Inbound marketing specialist HubSpot (NYSE: HUBS) recently reported its third-quarter results that continued to outpace market expectations. The company is seeing strong headwinds due to the macroeconomic conditions, but the company is confident of its growth in the coming quarters.

HubSpot’s Financials

HubSpot’s third quarter revenues grew 31% to $444 million, ahead of the Street’s forecast by 4.4%. Non-GAAP EPS of $0.69 grew from $0.50 a year ago and beat the market’s estimate of $0.51.

By segment, subscription revenues grew 32% to $435 million and Professional services and other revenues fell 13% to $8.9 million.

Among other operating metrics, the number of customers grew 24% to 158,905 at the end of the quarter. Average Subscription Revenue Per Customer grew 7% to $11,233.

Given the macro environment conditions, HubSpot is facing several challenges. Deals are taking longer to close because there are more decision-makers involved across the geographies and segments. It forecast revenues of $444-446 million and an EPS of $0.82-$0.84 for the fourth quarter. The market was looking for revenues of $449.35 million and an EPS of $0.79. HubSpot expects to end the year with revenues of $1.705-$1.707 billion and an EPS of $2.48-$2.50. The market was looking for revenues of $1.69 billion and an EPS of $2.28.

HubSpot’s Product Expansion

Despite the economic uncertainty, HubSpot has managed to drive the addition of new customers by focusing on its pricing and packaging. It is seeing demand from new customers as businesses are looking at driving efficiencies while lowering the total cost of ownership in the macro environment. This shift is resulting in companies consolidating systems and moving to adoption of multiple products from same vendors. Customer adds of over 8,000 during the quarter were better than those reported a quarter ago, primarily due to the strength in the Starter CRM Suite. But as the company heads into tougher quarters, it is looking at cost control measures. It has not announced layoffs, but is slowing down hiring outside of quota-carrying sales and developers.

HubSpot realizes the importance of a PaaS ecosystem and recently announced the publication of a new report produced in partnership with Canalys and Partnership Leaders. The State of Partner Ops and Programs 2022 will explore how organizations can leverage partner programs for growth.

According to HubSpot, many organizations have a difficult time implementing partner programs that meet the needs of the ecosystem business model. A lack of partner operations expertise and mature partner tech stacks are preventing organizations from putting the processes in place to share data or track the true ROI of partners. The report will reveal findings on the partner types organizations prioritize, the factors that contribute to increased partner-driven revenue, how partner technology is purchased, and the current top partner operations and program challenges organizations face.

HubSpot released some teasers from the report that reveal interesting data points such as 50% of organizations attribute 26% or more of their revenue to partners, 77% of organizations surveyed have technology partners that are ranked as the most important partner type. HubSpot itself is seeing more than 1,000 companies around the world on its App Partner Program. They are distributing their apps to HubSpot’s growing customer base. HubSpot estimates that by 2024, the app economy surrounding HubSpot will become a $4.2 billion opportunity.

Its stock is trading at $306.09 with a market capitalization of $14.9 billion. It touched a 52-week high of $866.00 in November last year. Earlier this month, it had fallen to a 52-week low of $245.03.

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