Google Parent Alphabet Eyes HubSpot Acquisition: Bloomberg

Zinger Key Points
  • Alphabet is negotiating acquisition of HubSpot.
  • Potential deal would enhance Alphabet's market competitiveness.

Alphabet Inc GOOGL, Google’s parent company, is in advanced discussions to acquire marketing software provider HubSpot Inc. HUBSBloomberg reports.

While discussions continue, no definitive agreement has been reached. The possibility of another interested buyer entering the scene remains, indicating a level of uncertainty surrounding the potential acquisition,

Both Alphabet and HubSpot have refrained from commenting on the matter, Bloomberg said.

HubSpot’s shares surged by approximately 32% over the past year, elevating its market capitalization to $30 billion. 

The stock witnessed a notable uptick, climbing up to 6% during premarket trading on Thursday.

HubSpot aims to deliver seamless connection for customer-facing teams on its platform, which includes AI-powered engagement hubs, a Smart CRM, and a connected ecosystem with over 1,500 App Marketplace integrations.

The company reported a first-quarter FY24 revenue of $617.4 million, a 23% increase compared to first-quarter FY23. Subscription revenue which makes up a large part, gained 23% to $603.8 million.

The company anticipates full-year 2024 revenue of $2.55 billion to $2.56 billion. As of Mar. 31, HubSpot had $447.79 million in cash and equivalents.

An acquisition of HubSpot by Alphabet would represent a significant move, potentially positioning Alphabet to enhance its competitiveness in the customer relationship management (CRM) sector, particularly targeting smaller businesses. 

This move could help Alphabet better compete with major CRM players like Microsoft Corp MSFT, Oracle Corp ORCL, and Salesforce Inc CRM, according to Bloomberg.

This prospect underscores Alphabet’s strategic intent to enhance its market presence and diversify its service offerings.

Alphabet stock has gained more than 57% in the last 12 months. Investors can gain exposure to the stock via Communication Services Select Sector SPDR Fund XLC and Vanguard Communication Services ETF VOX.

Price Action: HUBS shares are trading higher by 7.11% at $632. at the last check on Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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