- GitLab began trading on the Nasdaq on Thursday under the ticker symbol “GTLB.”
- The company, whose code-sharing software competes with Microsoft’s GitHub, raised about $650 million in its IPO, and investors bought additional stock from an entity linked to CEO Sid Sijbrandies.
- Revenue in the second quarter rose 69% from a year ago to $58.1 million.
Shares of GitLab jumped 22% in its first day of trading on Thursday after the software provider for developer collaboration sold shares above its expected limit in its IPO.
Trading on the Nasdaq under the ticker symbol “GTLB,” GitLab priced its stock at $77 late Wednesday, valuing the company at about $11 billion. GitLab said it would sell each share for $66 to $69. The stock opened at $94.25, bringing GitLab’s market cap to $13.5 billion
Since its founding nearly a decade ago, GitLab has been following GitHub in the source repository market, including Atlassian’s BitBucket. Microsoft acquired GitHub in 2018 for $7.5 billion, and since that time GitLab has grown rapidly into the only large independent player in the market.
Revenue in the second quarter rose 69% from a year ago to $58.1 million. However, because GitLab spends the equivalent of three-quarters of its revenue on sales and marketing, largely to build out its developer user base, the company reported a net loss of $40.2 million in the latest quarter.
GitLab raised approximately $650 million in the offering, and investors purchased more than $150 million of additional stock from an entity affiliated with GitLab CEO Sid Sijbrandies.
GitLab offers a free version of what the company calls its DevOps platform, a term that refers to a combination of developers and IT operations. Software allows users to work on code, package it, release it, and monitor it. Customers can run GitLab in any public cloud, their own data center, or as a GitLab-hosted service.
company makes money from premium product. For $19 per month per user, GitLab includes tools for enterprises and fast code reviews, and for $99 per month, users get features like security and compliance. Some 383 customers are spending at least $100,000 per year, GitLab said in its catalog.
“Our future success depends, in part, on our ability to convert users of our free product offering into paying customers by selling additional products and expanding additional subscription services,” GitLab said.
GitLab said its net revenue retention rate, a key metric for subscription software companies as it reflects customer success, climbed 152% over the July period. This would place it among the top publicly traded software companies.
This, along with the growth of GitLab, is also the main reason why the company is capturing such a high revenue multiplier. At a $13.5 billion market cap, GitLab trades for nearly 58 times annual revenue, just below four of the 58 companies in the Bessemer Cloud Index and above Atlassian.
GitLab is widely known as a pioneer in remote working. While companies were forced to adapt to distributed work during the pandemic, GitLab started that way and nothing had to change for its 1,350 employees working in more than 65 countries. In the header of its prospectus, Gitlab says “The address is not applicable.”
GitLab, which was founded in 2012 and incorporated two years later, was last valued at $6 billion in a secondary financing, confirmed in early 2021, that gave existing shareholders 20% of their vested equity. allowed to sell. This was up from the $2.7 billion valuation in the financing round at the end of 2019.
in his “Team Handbook” On its website, GitLab openly stated its plans to go public by November 2020. After the pandemic hit the broader economy early last year, the company delayed its launch, while indicating that a public listing was still on the roadmap.
According to the prospectus, GitLab co-founder Sijbrandies is the company’s largest stakeholder, holding 19% ownership prior to the offering. Khosla Ventures holds 14%, followed by ICONIQ about 12%, August Capital 11% and GV (formerly Google Ventures) less than 7%.
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