Bill Staples is ready to get to work.
Staples took over as chief executive officer of GitLab ( GTLB ) , effective Dec. 6, succeeding co-founder and CEO Sid Sijbrandij, who is stepping down from his day-to-day role to focus on his health, the DevOps software provider said.
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"I’m humbled to have been asked by Sid and the Board to take on the role of GitLab's CEO," Staples said during the company's third-quarter earnings call .
"I spent nearly three decades building developer platforms and tools, and I know our customer and category very well," he added. "I’m convinced that we have a significant opportunity ahead of us."
Staples was formerly the CEO of New Relic, a San Francisco web tracking and analytics company acquired last year for $6.5 billion. Prior to that, he held executive Microsoft ( MSFT ) and Adobe ( ADBE ) in executive leadership roles.
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"We’ve all seen how software has changed all aspects of our lives and transformed every business into a software-driven business," he said. "However, I believe we’re still in the early stages of the software transformation, which I expect AI to further accelerate."
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"In my view, there’s never been a better time to serve developers, and GitLab offers the best and most comprehensive platform to do that," Staples added. "We sit at the heart of the software development life cycle, improving the development experience for everyone involved and enabling customers to create better quality software faster for enterprises."
In a statement, Sijbrandij, who is from the Netherlands, said, "This is the right time to focus on my cancer treatment and health."
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"My treatments are going well, my cancer is not metastatic, and I'm working towards making a full recovery," he said.
During the earnings call, he told analysts, "as I have gotten to know Bill, his passion for software and commitment to innovation makes me confident he is the right person to lead the company going forward.”
GitLab reported adjusted earnings of 23 cents per share, up from 9 cents a year ago, beating Wall Street's call for 15 cents a share.
Revenue totaled $196 million, up from last year's $149.67 million and ahead of analysts' forecasts of $187.9 million.
In the fourth quarter, GitLab expects earnings to range from 22 cents to 23 cents a share on revenue ranging from $205 million to $206 million.
Analysts were expecting the company to earn 15 cents per share on $204.83 million in sales.
For the full-year, the company said it expects earnings to range from 63 cents to 64 cents, while net revenue was guided between $753 million and $754 million.
"We executed well, and once again, we exceeded both revenue and profitability guidance," Sijbrandij said. "Third quarter revenue increased 31% year-over-year to $196 million and consistent with our commitment to responsible growth, our non-GAAP operating margin reached 13.2%."
"This is an increase of over 1,000 basis points year-over-year," he said.
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From cyber security threats to compliance mandates, Sijbrandij said, "CTOs, CIOs and CISOs are facing increasingly complex challenges."
"And despite all of this, organizations need to accelerate the pace of software development to remain competitive and respond to ever-increasing customer expectations," he said. "This is why our DevSecOps platform resonates so well."
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Turning to AI, he said the company continues to build momentum with GitLab Duo Pro and Enterprise.
"In their first purchase with GitLab, Emirates, the world’s largest international airline chose Ultimate and Duo Pro," Sijbrandij told analysts. "After comparing different AI-powered developer tools, it was our platforms, building security and compliance capabilities, and our AI code assistance that made us the choice."
On Dec. 3, GitLab and Amazon Web Services, a subsidiary of Amazon ( AMZN ) announced a bundled offering for GitLab Duo with Amazon Q, a gen AI assistant
"The joint offering integrates AI capabilities from GitLab Duo and Amazon Q into a single interface for AWS customers using GitLab Ultimate," Sijbrandij said.
GitLab's shares are nearly 7% year-to-date, and the stock has climbed 14% from a year ago.
Analysts reboot GitLab stock forecasts on new CEO
Several investments updated their stock price targets for the company following the earnings report.
Bernstein raised the firm's price target on GitLab to $78 from $70 and kept an outperform rating on the shares, according to The Fly.
GitLab's third quarter delivered an expanded 4.6% beat compared guidance and raised implied fourth quarter guidance by $2 million, helping deliver an even larger 250+ basis point beat in non-GAAP operating margin, showing the trajectory and commitment to expand margins, the firm said
Staples' background positions him well as a more permanent leader of a company that aspires to stand alone and lead the future of DevSecOps, Bernstein said.
Cantor Fitzgerald boosted the firm's price target on GitLab to $80 from $75 and kept an overweight rating on the shares.
GitLab's Q3 results were "impressive," outperforming consensus estimates on revenue, operating income, and EPS, with the beat driven by GitLab Ultimate adoption, improved cost efficiencies, and strong core product demand, while the company also named Staples as CEO, effective Thursday, the firm said
While Staples' leadership direction for GitLab is yet to be seen, management hinted during the call that he may eventually guide the company toward a consumption-based pricing model as part of a longer-term strategy to incorporate AI agents, Cantor said.
KeyBanc analyst Jason Celino raised the firm's price target on GitLab to $80 from $74 and kept an overweight rating on the shares.
Celino said GitLab reported solid Q3 revenue and operating margin results, driven by broad-based strength and continued momentum with Duo.
The analyst said that he remains encouraged by GitLab's consolidation wins and large deal activity.
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