GitLab (GTLB) Stock Soars 9% Following Results, Guidance Seen as 'Impressive'
Shares of Gitlab (NASDAQ: GTLB) are up 10% in premarket trading Tuesday after the software company reported better-than-expected Q4 revenue and an upbeat Q1 forecast.
Gitlab reported fourth-quarter revenue of $77.8 million, beating the expected $70.3 million. The company reported an adjusted loss per share of 16c in the period. Loss per share was reported at 32c. Gitlab posted a Q4 adjusted gross margin of -89%.
For the first fiscal quarter, Gitlab expects adjusted loss per share in the range of 27c to 28c, compared to the estimated loss per share of 31c. Revenue in the period is expected to range from $77 million to $78 million, beating the consensus estimates of $72.7 million. Adjusted operating loss is estimated to range from $37.5 million to $38.5 million, compared to the expected operating loss of $44.2 million.
For the full-fiscal 2023, the company expects an adjusted loss per share from 97c to $1.02, compared to the analyst expectations of $1.05 loss per share. Gitlab expects FY2023 revenue to land between $385.5 million and $390.5 million, well above the analyst consensus of $336.2 million. Adjusted operating loss for the year is expected between $138 million and $142 million, compared to the expected $155.1 million.
"We are seeing continued strong momentum for customers adopting our DevOps platform, as revenue increased 69% year-over-year," said Sid Sijbrandij, GitLab CEO.
"This growth was broad-based, driven by strong customer additions across all company sizes.”
Cowen analyst Derrick Wood reiterated an Outperform rating and lowered the price target to $85.00 per share from the prior $90.00 following a “great 4Q and impressive guide.”
“This was a superb qtr led by an ~11% rev beat & FY23 guide ~15% above Street. We are encouraged by accelerating new customers, larger deal sizes & higher NRR. These mechanics should support strong upside potential, especially considering that GTLB's DevOps Platform vision seems to be gaining greater market traction. At ~9x EV/CY23E Sales, we think valuations are highly attractive for what we think could ultimately be minimal growth deceleration vs. 66% in CY21 & a relatively low FCF burn vs. peers,” Wood said in a client note.
BofA analyst Koji Ikeda is also positive as he lowered the price target to $65.00 per share from the prior $105.00.
“Consistent with our preview, GitLab reported strong F4Q results and guided FY23 total revenue 15% above the Street ($388mn vs. $337mn), a salient data point that the business is positioned to disrupt and take share in the large and expanding DevOps opportunity. Positives include: 1) dollar-based net revenue retention of 152%+, higher than at the time of IPO, 2) RPO growth of 95%, and billings growth of 93%, demonstrating strong sales execution, 3) record 65 net-new $100k+ ARR customers added, bringing the total to 492 (+74% y/y), 4) Ultimate tier now represents 37% of ARR, up from 26% last F4Q, and 5) acquired Opstrace, expanding the platform’s observability functionality,” Ikeda wrote in a memo.
The analyst reminded investors that GTLB’s lock up expires on 4/12/22, “which could create a near-term overhang.”
By Senad Karaahmetovic | [email protected]