Investors might want to bet on GitLab Inc. (GTLB) , as it has been recently upgraded to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Individual investors often fi ...

Shares of GitLab Inc. (GTLB) have gained 2.7% over the past four weeks to close the last trading session at $61.58, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $78.46 indicates a potential upside of 27.4%.The average comprises 24 short-term price targets ranging from a low of $61 to a high of $90, with a standard deviation of $7.81. While the lowest estimate indicates a decl ...

In Brief GitLab, the popular developer and security platform, has named a new CEO, Bill Staples, effective immediately. Staples, who’s also been appointed to the company’s board of directors, succeeds CEO Sid Sijbrandij, who’s battling a rare form of cancer. Sijbrandij will transition to executive chair of the board. “I believe [Bill’s] passion for software, commitment to customers, and strong track record make him the right person to lead the company going forward,” Sijbrandij said in a statement. “This i ...

Financial Data and Key Metrics - Q3 revenue increased 31% YoY to $196 million [14] - Non-GAAP operating margin reached 13.2%, an increase of over 1,000 basis points YoY [14] - Total RPO grew 48% YoY to $811.8 million, while CRPO grew 39% YoY to $515.2 million [38] - Non-GAAP gross margin was 91% for the quarter [38] - SaaS revenue grew 44% YoY and now represents 29% of total revenue [39] - Adjusted free cash flow was $9.7 million compared to negative $6.7 million in the prior year period [40] Business Line Data and Key Metrics - GitLab Ultimate now accounts for 48% of total ARR [26] - GitLab Duo Pro and Enterprise are driving productivity improvements, with some customers saving up to 2 hours per week and seeing productivity gains of up to 50% [16][20] - GitLab Dedicated is driving demand for Ultimate, with customers achieving quicker time to value and maintaining high security and compliance standards [32] Market Data and Key Metrics - The company has 9,519 customers with ARR of at least $5,000, contributing over 95% of total ARR [37] - The $100,000+ ARR customer cohort increased 31% this quarter, reaching 1,144 customers [37] - Dollar-based net retention rate (DBNRR) was 124% in Q3, driven by seat expansion, increased customer yield, and tier upgrades [38] Company Strategy and Industry Competition - The company is focused on AI integration throughout the software development lifecycle, with GitLab Duo Pro and Enterprise leading the way [16][25] - GitLab aims to be the vendor of choice for a comprehensive approach to AI, leveraging its end-to-end DevSecOps platform and self-hosted models for security [22][25] - The company is seeing strong momentum in the public sector, with a record quarter and in-process designation for FedRAMP moderate [34] Management Commentary on Operating Environment and Future Outlook - Management believes the software transformation is still in its early stages, with AI expected to further accelerate this trend [10] - The company is well-positioned to lead in the agentic AI space, with a focus on autonomous and proactive AI capabilities [25] - Management expects continued growth in the DevSecOps market, with significant opportunities for vendor consolidation [74] Other Important Information - The company announced a bundled offering for GitLab Duo with Amazon Q, integrating AI capabilities for AWS customers using GitLab Ultimate [24] - GitLab Advanced SaaS, powered by technology acquired from Oxide, is now generally available for Ultimate customers, providing more accurate vulnerability detection [31] - The company is working towards deconsolidating its China joint venture, JiHu, with $14 million in forecasted expenses for FY'25 [43] Q&A Session Summary Question: What stood out in Q3 that led to the strong performance? - The quarter was strong across the board, with record performance in the public sector, strong Ultimate adoption, and best-in-class net dollar retention [49][50] Question: How does the company view the future of AI in the DevSecOps space? - Both GitLab Duo Pro and Enterprise will exist in parallel, with agentic AI representing the next evolution in AI, leveraging GitLab's end-to-end platform [54][55] Question: What is the pricing yield for GitLab Duo? - GitLab Duo makes up over 25% of the total net ARR in year one for top deals, with customers seeing significant productivity gains [69] Question: How does the company view the current market for vendor consolidation? - The company believes it is still in the early innings of vendor consolidation, with significant opportunities to replace DIY DevOps solutions [74] Question: How does the company plan to evolve its pricing model for agentic AI? - While the company cannot comment on future pricing, it is considering different models, including consumption-based pricing, as AI agents become more prevalent [98][99] Question: What is driving the adoption of GitLab Ultimate? - Features like integrated security, compliance, and GitLab Duo Enterprise are driving adoption, with customers seeing significant productivity improvements and cost savings [85][86]

Customer Growth and Market Reach - GitLab has over 40 million registered users, with more than 50% of Fortune 100 companies as customers[173] - Base Customers increased to 9,519 as of October 31, 2024, up 16% from 8,175 in 2023[182] - $100,000 ARR customers grew to 1,144 as of October 31, 2024, a 31% increase from 874 in 2023[182] - The company had 1,144 customers with ARR over $100,000 as of October 31, 2024, up from 874 customers as of October 31, 2023[222] - The company expects to expand its global sales and marketing team to acquire new customers and increase sales to existing customers[183] - The company aims to continue investing in partnerships and alliances to expand its market reach and drive brand awareness[186] Financial Performance and Revenue Growth - Total revenue increased by 31% to $196.0 million for the three months ended October 31, 2024, and by 32% to $547.8 million for the nine months ended October 31, 2024, driven by demand for the DevSecOps Platform and customer expansion[222] - Subscription revenue (self-managed and SaaS) grew by 34% to $175.3 million for the three months ended October 31, 2024, and by 34% to $489.6 million for the nine months ended October 31, 2024[222] - License revenue (self-managed and other) increased by 11% to $20.8 million for the three months ended October 31, 2024, and by 12% to $58.2 million for the nine months ended October 31, 2024[222] - Net income attributable to GitLab was $29.6 million for the three months ended October 31, 2024, compared to a net loss of $285.2 million for the same period in 2023[217] - Revenue attributed to the variable interest entity, JiHu, was $1.9 million for the three months ended October 31, 2024, and $5.3 million for the nine months ended October 31, 2024[223] Expenses and Cost Management - Sales and marketing expenses increased to $95.3 million for the three months ended October 31, 2024, and to $285.5 million for the nine months ended October 31, 2024, but decreased as a percentage of total revenue to 49% and 52%, respectively[217][220] - Research and development expenses rose to $61.4 million for the three months ended October 31, 2024, and to $176.8 million for the nine months ended October 31, 2024, but decreased as a percentage of total revenue to 31% and 32%, respectively[217][220] - General and administrative expenses increased to $46.0 million for the three months ended October 31, 2024, and to $146.6 million for the nine months ended October 31, 2024, but decreased as a percentage of total revenue to 23% and 27%, respectively[217][220] - Cost of revenue increased by $7.0 million (47%) to $22.1 million for the three months ended October 31, 2024, driven by higher SaaS and cloud usage costs, amortization of intangible assets, and personnel-related expenses[224] - Sales and marketing expenses increased by $8.4 million (10%) to $95.3 million for the three months ended October 31, 2024, primarily due to higher personnel-related costs[228] - Research and development expenses increased by $12.3 million (25%) to $61.4 million for the three months ended October 31, 2024, driven by higher personnel-related costs and hosting expenses[232] - General and administrative expenses increased by $7.1 million (18%) to $46.0 million for the three months ended October 31, 2024, primarily due to higher personnel-related costs and stock-based compensation[235] - Stock-based compensation expense increased by $6.7 million (16%) to $48.0 million for the three months ended October 31, 2024, mainly due to higher RSU expenses[241] - Cost of revenue attributed to JiHu was $0.5 million for the three months ended October 31, 2024, compared to $0.8 million in the same period in 2023[227] - Sales and marketing expenses attributed to JiHu were $1.8 million for the three months ended October 31, 2024, compared to $1.6 million in the same period in 2023[230] - Research and development expenses attributed to JiHu were $0.6 million for the three months ended October 31, 2024, compared to $1.5 million in the same period in 2023[234] - General and administrative expenses attributed to JiHu were $1.6 million for the three months ended October 31, 2024, compared to $1.0 million in the same period in 2023[238] Product and Platform Efficiency - GitLab's DevSecOps Platform reduces software development cycle times by up to 7x, from weeks to minutes[172] - Nearly 700 contributors added over 2,100 merge requests to the core product in 2023, enhancing R&D efforts[175] - GitLab plans to increase R&D expenses, which may impact short-term profitability but drive long-term growth[180] Gross Margin and Profitability - Gross margin decreased by 1% to 89% for the three months ended October 31, 2024, compared to 90% in the same period in 2023[224] - GitLab's SaaS offering is expected to increase cloud-related costs, potentially impacting gross margins[202] Cash Flow and Liquidity - Cash and cash equivalents totaled $0.9 billion as of October 31, 2024, compared to $1.0 billion as of January 31, 2024[259] - Net cash used in operating activities was $127.2 million for the nine months ended October 31, 2024, compared to $10.2 million provided in the same period in 2023[262] - Cash used in investing activities was $8.6 million for the nine months ended October 31, 2024, compared to $50.5 million in the same period in 2023[262] - Cash provided by financing activities was $20.9 million for the nine months ended October 31, 2024, compared to $30.2 million in the same period in 2023[262] - Adjusted free cash flow is a non-GAAP measure used to assess liquidity, calculated as net cash from operating activities less property and equipment purchases plus non-recurring BAPA tax payments[271] - Adjusted free cash flow for 2024 was $9.65 million, compared to a negative $6.697 million in 2023[272] - GAAP net cash used in operating activities for 2024 was $(177.028) million, compared to $(5.961) million in 2023[272] - Income tax payments related to BAPA added $187.735 million to adjusted free cash flow in 2024[272] - As of October 31, 2024, the company had $0.9 billion in cash, cash equivalents, and short-term investments[280] - A 1% change in interest rates would result in a $4.2 million change in the fair value of the investment portfolio[280] - The company has $57.4 million in cash and cash equivalents denominated in currencies other than the U.S. dollar[282] - A 10% change in foreign currency exchange rates would have a material impact on the financial statements[282] Tax and Other Financial Metrics - The effective tax rate increased by 1244.3% for the three months ended October 31, 2024, primarily due to tax effects of BAPA negotiations[249] - Unrecognized tax benefits decreased to $9.9 million as of October 31, 2024, from $396.8 million as of January 31, 2024, due to BAPA settlement[256] - Interest income increased to $12.6 million for the three months ended October 31, 2024, up 16% from $10.9 million in the same period in 2023[245] - Total other income (expense), net increased to $4.99 million for the three months ended October 31, 2024, up 777% from $569,000 in the same period in 2023[245] - The company recorded an impairment charge of $8.9 million in other income (expense), net, reducing the equity method investment value to zero as of January 31, 2024[247] Internal Controls and Financial Reporting - A material weakness in internal control over financial reporting was identified as of October 31, 2024[286] - The material weakness relates to ineffective IT general controls for revenue-related financial reporting systems[287] - Remediation efforts include strengthening IT governance and enhancing user access controls[289] - The company's unaudited condensed consolidated financial statements for the periods presented are in conformity with U.S. GAAP, despite a material weakness in internal control over financial reporting[288] - The company implemented remediation actions in Q3 FY2025 to address the material weakness, including strengthening IT governance and developing training programs on internal controls[289] - The company believes the remediation actions, once fully tested, will be sufficient to address the material weakness, but effectiveness cannot be guaranteed[291] - No other changes in internal control over financial reporting were identified during the quarter ended October 31, 2024, apart from the material weakness and remediation efforts[292] - The company's internal controls over financial reporting are designed to provide reasonable assurance but cannot prevent or detect all errors and fraud[293]

GitLab Inc. (GTLB) came out with quarterly earnings of $0.23 per share, beating the Zacks Consensus Estimate of $0.16 per share. This compares to earnings of $0.09 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 43.75%. A quarter ago, it was expected that this company would post earnings of $0.10 per share when it actually produced earnings of $0.15, delivering a surprise of 50%.Over the last four quarters, the company has sur ...

Revenue and Financial Performance - Total revenue for Q3 FY 2025 reached $196.0 million, a 31% year-over-year increase[2][4] - Total revenue for the three months ended October 31, 2024, increased to $196.0 million, up from $149.7 million in the same period last year, representing a 31% growth[23] - Subscription revenue for the three months ended October 31, 2024, reached $175.3 million, a 34% increase compared to $131.0 million in the prior year period[23] - Q4 FY 2025 revenue guidance is projected between $205.0 million and $206.0 million, with full-year FY 2025 revenue expected to be between $753 million and $754 million[9] - Net income attributable to GitLab for the three months ended October 31, 2024, was $29.6 million, compared to a net loss of $285.2 million in the prior year period[23] - Net income for the three months ended October 31, 2023 was $28,267, compared to a net loss of $(286,355) in the same period last year[25] - Net income attributable to GitLab common stockholders on a GAAP basis for Q3 2024 was $29.6 million, compared to a loss of $285.2 million in Q3 2023[27] - Non-GAAP net income for Q3 2024 was $39.1 million, up from $14.4 million in Q3 2023[28] - GAAP net income per share, diluted, for Q3 2024 was $0.18, compared to a loss of $1.84 per share in Q3 2023[28] - Non-GAAP net income per share, diluted, for Q3 2024 was $0.23, up from $0.09 in Q3 2023[28] Operating Margins and Profitability - GAAP operating margin improved to (15)% from (27)% year-over-year, while Non-GAAP operating margin expanded to 13% from 3%[4] - Non-GAAP operating income for Q4 FY 2025 is forecasted to be between $28.0 million and $29.0 million, with full-year guidance of $69 million to $70 million[9] - Gross profit for the three months ended October 31, 2024, was $173.9 million, up 29% from $134.6 million in the same period last year[23] - Gross profit on GAAP basis for Q3 2024 was $173.9 million, compared to $134.6 million in Q3 2023, with a gross margin of 89% for both periods[27] - Non-GAAP gross profit for Q3 2024 was $178.4 million, with a gross margin of 91%, consistent with Q3 2023[27] Customer Growth and Retention - Customers with more than $100,000 of ARR grew 31% year-over-year to 1,144[6] - Dollar-Based Net Retention Rate stood at 124%[6] - Total RPO increased 48% year-over-year to $811.8 million, with cRPO growing 39% to $515.2 million[6] Expenses and Investments - Sales and marketing expenses for the three months ended October 31, 2024, were $95.3 million, up 10% from $87.0 million in the prior year period[23] - Research and development expenses for the three months ended October 31, 2024, were $61.4 million, up 25% from $49.1 million in the prior year period[23] - Research and development expenses on a GAAP basis for Q3 2024 were $61.4 million, up from $49.1 million in Q3 2023[27] - Sales and marketing expenses on a GAAP basis for Q3 2024 were $95.3 million, compared to $87.0 million in Q3 2023[27] - Stock-based compensation expense for the three months ended October 31, 2023 was $48,042, up from $41,334 in the prior year period[25] - Stock-based compensation expense for Q3 2024 was $48.0 million, up from $41.3 million in Q3 2023[27] Cash Flow and Financial Position - Cash and cash equivalents decreased to $176.6 million as of October 31, 2024, from $288.0 million as of January 31, 2024[21] - Total current assets decreased to $1,192.2 million as of October 31, 2024, from $1,280.9 million as of January 31, 2024[21] - Total liabilities decreased to $482.4 million as of October 31, 2024, from $699.9 million as of January 31, 2024[21] - Total stockholders' equity increased to $770.2 million as of October 31, 2024, from $617.9 million as of January 31, 2024[21] - Net cash used in operating activities for the three months ended October 31, 2023 was $(177,028), compared to $(5,961) in the same period last year[25] - Purchases of short-term investments for the three months ended October 31, 2023 totaled $(240,136), compared to $(238,680) in the prior year period[25] - Proceeds from maturities of short-term investments for the three months ended October 31, 2023 were $148,763, down from $253,995 in the same period last year[25] - Net cash provided by financing activities for the three months ended October 31, 2023 was $2,922, compared to $4,715 in the prior year period[25] - Cash and cash equivalents at end of period October 31, 2023 were $176,632, down from $285,309 at the end of the same period last year[25] - Adjusted free cash flow for Q3 2024 was $9.7 million, compared to a negative $6.7 million in Q3 2023[29] Product and Market Recognition - GitLab announced the general availability of Advanced SAST for GitLab Ultimate customers, leveraging technology acquired with Oxeye[7] - GitLab was recognized as a Leader in the Gartner® Magic Quadrant™ for DevOps Platforms for the second consecutive year[7] Deferred Revenue and Accounts Receivable - Deferred revenue for the three months ended October 31, 2023 was $19,665, up from $14,270 in the prior year period[25] - Accounts receivable for the three months ended October 31, 2023 was $(32,883), compared to $(30,572) in the same period last year[25] - Accrued expenses and other current liabilities for the three months ended October 31, 2023 was $(220,071), compared to $244,674 in the prior year period[25]

Dollar General NYSE: DG and GitLab NASDAQ: GTLB operate in different industries but offer similar value, trading near long-term lows. Both have the potential to reverse course and trend higher in 2025, but only one is a good buy for investors today. The other faces numerous headwinds that will take several quarters to mitigate, if not longer. Here’s a look at one stock to buy and one to sell before the end of the year.  Get GitLab alerts:Dollar General: Deeper Discounts Are Coming  Dollar General TodayDGDol ...

GitLab (GTLB) is set to release its third-quarter fiscal 2025 results on Dec. 5, 2024.The company anticipates third-quarter fiscal 2025 revenues between $187 million and $188 million, suggesting 25%-26% year-over-year growth. Non-GAAP earnings is anticipated to be between 15 cents and 16 cents.The Zacks Consensus Estimate for revenues is pegged at $187.67 million, indicating an increase of 25.39% from the year-ago quarter’s reported figure.The consensus mark for earnings remained at 16 cents per share in th ...

GitLab (GTLB) shares have jumped 13.3% in a month, underperforming the Zacks Computer & Technology sector’s return of 0.7% and the Zacks Internet Software industry’s appreciation of 3%. The outperformance can be attributed to strong top-line growth expectations in fiscal 2025. Its expanding clientele has been a key catalyst. Solid adoption of its AI-powered DevSecOps platform is aiding prospects.GTLB expects total revenues between $742 million and $744 million, indicating a growth rate of 28% over fiscal 20 ...