Why Is HubSpot (HUBS) Up 1.9% Since Last Earnings Report?

Core Viewpoint - HubSpot reported strong Q1 2024 earnings, exceeding estimates in both revenue and net income, driven by user engagement and AI integration across its platform [2][3][4]. Financial Performance - Net income on a GAAP basis was $5.9 million (12 cents per share), a significant improvement from a loss of $36.6 million (74 cents per share) in the prior year [3]. - Non-GAAP net income reached $89.1 million ($1.68 per share), up from $63 million ($1.22 per share) year-over-year, beating the Zacks Consensus Estimate by 19 cents [3]. - Quarterly revenues increased to $617.4 million from $501.6 million year-over-year, surpassing the Zacks Consensus Estimate of $596 million [4]. Customer Growth - HubSpot added over 11,700 net new customers, bringing the total customer count to 216,840, a 22% increase year-over-year, exceeding the consensus estimate of 214,877 [6]. - Subscription revenues rose to $603.8 million, up 23% year-over-year, also surpassing the Zacks Consensus Estimate of $585 million [6]. Product and Service Integration - The integration of HubSpot AI across the platform has enhanced user experience, with features like GPT-powered chatbots and real-time recommendations gaining traction [5]. - Professional services and other revenues totaled $13.6 million, up from $11.9 million in the year-ago quarter, marginally beating the consensus estimate of $12.22 million [7]. Profitability and Margins - Gross profit for the quarter was $522.3 million, up from $421.3 million year-over-year [8]. - Non-GAAP operating income improved to $92.6 million from $69.4 million, with respective margins of 15% and 13.8% [8]. Cash Flow and Liquidity - Cash generated from operating activities was $127.1 million, compared to $81.1 million in the prior year [9]. - As of March 31, 2024, HubSpot had $447.8 million in cash and cash equivalents [9]. Future Outlook - For Q2 2024, HubSpot forecasts revenues between $617 million and $619 million, with non-GAAP net income per share expected to be in the range of $1.62 to $1.64 [10]. - For the full year 2024, management estimates revenues between $2.55 billion and $2.56 billion, with non-GAAP net income per share likely to be in the range of $7.30 to $7.38 [11]. Market Position - HubSpot has a strong Growth Score of A and a momentum score of A, but a low value score of F, resulting in an aggregate VGM Score of B [12]. - The stock has a Zacks Rank 3 (Hold), indicating an expectation of in-line returns in the coming months [13].