GitLab Inc. Financial Results for the First Quarter of Fiscal Year 2025

Date: June 4, 2024

Exchange: NASDAQ

Ticker: GTLB

Sector: Technology

Industry: Software—Application

Executive Summary

GitLab Inc. displayed remarkable growth in Q1 FY 2025, highlighting the company's robust performance in a dynamic market. The quarter witnessed significant developments in revenue, margin expansion, product offerings, and market penetration, driven by innovations in AI and security compliance.

Quarterly Highlights

Revenue: GitLab reported revenue of $169.2M, showing a 33% year-over-year growth from Q1 FY 2024.

Gross Profit: The gross profit for the quarter stood at $150.4M, resulting in a gross profit margin of 88.9%.

Operating Income: The operating income registered a loss of $53.6M. Despite this, operational efficiencies were notable, as indicated by improved year-over-year margins.

Net Income: The net income for the quarter was -$54.6M, leading to an EPS of -$0.35.

Free Cash Flow: GitLab achieved a positive adjusted free cash flow of $37.4M in Q1, marking a significant improvement over the previous year.

Detailed Financial Analysis

Revenue

The company posted total revenue of $169.2M in Q1 FY 2025, a growth of 33% from the same quarter last year. This growth was driven primarily by sustained customer demand for GitLab's DevSecOps platform and increasing adoption of AI capabilities.

Operating Expenses

Operating expenses for the quarter amounted to $204.1M, with significant investments in R&D ($54.1M) and Selling & Marketing expenses ($92.4M). The company continued to prioritize expansion in AI, security capabilities, and global market reach.

Operating Income

Operating income recorded a loss of $53.6M. This, coupled with a total other income of $11.5M, resulted in an income before tax of -$42.2M.

Net Income

After an income tax expense of $12.7M, the net income for the quarter was -$54.6M. This outcome translated to a net income ratio of -32.3% and an EPS of -$0.35.

Free Cash Flow

Adjusted free cash flow turned positive for the first time in Q1 FY 2025 with $37.4M, a notable turnaround from the $11.2M cash used in operating activities in the same quarter of the previous year.

Balance Sheet

GitLab's balance sheet reflects a strong liquidity position with total cash and short-term investments amounting to $1.06B. The current ratio stood at an impressive 187.3%, indicating strong short-term financial health.

The total assets of the company were reported at $1.32B. The total liabilities were $707.3M, resulting in a stockholders' equity of $567.8M.

Market and Peer Comparison

GitLab's gross profit margin of 88.9% positions it favorably against peers, outperforming in several financial metrics. However, the company's operating profit margin, net profit margin, and return on equity are areas where improvement is needed.

Guidance

For Q2 FY 2025, GitLab projects revenue between $176M to $177M, representing year-over-year growth of 26%-27%. The company also expects non-GAAP operating income of $10M to $11M and non-GAAP net income per share of $0.09 to $0.10.

For the full year FY 2025, GitLab anticipates total revenue of $733M to $737M, with non-GAAP operating income ranging from $34M to $38M and non-GAAP net income per share of $0.34 to $0.37.

Report Date: June 3, 2024

Web Source: SEC Archives