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DevOps company GitLab Inc.’s stock surged in extended trading today after it reported fiscal first-quarter earnings and revenue that topped expectations and raised its outlook for the full year.

The company reported a loss of $26.1 million, or 18 cents per share, before certain costs such as stock compensation. Revenue jumped 75% from the year ago quarter to $87.4 million. The results were better than expected, since analysts modeled a loss of 27 cents per share on revenue of just $78.1 million for the quarter.

Wall Street cheered the report: GitLab’s stock price surged more than 10% in after-hours trading, erasing a 2% drop during the regular trading session. Update: Shares were rising 24% in Tuesday morning trading.

GitLab co-founder and Chief Executive Sid Sijbrandij (pictured) said his company is benefiting from a substantial shift in how enterprises are developing, operating and securing software, by moving to a “platform strategy.”

“Our One DevOps Platform is gaining momentum and broader adoption,” he said. “While accelerating revenue growth, we were also able to show significant operating leverage. Underpinning this acceleration in growth was a higher velocity of new customer wins, as well as seat expansion and tier upgrades of existing customers.

Given this wider enterprise shift, it’s no surprise that GitLab is finding its groove. The company is one of the pioneers of DevOps, enabling companies to adopt a modern strategy of rapid, continuous software updates by combining their developer teams and information technology operations staff. Using GitLab’s tools, developers can share code more easily and create new applications much faster than before.

The company reeled off some impressive numbers to highlight its momentum. It said that its number of customers generating at least $5,000 in revenue per year jumped 64%, to 5,168, at the end of the quarter. Meanwhile, customers that delivered at least $100,000 in annual revenue rose 68%, to 545.

GitLab also reported a dollar-based net retention rate of above 130%. NRR is a metric that indicates how much revenue growth or churn a company has from its existing customers. Investors like to see a number over 100% because it shows that a company is growing even apart from acquiring new customers.

Holger Mueller of Constellation Research Inc. said GitLab’s strong revenue growth of 75% shows the demand for both DevOps and the platform strategy that the company provides. Still, he warned that this growth comes at a cost, and that investors will be looking for a profitable return at some point.

“What’s key next is how much of a loss GitLab’s investors have an appetite for,” Mueller said. “They’ll be watchful of how GitLab’s numbers in the coming quarters, as executives need to find the right balance between growth and profitability.”

During the quarter, GitLab announced a major update to its DevOps platform, adding a host of new features it said are designed to help companies improve their cybersecurity, build machine learning applications and more easily troubleshoot errors.

For the second quarter, GitLab sees an adjusted loss of 23 to 24 cents per share on sales of $93.5 million to $94.5 million. That’s more optimistic than Wall Street’s forecast of an adjusted 25-cent-per-share loss on sales of just $89.6 million.

For the full year fiscal 2023, GitLab said it sees losses of 89 to 93 cents per share on revenue of $398 million to $402 million, up from an earlier range of 97 cents to $1.02 to per shareon $385.5 million to $390.5 million in revenue. Wall Street is forecasting an annual loss of 97 cents per share on total revenue of $389.8 million.

Photo: SiliconANGLE