HubSpot stock climbed Thursday after the marketing software maker reported third-quarter earnings and revenue that topped analyst estimates while its guidance met expectations.
Cambridge, Mass.-based HubSpot reported September-quarter earnings after the market close on Wednesday.
"Strength was driven by continued up-market and multi-hub traction, and improved execution with its new pricing model," said TD Cowen analyst Derrick Wood in a report. "External buying conditions remain unchanged with continued pressure on upgrade motions. Clean quarter and model stability driving shares up."
On an adjusted basis, HubSpot earnings came in at $2.18 share, up 37% from a year earlier. Revenue climbed 20% to $670 million, the maker of web marketing software said.
A year earlier, HubSpot's earnings were $1.59 a share on sales of $558 million. Analysts expected HubSpot earnings of $1.91 on sales of $647 million.
On the stock market today, HubSpot stock climbed 6.5% to 636.90 in early trading.
HubSpot Stock: Guidance Conservative
Heading into the HubSpot earnings report, shares were about flat in 2024. Google-parent Alphabet reportedly walked away from acquisition talks in early 2024.
For the current quarter ending in December, HubSpot forecast earnings per share of $2.19 at the midpoint of guidance and revenue of $673 million. Analysts had predicted adjusted EPS of $2.18 on revenue of $670 million.
"The company maintained prudent conservatism in its guidance, with fourth-quarter revenue only increasing for an expected currency benefit next quarter," said William Blair analyst Arjun Bhatia in a report. "Despite the conservative outlook, we sensed optimism on the fourth-quarter pipeline, leading us to believe there is further upside to estimates, assuming good execution and a relatively stable macro to end the year."
HubSpot's marketing focuses on digital channels such as blogs, internet search engines and social media. The company aims to attract people to customer websites and optimize content so that visitors are converted into paying customers.
According to IBD Stock Checkup, HubSpot stock owned a Relative Strength Rating of 74 out of a best-possible 99 heading into the earnings report.
What's more, HubSpot is among the top AI stocks to watch.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
