GitLab Inc. (GTLB) shares surged in after-hours trading on Tuesday following the release of its second-quarter financial results, which surpassed analysts’ forecasts. The company reported earnings of 15 cents per share, exceeding the consensus estimate by a significant 50%. Revenue for the quarter reached $182.6 million, exceeding the anticipated $176.889 million by 3.23% and showcasing a remarkable 30.82% increase compared to the same period last year.
The company’s growth is evident in its customer base. GitLab reported 9,314 customers with an Annual Recurring Revenue (ARR) exceeding $5,000, representing a 19% year-over-year increase. Furthermore, the number of customers with an ARR exceeding $100,000 reached 1,076, signifying a substantial 33% year-over-year growth. The company’s strong customer retention is highlighted by its Dollar-Based Net Retention Rate of 126%.
GitLab’s impressive performance extends beyond its core business. Total Remaining Performance Obligation (RPO) surged by 51% year-over-year to $747.9 million, while the contracted RPO (cRPO) climbed by 42% to $475.0 million. These metrics indicate a robust pipeline of future revenue and highlight the increasing demand for GitLab’s solutions.
GitLab’s CEO and co-founder, Sid Sijbrandij, attributed the company’s success to the effectiveness of its end-to-end platform and AI solutions in helping organizations expedite software delivery. “Organizations need to deliver software faster to accelerate performance and respond to intense competition,” Sijbrandij stated. “Our results show the combination of our end-to-end platform and AI solutions are driving results for our customers by aligning to business goals, providing measurable benefits, and improving security.”
Looking ahead, GitLab projects fiscal-year 2025 earnings between 45 cents and 47 cents per share, surpassing the consensus estimate of 36 cents. Revenue is expected to fall within the range of $742 million to $744 million, exceeding the $736.612 million estimate.
The positive earnings announcement propelled GTLB shares up 12.18% in after-hours trading, reaching $50.12 at the time of publication. This surge underscores investor confidence in GitLab’s ability to continue its growth trajectory and capitalize on the burgeoning demand for its software solutions in the competitive tech landscape.
