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Cloud Stocks: HubSpot Counts on its API Strategy

Posted on Wednesday, May 22nd 2019

According to a Grand View Research Report, the global digital marketing software market is estimated to grow 15% annually through to 2025. Cambridge, Massachusetts-based HubSpot (NYSE:HUBS) is a leading player in the inbound marketing campaigns segment that recently reported a strong quarter.

HubSpot’s Financials

For the recently announced first quarter results, HubSpot’s revenues grew 33% over the year to $151.8 million, ahead of the Street’s forecast of $148 million and higher than the management’s outlook of $146.5-$147.5 million. Growth was primarily driven by the 36% growth in customer base to 56,628. Non-GAAP EPS was $0.37, up an impressive 208.3% and ahead of the market’s estimate of $0.30.

By segment, subscription revenues grew 33% to $144.2 million and Professional services and other revenues grew 27% over the year to $7.6 million.

Among other operating metrics, total average subscription revenue per customer fell 2% over the year to $9,811. Deferred revenues grew 28% to $193.5 million. Calculated billings, defined as revenues plus the change in deferred revenues grew 27% to $160 million. International revenues increased 42% over the year and accounted for 39% of the quarter’s revenues.

For the current quarter, HubSpot expects revenues of $156.5-$157.5 million with an EPS of $0.24-$0.26. The market was looking for revenues of $155.9 million with an EPS of $0.23. HubSpot expects to end the year with revenues of $655.5-$658.5 million with an EPS of $1.26-$1.30. The market was looking for revenues of $651.77 million for the year with an EPS of $1.15.

HubSpot’s Product Expansion

Meanwhile, HubSpot’s services are gaining strong recognition. Recently it announced that it had achieved Amazon Web Services (AWS) Digital Customer Experience Competency status for Marketing Automation. The designation makes HubSpot a member of the Amazon Partner Network, thus certifying that it possesses deep AWS expertise and can deliver solutions seamlessly on AWS.

Recently, HubSpot also announced that it had integrated its service with LinkedIn so that LinkedIn ads are now available in the Professional and Enterprise tiers of Marketing Hub as part of the HubSpot Ads tool. HubSpot’s customers will be now able to target ads at their ideal customer across the buyer’s entire journey. Customers will be able to automatically sync, de-dupe, and nurture any new leads from LinkedIn’s Lead Gen ads to the HubSpot CRM, analyze LinkedIn ad spend with true ROI reporting, and align LinkedIn ads with the rest of the company’s marketing efforts within HubSpot. HubSpot Ads had earlier included integrations with Facebook and Google.

HubSpot’s API Focus

HubSpot is driving growth by focusing on its API strategy. To help its customers leverage the explosion of SaaS applications, it is working towards building a platform that can plug all these applications and orchestrate all of them to create a seamless experience. HubSpot currently offers more than 300 integrations that have been built using its integration partners. These integrations are in addition to the 10 natively built integrations.

HubSpot’s analysis reveals that an average HubSpot customer integrates five different applications into HubSpot. As part of its initiative to further strengthen HubSpot as a platform, and to invite more integrations, HubSpot is building even more API end points and investing in improving the developer experience.

In December last year, HubSpot also launched its own venture capital firm, HubSpot Ventures. The $30 million fund will focus on providing early stage funding for upcoming SaaS companies. Prior to setting up the VC, HubSpot had directly invested in nearly 10 start-ups. The Venture fund will now invest in startups that are aligned with its mission to help organizations grow better and add value to the ecosystem of companies benefiting from the HubSpot platform.

Its stock is trading at $188.74 with a market capitalization of $7.95 billion. It had touched a year high of $192.49 earlier this month. Like other tech stocks, it had fallen to a year low of $108.39 in December last year.

This segment is a part in the series : Cloud Stocks


. Smartsheet Acquiring Bootstrapped Startups to Drive Growth
. Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups
. Netflix Price Hike Ruffles Competition
. How Will Carbon Black Differentiate?
. ServiceNow Grows Through Addition of Capital-Efficient Startups
. Zendesk and Freshworks Follow Different Acquisition Strategies
. Tableau Grows Through Small Acquisitions
. Open Platform Strategy Stands Intuit in Good Stead
. Will GoDaddy Follow the PaaS Route?
. Adobe Delivers Via PaaS
. A Look at Oracle’s 2018 M&A Activity
. What Apps Will Drive More Traction for Cloudera?
. Slack's App Focus Will Be Key to Post-IPO Success
. IBM Counts on its Cloud and Platform for the Turnaround
. Atlassian Acquires From its PaaS Marketplace
. What Should SAP Acquire to Triple its Value by 2023?
. Expect ServiceNow to Acquire From App Marketplace
. Should Alarm.com Follow a PaaS Strategy?
. How Upwork Can Leverage the Virtual Company Trend
. Qualys Scouting For Acquisitions
. Should SAP Acquire Zendesk or Freshworks?
. HubSpot Counts on its API Strategy
. SurveyMonkey Eyes Acquisitions for Growth
. Workday Wants to Disrupt Cloud Computing Using Machine Learning
. Einstein and Open-Source Platform Lead the Charge for Salesforce
. DocuSign Prepares to Beat Rival Adobe
. Veeva Soars, But Dassault Acquires Medidata for $5.8 Billion
. Tableau Acquisition Signals Massive Analytics Push for Salesforce
. Oracle Joins Hands with Microsoft to Take on Amazon
. GoDaddy is Making Strategic Acquisitions for the Next Level of Growth
. Alteryx Sees Strong Momentum
. Adobe Leveraging Magento and Marketo to Deliver Blockbuster Performance
. Is Slack Overvalued?
. How Will Cloudera Address the Competition?
. Zoom is Not Bothered by Cisco or Microsoft
. Domo Counts on Enterprise Revenue for Growth
. Netflix Plays with Pricing and Games to Attract Subscribers
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. ServiceNow Believes Strength Lies in Tie-ups
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. HubSpot Soars to a New High
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. SAP Riding High on the Cloud
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. HubSpot Focuses on Its Platform
. BlackLine Partners with Google Cloud
. Rapid7’s Focus on Cloud SIEM Pays Off
. Splunk Bets Big on Data Streaming
. Intuit's QBO Scores Big
. VMware Builds Up With Acquisitions
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. Top 20 for 2020
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. Forescout Fails to Deliver
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. SAP Bets Big on Experience Management
. Twilio Steps up Investment in 2020 to Preserve Growth Momentum
. Zendesk, Freshworks Focus on Marketplaces and Integrations
. Proofpoint Targets Insider Threats Through Acquisition
. RingCentral's Powerful Partner Strategy Would Augment with PaaS
. Qualys Counts on Google and Microsoft for Growth
. Shopify Soars on Improved Merchant Offerings
. HubSpot Believes in the Importance of PaaS
. BlackLine Remains Focused on SAP Integration
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. GoDaddy is on a Shopping Spree
. Intuit Targets Online User Base Through Acquisition
. Should Palo Alto Networks Acquire ZScaler?
. Why Salesforce Buying Vlocity Proves the Growing Importance of PaaS
. Datadog Performing Well Post Recent IPO
. Workday Should Open Up About its PaaS Success
. Anaplan Focuses on API Connectors for its Platform
. Veeva
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. RealPage Brings AI and SaaS to Real Estate
. Splunk Should Open up About its PaaS Metrics
. Okta Benefiting from App Diversity
. Oracle Sees Growth Momentum
. Xero Focuses on a PaaS Strategy
. DocuSign Resilient to COVID-19
. Smartsheet Looking up to Enterprise Customers for Growth
. Paylocity Delivers Solid Results
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. New Relic Focuses on PaaS
. AppFolio Leverages AI for Product Enhancement
. Will Adobe Open Up About its PaaS Statistics?
. Change Healthcare Pushes APIs
. Dropbox Needs to Share API Metrics
. Upwork Improves Monetization
. MongoDB has Miles to go
. Nutanix Needs to Define a PaaS Strategy
. Cloudera Focuses on Hybrid Cloud
. Atlassian Gears Up for Growth, Unfazed by Covid-19
. Shopify Helps Merchants Pivot to Online Stores
. ServiceNow Steady in Turbulent Seas
. RingCentral Sees Strong Traction
. Twilio Hits 52-Week High Amidst COVID Crisis
. HubSpot Lowers Outlook Amidst Virus Concerns
. Proofpoint Acquiring Even Amidst Crisis
. BlackLine Looks Solid At The Face of Covid-19
. GoDaddy Continues to Acquire
. Qualys Expands Cloud Offerings to Soar to New Highs
. Zendesk Struggling Amidst the Downturn
. Alteryx Bounces Back Despite Low Outlook
. Palo Alto Networks Continues to Acquire
. Workday Extends its PaaS Strategy
. Splunk Rides High on Cloud Initiatives
. Salesforce Partners with Workday to Address the New Normal
. Veeva Scales New Highs
. Is Smartsheet’s Pullback a Buying Opportunity?
. MongoDB Soars Even in the Crisis
. Okta Reiterates Outlook
. Is Anaplan a Prospect for Oracle, SAP?
. Oracle Relies on Autonomous Offerings
. Adobe Shifts its Focus
. Paycom Confident Under Current Conditions
. DocuSign Soars to Record Highs
. Paylocity Acquires Amid Crisis
. Datadog's Integrations and Upgrades Help it Soar
. AppFolio Improves Offerings for Current Conditions
. SurveyMonkey Should Get Into PaaS
. Model N Soars to a Record High
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. Guidewire Expands Cloud Offerings
. Dropbox Should Focus on PaaS
. Talend Expands Data Offering Through Partners
. IBM Expands Cloud Partners
. One Medical Supports COVID-19 Care Digitally
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. ServiceNow Expands Ties with Zoom
. Cloudera Powers its Data Platform with Partnerships
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. GoDaddy Restructures During COVID

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