Core Insights - GitLab exceeded its own guidance and analysts' expectations in its fiscal 2025 fourth-quarter earnings report, showcasing strong operational improvements and effective cost management [2][4] Financial Performance - Non-GAAP earnings per share (EPS) were $0.33, surpassing analysts' estimates of $0.23, and reflecting a 120% increase from $0.15 in the prior year [3] - Revenue for the quarter reached $211.4 million, exceeding the forecast of $206 million and demonstrating a robust 29% year-over-year growth [3][6] - Non-GAAP net income rose to $56.7 million, nearly doubling from $25 million in the previous year, indicating a 126.4% increase [3][7] - Non-GAAP adjusted free cash flow was $62.1 million, a significant 153.1% increase from $24.5 million in the prior year [3] Business Overview - GitLab operates as a pioneer in the DevSecOps industry, integrating development, security, and operations within a single application, aiming to enhance productivity and reduce complexity [4] - The company focuses on AI integration, expanding its global presence, and optimizing software offerings to maintain its leadership position [4][5] Customer Growth - The number of customers providing annual recurring revenue (ARR) of more than $100,000 increased by 29%, while those delivering ARR of more than $5,000 rose by 15% to 9,893 [7] Product Development - GitLab's integration of artificial intelligence through tools like GitLab Duo has strengthened its competitive position, enabling customers to meet software quality, security, privacy, compliance, and governance requirements [8] Future Outlook - Management has set an optimistic revenue guidance range of $212 million to $213 million for the first quarter of fiscal 2026, and for the fiscal year, revenue guidance is between $936 million to $942 million [10]

Core Insights - GitLab Inc. reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.23 per share, and showing an increase from $0.15 per share a year ago, resulting in an earnings surprise of 43.48% [1] - The company achieved revenues of $211.43 million for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 2.82% and up from $163.78 million year-over-year [2] - GitLab has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The sustainability of GitLab's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $211.88 million, and for the current fiscal year, it is $0.74 on revenues of $931.75 million [7] Industry Context - The Internet - Software industry, to which GitLab belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Q4 revenue increased by 29% year-over-year to $211 million, exceeding expectations [8][31] - FY 2025 revenue grew by 31% to $759.2 million, driven by land and expand strategy [31] - Non-GAAP operating margin for Q4 reached 17.7%, an increase of over 960 basis points year-over-year [35] - Adjusted free cash flow grew by 259% to $120 million for FY 2025 [31] - Non-GAAP gross margin was 91% for Q4, maintaining best-in-class status [34] Business Line Data and Key Metrics Changes - GitLab Ultimate now accounts for 50% of total ARR, with significant growth in enterprise customers [21][73] - GitLab Dedicated grew approximately 90% year-over-year in Q4 [22] - The number of customers with ARR of at least $100,000 increased by 29% to 1,229 [32] - The dollar-based net retention rate (DB NRR) for Q4 was 123%, driven by seat expansion and tier upgrades [33] Market Data and Key Metrics Changes - SaaS revenue represented 29% of total revenue, growing 36% year-over-year [34] - Total remaining performance obligations (RPO) grew by 40% year-over-year to $945 million [34] - The company closed the largest net ARR deal in its history during Q4 [29] Company Strategy and Development Direction - The company aims to add more new paying customers, especially in mid-market and enterprise segments [14] - Focus on accelerating customer value realization through innovation in core DevOps, security, and AI areas [14][19] - Plans to enhance go-to-market strategies, including expanding customer success and professional service teams [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the AI landscape and its potential to transform software development [61] - The company is prioritizing responsible growth while navigating competitive challenges in the market [62] - Management highlighted strong customer enthusiasm and commitment to GitLab's platform [58] Other Important Information - The company announced the private beta of Duo Workflow, moving towards AI-driven software development [26] - New CRO Ian Steward is expected to drive revenue growth and operational improvements [8][27] Q&A Session Questions and Answers Question: Insights on Duo Enterprise's contribution and market competition - Duo's performance exceeded expectations, with about a third of deals including Duo ARR [46] - Differentiation in a competitive market is based on GitLab's comprehensive platform and context provided for AI models [50] Question: Understanding the gap between optimism and financial guidance - Management emphasized strong customer feedback and ROI from GitLab's platform, which supports their optimistic outlook [59] Question: Driving utilization of the GitLab platform - The company focuses on customer success plans and partnerships to enhance platform utilization and adoption [92] Question: Changes in go-to-market strategy with new CRO - Incremental changes are expected, focusing on customer success and global expansion [80] Question: Balance of growth investments versus margin expansion - The company aims to invest in growth while maintaining a strong margin profile, with a focus on sales capacity and engineering [87]

Revenue Growth - Total revenue for Q4 FY 2025 reached $211.4 million, representing a 29% year-over-year growth[6] - Fiscal Year 2025 total revenue was $759.2 million, up 31% from $579.9 million in FY 2024[7] - Total revenue for the three months ended January 31, 2025, was $211,431 thousand, representing a 29% increase from $163,779 thousand in the same period of 2024[31] - Subscription revenue from self-managed and SaaS offerings reached $185,562 thousand for the three months ended January 31, 2025, up 31% from $142,026 thousand in the prior year[31] Profitability - Non-GAAP operating income for Q4 FY 2025 was $37.4 million, compared to $13.2 million in Q4 FY 2024, marking a $24.2 million increase[8] - GAAP net income attributable to GitLab for Q4 FY 2025 was $10.8 million, a significant improvement from a loss of $36.9 million in Q4 FY 2024[8] - The company reported a net income of $10,207 thousand for the three months ended January 31, 2025, compared to a net loss of $37,972 thousand in the same period of 2024[31] - GitLab reported a non-GAAP net income attributable to common stockholders of $56.7 million for the latest quarter, compared to $25.0 million in the same quarter last year, representing a 126% increase[37] - The GAAP net income per share, diluted, was $0.06, a significant improvement from a loss of $0.24 per share in the same quarter last year[37] Cash Flow and Expenses - Cash provided by operating activities for the three months ended January 31, 2025, was $63,222,000, compared to $24,853,000 in 2024[33] - Total cash used in investing activities was $21,941,000 for the three months ended January 31, 2025, down from $35,772,000 in 2024[33] - Cash provided by financing activities was $11,693,000 for the three months ended January 31, 2025, compared to $14,992,000 in 2024[33] - Operating expenses for the fiscal year ended January 31, 2025, totaled $812,932 thousand, an increase from $707,638 thousand in the previous fiscal year[31] - Stock-based compensation expense for the three months ended January 31, 2025, was $46,636,000, slightly up from $43,017,000 in 2024[36] Assets and Liabilities - Cash and cash equivalents decreased to $227,649 thousand as of January 31, 2025, from $287,996 thousand as of January 31, 2024[29] - Total assets increased to $1,399,263 thousand as of January 31, 2025, compared to $1,321,403 thousand as of January 31, 2024[29] - Deferred revenue increased to $74,240,000 for the three months ended January 31, 2025, from $50,189,000 in 2024[33] - GitLab's accumulated deficit as of January 31, 2025, was $(1,163,722) thousand, slightly increasing from $(1,161,288) thousand as of January 31, 2024[29] Future Guidance - GitLab expects Q1 FY 2026 revenue guidance between $212.0 million and $213.0 million[11] - Non-GAAP diluted net income per share for FY 2026 is projected to be between $0.68 and $0.72[11] Operational Highlights - Customers with more than $5,000 of ARR increased to 9,893, a 15% year-over-year growth[15] - Dollar-Based Net Retention Rate was reported at 123%[15] - GitLab announced the general availability of GitLab Duo Self-Hosted, enhancing data privacy and security for customers[15] - The company appointed Ian Steward as Chief Revenue Officer, effective May 3, 2025[3] Other Financial Metrics - The Dollar-Based Net Retention Rate is calculated by comparing Current Period ARR to Prior Period ARR, indicating customer growth and retention[26] - The company experienced a gross profit of $188,562 thousand for the three months ended January 31, 2025, compared to $147,790 thousand in the same period of 2024[31] - Gross profit on a GAAP basis for the three months ended January 31, 2025, was $188,562,000, compared to $147,790,000 in 2024, reflecting a gross margin of 89%[36] - Non-GAAP gross profit for the same period was $192,755,000, with a gross margin of 91%, up from 149,951,000 and 92% in 2024[36] Foreign Exchange and Impairment - The company reported a foreign exchange loss of $3.9 million in the latest quarter, compared to a gain of $2.6 million in the same quarter last year[37] - The company recorded an impairment of equity method investment of $8.9 million in the latest quarter[37] Tax and Other Adjustments - GitLab's income tax adjustment for the latest quarter was a loss of $3.2 million, compared to a gain of $735,000 in the same quarter last year[37] - GitLab incurred acquisition-related expenses of $391,000 in the latest quarter, down from $1.3 million in the same quarter last year[37] - The company did not record any non-recurring payments related to the formation of JiHu during the periods presented[38]

Group 1 - GitLab (NASDAQ: GTLB) was previously rated a "buy" with a price target of $62.4, indicating a positive outlook for the company's market share growth [1] - The investment strategy of a boutique family office fund focuses on sustainable, growth-driven companies that aim to maximize shareholder equity [1] - The founder of the family office fund has experience in high-growth supply-chain start-ups and has worked with venture capital firms, enhancing her expertise in user acquisition and investment portfolios [1] Group 2 - The newsletter "The Pragmatic Optimist" emphasizes portfolio strategy, valuation, and macroeconomics, aiming to make financial literacy accessible and understandable [1] - The newsletter has been recognized as a top finance newsletter on popular platforms, showcasing its influence and reach in the investment community [1]

Core Viewpoint - GitLab is expected to report strong fourth-quarter fiscal 2025 results, with anticipated revenues between $205 million and $206 million, reflecting a year-over-year growth of 25-26% and non-GAAP earnings per share between 22 cents and 23 cents [1][2]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for revenues stands at $205.64 million, indicating a 25.56% increase from the previous year's quarter [1]. - The consensus for earnings per share has remained at 23 cents, showing a growth of 53.33% year-over-year [2]. Performance Drivers - GitLab's fourth-quarter performance is expected to benefit from the integration of AI capabilities into its platform, enhancing automation and developer productivity, which likely attracted new customers and improved retention [4]. - The GitLab Duo Pro and Enterprise offerings have gained momentum, contributing to increased productivity and time savings for customers, further supported by a bundled offering with Amazon Q [5]. - The company has focused on adapting to enterprise clients' needs, which is expected to drive higher annual recurring revenues and sustained growth [6]. SaaS Growth - In the third quarter of fiscal 2025, GitLab's SaaS offerings accounted for 29% of total revenues, growing 44% year-over-year, indicating strong adoption of cloud solutions [7]. Operational Challenges - GitLab's cash flow from operations may have been impacted by tax agreements with the U.S. Internal Revenue Service and the Dutch tax authority, including a one-time tax payment of $188 million to the Dutch tax authority [8]. Earnings Expectations - According to the Zacks model, GitLab currently has an Earnings ESP of 0.00% and a Zacks Rank of 3, indicating that the odds of an earnings beat are not favorable [9].

Core Viewpoint - GitLab (GTLB) shares are currently considered overvalued with a Value Score of F, trading at a forward 12-month price/sales (P/S) ratio of 15.69X, significantly higher than its median of 10.72X and the sector's average of 6.48X [1][4]. Year-to-Date Performance - Year-to-date, GitLab shares have increased by 29.8%, outperforming the broader sector's growth of 1.8% and the Zacks Internet – Software industry's return of 16.9% [4]. - GitLab has outperformed Microsoft (MSFT), which has seen a decline of 1.9% in the same period [4]. Technical Indicators - GitLab is currently trading above both the 50-day and 200-day moving averages, indicating a bullish trend [7]. Partnerships and Innovations - GitLab is benefiting from partnerships with major cloud platforms like Google Cloud and Amazon Web Services (AWS), which are enhancing its reach among large enterprise customers [10]. - A recent collaboration with AWS aims to launch an AI-powered solution to improve software development and security, integrating GitLab Duo with Amazon Q's autonomous agents [10][12]. Financial Outlook - For Q4 of fiscal 2025, GitLab anticipates revenues between $205 million and $206 million, reflecting a year-over-year growth of 25-26% [13]. - The Zacks Consensus Estimate for Q4 revenues is $205.64 million, indicating a growth of 25.56% year-over-year, with earnings expected at 23 cents per share, a 53.33% increase [14]. - For fiscal 2025, GitLab expects revenues between $753 million and $754 million, indicating approximately 30% year-over-year growth, with earnings projected at 63 cents per share, a 215% increase [13][15]. Competitive Landscape - The rapid evolution of AI poses challenges for GitLab, necessitating continuous integration of autonomous AI features to maintain its competitive edge [16]. - The emergence of DeepSeek Coder, a Chinese competitor, highlights the need for GitLab to differentiate itself in a crowded market [17]. Investment Considerations - Despite strong growth and solid partnerships, GitLab's high valuation and rising competition present challenges, leading to a Zacks Rank 3 (Hold) [18][19].

Core Insights - GitLab Inc. is recognized as a leading AI-powered DevSecOps platform for software development, with over 40 million registered users and more than 50% of Fortune 100 companies utilizing its services [1]. Company Overview - GitLab Inc. operates in the software development sector, focusing on integrating security into the development process through its DevSecOps platform [1]. - The company has a significant user base, indicating strong market penetration and potential for growth [1]. Market Position - The presence of over 50% of Fortune 100 companies as users highlights GitLab's competitive advantage and credibility in the industry [1].

Company Overview - GitLab Inc. (GTLB) shares increased by 12.3% to close at $72.75, with a notable trading volume compared to normal sessions, and a total gain of 14.7% over the past four weeks [1] - The company is experiencing growth due to an expanding clientele and strong adoption of its AI-powered DevSecOps platform [1] Earnings Expectations - GitLab is expected to report quarterly earnings of $0.23 per share, reflecting a year-over-year increase of 53.3% [2] - Revenue projections stand at $205.64 million, which is a 25.6% increase from the same quarter last year [2] Stock Performance Insights - The consensus EPS estimate for GitLab has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] - GitLab holds a Zacks Rank of 2 (Buy), suggesting positive market sentiment [3] Industry Comparison - GitLab is part of the Zacks Internet - Software industry, where another company, Zoom Communications (ZM), saw an 8.1% increase in its stock price, closing at $88.64 [3] - Zoom's consensus EPS estimate has also remained unchanged at $1.31, representing a 7.8% decrease from the previous year [4]

GitLab and Industry Trends - GitLab is a DevSecOps platform that assists developers in building, testing, and deploying software [1] - The company benefits from secular tailwinds, including the adoption of generative Artificial Intelligence (AI) by companies [1] Author Background and Disclosure - The author has a background in engineering and a strong interest in tech stocks, which influences their investment focus [1] - The author has no stock, option, or derivative positions in GitLab or any other mentioned companies, and no plans to initiate such positions within the next 72 hours [1]