HubSpot, a leading provider of inbound marketing and sales software, announced their Q1 2023 results, exceeding analysts’ expectations. The company reported strong revenue growth and higher than estimated earnings per share (EPS). HubSpot shares surged more than 5% in after-hours trading, indicating investors’ positive reaction to the results.
Revenue Growth and Segment Performance
HubSpot’s Q1 revenue grew by 27% year-over-year to reach $501.6 million, beating the consensus estimate of $474.87 million. The company’s subscription revenue, which accounted for the majority of the total revenue, increased by 27% YoY to $489.7 million. Professional services and other revenue also grew 12% YoY to $11.9 million.
The strong performance of subscription revenue can be attributed to the increase in new customers and the growth of existing customer accounts. HubSpot reported that it had 114,085 customers at the end of Q1, up from 100,000 customers reported at the end of Q1 2022. This indicates that HubSpot is successfully acquiring new customers and retaining existing ones.
Earnings Per Share
HubSpot’s Q1 EPS of $1.20 was higher than the consensus estimate of $0.83, representing an increase of 74% YoY. The growth in EPS was primarily due to the strong revenue growth and the company’s focus on profitability. The company’s operating income for the quarter was $42.7 million, representing an operating margin of 8.5%.
Guidance and Outlook
HubSpot raised its full-year guidance for 2023, with revenue expected to be between $2.13 billion and $2.14 billion, representing a growth rate of 24% to 25% YoY. The company expects EPS for the year to be in the range of $4.47 to $4.51.
The company’s CEO, Brian Halligan, expressed confidence in the company’s future growth, stating that “HubSpot is uniquely positioned to capitalize on the growth of the digital economy, as more and more companies shift their operations online.”
Conclusion
HubSpot’s strong Q1 results demonstrate the company’s ability to attract new customers and retain existing ones, leading to a rise in subscription revenue. The company’s focus on profitability has also led to an increase in earnings per share. With its raised guidance for the full year, HubSpot is expected to continue its growth trajectory in the coming quarters.
