A Technavio report published earlier last year estimates the global cloud-based marketing platform market to grow 9% annually over the period 2017 to 2021. The market is dominated by big players like Adobe Systems, Oracle, Salesforce, and IBM. But there are a few other vendors like Billion Dollar Unicorn HubSpot (NYSE: HUBS) that are doing very well in the industry.
Cambridge, Massachusetts-based HubSpot was founded in 2006 by MIT graduate students Brian Halligan and Dharmesh Shah to provide an all-in-one inbound marketing software platform for small- and medium-sized businesses. The company focused on inbound marketing and developed a platform that could centralize marketing automation and search engine optimization (SEO) tools.
HubSpot operates on a freemium model. Its CRM service is available to the organizations for free forever. The basic Marketing service is also available for free while premium options range from $50 per month to $2,400 per month. The additional features offered in these plans include services like customized form fields, blog, SEO and content creation tools, event-based segmentation, and detailed analytics, to name a few. It also offers a sales platform that is priced between $50 a month for a single user to $400 users a month for a professional edition for minimum five users. The premium sales platform offers services such as sales automation capabilities, predictive lead scoring, smart send times, and salesforce integration.
HubSpot has seen strong revenue growth for its services. For the recently reported fourth quarter, revenues increased 39% over the year to $106.5 million, compared with the market estimates of $101 million. Adjusted EPS came in at $0.12, which was also better than the market’s forecast EPS of $0.07 for the quarter.
By segment, Subscription revenues grew 40% to $101.7 million and professional services and other revenues increased 20% to $4.8 million.