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Shares of GitLab (GTLB) are soaring after the company beat second quarter earnings expectations on both the top and bottom lines and lifted its full-year revenue guidance. GitLab CFO Brian Robins joins Morning Brief to discuss the software company's earnings results and the key areas contributing to its success.
"We've seen the demand environment be more stable. We delivered 31% year-over-year revenue growth, and we did that with an impressive non-GAAP (Generally Accepted Accounting Principles) gross margin of 91%. And so we're seeing strength really in the enterprise and our Ultimate product, which is Gitlab's highest-price product, which really combines security and compliance," Robins tells Yahoo Finance.
He notes that while the overall spending environment remains "cautious," GitLab has been able to overcome the challenge through the value it provides with its services. He explains, "The great thing about GitLab is we're really easy to implement. And so the time to value and business outcome is really quick. We did a Forrester total return on investment study and it's over 400%... and payback period for Ultimate product is less than six months."
GitLab stock is rallying today after reporting a strong beat and raise second quarter. The company lifted its full-year revenue guidance after surpassing expectations across the top and bottom line during Q2. That beat aided by a major improvement in the company's adjusted operating margin here. Joining us now, we've got GitLab CFO, Brian Robbins. Brian, great to have you here on the program with us. I mean, take us into some of the success that you saw for the quarter. What was the kind of outlier or catalyst from your perspective?
Yeah, thanks for having me on the show today. Um, before I get into that, I'd love to tell the viewers what GitLab does. Uh, just give a brief overview and I'll do it from a non-technical standpoint. Um, I've written many S1s in my life and if you do it with Microsoft Word, um, most of the time you're playing air air traffic controller with GitLab, it's like Google Docs. You have the system of record of everything and all the changes and tracks, um, are done and so you're able to do things much faster, uh, and, uh, produce things quicker. And so first quarter results was really driven by, you know, we've seen the demand environment be more stable. We delivered 31% year-over-year revenue growth and we did that with an impressive non-GAAP gross margin of 91%. And so we're seeing strength really in the enterprise and our ultimate product, which is GitLab's, um, highest price product which really combines security and compliance. So I'm really happy with the results that we delivered this quarter.
What what are you seeing specifically from customers looking for some of these enterprise grade capabilities, uh, from your platform? What what is the demand profile and kind of this the spend propensity that you're seeing? Because I mean a lot of other B2B companies are talking about how there's elongated deal cycles or more scrutiny. What are you seeing from your seat?
Yeah, I think the spinning environment overall remains cautious. Uh, you know, and and we've seen that, but we've adjusted our go-to market and our sales enablement to overcome that. You know, the great thing about GitLab is we're really easy to implement and so the time to value and business outcome is really quick. We did a, uh, Forrester total, uh, uh, a return on investment study and it's over 400%. It increased about 60 basis points from last time we did it and payback period for ultimate product is less than six months.
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This post was written by Melanie Riehl