GitLab Loses One-Third of Its Value After Weak Revenue Forecast

GitLab shares plunged as much as 38% in extended trading after the provider of source code management software gave full-year revenue guidance that fell short of expectations. CNBC reports: Here's how the company did:

Earnings: Loss of 3 cents per share, adjusted, vs. loss of 14 cents per share as expected by analysts, according to Refinitiv.
Revenue: $122.9 million, vs. $119.6 million as expected by analysts, according to Refinitiv. Revenue increased 58% year over year in the quarter that ended Jan. 31, according to a statement.

GitLab called for a fiscal first-quarter adjusted loss of 14 cents to 15 cents per share on $117 million to $118 million in revenue. Analysts surveyed by Refinitiv had expected an adjusted loss of 16 cents per share and revenue of $126.2 million. For the 2024 fiscal year, the company sees an adjusted loss of 24 cents to 29 cents per share and $529 million to $533 million in revenue. That works out to 25% growth at the middle of the range. The consensus among analysts polled by Refinitiv was an adjusted loss of 54 cents per share and $586.4 million in revenue. During the quarter Gitlab said that in April its premium service tier will go up to $29 per month from $19.

Re:

[_6B6E6F78_]

huh? git was replaced by docker? Awesome!

Re:

[ctilsie242]

That is like saying that a 10mm socket was replaced by a staple gun. GitLab does repository stuff, Docker does containerization. One can use GitLab in a Docker container, but Docker isn't directly replacing GitLab.

Re:

[Antique Geekmeister]

Their market was in the CI/CD tools they were offering, which failed to expand as much as Gitlab anticipated.

Re:

[phantomfive]

Yes, that is exactly what I was about to say. Once you have docker, the value of a paid-for CI/CD is a lot lower.

Re:Their product was replaced

[Joce640k]

Earnings: Loss of 3 cents per share, adjusted, vs. loss of 14 cents per share as expected by analysts
Revenue: $122.9 million, vs. $119.6 million as expected by analysts

Is it just me or did those numbers seem like they beat the forecast?

I'm confused.

Re:

[phantomfive]

I share your confusion. If you find out, let me know.

Re:

[cmseagle]

FTFA:

For the 2024 fiscal year, the company sees an adjusted loss of 24 cents to 29 cents per share and $529 million to $533 million in revenue. That works out to 25% growth at the middle of the range. The consensus among analysts polled by Refinitiv was an adjusted loss of 54 cents per share and $586.4 million in revenue.

They did slightly better than expected in the most recent quarter, but their forecast for the coming fiscal year is looking grim (~10% or $50 million lower than analysts' projections). Disclaimer: I know nothing about this subject.

Re:

[DrXym]

GitLab is a source control, CI/CD and bug system. Docker is a container architecture. Not sure how one replaces the other. In fact GitLab uses docker images copiously for its pipeline and stuff like SAST / DAST analysis tools

Re:

[phantomfive]

Yeah, but no one uses GitLab because it's source control. The cool part is it makes deployment easy.

Of course the stock fell

[SuperKendall]

I see no announcement that they were laying of 50% of staff, how the the stock possibly remain up even on stronger than expected revenue?

P.S. /s/s/s/s/s/s/s/s

Re:

[dfghjk]

Because their developers use emacs on iPads, like you.

Stonks

[locater16]

Stonks beat analysts, stonks go down. Stonks fire half the company, stonks go up. Stonks go on Mr. Bones Wild Stonksmarket Ride, where the analysts don't matter and everything is made up.

Re:

[olsmeister]

These days, beats and misses are secondary to the forecast. I honestly don't even know why companies provide them. It's not like anyone has a crystal ball.

Re:

[93 Escort Wagon]

Stonks beat analysts, stonks go down. Stonks fire half the company, stonks go up. Stonks go on Mr. Bones Wild Stonksmarket Ride, where the analysts don't matter and everything is made up.

I thought it was the points that didn't matter [youtu.be]?

Re: Stonks

[reanjr]

I think that depends on the price history. MSFT - for example - pretty much always beats analyst predictions, so a small beat is seen as negative.

Re:

[ctilsie242]

Microsoft has GitHub Enterprise. GitLab is a different company.

The ironic thing is that GitHub support is extremely good. Wish the rest of MS could emulate that.

Re:

[John Smith 2294]

The ironic thing is rain on your wedding day and stupid fucks like you trying to pretend to be smart. I can't wait to watch you try and eat it.

I thought profit was good?

[nicolaiplum]

I thought that startups these days are all about Path to Profitability. Halving your losses while growing revenue looks like a good way to become profitable to me.

NeVeR MinD ThE Lo$$eS, LooK At thE ReVeNuEs is so early-2000s.

But what do I know, I'm not a Master of the Financial Universe. I just know that when more VC is hard to come by, it's better to be profitable than not.

Price hikes

[reynolds_john]

Unfortunately this is their second near-surprise price-hike in the last couple of years. I was literally about to purchase the bronze or whatever version for our team right before they spiked it last time. Now there's another one coming... and who knows when the next one will arrive soon after that.

I'm sure some mastermind is running the numbers, but they're trying to reign in the enterprise cash cows pretty hard and fast, and a lot of people from what I can see are scrambling to leave. Gitea has never looked so good.

Re:

[Anonymous Coward]

This, they removed their entry level package and increased the prices of the other packages, this is what drove my company with around 100 user license away from them.

Re:

[ctilsie242]

What is ironic, and I just realized the pricing updates after I replied. For the cost of the Ultimate tier, I could go with GitHub Enterprise (I think it is still $99/month after the intro rate expires), and have the flagship Git server on-prem. GitHub Enterprise appliances are a relative pleasure to install and maintain, and you can have them generate consistent backups, as well as using snapshots of the GHE server. Plus, I have seen GitHub fix bugs quite quickly, with a few hours for an emergency fix,

IIRC correctly it's not even ...

[Qbertino]

... 18 months or so ago that GitLab was evaluated at 15 billion USD. GitLab is an awesome tool with roughly 5000 features and functions, but there is no way it's parent company is worth 15 billion. GitLab is mostly popular because it has all the bells and whistles and comes as a self hosted FOSS version. Most features aren't needed by 99% of developers anyway.

That GitLabs value would find some correction was obvious from day 1 of their IPO.

Alternative to GitHub...

[ctilsie242]

What GitLab has going for it is that it can be run in so many places. For example, GitLab running on a Raspberry Pi. It can scale from that all the way to the upper tier of the enterprise where GitHub Enterprise sits. It may not be as easy to maintain in-house as GHE (GitHub Enterprise's appliances are very well self-contained with little file editing needed), but it can do an amazing amount of stuff.

At the enterprise level, there are not many choices out there. You have BitBucket by Atlassian, where yo

Re:

[DrXym]

I'm not surprised GitLab can scale because fundamentally it's just a pretty webserver skin for Git. It's probably not doing much unless you trigger pipelines or whatnot from its interface. And even then the pipelines can be runners that don't even have to be on the same device.

Personally I think the biggest scaling issue on their platform is their price plan. The free / open source version is gimped on purpose (e.g. the rules for merge requests) and if you want to unlock features then you have to pay for th

Re:

[coofercat]

I actually find Gitlab's backup to be quite honest - it puts everything except two files into it - and even tells you about that. The two files have secrets and configs in them.

My config is actually templated out of Configuration Management, so I don't technically need to back it up. The secrets are a bit of a problem, and I'd prefer if they were stored with some sort of encryption (perhaps by an AES key that you put in the config file?). But handling that file "manually" isn't a crazy amount of extra work.

Re:

[coofercat]

I run a Gitlab server, and my goodness, it's a vast swarm of separate services. They've done a good job of making it all operate as if it's a single "thing", but "go look in the log file" is a one in 15 type chance of success.

IMHO, GItlab is way too complex for its own good. They've endlessly added features, but haven't spent time on a clean, simple design. You can see the problems in the issues queues - lots of them are quite simple requests, but they go around the houses for months before concluding "we'r

Value != market cap

[Sun]

Gitlab did not lose a third of their value. They lost a third of their market cap. It's a number that is potentially as meaningless as untraded companies' "valuation".

At least you can self-host...

[rklrkl]

At work, we've always self-hosted the free ("omnibus") version of GitLab rather than use gitlab.com for a couple of obvious reasons - one is that it's free and the other is that our source code is kept on premises and not stored on the cloud. Having seen how expensive GitLab has become per user (with another price rise about to hit it), I think we made the right decision...

Poor experience getting things done

[UngodAus]

Aside from missing some very basic functionality (timestamps, schedule run history, pipeline/job search), it's quite common for bugs to have 3,4 & even 5 year ages on them before they even get looked at / scheduled. Even with the top tier licensing our company has with them, bugs regularly do not get addressed for years after filing. I think if they addressed these issues, there would be more people reccomending it to their peers, and this would definitely help uptake. As it is, I reccomend against it (and only use it as it's the company mandate CI system).

Saturation and Competition

[zuckie13]

They had some strong growth for a while, but eventually you hit the point where most companies have picked a solution for these services, and there is not room for that large growth anymore. Sure, some new sales every year, but not going to keep that kind of sustainable growth.

Add in competition from things like Atlassian and this is really to be expected.

Re:

[SAU!]

And that's one of the biggest problems with Wall Street. You have to have continuous growth, even once the market is basically saturated (see Netflix). If you can't meet these crazy expectations, you get clobbered.

Their cheapest hosting tier is too expensive

[Rujiel]

Twenty bucks per user per month! What about the hosting is that expensive? Unfortunately there aren't a lot of other good options for git hosting. Launchpad has minimal documentation and seemingly has only been successfully implemented by canonical, but still has to call itself open source. And github... microsoft will just take your creative code and train up copilot on it without asking, in an attempt to replace most of us.