By Senad Karaahmetovic
Shares of HubSpot (NYSE:HUBS) are trading 11% higher in pre-market Friday after the company reported better-than-expected Q4 results and offered a very strong full-year outlook for profit.
HUBS posted a Q4 EPS of $1.11 on revenue of $469.7 million to beat the average analyst estimate for earnings of $0.83 per share on sales of $446.2M. Revenue increased 27% year-over-year as subscription revenue jumped 28% to $458.2M, beating the $435.9M consensus.
“We executed well and helped our customers navigate choppy waters,” said Yamini Rangan, chief executive officer at HubSpot. “We focused on product innovation and showing the value HubSpot can deliver. As a result, we increasingly see HubSpot becoming the platform of choice for SMBs. Looking ahead, we have a tremendous opportunity in 2023 to help our customers grow and make progress on our vision of becoming the #1 CRM platform for scaling companies.”
For this quarter, the company sees EPS of $0.83 on revenue of $474M at the midpoint, topping the consensus for earnings of $0.59 per share on sales of $469.5M. For 2023, the company sees EPS in the range of $4.24-4.32, crushing the average analyst estimate of $2.85. Full-year revenue is seen between $2.05 billion and $2.06B, in line with the consensus of $2.05B.
Goldman Sachs analysts said HUBS delivered better-than-expected revenue growth and margin outlook. The analysts hiked the price target to $452 per share.
“We believe HubSpot is still in the early innings of driving operating margins higher, with the company noting a particular focus on automation, partner incentives, and enablement tools for its sales force,” they said in a note.
Mizuho analysts also hiked the price target as they went to $450 from the prior $350 to reflect a “strong quarter, despite macro headwinds.”
“The uncertain macro environment has remained the same as Q3 with lengthening sales cycles and more scrutiny around deals. Thus, given the macro pressure, management guided to 20% growth (in CC) for FY23, which appears conservative. We are encouraged by the company's strategy to navigate through this macro environment. We are confident in HubSpot's strength as an SMB CRM platform and durability of its growth with meaningful margin expansion,” analysts wrote to clients.