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Highlights:
- GitLab Inc reported a Q2 2023 revenue of US$ US$ 101.0 million.
- CrowdStrike Holdings Inc. went public in 2019.
- CrowdStrike Holdings has a market cap of US$ 32.68 billion.
This year has not been particularly good for tech stocks, although the broader market suffered due to inflation, rate hikes, and other macroeconomic headwinds.
However, investors might become less skeptical as there is a sense that inflation may have somewhat cooled, and the central bank might take a softer stance in subsequent hikes.
Although it is not clear what would be the next hike by the Federal Reserve. The first two quarters of 2022 were the worst for tech stocks, and only the last quarter could salvage some damage. Tech stocks saw their worst rout in several years in 2022.
Amid all these discussions, let us look at two tech stocks- GitLab Inc. (NASDAQ:GTLB) and CrowdStrike Holdings Inc. (NASDAQ:CRWD) and examine their performances in recent quarters:
GitLab Inc. (NASDAQ:GTLB)
GitLab Inc is a tech company that has an entirely remote model. The company’s main business is GitLab, a complete DevOps platform offered as a single application. A host of companies widely uses GitLab.
The US$ 5.86 billion market cap company has a P/B (price-to-book) ratio of 7.533.
GitLab achieved a 74 per cent year-over-year (YoY) revenue growth in its Q2 2023 results. It was reported at US$ 101 million. The company’s gross profit was US$ 88.01 million in Q2 Fy 23, up from US$ 50.93 million in Q3 FY22.
In the second quarter of fiscal 2023, GitLab also garnered the largest base customers in a single quarter. The company said that its customers with more than US$ 5,000 of AAR (Annual Recurring Revenue) grew to 5,864, a 61 per cent rise from the year-ago quarter.
GitLab said that it expects its revenue in Q3 2023 to be in the range of US$ 105 to US$ 106 million and between US$ 411 and US$ 414 for the year 2023. The company is slated to announce its Q3 2023 results on December 5, 2022.
Although the GTLB stock tumbled over 51 per cent year-to-date (YTD), it surged over three per cent in the past week.
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CrowdStrike Holdings Inc. (NASDAQ:CRWD)
CrowdStrike Holdings deals in cybersecurity services and products, helping organizations thwart cyber-attacks and keep online threats at bay. It operates on a cloud platform delivering protection across endpoints, threat intelligence, identity and data, log management, etc.
The US$ 32.68 billion company, CrowdStrike, went public in 2019. For the quarter that ended July 31, 2022, CrowdStrike posted a revenue of US$ 535.2 million, a 58 per cent growth from US$ 337.7 million in the same comparative period a year ago. It also said that in Q2 2023, the subscription revenue totaled US$ 506.2 million, up 60 per cent, compared to US$ 315.8 million in the year-ago quarter.
The company reported that its ARR also jumped 59 per cent YoY and soared to US$ 2.14 billion in Q2 2023.
CrowdStrike’s net cash in Q2 2023 from operations was reported at US$ 209.9 million, versus US$ 108.5 million in Q2 of fiscal 2022. Its free cash flow stood at US$ 135.8 million, compared to US$73.6 million in the year-ago quarter.
While the CRWD stock fell by over 14 per cent in the last 30 days, it also picked up by 3.31 per cent in the past week.
Bottom line:
Although tech stocks have been the favorite of investors earlier, the volatility in the stock market this year played the leveler, and most traders are wary of picking stocks they once loved. Indeed, investing in these trying times is challenging for traders. All sectors faced a similar fate this year. However, market upheavals don’t matter much for investors with a long-term strategy. Coupled with a diversified outlook, investors can still hope to wade through this bearish phase in the equity market.
