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GitLab stock soared after the company said it is the leading DevSecOps platform and is positioned to control most of the AI market share.
GitLab (NASDAQ: GTLB) stock jumped impressively on news that the company is set to benefit from the growing boom and high demand for artificial intelligence (AI) services. On Tuesday, GTLB climbed 31.195 to close at $46.44 after adding more than $11 to its value.
The open-core DevSecOps platform’s stock rose following impressive numbers published for its fiscal Q1 2024. According to an official release, the company recorded a total revenue of $126.9 million, climbing 45% from the $87.4 million reported last year. In addition, GitLab said its GAAP operating margin was 46%, with the non-GAAP operating margin at 12%. The non-GAAP margin rose by nearly 1,700 basis points year-over-year (YoY).
GitLab stock also benefited from increased revenue as stated by the quarterly report. In the report’s business highlights, GitLab said customers with over $5,000 of Annual Recurring Revenue (ARR) jumped 43% from fiscal Q1 2023 to 7,406. GitLab also noted a 39% increase in customers with over $100,000 of ARR from fiscal Q1 2023.
Other impressive notes from GitLab’s business highlights include a 128% increase in its Dollar-Based Net Retention Rate and new security implementations that protect credential exposure and cut down on false positives.
GitLab and AI
GitLab is very focused on AI and says it is poised to contribute to the booming sector. The report says GitLab is positioned as the apex AI-powered DevSecOps platform as it provides more AI-powered services than others. The company’s offerings support customers throughout their software processes, from planning to deployment.
Chief financial officer Brian Robins said GitLab is ready to grab a large chunk of the AI market share. Robins said:
“Against a backdrop of macroeconomic uncertainty, customers are looking to our AI-powered DevSecOps platform to drive efficiencies, increase productivity, and accelerate their pace of innovation. We are poised to make the most of the estimated $40B total addressable market opportunity before us.”
GitLab’s business highlights also provided a few more AI-related updates. The platform said it is in business with Google Cloud to offer more customizable AI models and infrastructure. GitLab also said it is improving customers’ experiences with an AI/ML feature in partnership with Oracle.
According to GitLab in its 7th annual Global DevSecOps Report, 65% of developers already currently use or will use AI/ML sometime in the next three years, to test or check code.
As of press time, GTLB is at $46.52 in after-hours trading, a little higher than its previous close. In the last five days, the DevSecOps platform has climbed nearly 30%, and more than 49% in the past month. However, figures for broader periods are lower.
Year to date, GTLB has only increased by 2.2%. The company has lost 6.82% in three months, and nearly 9% in the past year.
In March, GTLB crashed more than 31% on news of a disappointing full-year guidance. Although it announced a 58% jump in revenue YoY, its fiscal 2024 outlook revealed 24 cents to 29 cents per share in adjusted loss, and $529 million to $533 million in revenue.