What happened

Shares of HubSpot Inc. (NYSE:HUBS) climbed 15.8% in August, according to data from S&P Global Market Intelligence, after the cloud-based sales and marketing platform provider announced strong second-quarter 2018 results.

More specifically on the former, HubSpot's quarterly revenue increased 38% year over year to $122.6 million, and it translated to adjusted earnings of $7.4 million, or $0.18 per share, up from $0.07 per share in the same year-ago period. By comparison, most analysts were only expecting adjusted quarterly earnings of $0.16 per share on revenue of $118 million.

Stock market chart indicating volatile gains

IMAGE SOURCE: GETTY IMAGES.

So what

HubSpot's subscription revenue climbed 38%, representing the vast majority of total sales at $116.6 million. That growth was driven primarily by a 40% increase in HubSpot's total customers, to 48,091, which more than offset a modest 2% decline in average subscription revenue per customer. Professional services and other revenue also jumped 27%, to $6 million.

"Q2 was another strong quarter for HubSpot and I'm really pleased with our results," added company co-founder and CEO Brian Halligan. "We're starting to see the fruits of our investment in R&D and we're excited about the progress we've made toward building out our suite of products."

That's not to say HubSpot shares popped immediately in response. In fact, the stock declined modestly in the two trading days after its formal report hit the wires. But more than anything, that brief pullback appeared to be driven by short-term traders taking profits following the stock's more than 40% year-to-date rise leading up to its latest release.

Now what

In any case, HubSpot also raised its full-year guidance to call for revenue in the range of $496.8 million to $498.8 million (up from $489 million to $492 million previously), and for 2018 adjusted earnings per share of $0.63 to $0.67 (up from $0.59 to $0.65 before).

Given this solid beat-and-raise scenario, it was no surprise to see HubSpot stock ultimately respond in kind. And I see no reason the stock won't continue to trend higher if it's able to sustain its business momentum in the coming quarters.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends HubSpot. The Motley Fool has a disclosure policy.