CAMBRIDGE, Mass. - HubSpot, Inc. (NYSE: NYSE:HUBS) reported a successful first quarter with earnings and revenue surpassing Wall Street expectations.
The customer platform for scaling companies announced a non-GAAP EPS of $1.68, outperforming the analyst estimate of $1.50. Revenue also exceeded forecasts, coming in at $617.41 million against the consensus estimate of $597.64 million.
The company's total revenue marked a significant 23% increase compared to the first quarter of the previous year, signaling robust growth. Subscription revenue, a critical segment for HubSpot, saw a similar 23% year-over-year (YoY) rise, contributing to the company's financial strength.
HubSpot shares rose more than 9% on the Q1 earnings report.
HubSpot's Chief Executive Officer, Yamini Rangan, attributed the strong quarter to the company's ease of use and fast time to value, which resonated with customers across all segments. Rangan expressed confidence in HubSpot's ability to drive long-term durable growth, despite a challenging macro environment.
For the second quarter of 2024, HubSpot provided guidance that fell slightly short of analyst expectations. The company forecasts revenue between $617 million and $619 million, compared to the consensus of $623.8 million.
Non-GAAP operating income is projected to be between $92 million and $93 million, with non-GAAP net income per share expected to range from $1.62 to $1.64, above the consensus of $1.57.
Looking ahead to the full year, HubSpot anticipates total revenue to be in the range of $2.55 billion to $2.56 billion, narrowly missing the consensus estimate of $2.565 billion. Non-GAAP operating income is estimated to be between $426 million and $430 million, with non-GAAP net income per share forecasted to be between $7.30 and $7.38.
Investors seem to be focusing on the company's solid revenue growth and better-than-expected earnings for the quarter, while also considering the slightly conservative guidance for the coming periods. HubSpot's commitment to innovation, particularly in the AI space, positions the company as a strong contender in the industry, as per CEO Rangan's remarks.
Needham & Company analysts said the results were "consistent with our bullish expectations."
"While we see FY24 guidance as conservative, we note the upside relative to our previous expectations is limited by a near-term ASP headwind from changes to the company's seat-based pricing model that could move existing customers in 2H, Clearbit trends are increasingly challenged, partner-sourced deals are lower than expected, and FX is moving against the company."
"2024 will prove a modestly challenging year for HubSpot, we suspect, but we expect re-acceleration in FY25 as customers review the pricing model and the company receives some macro relief," the analysts said.
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