Gitlab Shares Soar 22% After Q2 Earnings Beat, Full-Year Guidance Hike: Retail Sentiment Hits 1-Year High

Shares of Gitlab Inc (GTLB) surged over 22% on Wednesday after the firm beat second-quarter earnings estimates and raised its full-year outlook.

Gitlab reported earnings per share (EPS) of $0.15 versus a median estimate of $0.10, while revenue rose 31% year-on-year (YoY) to $182.58 million, compared to an estimate of $176.71 million.

The firm also raised its full-year outlook and now expects FY2025 revenue to come in at $742 million - $744 million versus a previous guidance of $733 million - $737 million. Operating income is expected to jump to $55 million - $58 million, compared to a previous guidance of $34 million - $38 million. At the same time, EPS is expected to come in at $0.45-$0.47, compared to the earlier forecast of $0.34-$0.37.

For the third quarter, the company expects revenue to come in at $187 million - $188 million and EPS in the range of $0.15-$0.16.

CEO Sid Sijbrandij stated that organizations need to deliver software faster to accelerate performance and respond to intense competition. “Our results show the combination of our end-to-end platform and AI solutions are driving results for our customers by aligning to business goals, providing measurable benefits, and improving security,” he said.

The firm also witnessed an improvement in its annual recurring revenue (ARR). The number of customers with more than $5,000 of ARR increased 19% YoY to 9,314 while the number of customers with over $100,000 ARR rose 33% YoY to 1,076.

Following the upbeat set of earnings, Gitlab became the second most trending ticker on Stocktwits. Retail sentiment jumped into ‘extremely bullish’ territory (96/100) to hit a one-year high from the ‘bullish’ zone a day ago. The message volume score also soared to a one-year high of 96/100.

Bullish Stocktwits followers of the firm believe the shares have more upside left in them, especially after the earnings report.

Despite the stock’s significant rally on Wednesday, it is still down over 11% on a year-to-date (YTD) basis. Notably, Gitlab shares are still below their 200-day moving average of about $56.