GitLab Inc. (NASDAQ:GTLB) Beats Q3 Earnings Estimates but Stock Falls on Guidance

GitLab Inc. (NASDAQ:GTLB) reported third-quarter financial results that surpassed analyst expectations on the top and bottom lines, yet the stock faced significant selling pressure in after-hours trading. The company also announced a key leadership appointment as it navigates a period of sustained growth.

Quarterly Performance vs. Estimates

For its fiscal third quarter of 2026, ended October 31, 2025, GitLab delivered revenue of $244.4 million, representing a 25% year-over-year increase. This figure narrowly exceeded the consensus analyst estimate of $244.4 million. The company's profitability on an adjusted basis was more notably ahead of forecasts.

• Revenue: $244.4 million reported vs. $244.4 million estimated.
• Non-GAAP Earnings Per Share (EPS): $0.25 reported vs. $0.20 estimated.

The stronger-than-expected profit was driven by a significant improvement in operating margins. GitLab's non-GAAP operating margin expanded to 18%, up from 13% in the same quarter last year, as operating expenses grew at a slower pace than revenue.

Market Reaction and Forward Guidance

Despite the earnings beat, GitLab's shares fell approximately 8.5% in after-hours trading following the report. This negative reaction appears to be primarily tied to the company's financial outlook for the upcoming quarter and full year.

GitLab provided the following guidance, which aligns closely with, but does not materially exceed, current analyst expectations:

• Q4 FY2026 Revenue Guidance: $251.0 - $252.0 million.
  • Analyst Consensus for Q4 Sales: ~$257.7 million.
• Q4 FY2026 Non-GAAP EPS Guidance: $0.22 - $0.23.
  • Analyst Consensus for Q4 EPS: Not provided in context, but the range appears to meet prevailing expectations.
• Full Year FY2026 Revenue Guidance: $946 - $947 million.
  • Analyst Consensus for FY2026 Sales: ~$959.95 million.

The guidance suggests continued growth but may have disappointed investors hoping for a more substantial raise to annual forecasts following the Q3 beat.

Key Business Highlights

Beyond the financial figures, the earnings release highlighted several operational strengths and strategic moves:

• Strong Customer Growth: The company continues to move customers up the value chain. Customers with more than $100,000 in Annual Recurring Revenue (ARR) grew 23% year-over-year to 1,405.
• High Retention and Expansion: The Dollar-Based Net Retention Rate remained robust at 119%, indicating existing customers are spending significantly more year-over-year.
• Leadership Appointment: GitLab announced that Jessica Ross will join as Chief Financial Officer, effective January 15, 2026. Ross brings over 25 years of finance experience, including recent roles as CFO of Frontdoor and senior executive positions at Salesforce.
• Product Recognition: The company was again recognized as a Leader in the Gartner Magic Quadrant for DevOps Platforms and for AI Code Assistants.
• Platform Development: GitLab highlighted expansions to its AI-powered Duo Agent Platform and enhanced application security capabilities.

Conclusion

GitLab's third quarter demonstrated solid execution, with revenue growth and profitability exceeding Wall Street's targets. However, the market's immediate reaction underscores a focus on future trajectory. The provided guidance for the fourth quarter and full year, while healthy, seems to have been interpreted as conservative relative to some investor expectations, leading to the post-earnings stock decline. The appointment of a new CFO with extensive public company experience signals GitLab's focus on scaling its financial operations for the next phase of growth.

For a detailed look at GitLab's historical earnings, future estimates, and analyst projections, you can review the data here.

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