What happened

Shares of HubSpot (HUBS 0.59%) turned sharply higher on Thursday, surging as much as 14.8%, even as the broader market slumped. As of 11:22 a.m. ET, the stock was still up 13.8%.

The catalyst that sent the customer relationship management (CRM) specialist roaring higher was its quarterly earnings report, which was far better than investors expected.

So what

For the third quarter, HubSpot generated revenue of $444 million, up 31% year over year, which would have been up 38% in constant currency. This resulted in adjusted earnings per share (EPS) of $0.69. The company also generated free cash flow of $35.5 million.  

To give those numbers some context, analysts' consensus estimates were expecting revenue of $425.5 million and an adjusted EPS of $0.51, so HubSpot cleared both bars with ease.  

HubSpot's clients' gains were equally robust. New users flocked to the software-as-a-service (SaaS) provider, pushing its customer count to 158,905, up 24% year over year. HubSpot continues to not only add new customers but get existing customers to spend more, as evidenced by its net revenue retention rate of 109%. Additionally, the average revenue per subscriber climbed 7%, driven by users adopting additional products, or "hubs." 

Now what

HubSpot's calculated billings, which includes quarterly revenue plus the sequential change in deferred revenue, climbed 34% in constant currency, suggesting future growth remains robust.

The company's strong outlook helped boost the stock. HubSpot raised its full-year revenue guidance to roughly $1.7 billion, up from $1.69 billion, while increasing its expected EPS to $2.49, up from $2.29.

HubSpot is guiding for fourth-quarter revenue of $445 million at the midpoint of its guidance, which would represent year-over-year growth of roughly 20% -- including a 9% foreign currency headwind. It's also forecasting adjusted EPS of about $0.83, which would mark an increase of 32%. For perspective, analysts are calling for revenue of $447 million and EPS of $0.81. 

Management did its best to temper investor enthusiasm, noting that "the macro environment has become incrementally more difficult through October," while also noting that deals are taking longer to get approved.

Still, HubSpot's results showed continued strong demand in the face of economic headwinds, making the stock a strong buy.