People celebrate Gitlab’s IPO on Nasdaq, October 14, 2021.
GitLab Shares rose 33% on Tuesday after the code-deploying software provider reported a smaller loss than analysts had expected and raised its full-year forecast.
The stock was heading for its best day since GitLab’s 2021 debut on Nasdaq. It’s still about 65% below its peak in November of that year, the month when tech stocks hit all-time highs. After that, investors began pulling money out of risky assets, fearing slowing growth and rising interest rates.
GitLab said revenue for the quarter ended April 30 jumped 45% to $126.9 million from $87.4 million a year earlier. The company reported an adjusted loss of 6 cents per share, according to a statement. Analysts polled by Refinitiv had expected sales of $117.8 million and an adjusted loss of 14 cents per share.
GitLab’s net loss widened to $52.9 million from $26.6 million in the year-ago quarter.
For fiscal 2024, GitLab sees an adjusted loss of 14 cents to 18 cents per share on revenue of $541 million to $543 million. Analysts had expected an adjusted loss of 26 cents per share and sales of $532.6 million. In March, GitLab called for an adjusted loss per share of 24 cents to 29 cents on revenue of $529 million to $533 million.
During the quarter, GitLab raised the price of its premium tier at $29 per user per month starts at $19.
“To date, customer churn is unchanged for premium customers who renewed in April,” GitLab CFO Brian Robins said in Monday’s call with analysts. He added that the average annual recurring revenue per customer “has increased in line with our expectations.”
Sid Sijbrandij, CEO of GitLab, said more revenue could come from a generative AI add-on that will cost $9 per user per month when billed annually.
Sijbrandij, who co-founded the company over a decade ago, had encouraging personal news to share. Three months after announcing he had elected to undergo treatment for osteosarcoma, Sijbrandij said on the call that there were “no signs of detectable disease”, adding that he was excited about the future of the company and “maintaining my role as CEO and chairman”.
The company still has challenges. Sales cycles took longer than usual during the quarter and customers reduced the number of seats they purchased, Robins said.
But the financial numbers have led several analysts to raise their price targets on GitLab shares.
“The quarter was stronger than expected, and the company was able to maintain a very positive and conservative outlook – a contrast to last quarter,” Piper Sandler analysts Rob Owens and Ethan Weeks wrote in a statement. note to customers.
Analysts have the equivalent of a buy rating on the company’s stock and raised their price target from $50 to $52. GitLab shares were trading near $47 in mid-afternoon New York time.
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