HubSpot (HUBS) Up 12.5% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for HubSpot (HUBS). Shares have added about 12.5% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is HubSpot due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for HubSpot, Inc. before we dive into how investors and analysts have reacted as of late.

HubSpot Q4 Earnings Beat Estimates on Strong Revenue Growth

HubSpot reported impressive fourth-quarter 2025 results, with both the top and bottom lines beating the Zacks Consensus Estimate.

The software-as-a-service vendor reported a top-line expansion year over year, backed by growing user engagement across all segments. The integration of advanced AI tools, which include state-of-the-art features, such as AI assistance, AI agents, AI insights and ChatSpot, across its entire product suites and customer platform is driving more value to customers. However, in the premium market, the company faces competition from Salesforce and Microsoft. Management’s focus on expanding the AI portfolio to gain a competitive edge can bring long-term benefits but put pressure on margins in the near term.

Net Income

On a GAAP basis, the company recorded a net income of $54.4 million or $1.04 per share compared with a net income of $4.9 million or 9 cents per share in the year-ago quarter.

Non-GAAP net income was $162.5 million or $3.09 per share, up from $124.9 million or $2.42 per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate of $2.99 per share.

For 2025, the company reported a GAAP net income of $45.9 million or 86 cents per share compared to a net income of $4.6 million or 9 cents per share in 2024. Non-GAAP net income was $516 million or $9.7 per share compared to $434.1 million or $8.12 per share in 2024.

Revenues

Quarterly revenues improved to $846.7 million from $703.2 million reported in the year-ago quarter. The company is witnessing steady multi-hub adoption from enterprise customers in the premium market. Healthy net customer additions in the starter edition, along with pricing optimization, drove net sales in the lower tier of the market spectrum. Moreover, customers using free editions are increasingly opting for premium plans owing to greater time to value and seamless AI-powered onboarding. The top line beat the Zacks Consensus Estimate of $830 million.

For 2025, the company reported revenues of $3.13 billion, up 19% year over year.

HubSpot added more than 9,800 net new customers during the quarter, which increased the total customer count to 288,706, up 16% year over year.

Subscription revenues rose to $829 million, up 21% on a reported basis year over year. The figure beat the Zacks Consensus Estimate of $811.55 million. Average subscription revenues per customer increased 3% year over year to $11,700.

Professional services and other revenues totaled $17.8 million, up 12% on a reported basis year over year. The top line beat the Zacks Consensus Estimate of $17.71 million.

Other Details

Gross profit in the quarter was $709.1 million, up from $599.8 million in the year-ago quarter. Operating income, on a GAAP basis, was $48.23 million against a net loss of $10.8 million in the year-ago quarter. Non-GAAP operating income improved to $191 million from $133.07 million, with respective margins of 22.6% and 18.9%.

Cash Flow & Liquidity

In the fourth quarter of 2025, the company generated $247.4 million in cash from operating activities compared with $194.1 million cash generated in the year-ago quarter. For 2025, the company generated $760.7 million in operating cash compared to $598.6 million in 2024.

As of Dec 31, 2025, HubSpot had $882.2 million in cash and cash equivalents, with $89.3 million in other long-term liabilities compared to respective tallies of $512.7 million and $55.6 million in 2024.

Outlook

For the first quarter of 2026, HubSpot forecasts revenues in the range of $862 million to $863 million, up 21% at constant currency. The company expects non-GAAP net income per share in the band of $2.46-$2.48. The anticipated range for non-GAAP operating income is $144-$145 million, indicating a 17% operating profit margin.

For 2026, management estimates revenues between $3.69 billion and $3.7 billion, up 18% year over year on a reported basis. Non-GAAP operating income is expected to be in the range of $736-$740 million, representing an 20% operating profit margin. Non-GAAP net income per share is likely to be in the range of $12.38-$12.46.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 414.53% due to these changes.

VGM Scores

At this time, HubSpot has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock has a grade of F on the value side, putting it in the fifth quintile for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise HubSpot has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

HubSpot belongs to the Zacks Internet - Software industry. Another stock from the same industry, Datadog (DDOG), has gained 0.8% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

Datadog reported revenues of $953.19 million in the last reported quarter, representing a year-over-year change of +29.2%. EPS of $0.59 for the same period compares with $0.49 a year ago.

Datadog is expected to post earnings of $0.50 per share for the current quarter, representing a year-over-year change of +8.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -19.6%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Datadog. Also, the stock has a VGM Score of D.

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This article originally published on Zacks Investment Research (zacks.com).

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