Billion Dollar Unicorns: HubSpot On A Growth Trajectory

A market research conducted last year expects the $34.3 billion MarTech market in the US and UK to grow 10% in 2018. While the market is dominated by players like Adobe Systems, Oracle, Salesforce, and IBM, there are other smaller Billion Dollar Unicorns like HubSpot (HUBS) that are making their presence felt.

HubSpot’s Financials

HubSpot (NYSE:HUBS) recently announced its second quarter results that continued to outpace market expectations. Revenues for the quarter grew 38% over the year to $122.6 million, ahead of the Street’s forecast of $117.6 million. It ended the quarter with a net loss of $18.2 million, or $0.48 per share compared with a net loss of $0.26 per share reported a year ago. Adjusted EPS was $0.18, compared with the Street’s forecast of $0.16.

By segment, revenues from subscription services grew 38% to $116.6 million. Professional and other services revenues grew 28% to bring in the remaining $6 million.

Among key metrics, it grew its total customer base by 40% to end with over 48,000 customers. Total average subscription revenue per customer declined 2% to $10,004 during the second quarter. Deferred revenues grew 38% to $153.8 million while calculated billings, defined as revenues plus the change in deferred revenues, grew 32% to $125.6 million.

For the current quarter, HubSpot expects revenues of $125.6-$126.6 million with an EPS of $0.03-$0.05. It expects to end the year with revenues of $496.8-$498.8 million with an EPS of $0.63-$0.67. The market was looking for revenues of $125 million for the quarter and $491.6 million for the year.

HubSpot’s Product Expansion

During the recent quarter, HubSpot announced the launch of Service Hub. Service Hub is part of HubSpot’s free CRM targeted to improve the customer experience. It is built for service teams and has been integrated into its Marketing and Sales Hubs so that all of the organizations’ front office teams — marketing, sales, and service — can share a single view of the customer. It also provides a chat capability for customers to interact with the organization, an automatically indexed knowledge base for self service, a ticketing system and a system for gathering customer feedback.