What happened
Shares of GitLab (GTLB 4.24%) were rocketing higher today after the development, security, and operations (DevSecOps) software platform posted better-than-expected results in its first-quarter earnings report last night.
As of 12:19 p.m. ET, the stock was up 31.4%.
NASDAQ: GTLB
Key Data Points
So what
GitLab, which provides cloud-based software that helps companies develop and deploy software, said that revenue in the quarter jumped 45% to $126.9 million, beating estimates at $117.8 million.
The company added 404 customers in the quarter and added 63 customers with more than $100,000 in annual recurring revenue. Dollar-based net retention rate declined from the previous quarter, but remained strong at 128%, meaning that existing customers increased their spending by 28% over the last four quarters.
GitLab's adjusted gross margin improved to 91%, showing the company can reinvest nearly all of its revenue into the business through research and development and sales and marketing.
On the bottom line, the company narrowed its operating loss margin from negative 29% to 12% and reported an adjusted loss per share of $0.06, up from a loss per share of $0.18 and better than estimates at a per-share loss of $0.14.
CEO Sid Sijbrandij talked up the company's artificial intelligence (AI) investments, saying: "With AI revolutionizing how companies develop, secure, and operate software, we believe GitLab is positioned as the leading AI-powered DevSecOps platform. Today, we deliver more AI-powered capabilities to customers than any other DevSecOps platform."
Now what
GitLab raised its full-year guidance, calling for revenue of $541 million to $543 million, or 28% growth at the midpoint, and it now expects a full-year adjusted loss per share of $0.14 to $0.18, showing the company is moving toward breakeven, at least after backing out share-based compensation.
The software-as-a-service company laid off 7% of its staff in February, and its focus on controlling costs is helping improve margins.
GitLab is penetrating a $40 billion addressable market and has relatively little competition. If it can maintain a strong growth rate, the stock should continue to move higher.
