GitLab 2026 Q3 Earnings Net Income Deteriorates 131.6%

GitLab (GTLB) reported fiscal 2026 Q3 earnings on Dec 3, 2025, with revenue rising 24.6% to $244.35M, surpassing estimates. However, guidance for Q4 revenue growth of 19% signaled a slowdown. The stock fell 14% post-earnings despite beating revenue expectations, reflecting mixed investor sentiment.

Revenue

GitLab’s total revenue surged to $244.35 million in 2026 Q3, a 24.6% increase from $196.05 million in the prior-year period. Subscription revenue, encompassing self-managed and SaaS offerings, drove the majority of growth, reaching $223.26 million. License revenue, including self-managed and other components, contributed $21.09 million. These figures highlight the company’s reliance on recurring subscription models and the resilience of its core offerings.

Earnings/Net Income

GitLab swung to a net loss of $8.80 million in 2026 Q3, a 131.6% deterioration from a $27.80 million profit in 2025 Q3. The EPS decline from $0.18 to -$0.05 marked a 127.8% negative change. The loss underscored ongoing financial challenges, including sustained deficits over five years.

Post-Earnings Price Action Review

The strategy of buying GTLB after earnings beats and holding for 30 days underperformed significantly, with a total return of -43.79% versus a 51.76% benchmark. While the backtest showed no losses (0.00% drawdown), the low Sharpe ratio (-0.18) and high volatility (73.53%) highlighted its risk profile. This outcome raised questions about the reliability of earnings-driven trading strategies for GitLab.

CEO Commentary

William Staples, CEO, emphasized 25% revenue growth to $244M and an 18% non-GAAP operating margin, exceeding guidance. Strategic focus on AI-driven automation via the GitLab Duo Agent platform and addressing the “AI Paradox” was underscored. Challenges in the U.S. public sector due to government shutdowns were noted, but long-term confidence in DevSecOps leadership was reaffirmed.

Guidance

GitLab projected Q4 FY2026 revenue of $251–252M (19% YoY growth) and full-year revenue of $946–947M (25% YoY growth). Non-GAAP operating income is expected to reach $38–39M for Q4 and $147–148M annually. Management highlighted SMB softness, public sector delays, and JiHu-related expenses as risks to watch.

Additional News

GitLab’s stock price target was cut to $50 by Wolfe Research, maintaining an Outperform rating amid mixed Q3 results. The appointment of Jessica Ross as CFO and the 14% post-earnings selloff dominated recent headlines. Analysts cited cautious guidance and macroeconomic headwinds in public and SMB sectors as key concerns, despite AI-driven product innovations and a $1.13 billion cash position.