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.

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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