The GTLB stock came under severe selling pressure in the aftermarket hours on Monday since the projected revenue stood less than the estimates.
On Monday, March 13, GitLab Inc (NASDAQ: GTLB) stock plunged by more than 31% in the extended trading session after the software company gave full-year revenue guidance falling short of expectations.
The company’s revenue stood at $122.9 million against the expected $119.6 million. It also managed to narrow its losses at 3 cents per share, adjusted, vs. the expected loss of 14 cents per share. As per the company’s statement, in the quarter ending January 31, the company’s revenue jumped 58% year over year.
Besides, GitLab has called for an adjusted loss of 14 to 15 cents per share for the fiscal first quarter with a revenue expectation of $117-$118 million. Refinitiv analysts had expected an adjusted loss of 16 cents per share with a revenue of $126.2 million.
However, for the 2024 fiscal year, GitLab sees an adjusted loss of 24 cents to 29 cents per share and revenue between $529 million to $533 million. Speaking on the development, Sid Sijbrandij, co-founder and CEO of GitLab Inc said:
“Now more than ever, it is critical for companies to show an immediate return on their software investments. With our DevSecOps platform, our customers are consolidating tools, reducing integration costs, increasing productivity, and accelerating their revenue by deploying their software faster. We believe we are well positioned to continue to demonstrate significant value to our customers in the current macroeconomic environment.”
GTLB Stock Tanks Over 31%
Amid the weaker revenue forecast by the company, investors dumped GTLB stock during the extended trading hours on Monday. As a result, the GTLB stock price dropped to $30 from $44 at the closing hours on Monday. Also, as of Monday’s closing price, the GTLB stock is still trading 35% up on the yearly chart. The GTLB stock debuted on Nasdaq in 2021 when the revenue growth was at 69%.
From next month onwards in April 2023, GitLab is increasing its premium services tier from $19 to $29 a month. Besides, GitLab also stated that it’s cutting 7% of its workforce which is around 130 employees. Brian Robins, CFO of GitLab said:
“Our fourth quarter results demonstrate our continued focus on growth while driving improvements in the unit economics of the business. Revenue of $122.9 million grew 58% organically, and our non-GAAP operating margin improved by approximately 2,400 basis points year-over-year. We see significant opportunities ahead, and we’re confident in the value that GitLab provides to customers.”
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