), the provider of a customer relationship management (CRM) platform, has reported better-than-expected results for the first quarter of 2022. Shares of the company rose 2.6% to close at $350 in Thursday’s extended trading session.

Revenue & Earnings

Quarterly revenues rose 41% year-over-year to $395.6 million and surpassed the consensus estimate of $382.6 million. Subscription revenues were up 42% year-over-year and accounted for over 97% of the total quarterly revenues.

Earnings for the quarter stood at $0.54 per share, up 74% from the same quarter last year. Further, the figure surpassed the consensus estimate of $0.46 per share.

Other Operating Metrics

HubSpot’s adjusted operating margin improved to 8.8% from 6.7% a year ago. The company generated an operating cash flow of $82.2 million in the first quarter, compared to $72.5 million in the year-ago period. Free cash flow generation for the quarter was $62.6 million, compared to $61.2 million last year.

The company’s customers increased 26% to 143,689 during the quarter. Also, the average subscription revenue per customer for the first quarter stood at $11,030, up 12% year-over-year.

Outlook

For the second quarter, the company expects revenues in the range of $409 million to $410 million and earnings of $0.42 per share to $0.44 per share. Analysts expect the company to post revenues of $411.8 million and earnings of $0.51 per share.

For full-year 2022, the company anticipates revenues between $1.72 billion and $1.73 billion and earnings in the range of $2.40 per share to $2.42 per share. The consensus estimate for the same stands at $1.7 billion and $2.40 per share, respectively.

CEO’s Comments

The CEO of HubSpot, Yamini Rangan, said, “In the first quarter, we continued to make meaningful progress toward our goal of becoming the #1 CRM platform for scaling companies. Despite uncertainty in the world, we remained resilient and committed to empowering our customers to grow their businesses.”

“I’m particularly excited about the Service Hub relaunch and the robust new features we introduced to help customers deliver even more exceptional service. Looking ahead, 2022 is a year of focus and consistency. We will continue to execute on our key strategy priorities and solve for our customers,” Rangan added.

Stock Rating

Overall, the stock has a Strong Buy consensus rating based on 18 Buys and three Holds. Hubspot’s average price target of $657.38 implies upside potential of about 92.7% from current levels.

Website Traffic 

TipRanks’ Website Traffic tool helped us gain insight into HUBS’ performance for the reported quarter even before the company released its results.

According to the tool, a website traffic uptrend was visible, which indicated that the company was well-placed to report a solid quarter. In the first quarter of 2022, the total estimated visits on hubspot.com trended higher, on a global basis, representing a 75.5% year-over-year jump.

Takeaway

Strong results, encouraging outlook, recent stock price performance and positive analyst ratings reflect long-term growth potential in the stock. Thus, investors interested in the stock may want to take a closer look at its fundamentals. 

Learn more about the Website Traffic tool in this video by Youtube sensation Tom Nash.

Read full Disclaimer & Disclosure

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