GitLab jumps 15% following Q3 beat & guidance raise; Seen as a ‘good quarter’

(Updated – December 5, 2023 5:57 AM EST)

GitLab (GTLB) shares surged more than 15% pre-market today following the reported Q3 results.

EPS of $0.09 came in better than the consensus estimate of ($0.01). Revenue was $149.7 million, beating the consensus estimate of $141.53M.

“Revenue grew 32% year-over-year, which demonstrates continued business momentum driven by our market-leading platform approach. We continue to grow responsibly and delivered over 2,200 basis points of non-GAAP operating margin expansion,” said CFO Brian Robins.

Customers with more than $5,000 of ARR grew to 8,175, representing a 26% year-over-year growth. Meanwhile, customers with more than $100,000 of ARR increased to 874, up 37% year-over-year.

For Q4/24, the company expects EPS in the range of $0.08-$0.09, compared to the consensus of ($0.01), and revenue in the range of $157-$158M, compared to the consensus of $150.24M.

For the full year, the company sees EPS at $0.12-$0.13, compared to the consensus of ($0.06), and revenue at $573-$574M, compared to the consensus of $558.14M.

Analysts at Bank of America raised the price target by $12 to $74 per share on GTLB stock.

“We reiterate Buy, raising our PO to $74 (from $62) on a good F3Q24 result that displayed revenue and operating margin upside, and a healthy FY24 guidance raise, which is consistent with our preview,” they said.

“Given GitLab’s strong DevSecOps platform value proposition, we believe the headwinds are transitory and sales cycles will normalize as the macro improves.”