GitLab 2026 Q3 Earnings Sharp Net Loss Amid 24.6% Revenue Growth

GitLab (GTLB) reported third-quarter 2026 results with revenue rising 24.6% year-over-year to $244.35 million, surpassing expectations. However, the company swung to a net loss of $0.05 per share, a 127.8% decline from a $0.18 profit in the prior-year period. Management guided to continued growth but highlighted ongoing challenges in SMB and public sector markets.

Revenue

GitLab’s total revenue surged to $244.35 million in Q3 2026, driven by robust performance in its core segments. Subscription revenue—self-managed and SaaS—dominated, contributing $223.26 million, reflecting strong demand for its platform. License revenue, including self-managed and other offerings, added $21.09 million, supporting overall growth. The company’s ability to scale its subscription model underscores its market position in DevSecOps.

Earnings/Net Income

The earnings report revealed a stark deterioration in profitability, with GitLab posting a net loss of $8.80 million, a 131.6% decline from a $27.80 million profit in Q3 2025. This marked the fifth consecutive year of losses in the same quarter, raising concerns about financial sustainability. The EPS swing to a $0.05 loss highlights the widening gap between top-line growth and bottom-line performance.

Post-Earnings Price Action Review

The strategy of buying GTLB following an earnings beat and holding for 30 days underperformed dramatically, with a total return of -43.79% versus a benchmark gain of 51.76%. Despite a maximum drawdown of 0.00% indicating no losses during the backtest period, the strategy’s low Sharpe ratio of -0.18 and high volatility of 73.53% underscore its risk profile.

CEO Commentary

William Staples, CEO, emphasized 25% revenue growth and an 18% non-GAAP operating margin, exceeding guidance. Strategic priorities include expanding the go-to-market team, accelerating adoption of the GitLab Duo Agent platform for usage-based monetization, and leveraging AI-driven DevSecOps to address the “AI Paradox.” Challenges such as U.S. public sector delays and SMB softness were acknowledged but offset by strong international performance.

Guidance

GitLab projected Q4 2026 revenue of $251–252 million (19% YoY growth) and full-year revenue of $946–947 million (25% YoY). Non-GAAP operating income is expected at $38–39 million in Q4 and $147–148 million annually. The company factored in SMB weakness and public sector delays, with FY 2027 pricing impacts from a 2024 premium tier increase no longer a tailwind.

Additional News

GitLab announced the appointment of Jessica Ross as CFO, effective January 15, 2026, bringing seasoned leadership to balance growth and financial discipline. Macquarie downgraded the stock to Neutral, cutting its price target to $40 from $70, citing execution risks and market dynamics. Analysts like Piper Sandler maintained an Overweight rating at $70, while others, including Truist and BTIG, adjusted targets downward, reflecting mixed sentiment.

The earnings report highlights GitLab’s ability to grow revenue amid a challenging macroeconomic environment but underscores the need for improved profitability. With strategic shifts toward AI-driven tools and a hybrid pricing model, the company aims to capitalize on long-term trends in DevSecOps. However, near-term execution risks and sector-specific headwinds remain critical concerns for investors.