Shares of GitLab Inc. surged in extended trading today after the software development company posted strong earnings results and bumped up its full-year outlook.

That came even as lingering concerns over the health of the company’s chief executive fuel speculation over a possible sale.

The company reported second-quarter earnings before certain costs such as stock compensation of 15 cents per share, easily beating the Street’s target of 10 cents per share. Revenue for the period rose by an impressive 31% from a year ago, to $128.6 million, above the analysts’ consensus estimate of $176.9 million. All told, GitLab delivered net income of $12.3 million, recovering from a loss of $51.2 million in the year-ago period.

GitLab’s co-founder and CEO Sid Sijbrandij (pictured) told analysts the company is benefiting as more businesses try to embed artificial intelligence and security tooling into their technology platforms.

Because of that, the company is raising its full-year forecast by a fairly hefty margin. It said it’s now looking at full-year sales of between $742 million and $744 million, up from its previous guidance of $733 million to $737 million. It’s also targeting earnings of between 45 and 47 cents per share, compared to its previous forecast of 34 to 37 cents.

Both projections are now well ahead of the Street’s targets, with analysts looking for full-year revenue of $736.6 million and earnings of 36 cents per share.

GitLab’s forecast for the third quarter also looks good, with the company targeting earnings of 15 to 16 cents on sales of $187 million to $188 million. In comparison, the Street says it’s looking for third-quarter earnings of just 11 per share on sales of $187 million.

“Organizations need to deliver software faster to accelerate performance and respond to intense competition,” Sijbrandij said in a statement. “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.”

Investors liked what they saw, and GitLab’s stock jumped more than 15% in extended trading, erasing a loss of 5% that occurred during the regular trading session, prior to today’s report.

GitLab is considered to be a pioneer in DevOps, selling software that enables 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 faster than before.

Today’s results clearly helped to alleviate concerns some shareholders have had about the company in light of Sijbrandij’s revelation three months earlier that he’s undergoing treatment for osteosarcoma, a form of bone cancer. Shortly after, a report in Reuters emerged saying that GitLab was exploring a potential sale, citing Datadog Inc. as a possible acquirer.

In a note to clients later that month, financial analyst William Blair said Sijbrandij’s “uncertain health could be a factor in the board’s openness to a potential sale,” noting that the CEO controls 45.5% of GitLab’s voting stock through dual-class shares.

Sijbrandij said during the company’s prior earnings call in June that he was undergoing treatment for a second time, having previously done so a year earlier.

“My doctor believes that this finding is part of the original lesion and that as such the disease has not metastasized,” he told analysts at the time. “I’m working on making a full recovery. As [with] the last time, my scope and responsibilities as GitLab’s CEO and chair remain unchanged.”

Sijbrandij’s health is said to be one of the main reasons for the poor performance of GitLab’s stock lately. Prior to today’s results, the stock was down 29% in the year-to-date, with investors also worried about a cautious information technology spending environment stemming from the broader economic outlook.

Photo: SiliconANGLE