What happened
Shares of GitLab (GTLB -1.19%) plunged 24% on Tuesday after the software development company's forecast fell short of investors' expectations.
So what
GitLab's revenue surged 58% year over to $122.9 million in its fiscal 2023 fourth quarter ended Jan. 31, as the tech company saw solid demand for its software-building solutions.
"Now more than ever, it is critical for companies to show an immediate return on their software investments," CEO Sid Sijbrandij said in a press release. "With our DevSecOps platform, our customers are consolidating tools, reducing integration costs, increasing productivity, and accelerating their revenue by deploying their software faster."
GitLab also made progress toward profitability. Its adjusted operating loss narrowed to $13.8 million from $27.4 million in the prior-year quarter. GitLab's adjusted net loss per share, in turn, shrank to $0.03 from $0.16.
"Our fourth quarter results demonstrate our continued focus on growth while driving improvements in the unit economics of the business," CFO Brian Robins said.
Now what
However, investors appeared to focus more on GitLab's guidance. Management expects the company to generate revenue of $529 million to $533 million in fiscal 2024. That was well below Wall Street's estimates, which had called for revenue of $586 million.
Still, GitLab plans to raise the price of its premium service offering from $19 per user per month to $29 in April. The company also announced in February that it would reduce its workforce by 7%, or roughly 130 positions.
GitLab believes these moves will help cut its adjusted operating loss to between $59 million and $64 million in fiscal 2024, from $87 million in fiscal 2023.
