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Shares in HubSpot soar after marketing tech firm wraps up strong year amid pandemic

Cambridge company is banking on becoming the go-to place for business-to-business software

HubSpot cofounders Dharmesh Shah and Brian Halligan are pictured in this 2014 photo. The company had the strongest performing stock of any Massachusetts software firm in 2020.Dina Rudick/Globe Staff

HubSpot had the best performing stock of any Massachusetts software company last year. The Cambridge firm, chief executive Brian Halligan assured investors this week, is just getting started.

Shares in the marketing software firm rose 16 percent on Friday after its fourth quarter earnings beat Wall Street’s expectations, it forecasted strong growth for 2021, and several analysts raised their outlooks for the stock. The performance on Friday marked just the latest run-up in a long climb: The stock was trading on Friday above $500 a share, more than two-and-a-half times its value a year ago and nearly five times what it was worth during the stock market’s nadir last March.


Signs of growth abounded. The firm’s total revenue cleared $883 million for the year, up 31 percent. Its number of customers rose 42 percent, year-over-year, to end at 104,000. And headcount rose 25 percent, to 4,225 employees. HubSpot also hit a major milestone, crossing the $1 billion threshold for annual recurring revenue.

Investors seem to be betting on the fact that HubSpot’s solutions for clients’ customer-management needs are well suited for a new world order accelerated by the COVID-19 pandemic — one in which significantly more marketing happens online, digitally, and remotely. Halligan and chief financial officer Kate Bueker fielded questions on a conference call Thursday from a pack of largely effusive analysts.

“This unusual year opened up everyone’s eyes to just how early we still are in the digital transformation of the economy,” Halligan said. “This is the trend we’ve been seeing for 14 years, and was sped up for obvious reasons this [past] year.”

Halligan said clients now expect business-to-business software to work relatively seamlessly, much like the way consumers can easily pick through apps on their phones. When various customer-management programs are cobbled together from different companies, Halligan said, the user experience can suffer. The HubSpot platform, he argued, offers a more streamlined alternative.


Halligan said HubSpot is in “the bottom of the second inning in our baseball game” as it broadens its focus beyond its core marketing app to field a range of business-to-business demands. Halligan and Bueker talked about the four software “hubs” at the company now: marketing, sales, customer service, and website management.

“It’s still pretty earnings for HubSpot,” Halligan added. “There’s a lot more stuff in our heads … that we can expose through additional hubs down the road.”

HubSpot’s recent acquisition of business-newsletter producer The Hustle is one indication of where things could be headed. Halligan said HubSpot was built around the idea of marketing from a client’s own website and other internally developed materials — instead of advertising with TV, radio, newspapers, social networks, and search engines. The Hustle newsletter platform, and its related podcast, should help further that fundamental goal, he said.

But there are some issues brought about by the remote work trend that might be out of HubSpot’s reach. At one point on the earnings call, a doorbell rang. Halligan offered to take the next question, while a seemingly aghast Bueker apologized for the disruption. No matter how many apps HubSpot rolls out for clients, addressing work-from-home interruptions with software might not happen anytime soon.

Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.