HubSpot Raises Guidance, Here's Why Shares Are Getting Hammered Thursday

HubSpot Inc (NYSE:HUBS) stock is falling on Thursday after the company reported first-quarter financial results after market close and provided a guidance update.

• HubSpot stock is taking a hit today. What’s weighing on HUBS shares?

HubSpot Q1 Financials

HubSpot reported first-quarter sales of $880.995 million, up 23% year-over-year. The sales total beat a Street consensus estimate of $863.290 million according to data from Benzinga Pro.

Subscription revenue was $862.3 million in the quarter, up 23% year-over-year. Professional services revenue was $18.7 million, up 22% year-over-year.

The company reported first-quarter earnings per share of $2.72, beating a Street consensus estimate of $2.47.

HubSpot grew its customers by 16% year-over-year for the first quarter, ending with 299,458.

The average subscription revenue per customer was $11,722 in the first quarter, up 6% year-over-year.

HubSpot bought back $211 million in shares in the first quarter. A current share buyback program has $789 million remaining in repurchases authorized by the company's Board of Directors.

"Q1 was a solid quarter of revenue growth, customer growth, and operating margin expansion," HubSpot CEO Yamini Rangan said.

What's Next For HubSpot

HubSpot is guiding for second-quarter revenue to be in a range of $897 million to $898 million, up 18% year-over-year. The Street consensus estimate is $899.20 million.

The company sees second-quarter adjusted earnings per share in a range of $3 to $3.02, versus a Street estimate of $2.86.

For the full fiscal year, the company is guiding for revenue to be in a range of $3.700 billion to $3.708 billion, up 18% year-over-year. This is increased from a prior range of $3.69 billion to $3.70 billion. The Street currently expects full-year revenue of $3.669 billion.

Full-year earnings per share are expected to be in a range of $13.04 to $13.12, up from prior guidance of $12.38 to $12.46. The Street estimate is currently $12.45.

Guidance is likely coming in lower than expected based on the first-quarter beat. The second-quarter guidance is below Street estimates, while the full-year raised guidance is now above estimates. The 18% year-over-year revenue growth for the second quarter and full year would trail the first-quarter revenue growth.

Rangan said the company is seeing companies choosing HubSpot as their agentic customer platform as they drive AI innovation.

"The AI innovations we launched at Spring Spotlight, including Customer Agent, Prospecting Agent, and Data Agent, are delivering outcomes for customers and will strengthen our AI momentum," Rangan said.

HubSpot Stock Price Action

HubSpot stock is down 20.8% to $193 in after-hours trading on Thursday versus a 52-week trading range of $187.45 to $682.57.

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