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GitLab (GTLB) Posts Loss in Q2, Beats Revenue Estimates
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GitLab (GTLB - Free Report) reported non-GAAP earnings of 1 cent per share in second-quarter fiscal 2024, which surpassed the Zacks Consensus Estimate of a loss of 3 cents. The company reported a loss of 15 cents per share in the year-ago quarter.
Total revenues of $139.6 million also beat the consensus mark by 7.65% and jumped 38.1% year over year.
Top-Line Details
Subscriptions- self-managed and SaaS (87.5% of total revenues) revenues surged 37.3% year over year to $122.1 million. License- self-managed and other revenues (12.5% of total revenues) soared 44.4% year over year to $17.5 million.
Customers with more than $5K of Annual Recurring Revenues (ARR) increased to 7,815, up 33% year over year. Customers with more than $100K of ARR increased to 810, up 37% year over year.
The Ultimate tier continued to be Gitlab’s fastest growing tier, representing 42% of ARR for the second quarter of fiscal 2024 compared with 39% of ARR in the second quarter of fiscal 2023.
The dollar-based Net Retention Rate was 124% in the reported quarter.
Total Remaining Performance Obligation (RPO) grew 37% year over year to $496 million, and current RPO grew 34% to $335 million.
Operating Details
Second-quarter fiscal 2024 non-GAAP gross margin expanded 190 basis points from the year-ago quarter to 91.1%. The year-over-year growth was slightly improved by higher growth in low-margin SaaS revenues.
On a non-GAAP basis, research & development expenses increased 29.7% year over year to $36.5 million. Sales and marketing expenses were up 7.4% to $70.7 million. General and administrative expenses rose 5% to $24.2 million in the reported quarter.
On a non-GAAP basis, operating loss was $4.3 million compared with the year-ago quarter’s loss of $27.0 million.
Balance Sheet
As of Jul 31, 2023, cash and cash equivalents and short-term investments were $986.2 million.
Guidance
For the third quarter of fiscal 2024, GitLab expects revenues between $140 million and $141 million, indicating a growth rate of 24% to 25% year over year.
Non-GAAP operating loss is expected to be $6-$5 million for the fiscal third quarter. Loss is expected between 2 cents per share and 1 cent.
For fiscal 2024, GitLab expects revenues between $555 million and $557 million.
Non-GAAP operating loss is expected in the range of $33-$30 million for the fiscal year. Loss is expected between 8 cents and 5 cents.
Zacks Rank & Stocks to Consider
Currently, GitLab has a Zacks Rank #3 (Hold).
GitLab shares have gained 10% year to date compared with the Zacks Computer & Technology sector’s rally of 41.3%.
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GitLab (GTLB) Posts Loss in Q2, Beats Revenue Estimates
GitLab (GTLB - Free Report) reported non-GAAP earnings of 1 cent per share in second-quarter fiscal 2024, which surpassed the Zacks Consensus Estimate of a loss of 3 cents. The company reported a loss of 15 cents per share in the year-ago quarter.
Total revenues of $139.6 million also beat the consensus mark by 7.65% and jumped 38.1% year over year.
Top-Line Details
Subscriptions- self-managed and SaaS (87.5% of total revenues) revenues surged 37.3% year over year to $122.1 million. License- self-managed and other revenues (12.5% of total revenues) soared 44.4% year over year to $17.5 million.
Customers with more than $5K of Annual Recurring Revenues (ARR) increased to 7,815, up 33% year over year. Customers with more than $100K of ARR increased to 810, up 37% year over year.
GitLab Inc. Price, Consensus and EPS Surprise
GitLab Inc. price-consensus-eps-surprise-chart | GitLab Inc. Quote
SaaS represents more than 25% of the total ARR.
The Ultimate tier continued to be Gitlab’s fastest growing tier, representing 42% of ARR for the second quarter of fiscal 2024 compared with 39% of ARR in the second quarter of fiscal 2023.
The dollar-based Net Retention Rate was 124% in the reported quarter.
Total Remaining Performance Obligation (RPO) grew 37% year over year to $496 million, and current RPO grew 34% to $335 million.
Operating Details
Second-quarter fiscal 2024 non-GAAP gross margin expanded 190 basis points from the year-ago quarter to 91.1%. The year-over-year growth was slightly improved by higher growth in low-margin SaaS revenues.
On a non-GAAP basis, research & development expenses increased 29.7% year over year to $36.5 million. Sales and marketing expenses were up 7.4% to $70.7 million. General and administrative expenses rose 5% to $24.2 million in the reported quarter.
On a non-GAAP basis, operating loss was $4.3 million compared with the year-ago quarter’s loss of $27.0 million.
Balance Sheet
As of Jul 31, 2023, cash and cash equivalents and short-term investments were $986.2 million.
Guidance
For the third quarter of fiscal 2024, GitLab expects revenues between $140 million and $141 million, indicating a growth rate of 24% to 25% year over year.
Non-GAAP operating loss is expected to be $6-$5 million for the fiscal third quarter. Loss is expected between 2 cents per share and 1 cent.
For fiscal 2024, GitLab expects revenues between $555 million and $557 million.
Non-GAAP operating loss is expected in the range of $33-$30 million for the fiscal year. Loss is expected between 8 cents and 5 cents.
Zacks Rank & Stocks to Consider
Currently, GitLab has a Zacks Rank #3 (Hold).
GitLab shares have gained 10% year to date compared with the Zacks Computer & Technology sector’s rally of 41.3%.
Some better-ranked stocks in the sector are Model N (MODN - Free Report) , Paylocity Holding (PCTY - Free Report) and Semantix . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Model N have declined 31.5%, while shares of Paylocity and Semantix have gained 3.7% and 30.6%, respectively, in the year-to-date period.