Shares in GitLab tumbled Tuesday after the software maker reported fourth-quarter earnings and revenue that topped estimates while management's fiscal 2025 guidance for GTLB stock disappointed.
GitLab earnings for the quarter ending Jan. 31 were 15 cents a share, swinging from a loss of 3 cents a share a year earlier. Revenue rose 33% to $163.8 million.
Those results, reported after the market close on Monday, topped consensus estimates for 8-cent profit on an adjusted basis on revenue of $158 million.
On the stock market today, GTLB stock jumped tumbled 24.6% to56.14 in early trading.
GTLB Stock: 2025 Guidance Disappoints
For fiscal 2025, which starts with the current March quarter, San Francisco-based GitLab predicted adjusted profit of 21 cents at the midpoint of guidance versus estimates of 36 cents. It forecast revenue of $728 million at the midpoint of guidance, just below estimates of $730 million.
"Management guided fiscal 2025 revenue of $725 million to $731 million with Street at Street at $730 (million), amounting to 25% to 26% growth," said TD Cowen analyst Derrick Wood in a report. "Operating margin guide of 1% was below Street at 3.5%. Management noted revenue guidance is less conservative than in past years as the buying environment is normalizing."
At William Blair, analyst Jason Ader said in a report: "Fiscal 2025 top-line growth is expected to be 25.5%, somewhat perplexing given the positive macro commentary, and the chief financial officer's comment that his guidance philosophy is less conservative for the current year versus the prior two years."
Crowded Software Market
Founded in 2014, GitLab helps customers develop software and deploy new applications in a secure process. GitLab operates in a crowded software development market called "DevOps," for developer and operations.
GitLab competes with Microsoft, Atlassian and JFrog. The company also competes with privately-held Cloudbees.
GitLab launched its initial public offering in October, 2021. Shares swooned for 18 months before GitLab stock began rebounding in June.
Heading into the GitLab earnings report, the software stock owned a Relative Strength Rating of 95 out of a best-possible 99, according to IBD Stock Check-up.
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