HubSpot Reports Robust Q2 Results and CEO Transition; Shares Pop

Customer relationship management platform HubSpot, Inc. (HUBS) reported robust second-quarter results. The transition of the company’s current CEO to Executive Chairman was also revealed in its earnings release.

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In response to the news, shares jumped 4.1% during after-hours trading on August 4.

Adjusted earnings for the quarter came in at $0.43 per share, up 26.5% year-over-year, and beat the Street’s estimate of $0.32 per share.

On top of this, revenue climbed 53% to $310.8 million compared to the prior-year period, and surpassed analysts’ estimates of $296.03 million. (See HubSpot stock charts on TipRanks)

Providing some business highlights, Yamini Rangan, Chief Customer Officer of the company, said, “With the launch of CMS Hub Starter and recent improvements to CMS Hub Professional and Enterprise, we’re well-positioned to continue to support our customers through the ongoing trend of digital transformation as more companies have to adapt to doing business online.”

The company also provided guidance for the coming period. For the third quarter, HubSpot forecasts revenue and adjusted earnings of $325-$327 million and $0.42-$0.44 per share, respectively. Meanwhile, analysts estimate Q3 revenue and earnings will come in at $318.78 million and $0.39 per share, respectively.

For full year 2021, the company projects revenue and adjusted earnings to be in the range of $1.268-$1.272 billion and $1.67-$1.69 per share, respectively. The consensus estimates stand at $1.24 billion and $1.65 per share.

Concurrent with the earnings announcement, the company revealed that the current CEO, Brian Halligan, will take up the role of Executive Chairman on HubSpot’s Board, effective September 7, 2021. Yamini Rangan will take over as the company’s new CEO.

Following these developments, William Blair analyst Arjun Bhatia reiterated a Buy rating on the stock.

Bhatia said, “HubSpot noted that demand across the board was strong, but highlighted expansions within the customer base as a particular area of strength in the quarter. Overall, this was another solid quarter of execution from HubSpot as the market tailwinds of front-office digitization continue.”

The stock commands a Strong Buy consensus rating based on 14 Buys and 2 Holds. The average HubSpot price target of $598.45 implies 1.4% upside potential to current levels. Shares have gained 148.1% over the past year.