Quick development, sticky losses
Whereas the expertise and enterprise world labored in direction of the weekend, developer operations (DevOps) agency GitLab filed to go public. Earlier than we get into our day without work, we have to pause, digest the corporate’s S-1 submitting, and are available to some early conclusions.
GitLab competes with GitHub, which Microsoft bought for $7.5 billion again 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 newer outcomes, a narrowing working loss within the final two quarters is nice 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 knowledge. The identical info 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 development price, its closing pre-IPO scale, its SaaS metrics, after which ask if we predict it might probably surpass its most up-to-date private-market worth. Sound good? Let’s rock.
The GitLab S-1
GitLab intends to listing on the Nasdaq beneath 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, that means that its quarters are offset from conventional calendar durations 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.four million, and a modestly better 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 almost 67% to $213.9 million. Its web loss totaled $192.2 million.
This paints an image of a SaaS firm rising rapidly at scale, with primarily flat gross margins (88%). Progress has not been cheap both — GitLab spent extra on gross sales and advertising and marketing than it generated in gross revenue previously two fiscal years.