Quick progress, sticky losses
Whereas the know-how and enterprise world labored in the direction of the weekend, developer operations (DevOps) agency GitLab filed to go public. Earlier than we get into our break day, we have to pause, digest the corporate’s S-1 submitting, and are available to some early conclusions.
GitLab competes with GitHub, which Microsoft purchased for $7.5 billion back in 2018.
The corporate is notable for its long-held, remote-first stance, and for being extra public with its metrics than most unicorns — for a while, GitLab had a November 18, 2020 IPO goal in its public plans, to select an instance. We additionally knew when it crossed the $100 million recurring income threshold.
Contemplating GitLab’s more moderen outcomes, a narrowing working loss within the final two quarters is sweet information for the corporate.
The corporate’s IPO has subsequently been lengthy anticipated. In its final major transaction, GitLab raised $286 million at a post-money valuation of $2.75 billion, per Pitchbook data. The identical data supply additionally notes that GitLab executed a secondary transaction earlier this yr value $195 million, which gave the corporate a $6 billion valuation.
Let’s parse GitLab’s progress fee, its ultimate pre-IPO scale, its SaaS metrics, after which ask if we expect it will probably surpass its most up-to-date private-market worth. Sound good? Let’s rock.
The GitLab S-1
GitLab intends to checklist on the Nasdaq below the image “GTLB.” Its IPO submitting lists a placeholder $100 million elevate estimate, although that determine will change when the corporate units an preliminary worth vary for its shares. Its fiscal yr ends January 31, which means that its quarters are offset from conventional calendar intervals by a single month.
Let’s begin with the large numbers.
In its fiscal yr ended January 2020, GitLab posted revenues of $81.2 million, gross revenue of $71.9 million, an working lack of $128.4 million, and a modestly larger web lack of $130.7 million.
And within the yr ended January 31, 2021, GitLab’s income rose roughly 87% to $152.2 million from a yr earlier. The corporate’s gross revenue rose round 86% to $133.7 million, and working loss widened practically 67% to $213.9 million. Its web loss totaled $192.2 million.
This paints an image of a SaaS firm rising shortly at scale, with basically flat gross margins (88%). Development has not been cheap both — GitLab spent extra on gross sales and advertising and marketing than it generated in gross revenue prior to now two fiscal years.