HubSpot (HUBS -0.79%) shareholders beat the market on Friday as shares jumped as much as 5% compared to a 1% decline in the S&P 500. The boost erased just a small portion of recent losses for shareholders, and the stock remains down by over 40% so far in 2022.
But the enterprise software specialist's latest earnings report contained signs of solid operating trends into early 2022.
Management revealed in a late Thursday earnings announcement that sales rose 41% to $396 million in the first quarter that ended in late March. That result easily surpassed the guidance range management issued back in February, which called for sales of between $381 million and $383 million.
Profitability improved, too, with operating losses declining to 2.8% of sales compared to 5.3% a year ago. HubSpot continued to win new customers, renew existing contracts, and boost overall contract spending through the period.
In a conference call with Wall Street analysts, executives highlighted HubSpot's success transitioning into a subscription-based selling model. Its marketing unit just crossed $1 billion in annual recurring revenue, "and we now have the opportunity to replicate the success across all of our anchor hubs," CEO Yamini Rangan said.
Executives broadly affirmed their original bullish growth outlook for 2022 despite new pressures on sales, especially due to the war in Ukraine.
Investors were happy to hear that HubSpot still expects to book around $1.73 billion this year compared to $1.3 billion in 2021. That positivity pushed shares higher on Friday, especially considering the stock's slump over the last several months.