GitLab 2026 Q1 Earnings Strong Performance as Net Loss Narrows 35%

GitLab (GTLB) reported its fiscal 2026 Q1 earnings on Jun 11th, 2025. GitLab's fiscal 2026 Q1 earnings surpassed market expectations with a revenue increase of 27% year-over-year to $214.5 million. Despite strong performance, GitLab's forward guidance fell short of analyst expectations, forecasting Q2 revenue between $226 million and $227 million and full fiscal year revenue between $936 million and $942 million. The forecast reflects a growth rate of approximately 24% year-over-year, slightly below the consensus estimates.

Revenue

GitLab saw a 26.8% rise in total revenue, reaching $214.51 million in the first quarter of fiscal 2026, compared to $169.19 million in the same period last year. The Subscription-self-managed and SaaS segment generated $194.48 million, while the License-self-managed and other segment contributed $20.03 million.

Earnings/Net Income

GitLab narrowed its losses, reporting a loss of $0.22 per share in Q1 2026, a 37.1% improvement from the $0.35 per share loss in Q1 2025. Net losses decreased by 34.6%, with the company reporting a net loss of $36.26 million compared to $55.48 million in the prior year. The EPS improvement signifies a positive trend in financial recovery.

Price Action

The stock price of GitLab climbed 3.31% during the latest trading day, despite tumbling 8.48% during the most recent full trading week and 11.78% month-to-date.

Post-Earnings Price Action Review

The strategy of buying GitLab shares during a revenue miss and holding them for 30 days has proven ineffective. Backtesting showed a return of -36.98%, with a negative Sharpe ratio of -0.16, highlighting substantial risk and unfavorable returns. The strategy's maximum drawdown was -75.64%, and it displayed high volatility at 76.07%, indicating significant uncertainty and risk. Consequently, investors should approach this strategy with caution, as the historical performance suggests volatile and risky outcomes, potentially leading to significant losses.

CEO Commentary

William Staples, CEO of GitLab, emphasized the company's robust year-over-year revenue growth of 27% to $215 million and noted a non-GAAP operating margin of 12%. He highlighted GitLab's unique position as the sole AI-native, cloud-agnostic DevSecOps platform, crucial for enterprises seeking efficiency and competitive advantage. Staples expressed optimism about leveraging AI in software development and GitLab's trajectory in the industry.

Guidance

For Q2 FY '26, GitLab anticipates total revenue between $226 million and $227 million, aiming for a growth rate of approximately 24% year-over-year. The company projects a non-GAAP operating income of $23 million to $24 million and a non-GAAP net income per share of $0.16 to $0.17. For the full fiscal year 2026, GitLab expects total revenue between $936 million and $942 million, with a non-GAAP operating income of $117 million to $121 million and a non-GAAP net income per share of $0.74 to $0.75.

Additional News

GitLab has recently made notable changes at the executive level, with Ian Steward appointed as the new Chief Revenue Officer effective May 3, 2025. Steward joins from Tricentis, bringing extensive experience in driving revenue growth. Additionally, David Henshall has been appointed to the board of directors, serving on the Audit Committee. Henshall previously held leadership positions at Citrix Systems, Inc. These strategic appointments aim to strengthen GitLab's leadership team and position the company for continued growth in the competitive DevSecOps market.