Why HubSpot Stock Jumped on Friday

What happened

Shares of marketing software company HubSpot (NYSE: HUBS) jumped on Friday, rising as much as 22.2%, until settling to a gain of about 17% as of 11:15 a.m. EST.

The growth stock's gain follows HubSpot's strong fourth-quarter report, which featured revenue and adjusted earnings per share that crushed analysts' consensus forecasts for the two metrics.

A chart showing a stock price rising rapidly

Image source: Getty Images.

So what

Fourth-quarter revenue rose 35% year over year to $252.1 million. This was fueled primarily by 36% growth in subscription revenue, to $244.3 million. Adjusted EPS for the period was $0.40, up from $0.38 a year ago.

On average, analysts were expecting revenue and adjusted EPS of $237 million and $0.23, respectively.

In the fourth-quarter earnings release, CEO Brian Halligan said, "During the quarter we surpassed 100,000 total customers, and in December we crossed $1 billion in annual recurring revenue -- two great milestones that reflect the determination of our team and the strength of our customer relationships."

Now what

The company guided for full-year 2021 revenue between $1.16 billion and $1.17 billion. This compares to 2020 revenue of $883 million. Analysts on average are expecting revenue for the full year of $1.06 billion.

For the first quarter of 2021, management said it expects revenue between $260 million and $265 million, well ahead of analysts' average forecast for $245 million.

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Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of companies mentioned. The Motley Fool owns shares of and recommends HubSpot. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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