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Cloud Stocks: HubSpot Focuses on Its Platform

Posted on Thursday, Nov 7th 2019

Earlier this week, inbound marketing specialist HubSpot (NYSE:HUBS) reported its third quarter results. While the quarter’s performance outpaced market expectations, a rather lackluster outlook failed to impress the Street. Its stock fell 6% in the after-hours trading session post the announcement of the results.

HubSpot’s Financials

HubSpot’s Q3 revenues grew 32% over the year to $173.6 million, ahead of the Street’s forecast of $169 million. Revenues were also higher than the management’s outlook of $168-$169 million for the quarter. EPS was $0.32 compared with $0.17 a year ago and the market’s expectations of $0.24.

By segment, Subscription revenues grew 33% to $167.1 million and Professional services and other revenues grew 3% to $6.5 million.

Among other operating metrics, its customer base grew 31% to over 68,800 at the end of the quarter. Total average subscription revenue per customer grew a modest 0.3% to $9,992. Deferred revenues grew 25% to $203.6 million and calculated billings, defined as revenues plus the change in deferred revenues grew 27% to $179 million.

For the fourth quarter, HubSpot expects revenues of $180.3-$181.3 million with an EPS of $0.40-$0.42. The market was looking for revenues of $180.8 million with an EPS of $0.44. HubSpot expects to end the year with revenues of $669-$670 million with an EPS of $1.44-$1.46. The market was looking for revenues of $664.85 million for the year with an EPS of $1.41.

HubSpot’s Acquisition

Earlier this week, HubSpot announced the acquisition of PieSync, a real-time intelligent customer data synchronization platform. PieSync is an iPaaS offering that offers a two-way synchronization capability of customer data. It operates in the background and allows organizations to hold a consistent view of customers across the board. Customers using PieSync’s service can see the most recent customer information that has been pulled in from various apps.

Belgium-based PieSync was set up in 2012. It is a privately held organization that has raised $5 million in funding from investors including Dirk Vermunicht, Fortino Capital, PMV, Ark Angels Activator Fund, and SoFi. HubSpot plans to leverage PieSync to strengthen its platform. Its platform already offers more than 300 integrations to the customers. PieSync’s two-way sync technology will help customers leverage and manage these apps even better. It did not declare the transaction value of the deal.

HubSpot’s Product Upgrade

Additionally, HubSpot is also improving its product and platform capabilities. Earlier last month, it announced the ability to allow users to create LinkedIn Lead Gen Forms from within the HubSpot ads tool. The capability will enable marketers to directly collect quality leads from their ads on LinkedIn using pre-filled forms. These forms can also be set up directly within the HubSpot platform.

Last quarter, HubSpot also announced several innovative digital functionalities to improve user engagement and drive reliability. It launched an intelligent duplicate management tool that leverages machine learning to identify and eliminate duplicate data. The feature will help improve the results for Enterprise and Professional customers as they can now avoid data inefficiencies.

Some other features include the addition of an eSignature and a Buy Now capability in the Sales Hub Professional offering. It is also updating its customer experience management service by offering a Facebook Messenger integration that can let customers with Facebook Business page to design a Messenger experience. The service is currently in the Beta stage.

Its stock is trading at $145.08 with a market capitalization of $6.2 billion. It had touched a 52-week high of $207.98 in August this year. It had fallen to a 52-week low of $108.39 in December last year.

This segment is a part in the series : Cloud Stocks

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