Why HubSpot Inc (NYSE: HUBS) Stock Is Going Gangbusters Today

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HubSpot Inc (NYSE: HUBS) stock rose over 20% in the pre-market session of Feb 12th, 2021 (Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 20.

During the quarter, the company had surpassed 100,000 customers, and in December, the company crossed $1 billion in ARR. Q4 subscription revenue grew 36% year-over-year, while services revenue increased 9% year-over-year on an as-reported basis. In Q4, the company had added 8,400 net customers, ending 2020 with nearly 104,000 total customers, up 42% year-over-year. Average subscription revenue per customer of about $9,800 was up slightly sequentially but down a few points year-over-year. Domestic revenue rose 27% in Q4, while international revenue growth was 40% year-over-year in constant currency and 47% as reported. International revenue represented 44% of total revenue in Q4, up three points year-over-year. Deferred revenue as of the end of December was $317 million, which represents a 35% increase year-over-year. Calculated billings were $309 million in Q4, which grew 38% year-over-year in constant currency and 43% as reported. This reacceleration in constant currency billings growth was due to strong revenue performance and a positive mix shift toward Professional and Enterprise subscriptions in the quarter. The company reported net income for the fourth quarter of $20 million. The company generated free cash flow in the fourth quarter of $46 million or 18% of revenue. Overall, the cash and marketable securities totaled $1.3 billion at the end of December.

HUBS in the fourth quarter of FY 20 has reported the adjusted earnings per share of 40 cents, beating the analysts’ estimates for the adjusted earnings per share of 23 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 35 percent to $252.1 million in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $236.4 million.

For the first quarter ending in April, HubSpot expects its per-share earnings to range from 28 cents to 30 cents. The company expects revenue to be in the range of $260 million to $265 million for the fiscal first quarter. Q1 Non-GAAP operating income is expected to be between $17 million and $19 million.

HubSpot expects full-year earnings in the range of $1.51 to $1.59 per share, with revenue ranging from $1.16 billion to $1.17 billion. FY 21 Non-GAAP operating income is expected to be between $98 million and $102 million.

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