GitLab’s shares surged by up to 18% in after-hours trading following robust fiscal third-quarter results and promising quarterly guidance.

The developer-tools software maker exceeded analyst expectations with adjusted earnings of 9 cents per share (compared to an expected loss of 1 cent per share) and revenue of $149.7 million (beating the expected $141.5 million).

This quarter marks GitLab’s first posting of an adjusted operating profit.

“We continue to grow responsibly and delivered over 2,200 basis points of non-GAAP operating margin expansion,”

Is this what happens when company’s report their first quarter of revenue?

GitLab shares soar as company posts first adjusted operating profit https://t.co/6TbT3uKVqT@DataDInvesting @Kawcak20 @amitisinvesting $SOFI

— Ethan Smith (@xs4etsmith) December 4, 2023

Brian Robins, the finance chief of Gitlab, said in a statement.

GitLab reported a 32% year-over-year revenue increase, reaching $285.2 million in net loss attributed to the company.

Despite this, GitLab, which went public in 2021 and operates remotely, has seen substantial growth, boasting 874 customers contributing over $100 million in annual recurring revenue, a 37% increase from the same quarter last year.

While some organizations shift from Microsoft-owned GitHub, GitLab’s CEO, Sid Sijbrandij, noted caution among small to medium-sized customers due to economic conditions.

The company is also exploring partnerships, discussing an integration with Amazon Web Services for the Amazon Q work assistant.

GitLab expects adjusted earnings of 8 to 9 cents per share and $157.0 million to $158.0 million in revenue for Q4 2024. Despite a 16% year-to-date stock increase (excluding after-hours), GitLab lags behind the S&P 500’s 19% gain.

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