GitLab's Q4 Earnings Showcase AI-Driven Growth and Strong Financial Performance

GitLab Shares Rise After Better-Than-Expected Q4 Report: Details - GitLab (NASDAQ:GTLB)

Every week, our Whisper Index uncovers five overlooked stocks with big breakout potential. Get the latest picks today before they gain traction. GitLab, Inc. GTLB reported its fourth-quarter results after Thursday's closing bell. Here's a look at the details from the quarter. The Details: GitLab reported quarterly earnings of 33 cents per share which beat the analyst consensus estimate of 23 cents. Quarterly revenue came in at $211.43 million which beat the analyst consensus estimate of $206.12 million. Read Next: Tesla Rebounds While Tariffs Weigh On Manufacturing: What's Driving Markets Monday? "This quarter's results demonstrate the power of GitLab's innovative DevSecOps platform," said Bill Staples, GitLab CEO. "AI is fundamentally changing the software development landscape. With the GitLab platform and GitLab Duo, customers can leverage AI that fully takes advantage of the GitLab platform which ensures their software quality, security, privacy, compliance, and governance requirements are met to deliver secure software faster." Outlook: GitLab sees first-quarter adjusted earnings of between 14 cents and 15 cents per share, versus the 15 cent estimate, and revenue in a range of $212 million to $213 million, versus the $212.33 million estimate. The company expects fiscal 2026 earnings of between 68 cents and 72 cents per share, versus the 79-cent estimate, and revenue in a range of $936 million to $942 million, versus the $939.1 million estimate. Price Action: According to data from Benzinga Pro, GitLab shares are up 3.11% after hours at $58 after falling 6.58% in Monday's regular trading session. Read Next: Pending Home Sales Crash To Record Low, Jobless Claims Soar: Wall Street Reacts Image: Shutterstock GTLBGitLab Inc $54.89-8.84% Overview Market News and Data brought to you by Benzinga APIs

GitLab Surpasses Fiscal Q4 Forecasts

GitLab exceeded both its own guidance and analysts' expectations in its latest quarter. GitLab (GTLB -6.58%), a leading DevSecOps (development, security, and operations) platform provider, released its fiscal 2025 fourth-quarter earnings report on March 3. The company outperformed both its own guidance and analysts' expectations. Non-GAAP earnings were $0.33 per share compared to analysts' estimates of $0.23 per share. Revenue for the quarter was $211.4 million, beating the analyst forecast of $206 million and showing robust 29% year-over-year growth. The results highlight GitLab's continued operational improvements and effective cost management amid a competitive market environment. GitLab operates as a pioneer in the DevSecOps industry, integrating development, security, and operations within a single application. Its all-in-one platform aims to enhance productivity and reduce complexity via an open-core business model that actively involves the community for rapid innovation. GitLab's recent strategic focuses have included AI integration, expanding its global presence, and optimizing its software offerings to maintain its leadership in its space. It has also been working to enhance its SaaS offerings, increase customer retention and expansion, and optimize platform productivity to offer accelerated development cycles. Critical success factors will include its ability to leverage technology partnerships and enhance product functionalities to reinforce its competitive edge. Notable Achievements in the Quarter In its fiscal 2025 fourth quarter, which ended Jan. 31, GitLab achieved a remarkable revenue growth rate of 29% year over year. Additionally, GitLab considerably enhanced its profitability dynamics, with non-GAAP net income almost doubling from $25 million in the prior-year period to $56.7 million. A key driver behind these improvements was efficient expense management and a larger customer base. The total number of customers providing annual recurring revenue (ARR) of more than $100,000 rose by 29%, and the number of those delivering ARR of more than $5,000 increased by 15% to 9,893. On the product front, GitLab's integration of artificial intelligence into its platform through tools like GitLab Duo has enhanced its competitive position. "AI is fundamentally changing the software development landscape," said CEO Bill Staple in the earnings release. "With the GitLab platform and GitLab Duo, customers can leverage AI that fully takes advantage of the GitLab platform which ensures their software quality, security, privacy, compliance, and governance requirements are met to deliver secure software faster." Despite these successes, some challenges linger. The company booked a GAAP operating loss of $15.4 million in the quarter. Although that was down from the previous year's $34.9 million loss, GAAP profitability remains elusive. In addition, the company faces stiff competition within the DevSecOps landscape and market uncertainties that could affect its long-term outlook. Looking Ahead Management has set an optimistic revenue guidance range of $212 million to $213 million for the first quarter of fiscal 2026, and non-GAAP operating income of $21 million to $22 million. For the fiscal year, it's guiding for revenue of $936 million to $942 million, suggesting GitLab's continued confidence in its growth trajectory. Investors should monitor GitLab's ongoing AI advancements, potential changes in market dynamics, and the company's capacity to sustain its current growth rates during periods of economic uncertainty.

GitLab Continues to See Strong Revenue Growth Powered by AI, but Is the Stock a Buy? | The Motley Fool

There has been some significant market volatility this earnings season, with disappointing reports spooking some investors. One stock that got a reprieve following its earnings was DevSecOps platform GitLab (GTLB -3.21%), largely because investors liked its continued strong growth. Nonetheless, the stock still trades down about 25% over the past year. Let's take a closer look at GitLab's fourth-quarter results and outlook to see if this is a good time to buy the stock. GitLab operates a DevSecOps (development, security, and operations) platform that helps customers with their software development while also integrating cybersecurity into all stages of the process. The company has seen strong revenue growth helped by its artificial intelligence (AI)-powered GitLab Duo add-on offering, which can help programmers complete their assignments by offering coding suggestions and automation. The company has been able to consistently grow its revenue by around 30% in recent quarters, and Q4 was no different. For fiscal 2025's Q4, ended Jan. 31, revenue climbed 29% year over year to $211.4 million. That was well ahead of the company's prior forecast for revenue between $205 million and $206 million. Source: GitLab earnings reports. Subscription revenue climbed 31% to $185.6 million, while license revenue increased 19% to $25.9 million. Existing customers continue to increase their spending with GitLab, with its dollar-based net retention coming in at 123%. This metric measures the spending of existing customers who have been with the company for at least a year minus any customer churn. A number over 100% means existing customers increased their spending over the past 12 months. GitLab said seat expansion accounted for 75% of the increase, improved customer yields contributed 15%, and upgrades to higher-tier platforms 10%. Meanwhile, GitLab continues to see strong growth with its enterprise customers. The number of customers with $100,000 or more in annual recurring revenue (ARR) climbed 29% to 1,229, while customers with $1 million or more in ARR jumped to 123 customers. The strong growth continues to be powered by its Ultimate, Dedicated, and GitLab Duo solutions. Ultimate is GitLab's higher-tier platform and now accounts for half its ARR, while Dedicated includes additional features such as data isolation and regional data residency. Dedicated revenue surged approximately 90% year over year in the quarter. Remaining performance obligations (RPO) soared 40% to $945 million, while cRPO (current RPO) increased 35% to $579.2 million. RPO includes both revenue received from upfront payments that have yet to be recognized as revenue as well as revenue from un-cancellable contracts. It tends to help predict future revenue growth. On the profitability front, GitLab's adjusted earnings per share (EPS) more than doubled to $0.33 from $0.15 a year ago. It had a gross margin of 89% in the quarter. The company generated $62.1 million in adjusted free cash flow in the quarter and $120 million for the year. It ended the year with $992.3 million in cash and short-term investments and no debt. GitLab forecast fiscal 2026 revenue to range between $936 million and $942 million, representing about 24% growth. It is looking for adjusted EPS of between $0.68 and $0.72. For fiscal Q1, it guided for revenue of $212 million to $213 million, representing growth of 25% to 26%. It forecast adjusted EPS of $0.14 to $0.15. GitLab continues to steadily grow its revenue, while also seeing nice operating leverage in its business, which has been leading to strong profitability growth. Its guidance, meanwhile, seems conservative, setting the company up for some nice beat-and-raise results throughout the year. Last year, the company exceeded the top end of its forecast by about 4%. If it follows a similar pattern, I'd expect revenue closer to $980 million in fiscal year 2026, which would be around 29% revenue growth versus its 24% growth forecast. The stock is reasonably valued, trading at a price-to-sales (P/S) multiple of 10 times fiscal year 2026 analyst estimates. Meanwhile, excluding its net cash, its enterprise value (EV)-to-sales ratio is about 9 times. That's a pretty attractive valuation for a software-as-as-service (SaaS) company with a high gross margin growing its revenue in the mid-20% plus range. Overall, GitLab is a fast-growing SaaS company trading a reasonable valuation that is nicely benefiting from AI. The stock should have plenty of upside over the long term.