HubSpot (NYSE:HUBS) shares surged more than 5% after-hours following the company’s reported Q1 results, with EPS of $1.20 coming in better than the consensus estimate of $0.83.
Revenue grew 27% year-over-year to $501.6 million, beating the consensus estimate of $474.87M. Subscription revenue was up 27% to $489.7M, while Professional services and other revenue grew 12% year-over-year to $11.9M.
“We continue to operate in a tough macroeconomic environment but we have a solid playbook for executing and driving sustainable growth despite this challenge. At the same time, we are in the early stages of a transformative shift brought on by Generative AI,” said CEO Yamini Rangan, noting that the company is well-positioned to help go-to-market teams be even more effective with AI.
For Q2/23, the company expects EPS in the range of $0.98-$1.00, compared to the consensus of $0.88, and revenue in the range of $503M-$505M, compared to the consensus of $497.92M.
For the full year, the company expects EPS in the range of $4.80-$4.85, compared to the consensus of $4.27, and revenue of $2.08B-$2.088B, compared to the consensus of $2.06B.
Analysts raised their price targets on HUBS stock in response to solid results. Stifel's new price target is $500 per share while Oppenheimer boosted its forecast to $490.
"We believe HubSpot's bimodal GTM strategy will continue to drive share gain in the broader CRM ecosystem, and management's emphasis on efficiency will contribute to a steady uptick in profitability. While the company's multi-Hub strategy has undoubtedly been successful so far, we see significant runway for cross-sell activity in the customer base as solutions like Service Hub, CMS Hub, and Operations Hub mature and gain incremental traction. We maintain our Buy rating," wrote Stifel analysts.
(Additional reporting by Senad Karaahmetovic)