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Gitlab (GTLB) earnings propel the DevOps stock’s Tuesday gains

14:34, 7 June 2022

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Raw code as seen on a computer screen
DevOps stock GitLab (GTLB) soared after Q1 earnings included robust guidance – Photo: Shutterstock

Gitlab (GTLB) earnings, reported on Monday after markets closed, beat consensus forecasts for the DevOps software platform and sent its stock soaring on Tuesday, thanks to bullish guidance.

In pre-market US trading, GitLab (GTLB) stock was up 9% and by noon the stock was up more than 23% from Monday’s closing price. 

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Gitlab (GTLB) stock price

What is DevOps?

Slide explaining the concept of DevOpsGitLab

DevOps – an amalgamation of “development” and “operations” – is a method of working that unites people, processes and technology that enables formerly closed-off tech departments such as software development, IT operations and security to coordinate and collaborate to produce better products.

About GitLab

Launched in 2011, GitLab (GTLB) is an online repository for software that allows multiple team members to review and collaborate on coding projects which can be released as open-source software (where the original code can be openly inspected), or closed-source.

This slide introduces GitLab, the companyGitLab

Initially starting life as a place to store code online (known as a repository), GitLab broadened its offering into the entire software development lifecycle from code management to deployment, security and monitoring.

GitLab listed on the Nasdaq in late 2021. Its biggest competitor is GitHub, which was bought by Microsoft in 2018 for $7.5bn (£5.7bn, €6.8bn). Both GitLab and GitHub are DevOps platforms.

Gitlab Q1 earnings

For its fiscal first quarter ended 30 April, GitLab reported an adjusted loss of 18 cents per share on revenue that skyrocketed 75% to $87.4m.

Analysts had pencilled in a loss of 27 cents per share on revenue of $78.1m, according to according to figures widely available on financial news sites.

“GitLab’s stellar performance was driven by continued expansions in the installed base along with record new customer additions,” William Blair analyst Jason Ader wrote in a note obtained by Capital.com.

"Overall, we view GitLab as a generational winner in the DevOps space and see a long-tail growth opportunity as it helps customers streamline their tool sets (and spending) in this $40bn market" – William Blair analyst Jason Ader

“Overall, we view GitLab as a generational winner in the DevOps space and see a long-tail growth opportunity as it helps customers streamline their tool sets (and spending) in this $40bn market.”

Gitlab Outlook

Slide showing GitLab's financial outlookGitLab

“As we look forward, we are seeing continued strong momentum for customers adopting our One DevOps platform,” GitLab co-founder and CEO Sid Sijbrandij said in a statement.

The company increased its outlook for the fiscal year to an adjusted loss of 93 cents to 89 cents on revenue of $398m to $402m.

Analysts are expecting a loss of 96 cents per share on revenue of $389.3m for GitLab’s fiscal year.

Other tech firms such as Microsoft (MSFT) have flagged profit warnings while recent media reports indicate that firms such as Tesla (TSLA) are suspending hiring plans.

Microsoft (MSFT) stock price

Devops stocks to watch

Two other pure-play DevOps companies are JFrog (FROG) and Atlassian (TEAM), which was up more than 4% at midday on Tuesday against a flat Nasdaq 100 (US100).

Sunnyvale, California-headquartered JFrog's DevOps platform enables software creators to power their entire software supply chain through the full code lifecycle so they can build, secure, distribute and connect any source with any production environment.

Known for its Jira tracking and Confluence collaboration software, Atlassian is a software company which provides DevOps products.

Originally founded in Sydney, Australia the company is considering moving its parent company headquarters to the US from the UK.

Atlassian (TEAM) stock price

 

Further reading...

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