HubSpot Q1 Earnings Exceed Estimates: Revenue Up 15.7%, EPS Hits $1.78

HubSpot reported Q1 revenue of $714.14 million, up 15.7% YoY, and EPS of $1.78, up from $1.68 a year ago. Total customers increased to 258,258, and average subscription revenue per customer rose to $11,038. Revenues from subscription services reached $698.73 million, and gross margin for subscription services was $608.37 million. Shares of HubSpot have returned +17.2% over the past month.

HubSpot Inc. (HUBS) reported its first-quarter 2025 financial results, showcasing robust revenue growth and expanding customer base. The company's Q1 revenue of $714.14 million exceeded market expectations of $700.36 million, marking a 15.7% year-over-year increase [1]. This growth is driven by the company's AI-centric strategy, which has yielded positive results, as seen in the increased adoption of AI-driven solutions like Customer Agent [1].

The company's earnings per share (EPS) for Q1 2025 were $1.78, up from $1.68 a year ago, indicating strong financial performance. Total customers increased to 258,258, reflecting a significant expansion of the customer base. Additionally, average subscription revenue per customer rose to $11,038, highlighting the company's ability to maintain and grow its customer base [1].

Revenues from subscription services reached $698.73 million, representing a 16% year-over-year increase. The company's gross margin for subscription services was $608.37 million, up 15% year-over-year, indicating operational efficiency and cost management [1].

Wall Street analysts have forecasted a one-year price target of $756.91 for HubSpot Inc., with a high estimate of $980.00 and a low estimate of $535.00. The average target implies an upside of 14.62% from the current price of $660.36 [1]. The consensus recommendation from 35 brokerage firms is currently 1.8, indicating an "Outperform" status [1].

HubSpot's AI initiatives have gained momentum, with AI-powered communications generating over 10,000 meetings for the sales team in Q4. The company has successfully integrated AI across its platform, enhancing customer experience and operational efficiency. However, the company anticipates a seasonal downtick in net revenue retention in Q1 2025, suggesting potential challenges in maintaining customer engagement [1].

HubSpot's stock has returned +17.2% over the past month, reflecting investor confidence in the company's growth prospects. The company's strategic focus on rapid innovation and delivering clear value positions it for sustained, long-term growth in the evolving tech landscape [1].

References:
[1] https://www.gurufocus.com/news/2846345/hubspot-hubs-surpasses-q1-revenue-expectations-with-strong-growth-hubs-stock-news