Gitlab (NASDAQ: GTLB) shares are up more than 10% in premarket trading after the company reported better-than-expected Q1 revenue and provided an optimistic Q2 and full-year outlook.
Gitlab reported an adjusted Q1 loss per share of 17 cents, although analysts had predicted a loss per share of 27 cents. The company’s revenue of $87.4 million was above the average forecast of $77.7 million. For the first quarter, the gross margin was 90%.
The business anticipates a Q2 adjusted loss per share of between 23c and 24c, compared to the consensus estimate of 25c per share. GTLB anticipates Q2 revenue of between $93.5 million and $94.5 million, exceeding the consensus estimate of $90.4 million.
Gitlab expects a full-year adjusted loss per share in the range of 89c to 93c, which is less than the earlier estimate of 97c to $1.02, and less than what analysts expected, which was a loss per share of 98c.
Matthew Hedberg, an analyst with RBC Capital Markets, increased the price objective for the outperform-rated company from $64.00 per share to $66.00 per share.
The company recorded a solid start to the year and sustained execution in its third quarter as a publicly traded company. Revenue growth accelerated to +75 percent from +69 percent in the previous quarter, while RPO increased by +92 percent with significant margin expansion.In a client letter, Hedberg stated, “Both revenue and margin forecasts are revised upwards as management remains confident in their potential and pipeline.”
A Bank of America analyst named Koji Ikeda also raised the price target to $60.
“The key highlight, in our view, is the 12 percent revenue beat above the high-end of the guidance, which was higher than the F4Q22 magnitude (e.g. 10 percent),” Ikeda told clients in a note. “This is an important indicator that the GitLab DevSecOps platform story is resonating, and there is good visibility in the revenue model.”
