Shares of GitLab (GTLB +9.98%) gained on Wednesday after the software development platform highlighted its artificial intelligence (AI)-fueled growth prospects.
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Winning new customers
GitLab helps developers create and test software faster and more securely on a single, integrated platform. These benefits are evident in its financial results.
GitLab's total revenue rose 21% year over year to $286.3 million in its fiscal 2027 second quarter, which ended on July 31. The gains were driven by new customer additions and higher sales to existing users.
First orders placed by brand-new customers more than doubled to 1,700, while clients generating annual recurring revenue of over $100,000 climbed 17% to 1,571.
NASDAQ: GTLB
Key Data Points
Investors should note that GitLab is not yet profitable on a generally accepted accounting principles (GAAP) basis. However, its adjusted operating income increased nearly 8% to $42.6 million.
All told, GitLab's adjusted earnings per share came in at $0.24, well above Wall Street's projection of $0.18.
AI could be a powerful growth driver for GitLab
Looking ahead, management guided for full-year revenue of $1.13 billion in fiscal 2027. The company also forecast adjusted operating of $150 million and earnings per share of $0.86 at the midpoint of its guidance ranges.
Although analysts remain concerned about the threat of disruption from AI-powered coding tools, CEO Bill Staples said AI is providing a notable boost to its business.
"As AI drives more software creation and more work through the development lifecycle, the context, security, governance, and control GitLab provides become increasingly valuable," Staples said. "We believe this creates a significant opportunity for GitLab as humans and agents increasingly build software together."
