GitLab tops second-quarter estimates on AI-driven demand

Yahoo Finance ·

Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Proactive news team spans the world’s key finance and investing hubs with bureaus and studios in London, New York, Toronto, Vancouver, Sydney and Perth. We are experts in medium and small-cap markets, we also keep our community up to date with blue-chip companies, commodities and broader investment stories. This is content that excites and engages motivated private investors. The team delivers news and unique insights across the market including but not confined to: biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto and emerging digital and EV technologies. Proactive has always been a forward looking and enthusiastic technology adopter. Our human content creators are equipped with many decades of valuable expertise and experience. The team also has access to and use technologies to assist and enhance workflows. Proactive will on occasion use automation and software tools, including generative AI. Nevertheless, all content published by Proactive is edited and authored by humans, in line with best practice in regard to content production and search engine optimisation. GitLab Inc (NASDAQ:GTLB) reported second-quarter revenue and profit that beat analyst estimates, as the company's shift toward consumption-based artificial intelligence revenue gained momentum, sending its shares up more than 14% on Wednesday morning. The DevSecOps platform provider posted revenue of $286.3 million for the quarter, above the $273 million analysts had expected and up 21% year-over-year. Adjusted earnings per share came in at $0.24, topping estimates of $0.18. Non-GAAP operating income reached $42.6 million, well ahead of the $31.2 million analysts had projected. The company's new consumption-based AI offering, GitLab Flex, saw triple-digit annual recurring revenue growth year-over-year. GitLab said its guidance does not assume material contribution from Flex, leaving room for further upside if adoption continues to accelerate. Net ARR growth exceeded 40% year-over-year, with the company citing record gross bookings and accelerating net retention. Dollar-based net retention rate stood at 117%. "Q2 was an exceptional quarter, with record gross bookings and net ARR growth exceeding 40% year over year," said Bill Staples, GitLab’s CEO. "As AI drives more software creation and more work through the development lifecycle, the context, security, governance and control GitLab provides become increasingly valuable. We believe this creates a significant opportunity for GitLab as humans and agents increasingly build software together." For the third quarter, GitLab guided revenue of $281 million to $283 million, in line with the $281 million analyst estimate, and non-GAAP operating income of $35 million to $37 million, above the $29.6 million estimate. Adjusted EPS guidance for the quarter was $0.19 to $0.20. For fiscal 2027, the company raised its outlook, guiding revenue of $1.129 billion to $1.133 billion, above the $1.12 billion estimate, and adjusted EPS guidance of $0.85 to $0.87. Subscription revenue for the quarter totaled $258.3 million, while license revenue came in at $27.9 million. Non-GAAP gross margin was 86%, and adjusted free cash flow was $9.8 million. Total remaining performance obligations reached $1.2 billion, up 16% year-over-year, while current RPO rose 20% to $744.7 million. The number of customers with more than $100,000 in annual recurring revenue climbed 17% year-over-year to 1,571. During the quarter, GitLab launched its Secrets Manager product and introduced the GitLab Flex commercial model.

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