Shares of the DevOps pioneer GitLab Inc. were battered and bruised in late trading today after it increased its full-year profit outlook but narrowly missed expectations on sales guidance.

That came after it logged a narrower loss in the first quarter and grew its revenue. The company, which provides software development tools for enterprises, reported first-quarter earnings before certain costs such as stock compensation of 17 cents per share, edging past Wall Street’s target of 15 cents. Revenue for the period rose by an impressive 27% to $214.5 million, ahead of the analyst’s $213.2 million forecast.

Those numbers meant GitLab was able to reduce its net loss to $36.2 million in the quarter, after posting a wider loss of $55.4 million in the year-ago period.

GitLab is a major player in the DevOps market, selling software that helps companies to adopt a modern strategy of pushing out rapid and continuous updates by combining their developers teams and information technology operations staff. By using GitLab’s tools, developers can share code more easily and ship out new applications faster than before.

The company has been growing fast and is often seen as a rival to the Microsoft Corp.-owned GitHub, but it has endured a rough year, with its co-founder and former Chief Executive Sid Sijbrandij stepping down late last year after being diagnosed with cancer. There was talk that GitLab might become an acquisition target for companies, including Datadog Inc., but the appointment of former New Relic Inc. CEO Bill Staples (pictured) as Sijbrandij’s replacement appears to have put those rumors to bed.

Nowadays, GitLab is laser-focused on its mission of “giving every developer the AI-driven edge they need to innovate faster and more efficiently,” Staples said today. “As AI transforms development practices, our unified platform enables organizations to integrate these capabilities within a framework that helps maintain enterprise controls and deliver the required scalability and security.”

Constellation Research Inc. analyst Holger Mueller praised GitLab’s novel combination of code repository and DevSecOps capabilities as the driving force behind its growth, but warned that it still needs to do more to rein in its cost base.

“Its cost grew and so it added less than $19 million to its profit line, which is why it’s still in the red,” the analyst explained. “But with two more quarters like this, GitLab would likely make a profit for the first time. However, artificial intelligence is changing things around code, so it needs to remain alert and provide the right services to its customer base as they lean more heavily into AI.”

The strong start to the year seems to have given GitLab some impetus, and the company said it’s raising its full-year earnings forecast to a range of 74 to 75 cents per share, up from an earlier outlook of 68 to 72 cents. Wall Street is looking for full-year earnings of 72 cents per share.

However, the company could only reiterate its prior outlook for full-year revenue, saying it’s still targeting a range of $936 million to $942 million. The midpoint of that range is just shy of Wall Street’s target of $939.7 million in full-year revenue.

GitLab’s current-quarter forecast was also left wanting. The company said it’s expecting to earn a profit of 16 to 17 cents per share on sales of $226 million to $227 million, while Wall Street is modeling earnings of 16 cents on revenue of $226.6 million.

The market’s reaction was sour. GitLab’s stock fell more than 11% in the after-hours trading session, and is now down more than 13% in the year to date.

Photo: New Relic