HubSpot (NYSE:HUBS) Beats Q4 Sales Targets, Stock Soars On Optimistic Full Year Guidance

Kayode Omotosho /
2022/02/10 4:22 pm EST
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Sales and marketing software maker HubSpot (NYSE:HUBS) reported Q4 FY2021 results that beat analyst expectations, with revenue up 46.5% year on year to $369.3 million. Guidance for next quarter's revenue was $382 million at the midpoint, which is 1.18% above the analyst consensus. HubSpot made a GAAP loss of $16.3 million, down on its loss of $15.4 million, in the same quarter last year.

Is now the time to buy HubSpot? Access our full analysis of the earnings results here, it's free.

HubSpot (HUBS) Q4 FY2021 Highlights:

  • Revenue: $369.3 million vs analyst estimates of $357.5 million (3.29% beat)
  • EPS (non-GAAP): $0.58 vs analyst estimates of $0.53 (8.59% beat)
  • Revenue guidance for Q1 2022 is $382 million at the midpoint, above analyst estimates of $377.5 million
  • Management's revenue guidance for upcoming financial year 2022 is $1.72 billion at the midpoint, beating analyst estimates by 3.63% and predicting 32.6% growth (vs 38.9% in FY2021)
  • Free cash flow of $78.3 million, up 104% from previous quarter
  • Customers: 135,442, up from 128,144 in previous quarter
  • Gross Margin (GAAP): 80.6%, in line with same quarter last year

"I am incredibly proud of how the HubSpot team was able to adapt and execute in 2021 to deliver a truly exceptional year," said Yamini Rangan, Chief Executive Officer at HubSpot.

Started in 2006 by two MIT grad students, HubSpot (NYSE:HUBS) is a software as a service platform that helps small and medium-size businesses sell, market themselves, and get found on the internet.

Companies need to be able to interact with and sell to their customers as efficiently as possible. This reality, coupled with the ongoing migration of enterprises to the cloud drives demand for cloud-based customer relationship management (CRM) software that integrate data analytics with sales and marketing functions.

Sales Growth

As you can see below, HubSpot's revenue growth has been impressive over the last year, growing from quarterly revenue of $252 million, to $369.3 million.

HubSpot Total Revenue

And unsurprisingly, this was another great quarter for HubSpot with revenue up 46.5% year on year. On top of that, revenue increased $30.1 million quarter on quarter, a solid improvement on the $28.4 million increase in Q3 2021, and even a sign of slight acceleration of growth.

Guidance for the next quarter indicates HubSpot is expecting revenue to grow 35.7% year on year to $382 million, slowing down from the 41.4% year-over-year increase in revenue the company had recorded in the same quarter last year. For the upcoming financial year management expects revenue to be $1.72 billion at the midpoint, growing 32.6% compared to 38.9% increase in FY2021.

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Customer Growth

You can see below that HubSpot reported 135,442 customers at the end of the quarter, an increase of 7,298 on last quarter. That's in line with the customer growth we have seen over the last couple of quarters, suggesting that the company can maintain its current sales momentum.

HubSpot Customers

Key Takeaways from HubSpot's Q4 Results

Sporting a market capitalization of $24.7 billion, more than $1.19 billion in cash and with positive free cash flow over the last twelve months, we're confident that HubSpot has the resources it needs to pursue a high growth business strategy.

We were impressed by the exceptional revenue growth HubSpot delivered this quarter. And we were also glad that the revenue guidance for the rest of the year exceeded expectations. Overall, we think this was a strong quarter, that should leave shareholders feeling very positive. The company is up 4.96% on the results and currently trades at $561 per share.

Should you invest in HubSpot right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.