According to a recent report, the global DevOps Platform market is projected to grow 20% from $6.7 billion in 2021 to $26.37 billion by 2028. GitLab (Nasdaq: GTLB) is a leading provider of DevOps solution in the market that recently went public.

GitLab’s Offerings

Founded in 2014 by Dmitriy Zaporozhets and Sytse Sijbrandij, San Francisco-based GitLab is the pioneer of The DevOps Platform, an application that helps integrate development, operations, IT, security, and business teams to deliver desired business outcomes. DevOps is the set of practices that combines software development (dev) and IT operations (ops) to allow teams to collaborate and work together to shorten the development lifecycle and evolve from delivering software on a slow, periodic basis to rapid, continuous updates.

Prior to setting up DevOps, teams used to buy and build their own tools in isolation. Over the next few years, organizations started standardizing company-wide on the same tool for each stage across the DevOps lifecycle. But these tools were also operating in silos. To help bring efficiency in the development, organizations needed a solution that could integrate these disparate development capabilities. DevOps was an open-source project created by its founders to help address the issue of fragmentation and inefficiency.

DevOps accelerates the customers’ ability to create business value and innovate by reducing their software development cycle times. It removes the need for point tools and manual work, increases productivity, and drives innovation across the development teams. It embeds security earlier into the development process to improve customers’ software security, quality, and overall compliance.

Most of GitLab’s customers begin by using its Create and Verify solutions. Create helps collaborate on the same code base without conflicting or accidentally overwriting others’ changes. It maintains a running history of software contributions from each developer to allow for version control. DevTeams use Verify to ensure changes to code go through defined quality standards with automatic testing and reporting.

GitLabs follows a flywheel development strategy that leverages both development spend from its research and development team members as well as community contributions via its open core business model. By leveraging the power of each, it is able to create a cycle where more contributions lead to more features, which leads to more users, leading back to more contributions.

The DevOps market is a busy market with competition from players like CircleCI, Jenkins, and BitBucket, to name a few. In 2018, Microsoft also made big moves in the market when it acquired GitHub for an estimated $7.5 billion. GitLab realizes that it exists in an ecosystem of DevOps tools that are often interacting with each other. Some of these tools also have over-lapping capabilities, but it claims to be one with the most comprehensive suite of tools.

GitLab’s Financials

GitLab operates on an open core business model. It offers a free tier with several features to encourage use of The DevOps Platform, gather contributions, and act as targeted lead generation for paid customers. It also offers two paid subscription tiers with access to additional features that are more relevant to executives.

It has seen significant growth in the last few years. Revenues grew 87% from $81.2 million in fiscal 2020 to $152.2 million in fiscal 2021. As it continues to invest in growth and development, its net loss widened from $130.7 million in fiscal 2020 to $192.2 million in fiscal 2021.

In its recent third quarter, revenues grew 58% to $66.8 million and net loss was $0.62 per share.

For the fourth quarter, GitLab forecast revenues of $69.5-$70.5 million and a loss of $0.26-$0.25 per share. For the fiscal year, GitLab expects revenues of $244-$245 million and a loss of $1.43-$1.42 per share. The market forecast revenues of $70.29 million and a loss of $0.25 per share. For the fiscal year, the market forecast revenues of $245.17 million and a loss of $1.40 per share.

GitLab’s Opstrace Acquisition

Recently, GitLab announced the acquisition of Opstrace, an open-source observability distribution provider, for an undisclosed sum. The acquisition will allow GitLab to become the first to include an integrated open-source observability solution within a single application with one user interface, a unified data store, and security embedded within the DevOps lifecycle. It will allow GitLab to focus on the developer experience and the endeavor to offer robust monitoring and observability capabilities to better enable organizations to lower incident rates, increase developer productivity, and lower mean-time-to-resolution with a zero-configuration observability solution built into its DevOps platform. Prior to the acquisition, Opstrace was privately held and did not disclose its funding or financial details.

Prior to going public, GitLab had raised $413.5 million in six rounds of funding led by Goldman Sachs, Tiger Management Corporation, ICONIQ Capital, Alkeon Capital, Light Street Capital, D1 Capital Partners, Coatue, Two Sigma Private Investments, Adage Capital Investments, and Franklin Templeton. Its most recent round was held in September 2019 where it raised $268 million at an undisclosed valuation.

GitLab went public in October 2021 where it raised $650 million at a list price of $77 and a valuation of $11 billion. Its stock price has taken a beating since and is trading at $39.33 with a market capitalization of $5.14 billion.