What happened

Shares of HubSpot (HUBS -2.74%) rose 41.5% during the first half of 2020, according to data from S&P Global Market Intelligence. The sales, marketing, and customer service software-as-a-service company rose along with many high-growth enterprise software stocks during the first six months of 2020.

A combination of steady subscription revenue and low interest rates helped contribute to HubSpot's rise. In addition, HubSpot reported first-quarter earnings that beat analyst expectations, while giving optimistic commentary on the future, fueling further gains.

Words related to digital marketing on a chalkboard.

Image source: Getty Images.

So what

In its first-quarter earnings release, HubSpot saw revenue grow 31.1%, while adjusted (non-GAAP) earnings per share came in at $0.39. Both figures came in ahead of expectations. Importantly, management guided for only a slight deceleration in the second quarter. CEO Brian Halligan noted that while business ground to a halt in late March, it had begun to pick up in April:

The first few weeks, it's largely just a big 200-mile an hour headwind that hit the new business and retention side of our business at the same time. But over the last few weeks of April, the winds have shifted. I'd say we have 150-mile an hour headwind now, but that's coupled with 100-mile an hour tailwind as business has been picking up.

HubSpot's digital "inbound" marketing tools are actually well-suited for the pandemic, as HubSpot's technology suite helps companies digitize their marketing to reach customers in a more efficient manner. As such, many companies could still benefit from HubSpot's products, even in a socially distanced economy.

Now what

Halligan also noted HubSpot has very little exposure to small restaurants and stores amid small business customers, or airlines or cruises among large enterprise clients. Therefore, even though HubSpot serves small and medium-sized businesses, the majority of clients may be less exposed to COVID-19 than some might think.

Management also noted that it had worked with customers by offering discounts and downgrades to cash-strapped clients during the shut-downs, keeping them in the HubSpot ecosystem rather than letting them go. That resilience and customer-friendly ethos should serve HubSpot in good stead as the economy recovers.