Shares of GitLab (GTLB 0.25%) were soaring today after the DevOps cloud software specialist posted strong results in its fiscal 2025 second-quarter earnings report, beating estimates on the top and bottom lines.
As of 12:17 p.m. ET, the stock was up 17% on the news.
Image source: Getty Images.
GitLab keeps growing
In a difficult environment for cloud software companies, GitLab keeps delivering solid growth.
Revenue in the quarter rose 31% to $182.6 million, topping estimates at $177 million. Adjusted gross margin remained strong at 91%, and the company continued to gain leverage on its operating costs as sales and marketing expenses were up just 6% to $97.8 million.
Customers with more than $100,000 in annual recurring revenue rose 33% to 1,076, showing the business is scaling up with higher-end customers, and dollar-based net retention rate was 126%, showing that existing customers have increased their spending by 26% over the last four quarters.
Adjusted operating income, which excludes stock-based compensation, flipped from a $4.3 million loss in the quarter a year ago to an $18.2 million profit.
On the bottom line, the company reported adjusted operating income of $0.15, up from $0.01 in the quarter a year ago and better than the consensus of $0.10.
CEO Sid Sijbrandij said, "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 results, and improving security."
NASDAQ: GTLB
Key Data Points
Where does GitLab go from here?
Looking ahead, GitLab expects revenue of $187 million-$188 million, up 25.2% at the midpoint from a year ago and slightly ahead of estimates.
On the bottom line, the company called for adjusted earnings per share of $0.15-$0.16, up from $0.09 a year ago and better than the consensus of $0.11.
GitLab also reported strong growth in remaining performance obligations at 51%, a proxy for its backlog.
The company's valuation has come down sharply from its post-IPO peak, making the price look more reasonable. If it can keep delivering solid growth and improving its margins, the stock should move higher from here.
