GitLab (NASDAQ:GTLB) has released its financial results for the second quarter of fiscal year 2024, revealing non-GAAP earnings of 1 cent per share. This result pleasantly surprised analysts as it surpassed the Zacks Consensus Estimate, which had predicted a loss of 3 cents per share. In comparison, during the same period last year, the company reported a loss of 15 cents per share.
The company’s total revenues for the quarter reached $139.6 million, exceeding the consensus forecast by 7.65% and marking a substantial 38.1% increase compared to the previous year.
Breaking down the revenue streams, subscriptions, including self-managed and SaaS offerings, accounted for 87.5% of the total revenues, amounting to $122.1 million. These subscription revenues saw an impressive year-over-year surge of 37.3%. Meanwhile, license revenues, including self-managed and other sources, represented the remaining 12.5% of total revenues and soared by 44.4% year over year to reach $17.5 million.
GitLab’s customer base also showed robust growth, with 7,815 customers generating more than $5,000 of Annual Recurring Revenues (ARR), marking a 33% year-over-year increase. Customers with over $100,000 of ARR increased to 810, representing a 37% growth compared to the previous year. Notably, SaaS now accounts for over 25% of GitLab’s total ARR.
The Ultimate tier continued to drive growth, comprising 42% of ARR for the second quarter of fiscal 2024, compared to 39% in the same period the previous year. The company’s dollar-based Net Retention Rate for the reported quarter stood at an impressive 124%.
GitLab’s Total Remaining Performance Obligation (RPO) experienced a substantial 37% year-over-year growth, reaching $496 million, while current RPO grew by 34% to $335 million.
In terms of operating performance, the second quarter of fiscal 2024 saw non-GAAP gross margin expanding by 190 basis points compared to the previous year, reaching 91.1%. This improvement was partly attributed to the higher growth in low-margin SaaS revenues.
On a non-GAAP basis, research and development expenses increased by 29.7% year over year to $36.5 million, while sales and marketing expenses rose by 7.4% to $70.7 million. General and administrative expenses also saw a 5% increase, reaching $24.2 million for the reported quarter. Despite these expenditures, the company reported a non-GAAP operating loss of $4.3 million, a significant improvement compared to the $27.0 million loss in the same quarter the previous year.
As of July 31, 2023, GitLab had cash and cash equivalents along with short-term investments totaling $986.2 million.
Looking ahead, GitLab provided guidance for the third quarter of fiscal 2024, with revenue expectations ranging between $140 million and $141 million, reflecting a year-over-year growth rate of 24% to 25%. Non-GAAP operating loss is projected to be in the range of $5 million to $6 million, translating to a loss of 2 cents to 1 cent per share.
For the entire fiscal year 2024, GitLab anticipates revenues between $555 million and $557 million, with a non-GAAP operating loss expected in the range of $30 million to $33 million, equivalent to a loss of 5 cents to 8 cents per share.
Featured Image: Unsplash @ Pankaj Patel