Alphabet Quits the Hubspot Buyout, and Stock Fluctuations Continue

Google’s parent company, Alphabet, is finally out of the conversation about acquiring Hubspot. Reports have it that the tech giant has been looking to acquire Hubspot (the CRM giant) for the last three months. This could have been a multi-billion dollar deal that would have benefitted Google Cloud. 

According to reports, some sources told Bloomberg, “Parties didn’t get to a due-diligence stage in deal talks.”

This story ran for more than three months. Rumors have been circulating since April that Alphabet is in talks to acquire HubSpot. In May, there is proof that talks are ongoing, and in July, there is no chance of this happening. In the meantime, HubSpot users were either ignoring it all or wondering what it would mean for a key component of their marketing stack. 

Regardless of the validity of the rumors, HubSpot’s stock fluctuated like a yo-yo with each new development. Perhaps now things will calm down?

For the ninth consecutive quarter, HubSpot’s revenue and earnings exceeded forecasts despite growing rumors of a sale to Alphabet, Google’s parent company. Despite suffering a $176 million operating loss last year, HubSpot generated over $2 billion in revenue. 

For the first quarter of 2024, the Cambridge, Massachusetts-based company recorded earnings per share of $1.68 and revenue of $617.4 million. Revenue has increased by 23%, and earnings have increased by 40% since last year. On $598 million in sales, analysts had predicted that HubSpot would make $1.50 in profit.

With a 32% increase in share price over the last 12 months, HubSpot is now valued at $30 billion.

Following Wednesday’s earnings release, the company’s stock price saw a slight decline, but it recovered on Thursday morning when it was revealed that HubSpot and Alphabet were in talks to acquire each other. Bloomberg reported that talks were “progressing,” but it gave no specifics and cited anonymous sources for its information.

In 2023, Google Cloud registered a profit for the first time. In the first quarter of 2024, the cloud giant headquartered in California brought in $9.6 billion in sales, a 28% increase year over year, and earned $900 million in operating income.

Alphabet could’ve acquired HubSpot, which would’ve been a win for Google Cloud. With HubSpot on board, Google Cloud could’ve competed with giants like Microsoft, Oracle, and Salesforce in the CRM industry. HubSpot develops software to help businesses connect with potential clients and automate their marketing processes.

Additionally, there would have been net new sales opportunities thanks to HubSpot’s Service Hub, which assists customer service departments in managing their daily workload. Marketers create advertising campaigns, disseminate promotional content, and perform other marketing tasks using its cloud-based Marketing Hub software.