Yahoo Finance HubSpot Inc (HUBS) Q1 2024 Earnings: Strong Revenue Growth and Improved Margins
Revenue: Reported $617.4 million, a 23% increase year-over-year, surpassing estimates of $597.58 million.
Net Income: Achieved $5.9 million, transitioning from a net loss of $36.6 million in Q1'23, and fell short of estimates of $79.50 million.
Earnings Per Share (EPS): Non-GAAP EPS was $1.76 per basic and $1.68 per diluted share, exceeding the estimated $1.50.
Operating Income: Non-GAAP operating income rose to $92.6 million from $69.4 million in Q1'23, reflecting improved operational efficiency.
Customer Growth: Grew customer base to 216,840, marking a 22% increase from the previous year.
Cash Flow: Generated $127.1 million in operating cash flow, a significant increase from $81.1 million in Q1'23.
Future Outlook: Expects Q2 2024 revenue to range between $617.0 million and $619.0 million, with non-GAAP net income per share projected between $1.62 and $1.64.
On May 8, 2024, HubSpot Inc (NYSE:HUBS) disclosed its financial results for the first quarter of 2024, revealing substantial growth in revenue and earnings, which outpaced analyst forecasts. The company's detailed financial outcomes are available in its 8-K filing.
HubSpot, headquartered in Cambridge, Massachusetts, is renowned for its integrated cloud-based marketing, sales, and customer service platforms, which are designed to help businesses grow efficiently. Since its inception in 2006 and subsequent IPO in 2014, HubSpot has expanded its offerings beyond inbound marketing to provide comprehensive solutions across various customer interaction points.
Financial Performance Highlights
For Q1 2024, HubSpot reported a total revenue of $617.4 million, marking a 23% increase from Q1 2023 and surpassing the estimated $597.58 million. This growth was primarily driven by a 23% increase in subscription revenue, which reached $603.8 million. The company also saw a 15% increase in professional services and other revenue, totaling $13.6 million.
The GAAP operating margin improved significantly to (3.8%), up from (8.6%) in the previous year, while the non-GAAP operating margin expanded to 15.0% from 13.8%. HubSpot's GAAP net income stood at $5.9 million, or $0.12 per share, a notable recovery from a net loss of $36.6 million, or ($0.74) per share, in Q1 2023. Non-GAAP net income was $89.1 million, or $1.76 per basic and $1.68 per diluted share, improving from $63.0 million, or $1.28 per basic and $1.22 per diluted share in the prior year.
Balance Sheet and Cash Flow Insights
As of March 31, 2024, HubSpot's balance of cash, cash equivalents, and investments was robust at $1.8 billion. The company demonstrated strong cash generation capabilities, with $127.1 million in operating cash flow and $103.8 million in free cash flow during the quarter, up from $81.1 million and $85.2 million, respectively, in Q1 2023.
Operational and Strategic Developments
HubSpot's customer base grew by 22% year-over-year, reaching 216,840. The average subscription revenue per customer slightly increased by 1% to $11,447. CEO Yamini Rangan highlighted the company's continued innovation, particularly in AI, which helps maintain its competitive edge and supports long-term growth despite a challenging macroeconomic environment.
Forward Outlook
Looking ahead to Q2 2024, HubSpot expects total revenue to be between $617.0 million and $619.0 million, with non-GAAP operating income projected between $92.0 million and $93.0 million. For the full year, the company anticipates revenue in the range of $2.55 billion to $2.56 billion and non-GAAP net income per share between $7.30 and $7.38.
Conclusion
HubSpot's Q1 2024 results not only demonstrate a strong start to the year but also reflect the company's effective strategy and operational efficiency. With continued focus on innovation and customer satisfaction, HubSpot is well-positioned to maintain its growth trajectory and strengthen its market position.
Explore the complete 8-K earnings release (here) from HubSpot Inc for further details.
This article first appeared on GuruFocus.
