Software development tools maker Gitlab (NASDAQ:GTLB) reported better-than-expected results for the fourth quarter of Fiscal Year 2024, driven by robust customer growth. However, GTLB stock plunged over 22% in yesterday’s extended trading session due to weak Fiscal 2025 guidance.
Q4 Financial Highlights
The company posted adjusted earnings of $0.15 per share, which came above the analysts’ estimates of $0.08 per share and compared favorably with a loss of $0.03 per share in the prior-year quarter. Similarly, Q4 revenues of $163.8 million rose 33% year-over-year and surpassed the Street’s estimates of $157.9 million.
During Q4, GitLab’s net revenue retention (NRR) rate, a key performance indicator measuring recurring revenue growth from existing customers, was 130%.
Furthermore, GTLB witnessed a 52% year-over-year jump in customers with more than $1 million of annual recurring revenue (ARR). Also, customers with ARRs of over $5,000 and $100,000 increased by 23% and 37%, respectively.
Outlook
Looking forward, management expects revenue and adjusted loss per share for the Fiscal first quarter to be in the ranges of $165 million to $166 million and $0.04 to $0.05, respectively. Analysts expect a loss of $0.06 and revenue of $163.1 million.
For the Fiscal Year 2025, GitLab anticipates that adjusted earnings will be between $0.19 and $0.23, versus the consensus estimate of $0.37. Additionally, the company projects that revenue will come in the range of $725 million to $731 million, below consensus expectations of $732.20 million.
Is GTLB a Good Stock to Buy?
Currently, Wall Street is optimistic about GTLB stock. It has a Strong Buy consensus rating based on 13 Buy and four Hold recommendations. After a nearly 50% rally in the past six months, the average Gitlab stock price target of $73.67 per share implies a 1.1% downside potential.
