Core Insights - GitLab (GTLB) shares have declined by 16.8% year-to-date, underperforming the broader Zacks Computer & Technology sector, which has risen by 7%, and the Zacks Internet - Software industry, which has increased by 16.2% [1][2][10] - The underperformance is attributed to macroeconomic uncertainties and heightened competition in AI-enabled DevSecOps, particularly from larger competitors like Microsoft [2][10] - Despite challenges, GitLab is experiencing strong demand for its DevSecOps platform, with significant growth in its customer base [4][5] Stock Performance - GitLab's stock has lagged behind Microsoft, which has gained 19.4% year-to-date [2][10] - The company reported a 13% year-over-year increase in customers with over $5K in Annual Recurring Revenue (ARR) and a 26% increase in customers with over $100K in ARR in Q1 FY26 [5][10] Product and Portfolio Expansion - GitLab launched GitLab 18 in May 2025, introducing AI-native features and integrated tools for Premium and Ultimate customers at no additional cost [6][7] - The company achieved FedRAMP Moderate Authority to Operate status for GitLab Dedicated for Government, enhancing its offerings for federal agencies [8] Partnerships and Collaborations - GitLab is leveraging partnerships with major cloud platforms like Google Cloud and Amazon to expand its reach among large enterprise customers [11][12] - The integration of Amazon Q's AI agents into GitLab's platform aims to accelerate development and streamline security processes [11] Financial Guidance - For Q2 FY26, GitLab expects revenues between $226 million and $227 million, reflecting a growth of approximately 24% year-over-year [13] - For the full fiscal year 2026, the revenue forecast is between $936 million and $942 million, indicating a similar growth rate [14] Earnings Estimates - The Zacks Consensus Estimate for GTLB's Q2 FY26 earnings is 16 cents per share, with a year-over-year increase of 6.67% [15] - The consensus for fiscal 2026 earnings is pegged at 75 cents per share, reflecting a year-over-year increase of 1.35% [16] Valuation Metrics - GTLB is currently trading at a forward price/sales ratio of 7.57X, which is higher than the sector average of 6.57X, indicating a stretched valuation [17]

Core Insights - GitLab (GTLB) is experiencing strong demand for its DevSecOps platform, with significant contributions from solutions like GitLab Ultimate, Dedicated, and GitLab Duo, leading to increased customer adoption and relationship expansion [1][10] - The company's financial performance reflects this demand, with total revenues of $214.4 million in the first quarter of fiscal 2026, marking a 27% year-over-year increase [1] Customer Growth - GitLab's expanding clientele is evident, with customers generating over $5K in Annual Recurring Revenue (ARR) increasing to 10,104, a 13% year-over-year rise [2] - Customers with more than $100K in ARR grew to 1,288, up 26% year-over-year, indicating GitLab's success in attracting and retaining large enterprise customers [2] Product Innovations - The company announced the general availability of GitLab 18, which includes major innovations in core DevOps workflows, security, compliance, and AI capabilities [3] - GitLab Duo with Amazon Q was also launched for Ultimate self-managed customers on AWS, alongside achieving FedRAMP Moderate Authority to Operate for GitLab Dedicated for Government [3] Strategic Partnerships - GitLab benefits from a robust partner network, including major cloud platforms like Google Cloud and Amazon Web Services (AWS), which aids in expanding its presence among large enterprises [4] Competitive Landscape - GitLab operates in a highly competitive environment, facing significant competition from Microsoft, Atlassian, and other DevSecOps platforms [5][6][7] - Microsoft has strengthened its position through the integration of GitHub and Azure DevOps, making it a formidable rival for GitLab [6] Stock Performance and Valuation - GitLab's shares have declined by 17.7% year to date, contrasting with a 7% return from the broader Zacks Computer & Technology sector [8] - The stock is trading at a premium, with a forward 12-month Price/Sales ratio of 7.51X compared to the industry average of 5.74X, and it currently holds a Value Score of F [11] Earnings Estimates - The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings is 16 cents per share, reflecting a 6.67% year-over-year increase [13] - The consensus for fiscal 2026 earnings is set at 75 cents per share, indicating a 1.35% year-over-year growth [13]

Core Insights - GitLab Inc. reported a 27% year-over-year revenue growth to $214.5 million for Q1 FY2026, with a non-GAAP operating margin of 12% [1] - The company reaffirmed its guidance for approximately 24% top-line growth for FY2026, indicating strong market expansion opportunities [1] AI-Driven Product Adoption - GitLab Duo's first-time customer acquisition increased by 35% quarter-over-quarter, with significant wins including Highmark Health, the FBI, NatWest, and Volkswagen Digital Solutions [2][3] - 52% of total Annual Recurring Revenue (ARR) now comes from customers using the Ultimate tier, reflecting a growing demand for advanced security and AI features [2] Financial Performance - The company achieved a record adjusted free cash flow of $104.1 million, with a free cash flow margin of 49%, and a non-GAAP operating income of $26.1 million, compared to a loss of $3.8 million in the same period last year [4][5] - SaaS revenue, now constituting 30% of total revenue, increased by 35% year-over-year, driven by strong adoption of GitLab Dedicated [4] Strategic AI Platform Expansion - GitLab Duo's integration with Amazon Q and the expansion of agentic AI features have been pivotal, with AI-assisted test generation accelerating by over 35% during evaluations [6][7] - The company is focused on ongoing investment in native AI workflows and ecosystem interoperability to maintain relevance in evolving development environments [7] Future Outlook - Management guided Q2 FY2026 total revenue to be between $226 million and $227 million, and full-year FY2026 revenue to be between $936 million and $942 million, both implying a 24% year-over-year growth [8] - GitLab is set to publicly launch Duo Workflow (agentic AI) this winter and will provide further product innovation details at the GitLab 18 launch event on June 24 [9]

Core Insights - GitLab reported first-quarter fiscal 2026 non-GAAP earnings of 17 cents per share, exceeding the Zacks Consensus Estimate by 13.33% and up from 3 cents per share in the same quarter last year [1] - Total revenues reached $214.4 million, surpassing the consensus mark by 0.91% and reflecting a year-over-year increase of 27%, driven by strong demand for its DevSecOps platform [1][7] Revenue Breakdown - Subscription revenues, which include self-managed and SaaS, accounted for 90.7% of total revenues, increasing by 28.6% year over year to $194.5 million, beating the Zacks Consensus Estimate by 3.33% [3] - SaaS revenues contributed 30% to total revenues and surged 35% year over year, attributed to the strong adoption of GitLab Dedicated, AI integration, and expanding customer engagement [3] Customer Metrics - Customers with more than $5K of Annual Recurring Revenue (ARR) rose to 10,104, a 13% increase year over year [4] - Customers with more than $100K of ARR increased to 1,288, up 26% year over year, indicating GitLab's success in attracting and retaining large enterprise customers [4] - The dollar-based Net Retention Rate was 122% in the reported quarter [4] Performance Obligations - Total Remaining Performance Obligation (RPO) surged 40% year over year to $955.1 million, with current RPO increasing 34% to $584.8 million [4] Product Innovations - GitLab announced the general availability of GitLab 18, featuring major innovations in core DevOps workflows, security, compliance, and AI capabilities [5] - The company also launched GitLab Duo with Amazon Q for Ultimate self-managed customers on AWS and achieved FedRAMP Moderate Authority to Operate for GitLab Dedicated for Government [5] Operating Expenses - Non-GAAP research & development expenses increased by 22.3% year over year to $51.1 million, while sales and marketing expenses rose 15.1% to $85.5 million [6] - General and administrative expenses decreased by 25.3% to $30.7 million, resulting in an operating income of $26.1 million compared to a loss of $3.8 million in the previous year [6] Cash Flow and Balance Sheet - As of April 30, 2025, cash and cash equivalents and short-term investments totaled $11.05 billion, up from $9.92 billion as of January 31, 2025 [7] - The company generated a cash flow from operations of $106.3 million in the reported quarter, compared to an operating cash outflow of $63.2 million in the previous quarter [8] Guidance - For Q2 fiscal 2026, GitLab expects revenues between $226 million and $227 million, indicating approximately 24% year-over-year growth [9] - Non-GAAP operating income is anticipated to be in the range of $23-$24 million for the fiscal second quarter [9] - For fiscal 2026, GitLab projects revenues between $936 million and $942 million, also indicating growth of approximately 24% year over year [10]

Core Insights - GitLab (GTLB) is expected to report first-quarter fiscal 2026 results on June 10, 2025, with anticipated revenues between $212 million and $213 million, reflecting a year-over-year growth of 25-26% [1][9] - Non-GAAP earnings are projected to be between 14 cents and 15 cents per share, with the Zacks Consensus Estimate for revenues at $212.52 million, indicating a 25.61% increase from the previous year [1][2] Revenue Growth Drivers - The expected performance in the first quarter is attributed to ongoing investments in innovation within GitLab's core DevOps platform, security, and AI-driven solutions [3] - The expansion of GitLab Dedicated, which grew nearly 90% year-over-year in the prior quarter, is likely to have contributed to revenue growth, appealing to customers seeking secure, single-tenant SaaS solutions [4][9] Client Expansion and Partnerships - GitLab's growing customer base, including notable clients such as Delta AirLines, NatWest Group, Alphabet, and Amazon, is anticipated to drive growth in the first quarter [5][9] - Delta AirLines' adoption of GitLab Dedicated is expected to enhance product adoption and recurring revenues [6] - NatWest Group's expanded use of GitLab Ultimate and GitLab Dedicated reflects rising demand for secure solutions in regulated sectors, likely aiding revenue momentum [7] Collaborative Initiatives - GitLab's collaboration with Amazon Q to launch an AI-powered DevSecOps solution is designed to improve the developer experience and is expected to positively impact customer engagement [8][10] - Continued collaboration with Alphabet's Google Cloud platform aims to enhance GitLab's scalability and intelligence in its offerings, further increasing customer engagement [10]

Core Viewpoint - GitLab's share price has declined significantly due to increasing competition in the AI-driven code generation market, particularly from Microsoft's GitHub, alongside macroeconomic challenges and a shift towards agentic AI capabilities [1][2][3]. Company Performance - GitLab shares have lost 27.1% year to date, underperforming the broader Zacks Computer & Technology sector's 21% decline and the Zacks Internet Software industry's 18.3% drop [1]. Competitive Landscape - The competition in the AI-driven code generation space is intensifying, with GitHub's AI-powered coding assistant, GitHub Copilot, gaining traction and reinforcing Microsoft's dominance in the developer tools market [2]. - Persistent macroeconomic headwinds and the rapid shift towards agentic AI capabilities present growing challenges for GitLab [3]. Product Strengths - GitLab's robust DevSecOps platform, including GitLab Ultimate, GitLab Dedicated, and GitLab Duo, has driven customer adoption and retention, enhancing security, scalability, and AI-driven automation [4]. - GitLab Ultimate, the flagship product, accounted for 50% of the company's Annual Recurring Revenues as of the fourth quarter of fiscal 2025, highlighting its importance in revenue growth [6]. - The introduction of GitLab Duo, an AI-powered assistant, aims to improve software development workflows and developer productivity [7]. Innovation and Development - GitLab's Duo Workflow product, which focuses on AI-driven software development, entered private beta in the fourth quarter of 2024, leveraging Generative AI to enhance the software development lifecycle [8]. Strategic Partnerships - GitLab's partnerships with leading cloud providers, including Amazon Web Services and Zscaler, enhance the platform's scalability and deployment capabilities, strengthening its competitive position in the DevSecOps market [9]. - The integration of GitLab Duo with Amazon Q aims to improve AI-driven DevSecOps on AWS, enhancing security and efficiency [10]. Future Outlook - Despite challenges such as rising competition and cautious enterprise spending, GitLab's strong AI-driven DevSecOps platform, strategic partnerships, and growing enterprise adoption support long-term growth [11].

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]