Gitlab Jumps, Coupa Falls as Stock Markets Remain Turbulent

The stock market has been on pins and needles lately, and Monday didn't bring any relief for hard-hit investors. Although the Dow Jones Industrial Average (^DJI -1.33%) managed to close nearly unchanged on the day, the Nasdaq Composite (^IXIC -0.13%) and S&P 500 (^GSPC 0.13%) were both down sharply as rising bond rates, geopolitical concerns, and macroeconomic fears overwhelmed investors.

Data source: Yahoo! Finance.

Technology stocks  have been under particularly heavy pressure in 2022, but after the market closed, investors got some mixed readings on the health of the sector. Gitlab (GTLB 1.64%) managed to post a solid gain in after-hours trading following the release of its latest financial report, but Coupa Software (COUP) wasn't as fortunate, falling sharply. Let's learn more about what both companies said.

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Gitlab sees continued growth

Shares of Gitlab were up nearly 13% in after-hours trading on Monday afternoon. The development and operations software platform specialist reported fourth-quarter financial results that reassured investors that the company remains on the right path.

Gitlab's numbers were solid. Revenue for the quarter jumped 69% year over year to $77.8 million, finishing the 2022 fiscal year with a 66% rise in sales. Gitlab remained unprofitable, but adjusted losses of $0.16 per share for the quarter were only about a third as big as the loss in the year-earlier period. Gitlab finished the fiscal year with adjusted losses of $1.20 per share, down from $2.06 per share in fiscal 2021.

Key metrics looked quite favorable for Gitlab. The company boasted 39 customers producing at least $1 million in annualized recurring revenue, up from just 20 the year earlier. Dollar-based net retention rates weighed in at more than 152% for the quarter, indicating that customers generally stay loyal to Gitlab as they become more familiar with the platform.

Best of all, Gitlab predicted continued growth, including revenue of $385.5 million to $390.5 million for fiscal 2023. That would represent top-line gains of about 54%, and although that would be a slowdown, it's not as big as some of the numbers from other companies that have disappointed investors so much in the recent past. After falling more than 70% since its IPO in October 2021, the results were good enough to justify a bounce for Gitlab.

Coupa can't keep investors satisfied

On the other hand, Coupa Software's shares fell almost 30% in after-hours trading on Monday . The business spending management software specialist's fourth-quarter financial report wasn't able to meet the high expectations of shareholders.

Coupa's fourth-quarter numbers weren't bad, but they didn't match up to what most shareholders looked for from the growth stock. Revenue was up 18% year over year to $193.3 million, with subscription revenue rising 28% from year-ago levels. Billings also rose 18%, but losses widened to $0.19 per share on an adjusted basis. Full-year fiscal 2022 sales were up 34% with the same modest expansion in losses compared to the previous year.

Moreover, Coupa expects continued slow growth in fiscal 2023. Guidance for the year includes revenue projections of $836 million to $840 million, which would represent just 15% to 16% gains on Coupa's top line.

The company does expect to be profitable on an adjusted basis, with earnings of $0.15 to $0.19 per share. However, investors don't seem convinced about Coupa's longer-term prospects to be disruptive. That's a key driver in today's market, and that lack of confidence explains a lot about why Coupa's stock is falling so hard.