Sales and marketing software maker HubSpot (NYSE:HUBS) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 15.7% year on year to $714.1 million. Guidance for next quarter’s revenue was better than expected at $739 million at the midpoint, 2% above analysts’ estimates. Its non-GAAP profit of $1.78 per share was 1% above analysts’ consensus estimates.
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HubSpot (HUBS) Q1 CY2025 Highlights:
- Revenue: $714.1 million vs analyst estimates of $699.9 million (15.7% year-on-year growth, 2% beat)
- Adjusted EPS: $1.78 vs analyst estimates of $1.76 (1% beat)
- Adjusted Operating Income: $100.3 million vs analyst estimates of $99.67 million (14% margin, 0.6% beat)
- The company lifted its revenue guidance for the full year to $3.04 billion at the midpoint from $2.99 billion, a 1.7% increase
- Management raised its full-year Adjusted EPS guidance to $9.33 at the midpoint, a 2% increase
- Operating Margin: -3.8%, in line with the same quarter last year
- Free Cash Flow Margin: 17.1%, down from 22.5% in the previous quarter
- Customers: 258,258, up from 247,939 in the previous quarter
- Billings: $753.6 million at quarter end, up 17.5% year on year
- Market Capitalization: $33.88 billion
“We had a solid start to 2025, with continued revenue growth and customer expansion,” said Yamini Rangan, Chief Executive Officer at HubSpot.
Company Overview
Started in 2006 by two MIT grad students, HubSpot (NYSE:HUBS) is a software-as-a-service platform that helps small and medium-sized businesses market themselves, sell, and get found on the internet.
Sales Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, HubSpot’s sales grew at a solid 24.4% compounded annual growth rate over the last three years. Its growth beat the average software company and shows its offerings resonate with customers, a helpful starting point for our analysis.
This quarter, HubSpot reported year-on-year revenue growth of 15.7%, and its $714.1 million of revenue exceeded Wall Street’s estimates by 2%. Company management is currently guiding for a 16% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 13.8% over the next 12 months, a deceleration versus the last three years. Despite the slowdown, this projection is admirable and indicates the market is forecasting success for its products and services.
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Billings
Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.
HubSpot’s billings punched in at $753.6 million in Q1, and over the last four quarters, its growth was impressive as it averaged 19.2% year-on-year increases. This performance aligned with its total sales growth, indicating robust customer demand. The high level of cash collected from customers also enhances liquidity and provides a solid foundation for future investments and growth. 
Customer Base
HubSpot reported 258,258 customers at the end of the quarter, a sequential increase of 10,319. That’s roughly in line with what we’ve observed over the last year, confirming that the company is maintaining its sales momentum.
Key Takeaways from HubSpot’s Q1 Results
We enjoyed seeing HubSpot beat analysts’ billings expectations this quarter. We were also glad its full-year EPS guidance exceeded Wall Street’s estimates. On the other hand, its EPS guidance for next quarter slightly missed. Overall, this print had some key positives. The market seemed to be hoping for more, and the stock traded down 5.4% to $623.95 immediately after reporting.
Is HubSpot an attractive investment opportunity right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.