What happened
Shares of HubSpot (HUBS -0.01%), a marketing and customer-service software company, were rising quickly this morning after the company beat Wall Street's revenue and earnings expectations for the fourth quarter.
As a result, the software-as-a-service (SaaS) stock was up by 13.6% as of 10:33 a.m. on Friday.
So what
HubSpot reported adjusted earnings of $1.17, which were up from just $0.63 per share in the year-ago quarter. The fourth-quarter earnings were far better than analysts' average estimate of $0.82.
Revenue increased 27% to $469.7 million, easily beating Wall Street's expectation of $446 million for the quarter. The increase in total sales was driven by a 28% jump in subscription revenue to $458.2 million and an 8% increase in professional services sales, to $11.5 million.
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Management said on the company's earnings call that it added more than 8,400 net new customers in the quarter, bringing its total customer count to 167,000, an increase of 24% year over year. Chief financial officer Kate Bueker said average subscription revenue rose in the quarter by 3% and that customers are using multiple HubSpot services.
Now what
In addition to the strong fourth-quarter results, management issued upbeat guidance. The company's earnings guidance for the first quarter is in a range of $0.82 to $0.84, which is ahead of analysts' average estimate of $0.59.
HubSpot's revenue outlook of $474 million, at the midpoint, is also ahead of Wall Street's expectation of $469.5 million.
While the company expects growth in the coming quarter, Bueker also acknowledged that the broader economic environment is still uncertain, saying, "Our guidance assumes that these weaker macroeconomic conditions persist throughout 2023."
