Positive earnings results arrive after sale speculation swirled around software company this summer
Shares of GitLab Inc. rallied after hours on Tuesday after the software-development platform raised its full-year outlook, as more businesses try to embed artificial intelligence and security protections into their technology.
The company said it expects full-year sales of $742 million to $744 million, above its forecast in June for $733 million to $737 million. It also expects an adjusted per-share profit of 45 cents to 47 cents, better than its call in June for 34 cents to 37 cents.
Gitlab shares rose more than 16% after hours Tuesday. Still, the stock is down 29% so far this year, as investors have worried about a cautious IT spending backdrop, the broader economic outlook and competition from Big Tech players.
In its second-quarter results, GitLab reported revenue of $182.6 million, up 31% year over year and above estimates for $176.9 million.
The company reported net income of $12.3 million, or 8 cents a share, contrasting with a loss of $51.2 million, or 33 cents a share, in the same quarter last year. Adjusted earnings per share came in at 15 cents; analysts polled by FactSet expected 10 cents.
“Organizations need to deliver software faster to accelerate performance and respond to intense competition,” Sid Sijbrandij, GitLab’s chief executive and co-founder, said in a statement.
“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,” he continued.
GitLab’s results arrived after Reuters reported in July that the company was exploring a sale, as tech companies operating in the development and security space increasingly consolidate.
In a note in July, William Blair analyst noted that GitLab CEO Sijbrandij’s “uncertain health … could be a factor in the board’s openness to a potential sale,” citing how he “controls 45.5% of GitLab voting stock through dual-class shares.”
During GitLab’s earnings call in June, Sijbrandij said he needed to undergo treatment for osteosarcoma, a form of bone cancer. He was treated for that type of cancer last year.
“My doctor believes that this finding is part of the original lesion and that as such the disease has not metastasized” he said at the time. “I’m working on making a full recovery. As [with] the last time, my scope and responsibilities as GitLab’s CEO and chair remain unchanged.”