Inbound marketing specialist HubSpot (NYSE: HUBS) recently reported its second quarter results that continued to surpass market expectations. It has been improving its product offering to help gain a bigger foothold in the enterprise segment.

HubSpot’s Financials

HubSpot’s second quarter revenues grew 25% to $203.6 million, ahead of the Street’s forecast of $195.64 million. Non GAAP EPS of $0.34 beat the market’s expectations by 42% and grew from $0.31 from last year.

By segment, subscription revenues grew 26% to $196.41 million and Professional services and other revenues dropped 3% to $7.2 million.

Among other operating metrics, its customer base grew 34% to over 86,672, when compared with the customer base from 2019’s second quarter. Total average subscription revenue per customer dropped 5% to $9,466. Deferred revenues grew 3.1% to $238.1 million and Calculated billings grew 21% over the year to $202 million.

Unlike other technology players, HubSpot did not shy away from an outlook. It forecast revenues of $210-211 million for the quarter with an EPS of $0.11-$0.13. The market was looking for revenues of $200.5 million with an EPS of $0.12. HubSpot expects to end the year with revenues of $828-$832 million and an EPS of $0.92-$0.96. The market was looking for revenues of $805.84 million for the year with an EPS of $0.92.

HubSpot’s Product Growth

During the quarter, HubSpot introduced a new product line called CMS Hub. CMS Hub is a re-imagined version of its previous CMS Add-on but with advanced features that focus on the Enterprise tier. Some of the features included are dynamic content, adaptive testing, and 24/7 security monitoring. Traditional content management systems become more difficult to use over time as organizations try to stitch pieces together to meet the objectives of a CMS. However, CMS Hub scales in line with business growth and takes care of managing software, enabling users to focus on creating remarkable website experiences for their customers. By offering the CMS Hub in two tiers – Enterprise and Professional, HubSpot is also giving companies the freedom to choose a CMS offering best suited to their stage of growth.

HubSpot is also helping businesses transition online by reducing the first year price of its Starter Growth Suite by more than 50% and by increasing emails and call limits. It also released additional editing controls of its ad campaigns across Google, Facebook, and LinkedIn. These moves have helped it grow its install base by 400%.

It is also providing educational content to drive customer engagement. During the quarter, it saw 150% growth in its HubSpot Academy sign-ups as more customers were able to get certified on the product.

HubSpot has been following an active PaaS strategy and features in our list of promising PaaS players that are likely to build PaaS ecosystems. More than 94% of its user-base, have used apps from their platform to find products and solutions that help them. It has recorded over 1 million app installs as each of its users installs an average of six apps from its platform. HubSpot does not disclose details on the revenues earned by its developer partners.

Its stock is trading at $260.42 with a market capitalization of $11.68 billion. It touched a 52-week high of $268.43 earlier this month. In March, it had fallen to a 52-week low of $90.83.