GitLab Inc. delivered strong fourth-quarter results today that easily topped analysts’ estimates, but its stock plunged in extended trading after the company offered soft guidance for the current quarter and full year.

The company reported a net loss of $37.6 million, down slightly from the $42.1 million loss it posted in the same period one year earlier. Earnings before certain costs such as stock compensation came to 15 cents per share, easily topping Wall Street’s forecast of an eight-cent-per-share profit. Revenue climbed 33% from a year earlier, to $163.8 million, ahead of the $157.9 million forecast.

The results were impressive and GitLab’s stock initially headed up in after-hours trading, adding to a slight gain during the regular trading session. However, there was a prompt reversal when the company revealed disappointing guidance for both its first quarter and fiscal 2025. Investors panicked, and GitLab’s stock was down more than 19% in extended trading at the time of writing.

The company said it’s expecting a first-quarter loss of between four and five cents per share, in sharp contrast to Wall Street’s call for a profit of six cents per share. Revenue is expected to fall between $165 million and $166 million, ahead of the Street’s target of $161.9 million.

Although the first-quarter guidance was mixed, the full-year picture looks much worse. GitLab said it sees full-year earnings of between 19 and 23 cents on revenue of $725 million to $731 million. Both of those numbers were way short of the Street’s targets, with analysts calling for full-year earnings of 35 cents per share on total revenue of $731.7 million.

Co-founder and Chief Executive Sid Sijbrandij (pictured) hailed the company’s strong fourth-quarter results. “By integrating AI throughout the software development lifecycle, our DevSecOps platform allows our customers to plan, build, manage, and deliver software more efficiently, ultimately scaling the impact their software investments have on business outcomes,” he said. “We believe this puts us in a strong position to continue to win the large market opportunity in front of us.”

GitLab is considered to be a pioneer in DevOps, selling software that allows 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.

Like many software companies, GitLab has been racing to incorporate generative artificial intelligence technology into its platform, and during the quarter it unveiled GitLab Duo Pro, a paid version of the GitLab Duo tool that debuted in the summer. GitLab Duo is an AI assistant, offering code suggestions, chat and organizational control capabilities to help developers enhance and streamline their DevSecOps workflows. Sijbrandij has previously promised that GitLab Duo will have a significant impact on the company’s financial results in the years to come.

Despite continuing to run at a loss, GitLab has been making good progress in terms of customer acquisition. It ended the quarter with 955 customers that deliver at least $100,000 in annual revenue, up 37% from a year earlier. Moreover, the number of customers that generate at least $5,000 in annual sales rose 23% to 8,602.

GitLab said it ended the quarter with total remaining performance obligations of $674 million, up 55% from a year earlier. RPO is a key metric that represents the total value of contracted products and/or services that are yet to be delivered to our customers and henceforth provides visibility into expected future revenue.

Prior to today’s decline, GitLab’s stock was up 45% in the year to date, compared to a rise of just 27% in the broader S&P 500 Index.

Photo: SiliconANGLE