GitLab proves it’s possible to get better valuation for your software vendor – TechCrunch
No matter if you prefer to follow the public or private markets, 2022 turned out to be a complicated year for software publishers.
After a bullish 2021, when investors sent software stocks into the stratosphere, startups rode the same wave of enthusiasm to new heights. Since then, we’ve tracked the decline in value software companies have suffered, and the resulting ripple effects on startup fundraising and pricing.
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You’re probably tired of bad news by now. We get it, and to combat the general ominous mood surrounding startup founders, we’ve been looking for the good news. We talked about it over the weekend, and we’re back with After.
GitLab just showed that it’s possible to make investors so happy that they revalue you by more than 25% in a single day. Let’s find out how – and we’ll wrap up the latest Salesforce news to back up our point.
The GitLab neighborhood
Shares of GitLab rose just over 28% yesterday to $51.00 per share, up $11.16 in a single day. And investors aren’t changing their minds, with shares of the developer-focused service git not returning much, if any, of those gains in premarket trading.
What did GitLab have to accomplish to see such a dramatic revaluation from investors? The public market’s rare triple crown: It beat revenue, profitability and outlook in the quarter. Here is the data:
- Revenue growth of 75% to $87.4 million, ahead of analysts’ expectations of $78.1 million and faster than the 69% growth it recorded in previous quarter.
- Adjusted loss per share of $0.18, better than the loss of $0.27 per share expected in the neighborhood.
- Increased revenue guidance from $93.5 million to $94.5 million for the current quarter and from $398.0 million to $402.0 million for the current fiscal year. Both ranges are ahead of $93.14 million (quarter) and $398.51 million (year) that Yahoo Finance calculates like the current analyst average.
Also, for you SaaS fans, GitLab has had “net dollar retention over 130%” which is pretty impressive. In short, GitLab has accelerated its growth, exceeded revenue and earnings expectations, and raised its outlook to levels that put it ahead of current street estimates.
Now that we’re in 2022, there’s of course a bit of bad news: even after its huge rise in market value, GitLab’s stock is still trading well below its all-time high from last year.