HubSpot earnings stay hot amid reports of sale to Google

HubSpot’s earnings and revenue beat expectations for the ninth consecutive quarter amid more reports of a sale to Google’s parent company Alphabet.

The Cambridge, Mass., digital marketing vendor reported earnings at $1.68 a share and revenue of $617.4 million for the first quarter of 2024. The earnings are up 40% from the same period last year and a 23% increase in revenue. Analysts had expected HubSpot earnings of $1.50 on sales of $598 million.

Dig deeper: HubSpot launches new genAI-powered Content Hub

The company’s stock price, which fell slightly following Wednesday’s earnings report, bounced back Thursday morning on news of acquisition talks between HubSpot and Alphabet. Citing unnamed sources, Bloomberg reported that negotiations were “progressing,” although it provided no details. News of the discussions between the two companies first surfaced in April.

Over the past 12 months, HubSpot shares have gained about 32%, giving the company a market value of $30 billion.

Why we care. First, good earnings news at HubSpot is generally a positive sign for the entire digital marketing ecosystem. Second, these talks could indicate Alphabet is hedging its bets about the outcome of the Department of Justice’s antitrust lawsuit. If the company were to lose the case, it’s very likely that it “will have to change its business practices.” That’s legal speak for spinning off some of its business units. If so, it makes sense Alphabet would want to make up for any lost digital marketing muscle. HubSpot would be a good buy for anyone with a spare $30 billion to spend. For Alphabet, it would be a great buy, even if they don’t lose the antitrust case.